2006 Alabama Code - Section 10-4-388 — Issuance and transfer of shares.

(a) A domestic professional corporation may issue shares, fractional shares, and rights or options to purchase shares only to qualified persons.

(b) Where deemed necessary by the licensing authority for any profession in order to prevent violations of the ethical standards of such profession, the licensing authority may, within its rule-making power, by rule further restrict, condition, or abridge the authority of domestic professional corporations to issue shares but no such rule shall, of itself, have the effect of causing a shareholder of a professional corporation at the time such rule becomes effective to become a disqualified person unless and to the extent specified by such licensing authority.

(c) A shareholder of a domestic professional corporation may transfer or pledge shares, fractional shares, and rights or options to purchase shares of the professional corporation only to qualified persons.

(d) Any issuance or transfer of shares in violation of this section shall be void, however, nothing contained herein shall prohibit the transfer of shares of a domestic professional corporation by operation of law or court decree.

(e) Nothing in this section shall require domestic not-for-profit professional corporations to issue shares. Such corporations may have members and all such members must be qualified persons. A licensing authority may, within its rule-making power, by rule further restrict, condition or abridge membership in domestic not-for-profit corporations, but no such rule shall, of itself, have the effect of causing a member of a domestic not-for-profit professional corporation at the time such rule becomes effective to become a disqualified person unless and to the extent specified by such licensing authority.

(Acts 1983, No. 83-514, p. 763, §9.)