Opinion No. (2001)

BILL LOCKYER Attorney General CLAYTON P. ROCHE Deputy Attorney General THE HONORABLE DICK MONTEITH, MEMBER OF THE STATE SENATE, has requested an opinion on the following question: Where a city councilman owns 48 percent of the shares of an architectural corporation, with the remaining shares owned by three other licensed architects, and the corporation leases its premises from the councilman, may one of the other three architects establish a separate firm for the purpose of contracting with the city to provide architectural services utilizing the corporation's premises, employees, and equipment if the corporation bills the firm for its pro rata share of the rent, employees' services, and use of equipment, and the corporation does not share in the profits of the firm under the city's contracts? CONCLUSION Where a city councilman owns 48 percent of the shares of an architectural corporation, with the remaining shares owned by three other licensed architects, and the corporation leases its premises from the councilman, one of the other three architects may not establish a separate firm for the purpose of contracting with the city to provide architectural services utilizing the…