Restrictions on ownership and transfer of shares.
1. Except as otherwise provided in this section and NRS 623.349:
(a) No corporation organized under the provisions of this chapter may issue any of its stock to anyone other than a natural person who is licensed to render the same specific professional services as those for which the corporation was incorporated.
(b) No stockholder of a corporation organized under this chapter may enter into a voting trust agreement or any other type of agreement vesting another person with the authority to exercise the voting power of any or all of his stock, unless the other person is licensed to render the same specific professional services as those for which the corporation was incorporated.
(c) No shares of a corporation organized under this chapter may be sold or transferred except to a natural person who is eligible to be a stockholder of the corporation or to the personal representative or estate of a deceased or legally incompetent stockholder. The personal representative or estate of the stockholder may continue to own shares for a reasonable period, but may not participate in any decisions concerning the rendering of professional services.
Ę The articles of incorporation or bylaws may provide specifically for additional restrictions on the transfer of shares and may provide for the redemption or purchase of the shares by the corporation, its stockholders or an eligible individual account plan complying with the requirements of subsection 2 at prices and in a manner specifically set forth. A stockholder may transfer his shares in the corporation or any other interest in the assets of the corporation to a revocable trust if he acts as trustee of the revocable trust and any person who acts as cotrustee and is not licensed to perform the services for which the corporation was incorporated does not participate in any decisions concerning the rendering of those services.
2. Except as otherwise provided in NRS 623.349, a person not licensed to render the professional services for which the corporation was incorporated may own a beneficial interest in any of the assets, including corporate shares, held for his account by an eligible individual account plan sponsored by the professional corporation for the benefit of its employees, which is intended to qualify under section 401 of the Internal Revenue Code, 26 U.S.C. § 401, if the terms of the trust are such that the total number of shares which may be distributed for the benefit of persons not licensed to render the professional services for which the corporation was incorporated is less than a controlling interest and:
(a) The trustee of the trust is licensed to render the same specific professional services as those for which the corporation was incorporated; or
(b) The trustee is not permitted to participate in any corporate decisions concerning the rendering of professional services in his capacity as trustee.
Ę A trustee who is individually a stockholder of the corporation may participate in his individual capacity as a stockholder, director or officer in any corporate decision.
3. Except as otherwise provided in subsection 4, a professional corporation in which all the stockholders who are natural persons are licensed to render the same specific professional service may acquire and hold stock in another professional corporation, or in a similar corporation organized pursuant to the corresponding law of another state, only if all the stockholders who are natural persons of the corporation whose stock is acquired are licensed in that corporation’s state of incorporation to render the same specific professional service as the stockholders who are natural persons of the professional corporation that acquires the stock.
4. A professional corporation practicing pursuant to NRS 623.349 in which all the stockholders are natural persons, regardless of whether or not the natural persons are licensed to render the same specific professional service, may acquire and hold stock in another professional corporation or in a similar corporation organized pursuant to the corresponding law of another state if control and two-thirds ownership of the business organization or association that is acquired is held by persons registered or licensed pursuant to the applicable provisions of chapter 623, 623A or 625 of NRS. As used in this subsection, “control” has the meaning ascribed to it in NRS 623.349.
5. Any act in violation of this section is void and does not pass any rights or privileges or vest any powers, except to an innocent person who is not a stockholder and who has relied on the effectiveness of the action.
Last modified: February 26, 2006