39-8-202. Initial license application -- application fee -- standards. (1) An applicant for initial licensure as a professional employer organization or group shall file with the department a completed application on a form provided by the department.
     (2) The application must be accompanied by a nonrefundable application fee and any material or information required by the department that demonstrates compliance with the requirements of this chapter. The application fee is:
     (a) $750 for a resident or nonresident unrestricted license; and
     (b) $500 for a restricted license.
     (3) As a condition of licensure under this chapter, an applicant who is not a resident or who is domiciled outside the state must first be licensed as a professional employer organization or group in the state in which the applicant is a resident or is domiciled if licensing is required by that state.
     (4) An applicant for licensure as a professional employer organization or group shall meet the following standards:
     (a) An individual must be 18 years of age or older.
     (b) A partnership or a limited partnership shall provide the names and home addresses of all partners, indicate whether each partner is a general or a limited partner, and include a copy of the partnership agreement or an affidavit signed by all partners acknowledging that no written partnership agreement exists.
     (c) A corporation shall state the names and home addresses of all officers, directors, and shareholders who own a 5% or greater interest in the corporation and provide a certificate of good standing from the secretary of state demonstrating that the corporation is qualified to do business in this state.
     (d) A limited liability company shall state the names and home addresses of those individuals who own a 5% or greater interest in the limited liability company and provide a certificate of good standing from the secretary of state demonstrating that the company is qualified to do business in this state.
     (e) A group:
     (i) must be authorized to act on behalf of the group;
     (ii) shall include for each professional employer organization within the group the information required in subsection (4); and
     (iii) shall guarantee, on a form provided by the department and executed by each professional employer organization within the group, payment of all financial obligations with respect to wages, payroll-related taxes, insurance premiums, and employee benefits of each other member within the group.
     (5) An applicant shall also provide:
     (a) the trade name or names under which the applicant conducts business, the business's taxpayer or employer identification number, the address of the business's principal place of business in the state, and the addresses of any other offices within the state through which the applicant intends to conduct business as a professional employer organization or group. If the applicant's principal place of business is located in another state, the address must be provided.
     (b) a list by jurisdiction of each name under which the applicant has operated in the preceding 5 years, including any alternative names, names of predecessors, and names of related business entities with common majority ownership, and detailed information on the background of each controlling person to the extent required by the department; and
     (c) other information requested by the department to show that the applicant and each controlling person are of good moral character, have business integrity, and are financially responsible. "Good moral character" means a personal history of honesty, trustworthiness, and fairness; a good reputation for fair dealings; and respect for the rights of others and for the laws of this state and nation.
     (6) Except for an applicant who is granted a restricted license under subsection (8), an applicant shall maintain a tangible accounting net worth of not less than $50,000, evidenced by providing a financial statement prepared in accordance with generally accepted accounting principles and accompanied by a compilation report by an independent certified public accountant. Documents submitted to establish net worth must reflect net worth as of a date not more than 6 months prior to the date on which the application is submitted. A financial statement submitted must be attested by the president, chief financial officer, and at least one controlling person of the professional employer organization or group. In meeting the specified net worth requirement, the applicant may provide to the department a surety bond, letter of credit, or marketable securities acceptable to the department. A surety will not be acceptable to satisfy this requirement unless the applicant submits sufficient evidence to satisfy the department that the surety has adequate resources to satisfy the obligations of the surety. A surety is subject to audit or verification by the department or its agent.
     (7) The applicant shall maintain a positive working capital, as determined in accordance with generally accepted accounting principles.
     (8) The department may issue a restricted license for limited operation within this state to a professional employer organization or group that is a resident of or domiciled in another state if:
     (a) the applicant's state of residence or domicile provides for licensing of professional employer organizations or groups, the applicant is licensed and in good standing in the state of residence or domicile, and that state grants a similar privilege for restricted licensing to professional employer organizations or groups that are residents of or domiciled in this state and that are licensed under this chapter;
     (b) the applicant does not maintain an office, a sales force, or a sales representative in this state and does not solicit clients who are residents of or domiciled in this state; and
     (c) the applicant does not have more than 100 leased employees working in this state.
     (9) An applicant for a nonresident or restricted license shall file, on a form provided by the department, an appointment of a recognized and approved entity as its attorney to receive service of legal process issued against it in this state.
     (10) A license issued under this section remains the property of the department and may not be transferred.

     History: En. Sec. 4, Ch. 344, L. 1995.