§ 1507 — Issuance of shares

New York § 1507

• Jurisdiction: New York
• Law BSC: Business Corporation
• Art. 15: Professional Service Corporations

Text

§ 1507. Issuance of shares.\n (a) A professional service corporation may issue shares only to\nindividuals who are authorized by law to practice in this state a\nprofession which such corporation is authorized to practice and who are\nor have been engaged in the practice of such profession in such\ncorporation or a predecessor entity, or who will engage in the practice\nof such profession in such corporation within thirty days of the date\nsuch shares are issued. No shareholder of a professional service\ncorporation shall enter into a voting trust agreement, proxy, or any\nother type agreement vesting in another person, other than another\nshareholder of the same corporation or a person who would be eligible to\nbecome a shareholder if employed by the corporation, the authority to\nexercise voting power of any or all of his shares. All shares issued,\nagreements made, or proxies granted in violation of this section shall\nbe void.\n (b) A design professional service corporation may issue shares to\nindividuals who are authorized by law to practice in this state a\nprofession which such corporation is authorized to practice and who are\nor have been engaged in the practice of such profession in such\ncorporation or a predecessor entity, or who will engage in the practice\nof such profession in such corporation within thirty days of the date\nsuch shares are issued. A design professional service corporation may\nalso issue shares to employee stock ownership plans (ESOPs) and\nemployees of the corporation not licensed as design professionals,\nprovided that:\n (i) greater than seventy-five percent of the outstanding shares of\nstock of the corporation are owned by design professionals and an ESOP\n(or ESOPs) with greater than seventy-five percent of the plan's voting\ntrustees or greater than seventy-five percent of the plan's committee\nmembers being design professionals,\n (ii) an ESOP, either in part or in its entirety, shall not constitute\npart of the greater than seventy-five percent owned by design\nprofessionals unless greater than seventy-five percent of the plan's\nvoting trustees or greater than seventy-five percent of the plan's\ncommittee members are design professionals,\n (iii) greater than seventy-five percent of the directors are design\nprofessionals,\n (iv) greater than seventy-five percent of the officers are design\nprofessionals,\n (v) the president, the chairperson of the board of directors and the\nchief executive officer or officers are design professionals, and\n (vi) the single largest shareholder is either a design professional or\nan ESOP with greater than seventy-five percent of the plan's voting\ntrustees being design professionals and greater than seventy-five\npercent of the plan's committee members being design professionals.\n No shareholder of a design professional service corporation shall\nenter into a voting trust agreement, proxy or any other type of\nagreement vesting in another person, other than another shareholder of\nthe same corporation, the authority to exercise voting power of any or\nall of his or her shares. All shares issued, agreements made or proxies\ngranted in violation of this section shall be void.\n (c) Any firm established for the business purpose of incorporating as\na professional service corporation pursuant to paragraph (h) of section\nfifteen hundred three of this article may issue shares to individuals\nwho are authorized by law to practice in this state the profession which\nsuch corporation is authorized to practice or who will engage in the\npractice of such profession in such corporation within thirty days of\nthe date such shares are issued and may also issue shares to employees\nof the corporation not licensed as certified public accountants,\nprovided that:\n (i) at least a simple majority of the outstanding shares of stock of\nthe corporation are owned by certified public accountants,\n (ii) at least a simple majority of the directors are certified public\naccountants,\n (iii) at least a simple majority of the officers are certified public\naccountants,\n (iv) the president, the chairperson of the board of directors and the\nchief executive officer or officers are certified public accountants. No\nshareholder of a professional service corporation established pursuant\nto paragraph (h) of section fifteen hundred three of this article shall\nenter into a voting trust agreement, proxy or any other type of\nagreement vesting in another person, the authority to exercise voting\npower of any or all of his or her shares. All agreements made or proxies\ngranted in violation of this section shall be void.\n