LEGALITY OF PROFESSIONAL SERVICE CORPORATION TO PRACTICE ENGINEERING

CORPORATIONS ‑- ENGINEERING AND LAND SURVEY ‑- LEGALITY OF PROFESSIONAL SERVICE CORPORATION TO PRACTICE ENGINEERING

If a firm of professional engineers incorporates in order to practice that profession as a professional service corporation under the provisions of chapter 122, Laws of 1969 (now codified as chapter 18.100 RCW), it is nevertheless still required to comply with the various registration and filing requirements of RCW 18.43.130 (8) in order to engage in the corporate practice of engineering in this state.

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                                                                 January 25, 1974

Honorable James G. McGivern
Chairman, Board of Registration
for Professional Engineers and
Land Surveyors
P.O. Box 649
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1974 No. 10

Dear Sir:

            By letter previously acknowledged you have requested our opinion on a question which we paraphrase as follows:

            If a firm of professional engineers incorporates in order to practice that profession as a professional service corporation under the provisions of chapter 122, Laws of 1969 (now codified as chpater 18.100 RCW), is it nevertheless still required to comply with the various registration and filing requirements of RCW 18.43.130 (8) in order to engage in the corporate practice of engineering in this state?

            We answer this question in the affirmative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            InState ex rel. Standard Optical Co. v. Superior Court, 17 Wn.2d 323, 135 P.2d 839 (1943), the Washington court adhered to the common-law rule that a corporation cannot engage through licensed employees in the practice of a "learned profession" unless legislatively permitted to do so.  In this particular decision the court concluded that the profession of optometry was within the scope of that rule.

            Thereafter, in 1959, the legislature specifically authorized the corporate practice of professional engineering through its enactment of § 7, chapter 297, Laws of 1959, amending RCW 18.43.130, to read, in material part, as follows:

             [[Orig. Op. Page 2]]

            "This chapter shall not be construed to prevent or affect:

            ". . .

            "(8) The practice of engineering in this state by a corporation or joint stock association:Provided, That

            "(a) Such corporation shall file with the board an application for certificate of authorization upon a form to be prescribed by the board and containing information required to enable the board to determine whether such corporation is qualified in accordance with the provisions of this chapter to practice engineering in this state;

            "(b) Such corporation shall file with the board a certified copy of a resolution of the board of directors of the coproration which shall designate a person holding a certificate of registration under this chapter as responsible for the practice of engineering by said corporation in this state and shall provide that full authority to make all final engineering decisions on behalf of said corporation with respect to work performed by the corporation in this state shall be granted and delegated by the board of directors to the person so designated in said resolution:  Provided, That the filing of such resolution shall not relieve the corporation of any responsibility or liability imposed upon it by law or by contract;

            "(c) Such corporation shall file with the board a designation in writing setting forth the name or names of a person or persons holding certificates of registration under this chapter who shall be in responsible charge of each project and each major branch of the engineering activities in which the corporation shall specialize in this state.  In the event there shall be a change in the person or persons in responsible charge of any project or major branch of the engineering activities, such changes shall be designated in writing and filed with the board within thirty days after the effective date of such changes;

            ". . ."

             [[Orig. Op. Page 3]]

            The remainder of this provision then goes on to spell out certain other requirements to be met by a corporation seeking to obtain a certificate of authorization from the board,1/ including the payment of an initial fee of $500 and an annual renewal fee of $100.  Certain of these requirements, however, may be dispensed with by the board under the following terms of subparagraph (e):

            "(e) In the event a corporation, organized solely by a group of engineers, each holding a certificate of registration under this chapter, applies for a certificate of authorization, the board may, in its discretion, grant a certificate of authorization to such corporation based on a review of the professional records of such incorporators, in lieu of the required qualifications set forth in this subsection.  In the event the ownership of such corporation shall be altered, the corporation shall apply for a revised certificate of authorization, based upon the professional records of the owners, if exclusively engineers or, otherwise, under the qualifications required by subparagraphs (a), (b), (c) and (d) hereof."

