Duties upon legal disqualification of member or employee; redemption of and restrictions on transfer and ownership of memberís interest.
1. If any member or employee of a professional association who has been rendering professional service to the public becomes legally disqualified to render the professional service within this State, he shall sever within a reasonable period all professional service with and financial interest in the association; but this chapter does not prevent a professional association from entering into a contract with a member or employee which provides for severance pay or for compensation for past services upon termination of professional service, whether by death or otherwise. Upon the death of a member of the association who has transferred his interest in the association to a revocable trust as permitted by subsection 2, the trustee of the revocable trust may continue to retain any interest so transferred for a reasonable period, but may not exercise any authority concerning the rendering of professional services and may not, except as otherwise provided in NRS 623.349, distribute the interest in the association or its assets to any person not licensed to render the services for which the association was organized.
2. Except as otherwise authorized by NRS 623.349, a membership interest in a professional association may not be sold or transferred except to a natural person who is eligible to be a member of the association or to the personal representative or estate of a deceased or legally incompetent member, except as provided in this subsection. The personal representative of such a member may continue to own such interest for a reasonable period, but may not participate in any decisions concerning the rendering of professional service. A member may transfer his interest in the association or any other interest in the assets of the association 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 association is organized does not participate in any decisions concerning the rendering of those professional services.
3. The articles of association may provide specifically for additional restrictions on the transfer of membersí interests and may provide for the redemption or purchase of such an interest by the association or its other members at prices and in a manner specifically set forth in the articles.
Last modified: February 26, 2006