§ 830 - Issuance of shares - Vermont Statutes

§ 830. Issuance of shares

(a) Except as provided in section 881 of this title, a professional corporation may issue shares, fractional shares, and rights or options to purchase shares only to:

(1) individuals who are authorized by law to render a professional service described in the corporation's articles of incorporation;

(2) an employee stock ownership plan as defined in Section 4975(e)(7) of the Internal Revenue Code, if a majority of the voting trustees of the plan are professionals licensed to furnish the pertinent professional services, and the professional corporation's articles of incorporation or bylaws prohibit the direct issuance of ownership interests to anyone other than professionals licensed to furnish the pertinent professional services; or

(3) general partnerships in which all the partners are qualified persons with respect to the professional corporation, and in which at least one partner is authorized by law in this state to render a professional service described in the corporation's articles of incorporation.

(b) If a licensing authority with jurisdiction over a professional corporation 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 a professional corporation, 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. (Added 2001, No. 77 (Adj. Sess.), § 1.)