            Your question involves the relationship between this 1959 amendment to RCW 18.43.130 and the later enacted provisions of chapter 122, Laws of 1969, now codified as chapter 18.100 RCW and entitled "The Professional Service Corporation Act."  The primary purpose of this later act was to grant a general legislative authorization for the corporate practice of those professions ". . . which prior to the passage of this chapter and by reason of law could not be performed by a corporation . . ."  RCW 18.100.030.  In addition, however, authority was granted by § 4 of the act, now codified as RCW 18.100.040, for its utilization by other professions as well.  This section of chapter 122,supra, reads as follows:

            "This chapter shall not apply to any individuals or groups of individuals within this state who prior to the passage of this chapter were permitted to organize a corporation and  [[Orig. Op. Page 4]] perform personal services to the public by means of a corporation, and this chapter shall not apply to any corporation organized by such individual or group of individuals prior to the passage of this chapter:Provided, That any such individual or group of individuals or any such corporation may bring themselves and such corporation within the provisions of this chapter by amending the articles of incorporation in such a manner so as to be consistent with all the provisions of this chapter and by affirmatively stating in the amended articles of incorporation that the shareholders have elected to bring the corporation within the provisions of this chapter."

            Nothing contained in this 1969 "Professional Service Corporation Act," however, purported in any way to amend or repeal any of the provisions of RCW 18.43.130 (8),supra.  Thus, the question here presented is whether, in view of the fact that this prior law respecting the corporate practice of engineering remains in effect, the members of a firm of professional engineers are still required to comply with its registration and filing requirements in order to practice their profession as a corporation even where they have utilized the authority granted by § 4 of the "Professional Service Corporation Act"2/ in order to incorporate.

            In our opinion, this question is clearly answerable in the affirmative by reason of RCW 18.100.140, a statute which, codifying § 14 of that act, states that:

            "Nothing in this chapter shall authorize a director, officer, shareholder, agent or employee of a corporation organized under this chapter,or a corporation itself organized under this chapter, to do or perform any act which would be illegal, unethical or unauthorized conduct under the provisions of the following acts:  (1) Medical disiplinary act, chapter 18.72 RCW; (2) Anti-rebating act, chapter 19.68 RCW; (3) State bar act, chapter 2.48 RCW; (4) Professional accounting act, chapter 18.04 RCW; (5) Professional architects act, chapter 18.08 RCW; (6) Professional auctioneers act, chapter 18.11 RCW; (7) Barbers, chapter 18.15  [[Orig. Op. Page 5]] RCW (8) Beauty culturists act, chapter 18.18 RCW; (9) Boarding homes act, chapter 18.20 RCW; (10) Chiropody, chapter 18.22 RCW; (11) Chiropractic act, chapter 18.25 RCW (12) Registration of contractors, chapter 18.27 RCW; (13) Debt adjusting act, chapter 18.28 RCW; (14) Dental hygienist act, chapter 18.29 RCW; (15) Dentistry, chapter 18.32 RCW; (16) Dispensing opticians, chapter 18.34 RCW; (17) Drugless healing, chapter 18.36 RCW; (18) Embalmers and funeral directors, chapter 18.39 RCW; (19) Engineers and land surveyors, chapter 18.34 RCW; (20) Escrow agents registration act, chapter 18.44 RCW; (21) Furniture and bedding industry, chapter 18.45 RCW; (22) Maternity homes, chapter 18.46 RCW; (23) Midwifery, chapter 18.50 RCW; (24) Nursing homes, chapter 18.51 RCW; (25) Optometry, chapter 18.53 RCW; (26) Osteopathy, chapter 18.57 RCW; (27) Patent medicine peddlers, chapter 18.60 RCW; (28) Pharmacists, chapter 18.64 RCW; (29) Pharmacy owners and wholesale druggists, chapter 18.67 RCW; (30) Physical therapy, chapter 18.74 RCW; (31) Practical nurses, chapter 18.78 RCW; (32) Prophylactic vendors, chapter 18.81 RCW; (33) Proprietary schools, chapter 18.82 RCW; (34) Psychologists, chapter 18.83 RCW; (35) Real estate brokers and salesmen, chapter 18.85 RCW; (36) Registered professional nurses, chapter 18.88 RCW; (37) Sanitarians, chapter 18.90 RCW; (38) Veterinarians, chapter 18.92 RCW."  (Emphasis supplied.)

            Since it is not legal for a corporation to engage in the practice of professional engineering under chapter 18.43 RCW, unless that corporation has complied with the applicable registration and filing requirements of RCW 18.43.130 (8),supra, it thus readily follows that by virtue of this last quoted statute, nothing contained in chapter 122, supra, is to be read as permitting a firm of professional engineers, even though incorporated under that 1969 act, to engage in the practice of their profession as a corporation without having complied with that particular section of chapter 18.43 RCW.

            In so advising you, however, we should again make note of subparagraph (e) of RCW 18.43.130,supra, which allows the board of registration to dispense with certain of the qualifying requirements of that statute where the corporation applying for registration thereunder is