Industry guide
Buying an accounting practice in New York
On this page8 sections
Where accountancy differs from the other professions
Our professional practice guide sets out the general New York position: a professional corporation's shareholders, officers and directors are listed with their licence numbers under penalties of perjury, and there is no line on that form for an unlicensed owner.
Public accountancy is the documented exception. The Office of the Professions publishes Form 6R, headed "Application for Public Accountancy Firm Registration or Amendment to add Non-Licensee Owners to Existing Firms" [1] . A form exists for the thing the general regime does not contemplate.
What that does and does not tell you. It tells you the door exists — that a non-licensee owner in a registered New York accountancy firm is a recognised arrangement with a published application, not a structure to be improvised. It does not tell you what conditions attach: ownership proportions, control, who may hold what role, and what happens to attest work are all questions for the Department and for counsel. If you are a non-CPA looking at an accounting practice, this is the page's most useful sentence — and the next call should be to a lawyer who does this, not to a broker.
Two registration layers, on different clocks
| Layer | What it is | Buyer implication |
|---|---|---|
| The individual | Certified Public Accountant licence and registration | Verify each professional at source through the Department's licence verification. Registration lapses are a live operating problem |
| The firm | Public accountancy firm registration — Form 6T, CPA Firm Triennial Registration [1] | A three-year cycle. Find out where the target sits in it before agreeing a closing date |
| Ownership and competency | Form 6C, Certification of Ownership and Attest Competency | If the practice does attest work, the firm certifies that competency. The people who make it real are not interchangeable staff |
| Quality | Form 6PR, Peer Review, Competency and Annual Statements | Where peer review applies, its history is diligence. Ask for the most recent report and any findings |
Where the practice is held in a professional corporation, the entity filings and the 8–10 week mail-only review described in the framework guide apply on top [2] .
Split the fee book before you value it
Accounting practices are sold on the strength of "recurring revenue", and the phrase does real work — but not all of the book recurs the same way, and the differences decide what survives you.
| Work type | Recurs because | Transfer risk | What to establish |
|---|---|---|---|
| Tax compliance | The calendar requires it | Low. The client needs a return next year regardless of who signs it | Client count and fee by year over three years, and the realisation rate against standard fees |
| Bookkeeping and payroll | It is operationally embedded | Lowest. Switching costs are real for the client | Whether it is genuinely systematised or depends on one person's knowledge of each client |
| Audit and attest | An external requirement | Moderate, and gated by competency | Who provides the attest competency, and whether they are staying |
| Advisory and planning | A relationship and a judgement the client trusts | High. This follows the person | Fee by partner. If advisory is concentrated in the seller, that revenue has a transition attached to it |
| One-off and project work | It does not | — | Strip it out of the run rate entirely before applying any multiple |
Ask for the fee book by client by year for three years, with the work type coded. That single artefact tells you the retention rate, the concentration, the mix, and whether the practice is growing or holding. Our concentration guide gives the framework — here the concentration is often a partner rather than a client.
Tax season is a financing problem
A practice weighted to tax season earns a large part of its year in a few months while rent, salaries and your loan payment run all twelve. That is not an operating inconvenience; it is the thing that decides whether the first year works.
- Get monthly revenue and collections for 36 months, not annual totals.
- Find the trough and test debt service against it with the seasonality stress test, which also sizes the cash low point.
- Fund the low point at closing. A practice bought in the spring on the strength of a strong season has a long quiet stretch immediately ahead of it.
- Check billing and collection rhythm, not just fee dates. Work performed in March and collected in July is a working capital pattern you inherit.
The transition unit is a tax season
In most industries a handover is measured in months. Here it is measured in cycles: the seller introduces you through a full season, clients see continuity in the work that matters most to them, and only then is the relationship genuinely transferred.
If you are financing with an SBA loan, note the ceiling. SOP 50 10 8.1 provides that the seller may not remain as an officer, director, stockholder or employee, and a consultancy is capped at 24 months in aggregate including extensions [5] . Two seasons is the practical maximum, and the handover has to be designed to fit inside it.
One more financing interaction worth knowing before it is proposed to you: sellers of accounting practices frequently suggest a retention-based earnout, paying more if clients stay. Seller earnouts are prohibited on SBA change-of-ownership deals. Only a buyer rebate is permitted, and its proceeds must pay down loan principal. See the earnout guide for the inversion that works.
Accounting-practice diligence red flags
- Fee book presented in total rather than by client, by year, by work type.
- Advisory revenue concentrated in the seller with a short transition proposed.
- Realisation not tracked. If nobody knows what proportion of time billed is actually collected, the margin is an estimate.
- Work in progress and unbilled time carried on the balance sheet at optimistic values.
- Aged receivables, which in this profession can drift a long way before anyone chases.
- Peer review findings undisclosed, or a review overdue.
