N.Y. Business Corporation Law § 1510: Death or disqualification of shareholders

§ 1510. Death or disqualification of shareholders.

(a) A professional service corporation, including a design

professional service corporation, shall purchase or redeem the shares of

a shareholder in case of his death or disqualification pursuant to the

provisions of section 1509 of this article, 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, at the book value of such 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. The certificate of incorporation, the by-laws of the

corporation or an agreement among the corporation and all shareholders

may modify this section by providing for a shorter period of purchase or

redemption, or an alternate method of determining the price to be paid

for the shares, or both. If the corporation shall fail to purchase or

redeem such shares within the required period, a successful plaintiff in

an action to recover the purchase price of such shares shall also be

awarded reasonable attorneys' fees and costs. Limitations on the

purchase or redemption of shares set forth in section 513 of this

chapter shall not apply to the purchase or redemption of shares pursuant

to this section. Nothing herein contained shall prevent a corporation

from paying pension benefits or other deferred compensation to or on

behalf of a former or deceased officer, director or employee thereof as

otherwise permitted by law. The provisions of this section shall not be

deemed to require the purchase of the shares of a disqualified

shareholder where the period of disqualification is for less than six

months, and the shareholder again becomes eligible to practice his

profession within six months from the date of disqualification.

(b) Notwithstanding the provisions of paragraph (a) of this section,

the corporation shall not be required to purchase or redeem the shares

of a deceased or disqualified shareholder if such shares, within the

time limit prescribed by paragraph (a) of this section, are sold or

transferred to another professional pursuant to the provisions of

section 1511 of this article.