Corporations – Professional Corporation – Oklahoma
18 OKLAHOMA STATUTES §§ 801 through 819 (Professional Corporation Act)
18 OKLAHOMA STATUTES §§ 1001 through 1155 (Oklahoma General Corporation Act)
59 OKLAHOMA STATUTES §§ 481 through 519 (Oklahoma Allopathic Medical and Surgical Licensure and Supervision Act)
An Oklahoma professional corporation organized to engage in the practice of medicine is controlled generally by the provisions of 18 OKLAHOMA STATUTES §§ 421 through 436 (Corporations) and specifically by the provisions of 18 OKLAHOMA STATUTES §§ 801 through 819 (Professional Corporation Act). Additionally, the corporation is subject to the statutory requirements 59 OKLAHOMA STATUTES §§ 481 through 519 (Oklahoma Allopathic Medical and Surgical Licensure and Supervision Act) and the rules and regulations of the Oklahoma State Board of Medical Licensure and Supervision.
A Professional service is the personal service rendered by a physician, surgeon or doctor of medicine pursuant to a license under §§ 481 through 524 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of medicine.
The “incapacity” of a shareholder means that a determination by a court of competent jurisdiction, or otherwise by two independent licensed physicians, that the share holder is fully incapacitated or is partially incapacitated to the extent that the shareholder is not capable of rendering the professional service for which the professional corporation was organized.
Individuals forming a professional corporation must be duly licensed in accordance with the provisions of Oklahoma’s licensing laws for the profession and in good standing within the profession to be practiced through the professional corporation.
A Certificate of Incorporation for a professional corporation must contain the following: 1. The profession or related professions to be practiced through the professional corporation; and
2. A certificate by the regulating board of the profession that each of the persons who are to become owners or managers of a professional corporation and who are to engage in the practice of the profession is duly licensed in accordance with the provisions of Oklahoma’s licensing laws for the profession to practice the profession. The respective associated act is applicable to a professional corporation, and a professional corporation enjoys the powers and privileges and is subject to the duties, restrictions, and liabilities of other similarly situated business entities, except where inconsistent with the Professional Corporation Act. The Professional Corporation Act takes precedence in the event of any conflict with provisions of the applicable associated act or other laws.
A professional corporation can be formed for the purpose of rendering one specific type of professional service or related professional services and services ancillary thereto and may not engage in any business other than rendering the professional service or services which it was organized to render and services ancillary thereto. However, a professional corporation may own real and personal property necessary or appropriate for rendering the type of professional services it was organized to render and may invest its funds in real estate, mortgages, stocks, bonds and any other type of investments.
The name of a professional corporation must end with either association, company, corporation, club, foundation, fund, incorporated, institute, society, union, syndicate or limited or one of the abbreviations Co., Corp., Inc. or Ltd. and must include the word “professional” or the abbreviation “P.C.” or “PC”. The regulating board regulating the profession may adopt further requirements as to the names of professional entities organized to render professional services within the jurisdiction of that regulating board.
Except when affected by the death or disqualification of a shareholder, all shareholders of the professional corporation must be duly licensed in accordance with the provisions of Oklahoma’s licensing laws for the to render the same professional services as those for which the corporation is organized. Likewise, all managers of a professional corporation must be licensed to render the professional services for which the corporation is organized.
A professional corporation may render professional services only through its owners, managers, employees and agents who are duly licensed in accordance with the provisions of Oklahoma’s licensing laws to render professional services. “Employee” does not clerks, secretaries, bookkeepers, technicians and other assistants who are not usually and ordinarily considered by custom and practice to be rendering professional services to the public for which a license is required.
The Professional Corporation Act does not alter any law applicable to the relationship between a person rendering professional services and a person receiving such services, including liability arising out of such professional services.
Subject to the provisions of §819, nothing in the Professional Corporation Act restricts or limits the authority and duty of the regulating boards for the licensing of individual persons rendering professional services or the practice of the profession which is within the jurisdiction of such regulating board, notwithstanding that a person is an owner, manager or employee of a professional corporation and rendering such professional services or engaging in the practice of such profession through a professional corporation.
No professional corporation may do any act which is prohibited to be done by individual persons licensed to practice a profession which a professional corporation is organized to render.
The certificate of incorporation, the by-laws or any other agreement may provide for the purchase or redemption of the shares of any shareholder upon the death, incapacity, disqualification or ending of employment of a shareholder. In the absence of a provision in the certificate of incorporation, or the bylaws, or other agreement, a professional corporation must purchase the shares of a deceased shareholder, a shareholder who is incapacitated or who is no longer qualified to own shares in the corporation or a shareholder whose employment has ended within ninety (90) days after that shareholder’s death, incapacity or disqualification or ending of employment.
The price for the shares of a deceased shareholder, a shareholder who is incapacitated or who is no longer qualified to own shares in the corporation or a shareholder whose employment has ended must be the book value as of the end of the month immediately preceding that shareholder’s death, incapacity, disqualification or ending of employment. Book value is determined from the books and records of the corporation in accordance with the regular method of accounting used by the corporation. If the corporation fails to purchase the shares by the end of the ninety day period, then the executor or administrator or other personal representative of the deceased, incapacitated or disqualified shareholder may bring an action in the district court of the county in which the principal office or place of practice of a professional corporation is located for the enforcement of the statutory provision.
A professional corporation must repurchase shares under these circumstances without regard to restrictions upon the repurchase of shares provided for in the Oklahoma General Corporation Act.
If there is only one shareholder of a professional corporation, and the shareholder dies or becomes incapacitated, the executor or administrator or other personal representative of the shareholder has the authority to sell the shares of capital stock owned by the shareholder to a qualified purchaser or to cause a dissolution of a professional corporation as provided by law. The vesting of ownership of shares of stock in a professional corporation in the executor or administrator or other personal representative is solely for the purposes of selling or dissolving the corporation and is not a violation of the Professional Corporation Act.
All laws and rules and parts of laws and rules in conflict with any of the provisions of the Professional Corporation Act or otherwise restricting the forms of organization available to persons providing professional services are inapplicable to professional corporations formed under the Professional Corporation Act. Nothing in the Professional Corporation Act supersedes the provisions of §§ 581 through 592, §§ 601 through 606, or §§ 941 through 947 of Title 59 of the Oklahoma Statutes. In the event of the conflict of any of the provisions of this act with any of these sections, then the cited sections take precedence over the Professional Corporation Act.
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