- Firm registration cycle unchecked — a triennial renewal falling just after closing.
- Attest competency resting on one person who is leaving with the seller.
- Software and workpaper systems that you cannot extract, or licences that do not transfer.
- Staff with no agreements in a profession where a departing manager can take a client list with them.
- Engagement letters missing or stale. They define scope and liability, and their absence is a risk you assume.
New York-specific items
- Individual CPA licences and registrations verified at source, and the firm registration status and cycle position established [1] .
- Professional entity filings where the practice is held in a P.C., with the 8–10 week review [2] .
- Bulk-sale notice at least 10 days before you take possession [3] . See the bulk-sale guide.
- Workers' compensation, disability and Paid Family Leave from day one [4] , and the seller's unemployment experience rating, which follows the business.
- Client records and confidentiality obligations, which transfer with the practice and which counsel should address in the agreement.
SBA financing
Accounting practices are well understood by SBA lenders because the recurring compliance base is legible as cash flow. Buyer equity injection is 10% of total project cost on a first acquisition, which the SOP states cannot be reduced or eliminated, with no more than half from a standby seller note [5] .
Bring two things to the lender: the fee book split by work type with retention evidenced over three years, and a transition plan that fits inside the 24-month consultancy cap. Both are the questions they will ask, and having them ready is the difference between a fast file and a slow one. See the equity injection planner.
Frequently asked questions
Can a non-CPA own part of an accounting firm in New York?
Accountancy is the exception among the licensed professions here, and it is worth knowing. The Office of the Professions publishes Form 6R, titled "Application for Public Accountancy Firm Registration or Amendment to add Non-Licensee Owners to Existing Firms" — so the regime expressly contemplates non-licensee owners in a registered firm. That is not true of the professional corporation route generally. What conditions attach is a question for the Department and for counsel; the point is that the door exists.
Do accounting firms register separately from the individual CPAs?
Yes. New York licenses Certified Public Accountants individually and separately registers public accountancy firms, with a triennial firm registration on Form 6T. So there are two layers, and the firm layer renews on its own three-year cycle — worth checking where the target sits in that cycle before you set a closing date.
What is attest competency and why does it matter to a buyer?
The Department publishes Form 6C, "Certification of Ownership and Attest Competency". If the practice performs attest work, the firm has to be able to certify that competency — which means the people who provide it are not simply staff you might replace. Establish early whether the practice does attest work and who makes that competency real.
What is peer review and does it affect the deal?
Form 6PR covers "Peer Review, Competency and Annual Statements". Where peer review applies, its history is diligence: ask for the most recent report and any findings. A practice with an unresolved peer review issue is buying you a problem, and it is exactly the kind of thing that does not appear in the financial statements.
How much of an accounting practice's revenue actually transfers?
More than most professional practices, and less than the recurring-revenue framing suggests. Compliance work — tax returns, bookkeeping, payroll — recurs on a calendar and tends to follow the firm. Advisory and relationship-led work follows the partner. Split the fee book on that basis before you value anything.
What is the seasonality risk?
Substantial, and it is a financing question rather than an operating inconvenience. A practice with a heavy tax-season concentration earns much of its year in a few months while its fixed costs and your loan payment run all twelve. Get monthly figures for 36 months and test the trough.
How is the transition usually structured?
By the selling accountant staying long enough to hand over relationships through at least one full cycle — which in this profession means a tax season. Note the constraint if you are borrowing: SBA rules cap a seller consultancy at 24 months in aggregate and bar the seller from remaining an officer, director, stockholder or employee. Two cycles is the practical ceiling.
Sources cited on this page
Every mutable number on this page — program caps, tax rules, thresholds, filing deadlines — traces to one of these primary sources. Rules change; check the source before you act on the number.
- 1 New York State Education Department, Office of the Professions. Forms for Public Accounting Firms. https://www.op.nysed.gov/professions/certified-public-accountants/public-accounting-firms
- 2 New York State Education Department, Office of the Professions. Corporate Entities for Professional Practice — filing instructions. https://www.op.nysed.gov/corporate/disclaimer/section-iii
- 3 NYS Department of Taxation and Finance. Tax Bulletin ST-360: Purchasers' Obligations to Pay Sales Taxes (Bulk Sales). https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/purchasers_obligations_to_pay_sales_taxes.htm
- 4 NYS Workers' Compensation Board. Employers' coverage requirements. https://www.wcb.ny.gov/content/main/Employers/Employers.jsp
- 5 U.S. Small Business Administration. SOP 50 10 8.1 — Appendix 15: 7(a) Changes of Ownership. https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs
Educational only — not legal, tax, lending, or investment advice. Confirm specific rules, rates, and forms with the relevant New York State agency, attorney, CPA, lender, or insurer before acting. See the editorial policy and methodology for how sourcing and review work.