North Carolina SB 193: Amend Professional Corp. Act/AB.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S 1

SENATE BILL 193*

Short Title: Amend Professional Corp. Act/AB. (Public)

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Sponsors: Senators Hartsell; and Soles.

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Referred to: Judiciary I.

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March 1, 1999

A BILL TO BE ENTITLED 1
AN ACT TO AMEND THE PROFESSIONAL CORPORATION ACT TO PERMIT 2
CERTAIN EMPLOYEE RETIREMENT PLANS TO HOLD SECURITIES AS A 3
LICENSEE AND TO REVISE THE DEFINITION OF A FOREIGN 4
PROFESSIONAL CORPORATION THAT MAY BE AUTHORIZED TO DO 5
BUSINESS IN THIS STATE, AS RECOMMENDED BY THE GENERAL 6
STATUTES COMMISSION. 7
The General Assembly of North Carolina enacts: 8
Section 1. G.S. 55B-6 reads as rewritten: 9
"§ 55B-6. Capital stock. 10
(a) Except as provided in subsection (b), a professional corporation may issue 11
shares of its capital stock only to a licensee as defined in G.S. 55B-2, and a shareholder 12
may voluntarily transfer such shares of stock issued to him only to another such licensee. 13
No share or shares of any stock of such corporation shall be transferred upon the books of 14
the corporation unless the corporation has received a certification of the appropriate 15
licensing board that the transferee of such shares is a licensee. Provided, it shall be lawful 16
in the case of professional corporations rendering services as defined in Chapters 83A, 17
89A, 89C, and 89E, for non-licensed employees of such corporation to own not more 18
than one-third of the total issued and outstanding shares of such corporation. Provided 19
further, subject to any additional conditions that the appropriate licensing board may by 20

GENERAL ASSEMBLY OF NORTH CAROLINA 1999
Page 2 SENATE BILL 193* version 1
rule or order impose in the public interest, it shall be lawful for individuals who are not 1
licensees but who perform professional services on behalf of a professional corporation in 2
another jurisdiction in which the corporation maintains an office, and who are duly 3
licensed to perform professional services under the laws of the other jurisdiction, to be 4
shareholders of the corporation so long as there is at least one shareholder who is a 5
licensee as defined in G.S. 55B-2, and the corporation renders its professional services in 6
the State only through those shareholders that are licensed in North Carolina. Upon the 7
transfer of any shares of such corporation to a non-licensed employee of such 8
corporation, the corporation shall inform the appropriate licensing board of the name and 9
address of the transferee and the number of shares issued to such nonprofessional 10
transferee. Any share of stock of such corporation issued or transferred in violation of 11
this section shall be null and void. No shareholder of a professional corporation shall 12
enter into a voting trust agreement or any other type of agreement vesting in another 13
person the authority to exercise the voting power of any or all of his stock. 14
(b) A professional corporation formed pursuant to this Chapter may issue one 15
hundred percent (100%) of its capital stock to another professional corporation in order 16
for that corporation (the distributing corporation) to distribute the stock of the controlled 17
corporation to one or more shareholders of the distributing corporation in accordance 18
with section 355 of the Internal Revenue Code of 1986, as amended. The distributing 19
corporation shall distribute the stock of the controlled corporation within 30 days after 20
the stock was issued to the distributing corporation. A share of stock of the controlled 21
corporation that has not been transferred to a licensee more than 30 days after it was 22
issued to the distributing corporation is void. 23
(a) Subject to subsection (d) of this section and except as provided in subsections 24
(b), (c), and (e) of this section, a professional corporation may issue shares of its capital 25
stock only to a licensee as defined in G.S. 55B-2, and a shareholder may voluntarily 26
transfer shares of stock issued to the shareholder only to another licensee. No share or 27
shares of any stock of a professional corporation shall be transferred upon the books of 28
the corporation unless the corporation has received a certification of the appropriate 29
licensing board that the transferee is a licensee. The issuance or transfer of any share of 30
stock in violation of this section is null and void. No shareholder of a professional 31
corporation shall enter into a voting trust agreement or any other type of agreement 32
vesting in another person the authority to exercise the voting power of any of the stock of 33
a professional corporation. 34
(b) A professional corporation formed pursuant to this Chapter may issue one 35
hundred percent (100%) of its capital stock to another professional corporation in order 36
for that corporation (the distributing corporation) to distribute in accordance with section