13.1-552 - Conversion into nonprofessional corporation; disposition of shares of deceased or disqualified shareholders. - Virginia Statutes

§ 13.1-552. Conversion into nonprofessional corporation; disposition ofshares of deceased or disqualified shareholders.

A. A corporation under this chapter shall have perpetual existence until itscorporate existence is terminated in accordance with other provisions of thistitle.

B. Whenever all shareholders of a corporation licensed under this chaptercease at any one time and for any reason to be licensed, certified orregistered in the particular field of endeavor for which the corporation wasorganized, or by the vote of the holders of at least two-thirds of itsoutstanding capital stock, the corporation thereupon shall be treated asconverted into, and shall operate henceforth solely as, a corporation underapplicable provisions of this title, exclusive of this chapter, but may bereconverted upon removal of the disability or by the vote of the holders ofat least two-thirds of its outstanding capital stock.

C. Within one year following the date of death of a shareholder, or hisdisqualification as hereinbefore provided, all of the shares of suchshareholders shall be transferred to, and acquired by, the corporation orpersons qualified to own the shares, if the provisions of subsection B areinapplicable. If no other provision to accomplish this transfer andacquisition is in effect and carried out within this period, the corporationthereafter shall purchase and redeem all of the decedent shareholder's sharesof stock at book value, determined as of the end of the month immediatelypreceding death or disqualification. The book value shall be determined fromthe books and records of the corporation in accordance with the generallyaccepted accounting principles on the accrual method of accounting. Nosubsequent adjustment of this book value, whether by the corporation itself,by federal income tax audit made and agreed to, or by a court decision whichhas become final, shall alter the redemption price. Nothing contained in thissection shall prevent the parties involved from making any other arrangementor provision in the corporate articles, bylaws, or by contract to transferthe shares of a (i) deceased or disqualified shareholder or (ii) disqualifiedcharitable remainder trust to the corporation or to persons qualified to ownthe shares, whether made before or after (i) the death or disqualification ofthe shareholder or (ii) the disqualification of a charitable remainder trust,provided that within the one-year period herein specified all the stockinvolved shall have been so transferred.

(1970, c. 77; 1999, c. 100; 2002, c. 77.)