2023 New York Laws › BSC - Business Corporation › Article 15 - Professional Service Corporations › 1507 - Issuance of Shares.

§ 1507. Issuance of shares.
(a)  A  professional  service  corporation  may  issue  shares only to
individuals who are authorized by  law  to  practice  in  this  state  a
profession  which such corporation is authorized to practice and who are
or have been  engaged  in  the  practice  of  such  profession  in  such
corporation  or a predecessor entity, or who will engage in the practice
of such profession in such corporation within thirty days  of  the  date
such  shares  are  issued.  No  shareholder  of  a  professional service
corporation shall enter into a voting trust  agreement,  proxy,  or  any
other  type  agreement  vesting  in  another  person, other than another
shareholder of the same corporation or a person who would be eligible to
become a shareholder if employed by the corporation,  the  authority  to
exercise  voting  power  of any or all of his shares. All shares issued,
agreements made, or proxies granted in violation of this  section  shall
be void.
(b)  A  design  professional  service  corporation may issue shares to
individuals who are authorized by  law  to  practice  in  this  state  a
profession  which such corporation is authorized to practice and who are
or have been  engaged  in  the  practice  of  such  profession  in  such
corporation  or a predecessor entity, or who will engage in the practice
of such profession in such corporation within thirty days  of  the  date
such  shares  are  issued. A design professional service corporation may
also  issue  shares  to  employee  stock  ownership  plans  (ESOPs)  and
employees  of  the  corporation  not  licensed  as design professionals,
provided that:
* (i) greater than seventy-five percent of the outstanding  shares  of
stock of the corporation are owned by design professionals,
* NB Effective until July 21, 2024
* (i)  greater  than seventy-five percent of the outstanding shares of
stock of the corporation are owned by design professionals and  an  ESOP
(or  ESOPs)  with greater than seventy-five percent of the plan's voting
trustees or greater than seventy-five percent of  the  plan's  committee
members being design professionals,
* NB Effective July 21, 2024
* (ii)  an  ESOP,  either  in  part  or  in  its  entirety,  shall not
constitute part of the greater than seventy-five percent owned by design
professionals,
* NB Effective until July 21, 2024
* (ii) an  ESOP,  either  in  part  or  in  its  entirety,  shall  not
constitute part of the greater than seventy-five percent owned by design
professionals  unless  greater  than  seventy-five percent of the plan's
voting trustees or greater  than  seventy-five  percent  of  the  plan's
committee members are design professionals,
* NB Effective July 21, 2024
(iii)  greater  than  seventy-five percent of the directors are design
professionals,
(iv) greater than seventy-five percent  of  the  officers  are  design
professionals,
(v)  the  president, the chairperson of the board of directors and the
chief executive officer or officers are design professionals, and
(vi) the single largest shareholder is either a design professional or
an ESOP with greater than seventy-five  percent  of  the  plan's  voting
trustees  being  design  professionals  and  greater  than  seventy-five
percent of the plan's committee members being design professionals.
No shareholder of a  design  professional  service  corporation  shall
enter  into  a  voting  trust  agreement,  proxy  or  any  other type of
agreement vesting in another person, other than another  shareholder  of
the  same  corporation, the authority to exercise voting power of any or

all of his or her shares. All shares issued, agreements made or  proxies
granted in violation of this section shall be void.
* (c)  Any  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  may issue shares to
individuals who are authorized by law to  practice  in  this  state  the
profession  which such corporation is authorized to practice or who will
engage in the practice of such profession  in  such  corporation  within
thirty days of the date such shares are issued and may also issue shares
to  employees  of  the  corporation  not  licensed  as  certified public
accountants, provided that:
(i) at least a simple majority of the outstanding shares of  stock  of
the corporation are owned by certified public accountants,
(ii)  at least a simple majority of the directors are certified public
accountants,
(iii) at least a simple majority of the officers are certified  public
accountants,
(iv)  the president, the chairperson of the board of directors and the
chief executive officer or officers are certified public accountants. No
shareholder of a professional service corporation  established  pursuant
to  paragraph (h) of section fifteen hundred three of this article shall
enter into a  voting  trust  agreement,  proxy  or  any  other  type  of
agreement  vesting  in  another person, the authority to exercise voting
power of any or all of his or her shares. All agreements made or proxies
granted in violation of this section shall be void.
* NB Effective June 8, 2024