Professional Service Organizations: A Reply

Abstract

In applying the term "association" as used in section 7701 (a) (3), Mr. Thies argues that we can find guidance in a "largely overlooked" cranny of the law: the "common law association." Asserting that this form of organization was characterized by centralized management and continuity of life, but not by limited liability or transferability of interests, Mr. Thies concludes that the first two characteristics alone are the only proper criteria of association status. The test, in other words, is whether the organization under examination resembles a "classic common law association," not whether it resembles a corporation; and this in turn means that centralizccl management and continuity of life are sufficient (and, evidently, necessary) to confer association status under section 7701(a) (3). Mr. Thies then asserts that "virtually all" new-style professional association and corporation statutes satisfy these criteria.