§ 1516 — Corporate mergers, consolidations and other reorganizations

New York § 1516

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

Text

§ 1516. Corporate mergers, consolidations and other reorganizations.\n (a) Notwithstanding any inconsistent provision of this article, and\nsubject to the limitations in paragraph (d) of this section, a\nprofessional service corporation, including a design professional\nservice corporation, pursuant to the provisions of article nine of this\nchapter, may be merged or consolidated with another corporation formed\npursuant to the provisions of this chapter, with a corporation\nauthorized and registered to practice the same profession pursuant to\nthe applicable provisions of subdivision six of section seventy-two\nhundred nine of the education law (engineer or land surveyor),\nsubdivision four of section seventy-three hundred seven of the education\nlaw (architect) or subdivision four of section seventy-three hundred\ntwenty-seven of the education law (landscape architect) of articles one\nhundred forty-five, one hundred forty-seven and one hundred forty-eight\nof the education law, or with a foreign corporation, or other business\nentity practicing the same profession or professions in this state or\nthe state of its formation, or may be otherwise reorganized, provided\nthat the corporation which survives or which is formed pursuant thereto\nis a professional service corporation, a design professional service\ncorporation, a professional service limited liability company or a\nforeign professional service corporation practicing the same profession\nor professions in this state or the state of incorporation or, if one of\nthe original corporations is authorized to practice pursuant to the\nprovisions of either subdivision six of section seventy-two hundred\nnine, subdivision four of section seventy-three hundred seven or\nsubdivision four of section seventy-three hundred twenty-four of the\neducation law, a corporation authorized and registered to practice the\nsame profession pursuant to the applicable provisions of subdivision six\nof section seventy-two hundred nine of the education law (engineer or\nland surveyor), subdivision four of section seventy-three hundred seven\nof the education law (architect) of articles one hundred forty-five, one\nhundred forty-seven and one hundred forty-eight or subdivision four of\nsection seventy-three hundred twenty-seven of the education law.\n (b) If the surviving business entity is a professional corporation,\nthe restrictions on the issuance, transfer or sale of shares of a\nprofessional service corporation or a design professional service\ncorporation shall be suspended for a period not exceeding thirty days\nwith respect to any issuance, transfer or sale of shares made pursuant\nto such merger, consolidation or reorganization, provided that: (i) no\nperson who would not be eligible to be a shareholder in the absence of\nthis section shall vote the shares of or receive any distribution from\nsuch corporation; (ii) after such merger, consolidation or\nreorganization, any professional service corporation or a design\nprofessional service corporation which survives or which is created\nthereby shall be subject to all of the provisions of this article; and\n(iii) shares thereafter only may be held by persons who are eligible to\nreceive shares of such professional service corporation, design\nprofessional service corporation or such other corporation authorized\nand registered to practice the same profession pursuant to the\napplicable provisions of subdivision six of section seventy-two hundred\nnine of the education law (engineer or land surveyor), subdivision four\nof section seventy-three hundred seven of the education law (architect)\nor subdivision four of section seventy-three hundred twenty-seven of the\neducation law (landscape architect) of articles one hundred forty-five,\none hundred forty-seven and one hundred forty-eight of the education\nlaw, which survives. Nothing herein contained shall be construed as\npermitting the practice of a profession in this state by a corporation\nwhich is not incorporated pursuant to the provisions of this article or\nauthorized to do business in this state pursuant to the provisions of\narticle fifteen-A of this chapter, authorized pursuant to subdivision\nsix of section seventy-two hundred nine of the education law, authorized\npursuant to subdivision four of section seventy-three hundred seven of\nthe education law, authorized pursuant to subdivision four of section\nseventy-three hundred twenty-seven of the education law or authorized\nand registered to practice a profession pursuant to the applicable\nprovisions of article one hundred forty-five, one hundred forty-seven or\none hundred forty-eight of the education law. For the purposes of this\nsection, other reorganizations shall be limited to those reorganizations\ndefined in paragraph one of subsection (a) of section three hundred\nsixty-eight of the internal revenue code.\n (c) If the surviving business entity is a professional service limited\nliability company, the restrictions on the issuance, transfer or sale of\nmembership interests of a professional service limited liability company\nother than the requirements of the first two sentences of subdivision\n(c) of section twelve hundred eleven of the limited liability company\nlaw, shall be suspended for a period not exceeding thirty days with\nrespect to any issuance, transfer or sale of membership interests made\npursuant to such merger or consolidation, provided that: (i) no person\nor business entity who would not be eligible to be a member in the\nabsence of this section shall vote or receive any distribution from such\nlimited liability company; (ii) after such merger or consolidation, any\nprofessional service limited liability company that survives or that is\ncreated thereby shall be subject to all the provisions of the limited\nliability company law; and (iii) membership interests thereafter may be\nheld only by persons or business entities who are eligible to be a\nmember of such professional service limited liability company. Nothing\nherein contained shall be construed as permitting the practice of a\nprofession in this state by a limited liability company that is not\nformed pursuant to the provisions of the limited liability company law\nor authorized to do business in the state pursuant to the provisions of\narticle thirteen of the limited liability company law.\n (d) Notwithstanding the provisions contained in paragraphs (a), (b)\nand (c) of this section, no design professional service corporation\nshall be merged or consolidated with any entity unless such entity is a\nprofessional business organization lawfully organized to provide\nprofessional services pursuant to articles one hundred forty-five, one\nhundred forty-seven and one hundred forty-eight of the education law.\n