Arizona Laws 10-2223. Compulsory acquisition of shares after death, dissolution or disqualification of shareholder
A. Except as provided in subsection C of this section, and unless the shares are otherwise acquired by a qualified person within the applicable time period specified in section 10-2227, a professional corporation shall acquire the voting shares of its shareholder within the applicable time period if any of the following occurs:
Terms Used In Arizona Laws 10-2223
- Articles of incorporation: means the original or restated articles of incorporation or articles of merger and all amendments to the articles of incorporation or merger and includes amended and restated articles of incorporation and articles of amendment and merger. See Arizona Laws 10-140
- Bylaws: means the code of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name by which those rules are designated. See Arizona Laws 10-140
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Disqualified person: means an individual or entity that is not or ceases to be a qualified person. See Arizona Laws 10-2201
- disqualified shareholder: means a shareholder described in subsection 10-2223, subsection A, paragraph 1 or 2 or the legal representative of that shareholder. See Arizona Laws 10-2228
- Person: includes an individual and entity. See Arizona Laws 10-140
- Proceeding: includes a civil suit and a criminal, administrative and investigatory action. See Arizona Laws 10-140
- Shareholder: means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation. See Arizona Laws 10-140
- Shares: means the units into which the proprietary interests in a corporation are divided. See Arizona Laws 10-140
- Voting shares: means shares entitled to vote for election of directors of the professional corporation. See Arizona Laws 10-2201
1. The shareholder dies or dissolves and any person to whom the shares are to devolve is not a person to whom section 10-2222 permits the shares to be transferred.
2. The shareholder becomes a disqualified person.
B. The price shall be as follows:
1. If a price for the shares is fixed in accordance with the articles of incorporation or bylaws or by private agreement, that price controls and sections 10-2224, 10-2225 and 10-2226 are inapplicable.
2. If a price is not fixed, in accordance with the articles of incorporation or bylaws or by private agreement, the corporation shall offer to acquire the shares in accordance with section 10-2224, and if the disqualified shareholder rejects the corporation’s purchase offer, either the shareholder or the corporation may commence a proceeding under section 10-2225 to determine the fair value of the shares.
C. This section does not require the acquisition of shares if the disqualification of the shareholder or the transferee lasts no more than five months from the date the disqualification or transfer occurs.
D. This section and section 10-2224 do not prevent or relieve a professional corporation from paying pension benefits or other deferred compensation for services rendered to a former shareholder if otherwise permitted by law.
E. A provision for the acquisition of shares contained in a professional corporation’s articles of incorporation or bylaws or in a private agreement is specifically enforceable.