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Please find below proposed amendments to the definition of "Alternative Business Structure" and "Economic interest" as defined in proposed ACJA 7-209. These proposed amendments to the definitions are submitted by: May Lu, Esq.; John Hay, Esq.; James O’Sullivan, Esq.; James Reynolds, Esq.; and Lynda Shely, Esq. Arizona Code of Judicial Administration Part 7: Administrative Office of the Courts Chapter 2: Certification and Licensing Programs Section 7-209: Alternative Business Structures A. Definitions. “Alternative business structure” (“ABS”) is a business entity that includes nonlawyers who have an economic interest or decision-making authority in the firm and provides legal services in accord with Supreme Court Rules 31 and 31.1(c). “Economic interest” means (1) a share of a corporation’s stock, a capital or profits interest in a partnership or limited liability company, or a similar ownership interest in any other form of entity, or (2) a right to receive payments for providing to or on behalf of the entity management services, property, or the use of property (including software and other intangible personal property) that is based, in whole or in part, on the firm’s gross revenue or profits or any portion thereof. Notwithstanding the foregoing, “economic interest” does not mean employment-based compensation pursuant to a plan qualified under the Internal Revenue Code of 1986, as hereafter may be amended, or any successor rule, or discretionary bonuses paid to employees.
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