N.Y. Business Corporation Law 1509 – Disqualification of shareholders, directors, officers and employees
* § 1509. Disqualification of shareholders, directors, officers and
Terms Used In N.Y. Business Corporation Law 1509
- 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.
- Design professional service corporation: means a corporation organized under this article practicing professional engineering, architecture, landscape architecture, geology, or land surveying, or practicing any combination of such professions. See N.Y. Business Corporation Law 1501
- Profession: includes any practice as an attorney and counselor-at-law, or as a licensed physician, and those occupations designated in title eight of the education law. See N.Y. Business Corporation Law 1501
- Professional service: means any type of service to the public which may be lawfully rendered by a member of a profession within the purview of his or her profession. See N.Y. Business Corporation Law 1501
- Professional service corporation: means a corporation organized under this article. See N.Y. Business Corporation Law 1501
employees.
If any shareholder, director, officer or employee of a professional service corporation, including a design professional service corporation, who has been rendering professional service to the public becomes legally disqualified to practice his profession within this state, he shall sever all employment with, and financial interests (other than interests as a creditor) in, such corporation forthwith or as otherwise provided in section 1510 of this article. All provisions of law regulating the rendering of professional services by a person elected or appointed to a public office shall be applicable to a shareholder, director, officer and employee of such corporation in the same manner and to the same extent as if fully set forth herein. Such legal disqualification to practice his profession within this state shall be deemed to constitute an irrevocable offer by the disqualified shareholder to sell his shares to the corporation, pursuant to the provisions of section 1510 of this article or of the certificate of incorporation, by-laws or agreement among the corporation and all shareholders, whichever is applicable. Compliance with the terms of such offer shall be specifically enforceable in the courts of this state. A professional service corporation's failure to enforce compliance with this provision shall constitute a ground for forfeiture of its certificate of incorporation and its dissolution.
* NB Effective until June 8, 2024 * § 1509. Disqualification of shareholders, directors, officers and
employees.
If any shareholder, director, officer or employee of a professional service corporation, including a design professional service corporation, who has been rendering professional service to the public becomes legally disqualified to practice his or her profession within this state, he or she shall sever all employment with, and financial interests (other than interests as a creditor) in, such corporation forthwith or as otherwise provided in section 1510 of this article. All provisions of law regulating the rendering of professional services by a person elected or appointed to a public office shall be applicable to a shareholder, director, officer and employee of such corporation in the same manner and to the same extent as if fully set forth herein. Such legal disqualification to practice his or her profession within this state shall be deemed to constitute an irrevocable offer by the disqualified shareholder to sell his or her shares to the corporation, pursuant to the provisions of section 1510 of this article or of the certificate of incorporation, by-laws or agreement among the corporation and all shareholders, whichever is applicable. Compliance with the terms of such offer shall be specifically enforceable in the courts of this state. A professional service corporation's failure to enforce compliance with this provision shall constitute a ground for forfeiture of its certificate of incorporation and its dissolution.
* NB Effective June 8, 2024