Corporations – Professional Corporation – Mississippi
MISSISSIPPI CODE ANNOTATED, 79-4-1.01 through 79-4-17.03 (Mississippi Business Corporation Act)
MISSISSIPPI CODE ANNOTATED, 79-10-1 through 79-10-117 (Mississippi Professional Corporation Act)
MISSISSIPPI CODE ANNOTATED, 73-3-2 through 73-3-403 (Attorneys at Law)
A Mississippi professional corporation organized to engage in the practice of law is controlled generally by the Mississippi Business Corporation Act and specifically by the Mississippi Professional Corporation Act. If there is a conflict between the provisions of the Business Corporation Act and the Professional Corporation Act, the Professional Corporation Act controls. Professional corporations are not subject to the provisions of the Uniform Partnership Act.
Additionally, the practice of law and a professional corporation organized to engage in the practice of law are both subject to the rules and regulations of the Mississippi Supreme Court and the provisions of MISSISSIPPI CODE ANNOTATED, §§73-3-2 through 73-3-403.
The following definitions are applicable to a professional corporation:
1.A “disqualified person” is an individual, a general partnership, a professional corporation or another entity that for any reason is or becomes ineligible to be issued shares by a professional corporation.
2. The “licensing authority” is the office, board, agency, court or other authority in Mississippi empowered to license or otherwise authorize the rendition of a professional service.
3. A “professional service” is a service that may be lawfully rendered only by a person by a licensing authority in Mississippi to render the service.
4. A “qualified person” is an individual, a general partnership, a professional corporation or another entity that is eligible to be issued shares by a professional corporation.
A professional corporation may be organized solely for the purpose of rendering professional services (including services ancillary to those professional services) and solely within a single profession. Provided, however, that a professional corporation may render two (2) or more professions, and for the purpose of engaging in any lawful business authorized by §79-4-3.01, MCA, to the extent that the combination of professional purposes or of professional and business purposes is not prohibited by the licensing law of Mississippi applicable to each profession in the combination.
A professional corporation may be a promoter, general partner, member, associate, or manager of a partnership, joint venture, trust, or other entity only if the entity is engaged solely in rendering professional services or in carrying on business authorized by the professional corporation’s articles of incorporation and not prohibited by the licensing laws applicable to each profession rendering services through the professional corporation.
A professional corporation may render professional services in Mississippi only through individuals licensed or otherwise authorized in Mississippi to render the services. A professional corporation may not render any professional service other than the professional service authorized by its articles of incorporation. However, a professional corporation may invest its funds in real estate, mortgages, securities, or any other type of investment or may own real or personal property necessary for carrying on its business.
The name of a professional corporation:
1. Must contain the words “professional corporation” or “professional association” or the abbreviations “P.C.,” “PC,” “P.A.” or “PA”;
2. May not contain language stating or implying that it is incorporated for a purpose other than that . authorized by law and its articles of incorporation; and
3. Must conform with any rule promulgated by the licensing authority having jurisdiction over a professional service described in the corporation’s articles of incorporation.
A professional corporation may issue shares only to:
1. Individuals who are authorized by law in Mississippi or another state to render a professional service described in the corporation’s articles of incorporation;
2. Professional corporations, domestic or foreign, authorized by law in Mississippi to render a professional service described in the corporation’s articles of incorporation;
3. General partnerships in which all the partners are individuals or entities otherwise authorized by Statute to be shareholders of a professional corporation.
A licensing authority with jurisdiction over a profession may by rule restrict or condition, or revoke in part, the authority of professional corporations subject to its jurisdiction to issue shares.
Shares issued in violation of the statutory ownership requirements are void.
The following statement must appear conspicuously on each share certificate issued by a professional corporation:
The transfer of shares of a professional corporation is restricted by the Mississippi Professional Corporation Act. Shares of a professional corporation are also subject to a statutory compulsory repurchase obligation. Within a reasonable time after the issuance or transfer of uncertificated shares of a professional corporation, the corporation must send the shareholders a written notice containing the above statement.
A shareholder of a professional corporation may transfer shares of the corporation only to qualified persons. However, a shareholder of a professional corporation may pledge shares to a qualified person or to a disqualified person.
A transfer of shares made into a disqualified person or entity, except such a transfer made by operation of law or court judgment, is void.
A professional corporation must acquire (or cause to be acquired by a qualified person) the shares of its shareholder if:
1. The shareholder dies and the successor in interest to the deceased shareholder is not a qualified person;
2. The shareholder becomes a disqualified person; or
3. The shares are transferred by operation of law or court judgment to a disqualified person.
In the event such a transfer is necessitated, if a price for the shares is established in accordance with the articles of incorporation or bylaws or by private agreement, that price controls. If the price is not so established, the corporation must acquire the shares in accordance with §79-10-39. If the disqualified person rejects the corporation’s purchase offer, either the person or the corporation may commence a judicial proceeding to determine the price of the shares. A provision for the acquisition of shares contained in a professional corporation’s articles of incorporation or bylaws, or in a private agreement, is specifically enforceable.
Acquisition of shares in the event of a disqualification that lasts no more than five (5) months from the date the disqualification or transfer occurs is not required. A shareholder who becomes a disqualified person must notify the corporation promptly.
Only a qualified person may be appointed a proxy to vote shares of a professional corporation. A voting trust with respect to shares of a professional corporation is not valid unless all of its trustees and beneficiaries are qualified persons. But if a beneficiary who is a qualified person dies or becomes disqualified, a voting trust valid prior to a death or disqualifying event, it remains valid for ten months after the date of death or for five months after the disqualification occurred.
The relationship between an individual rendering professional services as an employee of a professional corporation and his client or patient is the same as if the individual were rendering the services as a sole practitioner. Further, the relationship between a professional corporation and the client or patient for whom its employee is rendering professional services is the same as that between the client or patient and the employee.
The privilege applicable to communications between an individual rendering professional services and the person receiving the services recognized under the statutory or common law of Mississippi is not affected by Mississippi Professional Corporation Act. The privilege applies to a professional corporation and to its employees in all situations in which it applies to communications between an individual rendering professional services on behalf of the corporation and the person receiving the services.
Each individual who renders professional services as an employee of a professional corporation is liable for a negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered the services as a sole practitioner. An employee or shareholder of a professional corporation is not liable, however, for the conduct of other employees or shareholders of the corporation, except a person under his direct supervision and control.
A professional corporation whose employees perform professional services within the scope of their employment or of their apparent authority to act for the corporation is liable to the same extent as its employees.
Note: All Information and Previews are subject to the Disclaimer located on the main forms page, and also linked at the bottom of all search results.