N.Y. Business Corporation Law § 1507: Issuance of shares

§ 1507. Issuance of shares.

(a) A professional service corporation may issue shares only to

individuals who are authorized by law to practice in this state a

profession which such corporation is authorized to practice and who are

or have been engaged in the practice of such profession in such

corporation or a predecessor entity, or who will engage in the practice

of such profession in such corporation within thirty days of the date

such shares are issued. No shareholder of a professional service

corporation shall enter into a voting trust agreement, proxy, or any

other type agreement vesting in another person, other than another

shareholder of the same corporation or a person who would be eligible to

become a shareholder if employed by the corporation, the authority to

exercise voting power of any or all of his shares. All shares issued,

agreements made, or proxies granted in violation of this section shall

be void.

(b) A design professional service corporation may issue shares to

individuals who are authorized by law to practice in this state a

profession which such corporation is authorized to practice and who are

or have been engaged in the practice of such profession in such

corporation or a predecessor entity, or who will engage in the practice

of such profession in such corporation within thirty days of the date

such shares are issued. A design professional service corporation may

also issue shares to employee stock ownership plans (ESOPs) and

employees of the corporation not licensed as design professionals,

provided that:

(i) greater than seventy-five percent of the outstanding shares of

stock of the corporation are owned by design professionals and an ESOP

(or ESOPs) with greater than seventy-five percent of the plan's voting

trustees or greater than seventy-five percent of the plan's committee

members being design professionals,

(ii) an ESOP, either in part or in its entirety, shall not constitute

part of the greater than seventy-five percent owned by design

professionals unless greater than seventy-five percent of the plan's

voting trustees or greater than seventy-five percent of the plan's

committee members are design professionals,

(iii) greater than seventy-five percent of the directors are design

professionals,

(iv) greater than seventy-five percent of the officers are design

professionals,

(v) the president, the chairperson of the board of directors and the

chief executive officer or officers are design professionals, and

(vi) the single largest shareholder is either a design professional or

an ESOP with greater than seventy-five percent of the plan's voting

trustees being design professionals and greater than seventy-five

percent of the plan's committee members being design professionals.

No shareholder of a design professional service corporation shall

enter into a voting trust agreement, proxy or any other type of

agreement vesting in another person, other than another shareholder of

the same corporation, the authority to exercise voting power of any or

all of his or her shares. All shares issued, agreements made or proxies

granted in violation of this section shall be void.

(c) Any firm established for the business purpose of incorporating as

a professional service corporation pursuant to paragraph (h) of section

fifteen hundred three of this article may issue shares to individuals

who are authorized by law to practice in this state the profession which

such corporation is authorized to practice or who will engage in the

practice of such profession in such corporation within thirty days of

the date such shares are issued and may also issue shares to employees

of the corporation not licensed as certified public accountants,

provided that:

(i) at least a simple majority of the outstanding shares of stock of

the corporation are owned by certified public accountants,

(ii) at least a simple majority of the directors are certified public

accountants,

(iii) at least a simple majority of the officers are certified public

accountants,

(iv) the president, the chairperson of the board of directors and the

chief executive officer or officers are certified public accountants. No

shareholder of a professional service corporation established pursuant

to paragraph (h) of section fifteen hundred three of this article shall

enter into a voting trust agreement, proxy or any other type of

agreement vesting in another person, the authority to exercise voting

power of any or all of his or her shares. All agreements made or proxies

granted in violation of this section shall be void.