Section 10A-4-3.01

Issuance and transfer of shares.

(a) A domestic professional corporation may issue shares, fractional shares, and rights or options to purchase shares only to qualified persons.

(b) Where deemed necessary by the licensing authority for any profession in order to prevent violations of the ethical standards of the profession, the licensing authority may, within its rule-making power, by rule further restrict, condition, or abridge the authority of domestic professional corporations to issue shares, but no rule shall, of itself, have the effect of causing a shareholder of a professional corporation at the time the rule becomes effective to become a disqualified person unless and to the extent specified by the licensing authority.

(c) A shareholder of a domestic professional corporation may transfer or pledge shares, fractional shares, and rights or options to purchase shares of the professional corporation only to qualified persons.

(d) Any issuance or transfer of shares in violation of this section shall be void, however, nothing contained herein shall prohibit the transfer of shares of a domestic professional corporation by operation of law or court decree.

(e) Nothing in this section shall require domestic nonprofit professional corporations to issue shares. The corporations may have members and all members must be qualified persons. A licensing authority may, within its rule-making power, by rule further restrict, condition, or abridge membership in domestic nonprofit corporations, but no rule shall, of itself, have the effect of causing a member of a domestic nonprofit professional corporation at the time the rule becomes effective to become a disqualified person unless and to the extent specified by the licensing authority.

(Acts 1983, No. 83-514, p. 763, §9; §10-4-388; amended and renumbered by Act 2009-513, p. 967, §205.)