2023 New York Laws › BSC - Business Corporation › Article 15 - Professional Service Corporations › 1511 - Transfer of Shares.

§ 1511. Transfer of shares.
* (a) No shareholder of a professional service corporation or a design
professional service corporation may sell or transfer his shares in such
corporation  except to another individual who is eligible to have shares
issued to him  by  such  corporation  or  except  in  trust  to  another
individual  who  would be eligible to receive shares if he were employed
by the corporation. Nothing  herein  contained  shall  be  construed  to
prohibit  the transfer of shares by operation of law or by court decree.
No transferee of shares by operation of law or court decree may vote the
shares for any purpose  whatsoever  except  with  respect  to  corporate
action  under  sections 909 and 1001 of this chapter. The restriction in
the preceding sentence shall not apply, however, where  such  transferee
would be eligible to have shares issued to him if he were an employee of
the corporation and, if there are other shareholders, a majority of such
other  shareholders  shall  fail  to  redeem  the shares so transferred,
pursuant to section 1510 of this article, within sixty days of receiving
written notice of  such  transfer.  Any  sale  or  transfer,  except  by
operation of law or court decree or except for a corporation having only
one  shareholder,  may  be  made  only  after  the  same shall have been
approved by the board  of  directors,  or  at  a  shareholders'  meeting
specially  called  for  such purpose by such proportion, not less than a
majority,  of  the  outstanding  shares  as  may  be  provided  in   the
certificate  of  incorporation  or  in  the by-laws of such professional
service corporation. At such shareholders' meeting the  shares  held  by
the  shareholder  proposing  to  sell  or transfer his shares may not be
voted or counted for any purpose, unless all shareholders  consent  that
such shares be voted or counted. The certificate of incorporation or the
by-laws  of  the  professional  service corporation, or the professional
service corporation and  the  shareholders  by  private  agreement,  may
provide,  in lieu of or in addition to the foregoing provisions, for the
alienation of shares and may require the redemption or purchase of  such
shares  by  such  corporation at prices and in a manner specifically set
forth therein. The existence of the restrictions on the sale or transfer
of shares, as contained in this  article  and,  if  applicable,  in  the
certificate   of   incorporation,   by-laws,  stock  purchase  or  stock
redemption agreement, shall be noted conspicuously on the face  or  back
of  every  certificate  for  shares  issued  by  a  professional service
corporation. Any sale or transfer  in  violation  of  such  restrictions
shall be void.
* NB Effective until June 8, 2024
* (a)  No shareholder of a professional service corporation, including
a design professional service corporation, may sell or transfer  his  or
her  shares  in  such  corporation  except  to another individual who is
eligible to have shares issued to him or  her  by  such  corporation  or
except  in  trust to another individual who would be eligible to receive
shares if he or she were employed by  the  corporation.  Nothing  herein
contained  shall  be  construed  to  prohibit  the transfer of shares by
operation of law  or  by  court  decree.  No  transferee  of  shares  by
operation  of  law  or  court decree may vote the shares for any purpose
whatsoever except with respect to corporate action  under  sections  909
and  1001  of  this chapter.   The restriction in the preceding sentence
shall not apply, however, where such transferee  would  be  eligible  to
have  shares  issued  to him or her if he or she were an employee of the
corporation and, if there are other shareholders,  a  majority  of  such
other  shareholders  shall  fail  to  redeem  the shares so transferred,
pursuant to section 1510 of this article, within sixty days of receiving
written notice of such transfer.    Any  sale  or  transfer,  except  by
operation of law or court decree or except for a corporation having only

one  shareholder,  may  be  made  only  after  the  same shall have been
approved by the board  of  directors,  or  at  a  shareholders'  meeting
specially  called  for  such purpose by such proportion, not less than a
majority,   of  the  outstanding  shares  as  may  be  provided  in  the
certificate of incorporation or in  the  by-laws  of  such  professional
service  corporation.  At  such shareholders' meeting the shares held by
the shareholder proposing to sell or transfer his or her shares may  not
be  voted  or  counted  for any purpose, unless all shareholders consent
that such shares be voted or counted. The certificate  of  incorporation
or   the  by-laws  of  the  professional  service  corporation,  or  the
professional  service  corporation  and  the  shareholders  by   private
agreement,  may  provide,  in  lieu  of  or in addition to the foregoing
provisions, for the alienation of shares and may require the  redemption
or purchase of such shares by such corporation at prices and in a manner
specifically  set  forth therein.   The existence of the restrictions on
the sale or transfer of shares, as contained in  this  article  and,  if
applicable, in the certificate of incorporation, by-laws, stock purchase
or  stock redemption agreement, shall be noted conspicuously on the face
or back of every certificate for shares issued by a professional service
corporation. Any sale or transfer  in  violation  of  such  restrictions
shall be void.
* NB Effective June 8, 2024
(b) A design professional service corporation shall purchase or redeem
the  shares  of a non-design professional shareholder in the case of his
or  her  termination  of  employment  within  thirty  days  after   such
termination.  A  design  professional  service  corporation shall not be
required to purchase or redeem the shares  of  a  terminated  non-design
professional  shareholder  if such shares, within thirty days after such
termination,  are  sold  or  transferred  to  another  employee  of  the
corporation pursuant to this article.
* (c)  A firm established for the business purpose of incorporating as
a professional service corporation pursuant to paragraph (h) of  section
fifteen  hundred  three  of  this  article, shall purchase or redeem the
shares of a non-licensed professional shareholder in the case of his  or
her termination of employment within thirty days after such termination.
A  firm  established  for  the  business  purpose  of incorporating as a
professional service corporation pursuant to paragraph  (h)  of  section
fifteen hundred three of this article, shall not be required to purchase
or   redeem   the  shares  of  a  terminated  non-licensed  professional
shareholder if such shares, within thirty days after  such  termination,
are  sold or transferred to another employee of the corporation pursuant
to this article.
* NB Effective June 8, 2024