10-2223. Compulsory acquisition of shares after death, dissolution or disqualification of shareholder

286 words·~1 min read·/az/title-10/10-2223

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. Except as provided in subsection C of this section, and unless the shares are otherwise acquired by a qualified person within the applicable time period specified in section 10-2227, a professional corporation shall acquire the voting shares of its shareholder within the applicable time period if any of the following occurs:

1. The shareholder dies or dissolves and any person to whom the shares are to devolve is not a person to whom section 10-2222 permits the shares to be transferred.

2. The shareholder becomes a disqualified person.

B. The price shall be as follows:

1. If a price for the shares is fixed in accordance with the articles of incorporation or bylaws or by private agreement, that price controls and sections 10-2224, 10-2225 and 10-2226 are inapplicable.

2. If a price is not fixed, in accordance with the articles of incorporation or bylaws or by private agreement, the corporation shall offer to acquire the shares in accordance with section 10-2224, and if the disqualified shareholder rejects the corporation's purchase offer, either the shareholder or the corporation may commence a proceeding under section 10-2225 to determine the fair value of the shares.

C. This section does not require the acquisition of shares if the disqualification of the shareholder or the transferee lasts no more than five months from the date the disqualification or transfer occurs.

D. This section and section 10-2224 do not prevent or relieve a professional corporation from paying pension benefits or other deferred compensation for services rendered to a former shareholder if otherwise permitted by law.

E. A provision for the acquisition of shares contained in a professional corporation's articles of incorporation or bylaws or in a private agreement is specifically enforceable.