New York Professional Service Corporation for Public Accountants Law

Corporations – Professional Corporation – New York

Related New York Legal Forms

NEW YORK CONSOLIDATED LAWS, Chapter 4 (Business Corporation Law) and specifically Article 15 (Professional Service Corporations)

NEW YORK CONSOLIDATED LAWS, Chapter 16, Article 149 (Public Accountancy)

The corporate practice of public accountancy in the State of New York is controlled generally by the Business Corporation Law as set out in NEW YORK CONSOLIDATED LAWS, Chapter 4. However, within that Chapter, there are specific provisions applicable to professional service corporations contained in Article 15.

In addition to the statutory provisions relative to the corporate practice of public accountancy and the profession specific provisions of law applicable to the practice of public accountancy (NEW YORK CONSOLIDATED LAWS, Chapter 16, Article 149), both individuals and professional service corporations which engage in the practice of public accountancy are subject to the rules and regulations of the New York State Board for Public Accountancy.

The primary distinctions between a “regular” corporation and a professional service corporation organized to engage in the practice of dentistry are:

CERTIFICATE OF INCORPORATION

1. In addition to meeting the standard statutory requirements, the certificate of incorporation of a professional service corporation must state the profession to be practiced by the corporation and the names and residence addresses of all individuals who are to be the original shareholders, directors and officers of the corporation.

2. There must be attached to the certificate of incorporation certifications from the State Board of Dentistry certifying that each of the proposed shareholders, directors and officers is authorized by law to practice dentistry in the State of New York.

3. Within thirty days after the certificate of incorporation is filed, a certified copy of the certificate of incorporation must be filed with the State Board of Dentistry.

RENDERING PROFESSIONAL SERVICE

1. No professional service corporation may render professional services except through individuals authorized by law to render such professional services as individuals.

2. Every report, diagnosis, prognosis, and prescription made or issued by a corporation practicing dentistry shall bear the signature of one or more chiropractors responsible for that report, diagnosis, prognosis, or prescription.

PROFESSIONAL RELATIONSHIP AND LIABILITY

1. Every shareholder, employee or agent of a professional service corporation is personally and fully liable and accountable for any negligent or wrongful act or misconduct committed by him/her or by any person under his/her supervision and control while rendering professional services on behalf of such corporation.

2. The relationship of an individual to a professional service corporation with which that individual is associated, whether as shareholder, director, officer, employee or agent, does not modify or diminish the jurisdiction over the individual by the State Board of Dentistry.

CORPORATE PURPOSE

1. A professional service corporation organized to engage in the practice of dentistry cannot engage in any business other than the rendering of the professional services of chiropractors.

2. The corporation may invest its funds in real estate, mortgages, stocks, bonds or any other type of investments.

ISSUANCE OF SHARES

1. The corporation may issue shares only to individuals who are authorized to practice dentistry in New York.

2. No shareholder of a the corporation is allowed to enter into a voting trust agreement, proxy, or any other type agreement that vests in anyone, other than another shareholder of the same corporation or a person who would be eligible to become a shareholder.

3. All shares issued, agreements made, or proxies granted in violation of this restriction are void.

DIRECTORS AND OFFICERS

1. All officers and directors of the corporation must be licensed to practice dentistry in the State of New York.

2. All officers and directors of the corporation must be shareholders of the corporation OR engaged in the practice of dentistry. NOTE: This form packet provides that all officers and directors MUST be shareholders.

DISQUALIFICATION

1. If any shareholder, director, officer or employee of a professional service corporation organized to engage in the practice of becomes legally disqualified to practice dentistry in New York, that individual MUST immediately sever all employment with and financial interests in the corporation.

2. All provisions of law regulating the rendering of professional services by a person elected or appointed to a public office shall be applicable to a shareholder, director, officer and employee of such corporation.

3. The legal disqualification to practice dentistry in New York by statute constitutes an irrevocable offer by the disqualified shareholder to sell his shares to the corporation pursuant to statutory provisions or, if applicable, as set out in the certificate of incorporation, the by-laws of the corporation, or by agreement between the corporation and all shareholders.

4. A professional service corporation’s failure to enforce compliance with this statutory provision constitutes a ground for forfeiture of its certificate of incorporation and its dissolution.

DEATH OR DISQUALIFICATION OF SHAREHOLDERS

1. A professional service corporation must purchase or redeem the shares of a shareholder who dies or is disqualified within six months after the appointment of the executor or administrator or other legal representative of the estate of such deceased shareholder, or within six months after such disqualification.

2. The purchase price of such shares must be at the book value of those shares as of the end of the month immediately preceding the death or disqualification of the shareholder as determined from the books and records of the corporation in accordance with its regular method of accounting.

3. The certificate of incorporation, the by-laws of the corporation, or an agreement between the corporation and all shareholders incorporation may modify the statutory provisions by providing for a shorter period of purchase or an alternate method of determining the price to be paid for the shares, or both.

4. If the corporation fails to purchase or redeem such shares within the required period, a successful plaintiff in an action to recover the purchase price of the shares is also be awarded reasonable attorneys` fees and costs.

5. The statutory provisions regarding the purchase of the shares of a disqualified shareholder are not applicable if the period of disqualification is less than six months and the shareholder becomes eligible to practice dentistry within six months from the date of disqualification.

6. The statutory provisions regarding the purchase of the shares of a disqualified shareholder are not applicable if the shares, within the time limit prescribed, are sold or transferred to another person licensed to practice dentistry in the State of New York.

TRANSFER OF SHARES

1. No shareholder of a professional service corporation may sell or transfer his except to another individual who is licensed to practice dentistry in the State of New York.

2. Any sale or transfer of shares, except by operation of law or court decree or except for a corporation having only one shareholder, may be made only after the transfer is approved by the board of directors, or at a shareholders’ meeting specially called for such purpose. In that event, approval of the transfer must be by not less than a majority of the outstanding shares or as may be provided in the certificate of incorporation or in the by-laws of the corporation.

3. The certificate of incorporation or the by-laws of the corporation, or the professional service corporation and the shareholders by private agreement, may provide, in lieu of or in addition to the foregoing restrictions, for the alienation of shares and may require the redemption or purchase of such shares by such corporation at prices and in a manner specifically set forth in the certificate of incorporation or the by-laws.

4. Any restrictions on the sale or transfer of shares must be noted conspicuously on the face or back of every certificate for shares issued by the corporation. Any sale or transfer in violation of such restrictions shall be void.

CORPORATE NAME

[T]he name of a professional service corporation may contain any word which, at the time of incorporation, could be used in the name of a partnership practicing a profession which the corporation is authorized to practice, and may not contain any word which could not be used by such a partnership. Provided, however, the name of a professional service corporation may not contain the name of a deceased person unless (1) such person’s name was part of the corporate name at the time of such person’s death; or (2) such person’s name was part of the name of an existing partnership and at least two-thirds of such partnership’s partners become shareholders of the corporation [The] corporate name shall end with the words “Professional Corporation” or the abbreviation “P.C.”

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Inside New York Professional Service Corporation for Public Accountants Law