N.Y. Business Corporation Law § 1511: Transfer of shares

§ 1511. Transfer of shares.

(a) No shareholder of a professional service corporation, including a

design professional service corporation, may sell or transfer his or her

shares in such corporation except to another individual who is eligible

to have shares issued to him or her by such corporation or except in

trust to another individual who would be eligible to receive shares if

he or she were employed by the corporation. Nothing herein contained

shall be construed to prohibit the transfer of shares by operation of

law or by court decree. No transferee of shares by operation of law or

court decree may vote the shares for any purpose whatsoever except with

respect to corporate action under sections 909 and 1001 of this chapter.

The restriction in the preceding sentence shall not apply, however,

where such transferee would be eligible to have shares issued to him or

her if he or she were an employee of the corporation and, if there are

other shareholders, a majority of such other shareholders shall fail to

redeem the shares so transferred, pursuant to section 1510 of this

article, within sixty days of receiving written notice of such transfer.

Any sale or transfer, except by operation of law or court decree or

except for a corporation having only one shareholder, may be made only

after the same shall have been approved by the board of directors, or at

a shareholders' meeting specially called for such purpose by such

proportion, not less than a majority, of the outstanding shares as may

be provided in the certificate of incorporation or in the by-laws of

such professional service corporation. At such shareholders' meeting the

shares held by the shareholder proposing to sell or transfer his or her

shares may not be voted or counted for any purpose, unless all

shareholders consent that such shares be voted or counted. The

certificate of incorporation or the by-laws of the professional service

corporation, or the professional service corporation and the

shareholders by private agreement, may provide, in lieu of or in

addition to the foregoing provisions, 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 therein.

The existence of the restrictions on the sale or transfer of shares, as

contained in this article and, if applicable, in the certificate of

incorporation, by-laws, stock purchase or stock redemption agreement,

shall be noted conspicuously on the face or back of every certificate

for shares issued by a professional service corporation. Any sale or

transfer in violation of such restrictions shall be void.

(b) A design professional service corporation shall purchase or redeem

the shares of a non-design professional shareholder in the case of his

or her termination of employment within thirty days after such

termination. A design professional service corporation shall not be

required to purchase or redeem the shares of a terminated non-design

professional shareholder if such shares, within thirty days after such

termination, are sold or transferred to another employee of the

corporation pursuant to this article.

(c) A 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, shall purchase or redeem the

shares of a non-licensed professional shareholder in the case of his or

her termination of employment within thirty days after such termination.

A 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, shall not be required to purchase

or redeem the shares of a terminated non-licensed professional

shareholder if such shares, within thirty days after such termination,

are sold or transferred to another employee of the corporation pursuant

to this article.