13.1-543 - Definitions. - Virginia Statutes

§ 13.1-543. Definitions.

A. As used in this chapter:

"Eligible employee stock ownership plan" means an employee stock ownershipplan as such term is defined in § 4975(e) (7) of the Internal Revenue Code of1986, as amended, sponsored by a professional corporation and with respect towhich:

1. All of the trustees of the employee stock ownership plan are individualswho are duly licensed or otherwise legally authorized to render theprofessional services for which the professional corporation is organizedunder this chapter; however, if a conflict of interest exists for one or moretrustees with respect to a specific issue or transaction, such trustees mayappoint a special independent trustee or special fiduciary, who is not dulylicensed or otherwise legally authorized to render the professional servicesfor which the professional corporation is organized under this chapter, whichspecial independent trustee shall be authorized to make decisions only withrespect to the specific issue or transaction that is the subject of theconflict;

2. The employee stock ownership plan provides that no shares, fractionalshares, or rights or options to purchase shares of the professionalcorporation shall at any time be issued, sold, or otherwise transferreddirectly to anyone other than an individual duly licensed or otherwiselegally authorized to render the professional services for which theprofessional corporation is organized under this chapter, unless such sharesare transferred as a plan distribution to a plan beneficiary and subject toimmediate repurchase by the professional corporation, the employee stockownership plan or another person authorized to hold such shares; however:

a. With respect to a professional corporation rendering the professionalservices of public accounting or certified public accounting:

(1) The employee stock ownership plan may permit individuals who are not dulylicensed or otherwise legally authorized to render these services toparticipate in such plan, provided such individuals are employees of thecorporation and hold less than a majority of the beneficial interests in suchplan; and

(2) At least 51% of the total of allocated and unallocated equity interestsin the corporation sponsoring such employee stock ownership plan are held (i)by the trustees of such employee stock ownership plan for the benefit ofpersons holding a valid CPA certificate as defined in § 54.1-4400, withunallocated shares allocated for these purposes pursuant to § 409(p) of theInternal Revenue Code of 1986, as amended, or (ii) by individual employeesholding a valid CPA certificate separate from any interests held by suchemployee stock ownership plan; and

b. With respect to a professional corporation rendering the professionalservices of architects, professional engineers, land surveyors, landscapearchitects, or certified interior designers, the employee stock ownershipplan may permit individuals who are not duly licensed to render the servicesof architects, professional engineers, land surveyors, or landscapearchitects, or individuals legally authorized to use the title of certifiedinterior designers to participate in such plan, provided such individuals areemployees of the corporation and together hold not more than one-third of thebeneficial interests in such plan, and that the total of the shares (i) heldby individuals who are employees but not duly licensed to render suchservices or legally authorized to use a title and (ii) held by the trusteesof such employee stock ownership plan for the benefit of individuals who areemployees but not duly licensed to render such services or legally authorizedto use a title, shall not exceed one-third of the shares of the corporation;and

3. The professional corporation, the trustees of the employee stock ownershipplan, and the other shareholders of the professional corporation comply withthe foregoing provisions of the plan.

"Professional business entity" means any entity as defined in § 13.1-603that is duly licensed or otherwise legally authorized under the laws of theCommonwealth or the laws of the jurisdiction under whose laws the entity isformed to render the same professional service as that for which aprofessional corporation or professional limited liability company may beorganized, including, but not limited to, (i) a professional limitedliability company as defined in § 13.1-1102, (ii) a professional corporationas defined in this subsection, or (iii) a partnership that is registered as aregistered limited liability partnership registered under § 50-73.132, all ofthe partners of which are duly licensed or otherwise legally authorized torender the same professional services as those for which the partnership wasorganized.

