Section 10-10-7 Stock and nonstock associations; nature and transferability of members' interests. - Alabama Statutes

Section 10-10-7

Stock and nonstock associations; nature and transferability of members' interests.

A professional association organized pursuant to the provisions of this chapter may issue stock or certificates of evidence of ownership of an interest in the assets of the professional association to the members of a stock-type association, or the association may be a nonstock organization with the members owning no individual interest in the assets of the association but with the rights and duties specified in the articles of association, or the association may be a nonstock organization with the members owning undivided interests in the assets of the association according to the articles of association. The stock or certificates of ownership, if a stock-type association, or a membership in a nonstock association, shall be freely transferable, except as may be lawfully restricted in the articles of association. A professional association may issue its capital stock to, if it is a stock-type association, or accept as members of the professional association, if a nonstock association, only persons who are duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized. Subject to the provisions of the articles of association, the estate of a member or shareholder who was a person duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized may continue to hold stock or membership pursuant to the articles of association for a reasonable period of administration of the estate, but shall not be authorized to participate in any decisions concerning the rendering of professional service.

(Acts 1961, No. 865, p. 1349, §9.)