N.Y. Business Corporation Law § 1516: Corporate mergers, consolidations and other reorganizations

§ 1516. Corporate mergers, consolidations and other reorganizations.

(a) Notwithstanding any inconsistent provision of this article, and

subject to the limitations in paragraph (d) of this section, a

professional service corporation, including a design professional

service corporation, pursuant to the provisions of article nine of this

chapter, may be merged or consolidated with another corporation formed

pursuant to the provisions of this chapter, with a corporation

authorized and registered to practice the same profession pursuant to

the applicable provisions of subdivision six of section seventy-two

hundred nine of the education law (engineer or land surveyor),

subdivision four of section seventy-three hundred seven of the education

law (architect) or subdivision four of section seventy-three hundred

twenty-seven of the education law (landscape architect) of articles one

hundred forty-five, one hundred forty-seven and one hundred forty-eight

of the education law, or with a foreign corporation, or other business

entity practicing the same profession or professions in this state or

the state of its formation, or may be otherwise reorganized, provided

that the corporation which survives or which is formed pursuant thereto

is a professional service corporation, a design professional service

corporation, a professional service limited liability company or a

foreign professional service corporation practicing the same profession

or professions in this state or the state of incorporation or, if one of

the original corporations is authorized to practice pursuant to the

provisions of either subdivision six of section seventy-two hundred

nine, subdivision four of section seventy-three hundred seven or

subdivision four of section seventy-three hundred twenty-four of the

education law, a corporation authorized and registered to practice the

same profession pursuant to the applicable provisions of subdivision six

of section seventy-two hundred nine of the education law (engineer or

land surveyor), subdivision four of section seventy-three hundred seven

of the education law (architect) of articles one hundred forty-five, one

hundred forty-seven and one hundred forty-eight or subdivision four of

section seventy-three hundred twenty-seven of the education law.

(b) If the surviving business entity is a professional corporation,

the restrictions on the issuance, transfer or sale of shares of a

professional service corporation or a design professional service

corporation shall be suspended for a period not exceeding thirty days

with respect to any issuance, transfer or sale of shares made pursuant

to such merger, consolidation or reorganization, provided that: (i) no

person who would not be eligible to be a shareholder in the absence of

this section shall vote the shares of or receive any distribution from

such corporation; (ii) after such merger, consolidation or

reorganization, any professional service corporation or a design

professional service corporation which survives or which is created

thereby shall be subject to all of the provisions of this article; and

(iii) shares thereafter only may be held by persons who are eligible to

receive shares of such professional service corporation, design

professional service corporation or such other corporation authorized

and registered to practice the same profession pursuant to the

applicable provisions of subdivision six of section seventy-two hundred

nine of the education law (engineer or land surveyor), subdivision four

of section seventy-three hundred seven of the education law (architect)

or subdivision four of section seventy-three hundred twenty-seven of the

education law (landscape architect) of articles one hundred forty-five,

one hundred forty-seven and one hundred forty-eight of the education

law, which survives. Nothing herein contained shall be construed as

permitting the practice of a profession in this state by a corporation

which is not incorporated pursuant to the provisions of this article or

authorized to do business in this state pursuant to the provisions of

article fifteen-A of this chapter, authorized pursuant to subdivision

six of section seventy-two hundred nine of the education law, authorized

pursuant to subdivision four of section seventy-three hundred seven of

the education law, authorized pursuant to subdivision four of section

seventy-three hundred twenty-seven of the education law or authorized

and registered to practice a profession pursuant to the applicable

provisions of article one hundred forty-five, one hundred forty-seven or

one hundred forty-eight of the education law. For the purposes of this

section, other reorganizations shall be limited to those reorganizations

defined in paragraph one of subsection (a) of section three hundred

sixty-eight of the internal revenue code.

(c) If the surviving business entity is a professional service limited

liability company, the restrictions on the issuance, transfer or sale of

membership interests of a professional service limited liability company

other than the requirements of the first two sentences of subdivision

(c) of section twelve hundred eleven of the limited liability company

law, shall be suspended for a period not exceeding thirty days with

respect to any issuance, transfer or sale of membership interests made

pursuant to such merger or consolidation, provided that: (i) no person

or business entity who would not be eligible to be a member in the

absence of this section shall vote or receive any distribution from such

limited liability company; (ii) after such merger or consolidation, any

professional service limited liability company that survives or that is

created thereby shall be subject to all the provisions of the limited

liability company law; and (iii) membership interests thereafter may be

held only by persons or business entities who are eligible to be a

member of such professional service limited liability company. Nothing

herein contained shall be construed as permitting the practice of a

profession in this state by a limited liability company that is not

formed pursuant to the provisions of the limited liability company law

or authorized to do business in the state pursuant to the provisions of

article thirteen of the limited liability company law.

(d) Notwithstanding the provisions contained in paragraphs (a), (b)

and (c) of this section, no design professional service corporation

shall be merged or consolidated with any entity unless such entity is a

professional business organization lawfully organized to provide

professional services pursuant to articles one hundred forty-five, one

hundred forty-seven and one hundred forty-eight of the education law.