48-101-610 - Stock Limitations on ownership. - Tennessee Statutes

48-101-610. Stock Limitations on ownership.

(a)  (1)  A professional corporation may issue shares, fractional shares, and rights to purchase shares.

     (2)  A professional corporation may only issue shares for sale to other persons not licensed to practice such profession in Tennessee if the licensing authority which licenses the professionals forming such corporations specifically authorizes the issuance of such shares. If permitted by the authority which licenses such professionals, and if such professionals form corporations, such corporations may issue such shares, fractional shares and rights or options to purchase shares only to:

          (A)  Individuals who are authorized by law in this or another state to render a professional service described in the corporation's charter;

          (B)  General partnerships in which all the partners are qualified persons with respect to the professional corporation and in which at least one (1) partner is authorized by law in this state to render a professional service described in the corporation's charter;

          (C)  Professional corporations, domestic or foreign, authorized by law in this state to render a professional service described in the corporation's charter; or

          (D)  Professional limited liability companies, domestic or foreign, authorized by law in this state to render a professional service described in the professional limited liability company's articles.

(b)  If a licensing authority with jurisdiction over a profession considers it necessary to prevent violation of the ethical standards of the profession, the authority may by rule restrict or condition, or revoke in part, the authority of professional corporations subject to its jurisdiction to issue shares. A rule promulgated under this section does not, of itself, make a shareholder of a professional corporation at the time the rule becomes effective a disqualified person.

(c)  Shares issued in violation of this section or a rule promulgated under this section are void.

(d)  Notwithstanding any other provision of this chapter, the following health care professionals shall have a right to form and own shares in the same professional corporation formed pursuant to this part:

     (1)  Optometrists licensed under title 63, chapter 8, and ophthalmologists licensed under title 63, chapter 6 or 9;

     (2)  Podiatrists licensed under title 63, chapter 3, and physicians licensed under title 63, chapter 6 or 9, except radiologists, pathologists, or anesthesiologists;

     (3)  Doctors of chiropractic licensed under title 63, chapter 4, and physicians licensed under title 63, chapter 6 or 9, except radiologists, pathologists, and anesthesiologists; and

     (4)  Physician assistants licensed under title 63, chapter 19, part 1, and physicians licensed under title 63, chapter 6 or 9, except radiologists, pathologists, and anesthesiologists.

The services rendered by these health care professionals are considered related and complementary to one another; provided, that nothing in this chapter shall be construed to alter the lawful scope of practice of a professional forming a professional corporation pursuant to this subsection (d); and provided further, that nothing in this part shall be construed to allow any professional forming a professional corporation pursuant to this subsection (d) to conduct the professional's practice in a manner contrary to the standards of ethics applicable to the profession. Such individual shall accurately state the individual's professional credentials on any advertisement to the public.

[Acts 1992, ch. 698, § 1; 1994, ch. 868, § 9; T.C.A., § 48-3-610; Acts 2002, ch. 742, § 1; 2003, ch. 45, § 1; 2005, ch. 59, § 1.]