"Professional corporation" means a corporation whose articles ofincorporation set forth a sole and specific purpose permitted by this chapterand that is either (i) organized under this chapter for the sole and specificpurpose of rendering professional service other than that of architects,professional engineers, land surveyors, or landscape architects, or using atitle other than that of certified interior designers and, except asexpressly otherwise permitted by this chapter, that has as its shareholdersor members only individuals or professional business entities that are dulylicensed or otherwise legally authorized to render the same professionalservice as the corporation, including the trustees of an eligible employeestock ownership plan or (ii) organized under this chapter for the sole andspecific purpose of rendering the professional services of architects,professional engineers, land surveyors, or landscape architects, or using thetitle of certified interior designers, or any combination thereof, and atleast two-thirds of whose shares are held by persons duly licensed within theCommonwealth to perform the services of an architect, professional engineer,land surveyor, or landscape architect, including the trustees of an eligibleemployee stock ownership plan, or by persons legally authorized within theCommonwealth to use the title of certified interior designer; or (iii)organized under this chapter or under Chapter 10 (§ 13.1-801 et seq.) of thistitle for the sole and specific purpose of rendering the professionalservices of one or more practitioners of the healing arts, licensed under theprovisions of Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1, or one or morenurse practitioners, licensed under Chapter 29 (§ 54.1-2900 et seq.) of Title54.1, or one or more optometrists licensed under the provisions of Chapter 32(§ 54.1-3200 et seq.) of Title 54.1, or one or more physical therapists andphysical therapist assistants licensed under the provisions of Chapter 34.1(§ 54.1-3473 et seq.) of Title 54.1, or one or more practitioners of thebehavioral science professions, licensed under the provisions of Chapter 35(§ 54.1-3500 et seq.), 36 (§ 54.1-3600 et seq.) or 37 (§ 54.1-3700 et seq.)of Title 54.1, or one or more practitioners of audiology or speech pathology,licensed under the provisions of Chapter 26 (§ 54.1-2600 et seq.) of Title54.1, or one or more clinical nurse specialists who render mental healthservices licensed under Chapter 30 (§ 54.1-3000 et seq.) of Title 54.1 andregistered with the Board of Nursing, or any combination of practitioners ofthe healing arts, optometry, physical therapy, the behavioral scienceprofessions, and audiology or speech pathology, and all of whose shares areheld by or all of whose members are individuals or professional businessentities duly licensed or otherwise legally authorized to perform theservices of a practitioner of the healing arts, nurse practitioners,optometry, physical therapy, the behavioral science professions, audiology orspeech pathology or of a clinical nurse specialist who renders mental healthservices, including the trustees of an eligible employee stock ownershipplan; however, nothing herein shall be construed so as to allow any member ofthe healing arts, optometry, physical therapy, the behavioral scienceprofessions, audiology or speech pathology or a nurse practitioner orclinical nurse specialist to conduct his practice in a manner contrary to thestandards of ethics of his branch of the healing arts, optometry, physicaltherapy, the behavioral science professions, audiology or speech pathology,or nursing, as the case may be.

"Professional service" means any type of personal service to the publicthat requires as a condition precedent to the rendering of such service oruse of such title the obtaining of a license, certification, or other legalauthorization and shall be limited to the personal services rendered bypharmacists, optometrists, physical therapists and physical therapistassistants, practitioners of the healing arts, nurse practitioners,practitioners of the behavioral science professions, veterinarians, surgeons,dentists, architects, professional engineers, land surveyors, landscapearchitects, certified interior designers, public accountants, certifiedpublic accountants, attorneys-at-law, insurance consultants, audiologists orspeech pathologists, and clinical nurse specialists. For the purposes of thischapter, the following shall be deemed to be rendering the same professionalservice:

1. Architects, professional engineers, and land surveyors; and

2. Practitioners of the healing arts, licensed under the provisions ofChapter 29 (§ 54.1-2900 et seq.) of Title 54.1; nurse practitioners, licensedunder the provisions of Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1;optometrists, licensed under the provisions of Chapter 32 (§ 54.1-3200 etseq.) of Title 54.1; physical therapists and physical therapist assistants,licensed under the provisions of Chapter 34.1 (§ 54.1-3473 et seq.) of Title54.1; practitioners of the behavioral science professions, licensed under theprovisions of Chapters 35 (§ 54.1-3500 et seq.), 36 (§ 54.1-3600 et seq.),and 37 (§ 54.1-3700 et seq.) of Title 54.1; and one or more clinical nursespecialists who render mental health services, licensed under Chapter 30 (§54.1-3000 et seq.) of Title 54.1 and are registered with the Board of Nursing.

B. Persons who practice the healing art of performing professional clinicallaboratory services within a hospital pathology laboratory shall be legallyauthorized to do so for purposes of this chapter if such persons (i) hold adoctorate degree in the biological sciences or a board certification in theclinical laboratory sciences and (ii) are tenured faculty members of anaccredited medical college or university that is an "educationalinstitution" within the meaning of § 23-14.

(1970, c. 77; 1972, c. 180; 1980, cc. 701, 757; 1981, c. 217; 1985, c. 576;1989, c. 665; 1990, cc. 481, 595; 1992, cc. 13, 16; 1994, c. 349; 1999, c.83; 2000, cc. 194, 688, 763; 2003, c. 678; 2006, cc. 672, 715; 2008, c. 265;2009, c. 309.)