79-10-31 - Issuance of shares.
§ 79-10-31. Issuance of shares.
(1) A professional corporation may issue shares, fractional shares and rights or options to purchase shares only to:
(a) Individuals who are authorized by law in this or another state to render a professional service described in the corporation's articles of incorporation;
(b) Professional corporations, domestic or foreign, authorized by law in this state to render a professional service described in the corporation's articles of incorporation;
(c) General partnerships in which all the partners are individuals or entities otherwise authorized by paragraph (a), (b) or (d) of this subsection (1) to be shareholders of a professional corporation under this chapter;
(d) Any other individual or entity not included in paragraph (a), (b) or (c) of this subsection (1) if expressly authorized by the licensing authority having jurisdiction over the professional services described in the articles of incorporation of the professional corporation.
(2) A licensing authority with jurisdiction over a profession may by rule restrict or condition, or revoke in part, the authority of professional corporations subject to its jurisdiction to issue shares. A rule promulgated under this section does not, of itself, make a shareholder of a professional corporation at the time the rule becomes effective a disqualified person.
(3) The articles of incorporation may provide for additional limitations and restrictions on the ownership of shares or for additional qualifications of shareholders and such limitations, restrictions or qualifications shall be valid and enforceable in each instance.
(4) Shares issued in violation of this section or a rule promulgated under this section are void.
Sources: Laws, 1995, ch. 494, § 10, eff from and after July 1, 1995.