N.Y. Business Corporation Law 1511 – Transfer of shares
§ 1511. Transfer of shares.
Terms Used In N.Y. Business Corporation Law 1511
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Design professional: means an individual licensed and registered pursuant to title eight of the education law to practice professional engineering, architecture, landscape architecture, geology or land surveying. See N.Y. Business Corporation Law 1501
- Design professional service corporation: means a corporation organized under this article practicing professional engineering, architecture, landscape architecture, geology, or land surveying, or practicing any combination of such professions. See N.Y. Business Corporation Law 1501
- Professional service: means any type of service to the public which may be lawfully rendered by a member of a profession within the purview of his or her profession. See N.Y. Business Corporation Law 1501
- Professional service corporation: means a corporation organized under this article. See N.Y. Business Corporation Law 1501
* (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