2006 Code of Virginia § 13.1-543 - Definitions

13.1-543. Definitions.

A. As used in this chapter:

"Eligible employee stock ownership plan" means an employee stock ownershipplan as such term is defined in 4975(e)(7) of the Internal Revenue Code of1986, as amended, sponsored by a professional corporation and with respect towhich:

1. All of the trustees of the employee stock ownership plan are individualswho are duly licensed or otherwise legally authorized to render theprofessional services for which the professional corporation is organizedunder this chapter; however, if a conflict of interest exists for one or moretrustees with respect to a specific issue or transaction, such trustees mayappoint a special independent trustee or special fiduciary, who is not dulylicensed or otherwise legally authorized to render the professional servicesfor which the professional corporation is organized under this chapter, whichspecial independent trustee shall be authorized to make decisions only withrespect to the specific issue or transaction that is the subject of theconflict;

2. The employee stock ownership plan provides that no shares, fractionalshares, or rights or options to purchase shares of the professionalcorporation shall at any time be issued, sold, or otherwise transferreddirectly to anyone other than an individual duly licensed or otherwiselegally authorized to render the professional services for which theprofessional corporation is organized under this chapter, unless such sharesare transferred as a plan distribution to a plan beneficiary and subject toimmediate repurchase by the professional corporation, the employee stockownership plan or another person authorized to hold such shares; however:

a. With respect to a professional corporation rendering the professionalservices of public accounting or certified public accounting:

(1) The employee stock ownership plan may permit individuals who are not dulylicensed or otherwise legally authorized to render these services toparticipate in such plan, provided such individuals are employees of thecorporation and hold less than a majority of the beneficial interests in suchplan; and

(2) At least 51% of the total of allocated and unallocated equity interestsin the corporation sponsoring such employee stock ownership plan are held (i)by the trustees of such employee stock ownership plan for the benefit ofpersons holding a valid CPA certificate as defined in 54.1-4400, withunallocated shares allocated for these purposes pursuant to 409(p) of theInternal Revenue Code of 1986, as amended, or (ii) by individual employeesholding a valid CPA certificate separate from any interests held by suchemployee stock ownership plan; and

b. With respect to a professional corporation rendering the professionalservices of architects, professional engineers, land surveyors, certifiedlandscape architects, or certified interior designers, the employee stockownership plan may permit individuals who are not duly licensed to render theservices of architects, professional engineers or land surveyors orindividuals legally authorized to use the title of certified landscapearchitects or certified interior designers to participate in such plan,provided such individuals are employees of the corporation and together holdnot more than one-third of the beneficial interests in such plan, and thatthe total of the shares (i) held by individuals who are employees but notduly licensed to render such services or legally authorized to use a titleand (ii) held by the trustees of such employee stock ownership plan for thebenefit of individuals who are employees but not duly licensed to render suchservices or legally authorized to use a title, shall not exceed one-third ofthe shares of the corporation; and

3. The professional corporation, the trustees of the employee stock ownershipplan, and the other shareholders of the professional corporation comply withthe foregoing provisions of the plan.

"Professional corporation" means a corporation whose articles ofincorporation set forth a sole and specific purpose permitted by this chapterand that is either (i) organized under this chapter for the sole and specificpurpose of rendering professional service other than that of architects,professional engineers or land surveyors, or using a title other than that ofcertified landscape architects or certified interior designers and, except asexpressly otherwise permitted by this chapter, that has as its shareholdersonly individuals who themselves are duly licensed or otherwise legallyauthorized to render the same professional service as the corporation,including the trustees of an eligible employee stock ownership plan, and ofwhich shareholders at least one is duly licensed or otherwise legallyauthorized to render such professional service within the Commonwealth; or(ii) organized under this chapter for the sole and specific purpose ofrendering the professional services of architects, professional engineers orland surveyors, or using the title of certified landscape architects orcertified interior designers, or any combination thereof, and at leasttwo-thirds of whose shares are held by persons duly licensed within theCommonwealth to perform the services of an architect, professional engineeror land surveyor, including the trustees of an eligible employee stockownership plan, or by persons legally authorized within the Commonwealth touse the title of certified landscape architect or certified interiordesigner; or (iii) organized under this chapter or under Chapter 10 (13.1-801 et seq.) of this title for the sole and specific purpose ofrendering the professional services of one or more practitioners of thehealing arts, licensed under the provisions of Chapter 29 ( 54.1-2900 etseq.) of Title 54.1, or one or more nurse practitioners, licensed underChapter 29 ( 54.1-2900 et seq.) of Title 54.1, or one or more optometristslicensed under the provisions of Chapter 32 ( 54.1-3200 et seq.) of Title54.1, or one or more physical therapists and physical therapist assistantslicensed under the provisions of Chapter 34.1 ( 54.1-3473 et seq.) of Title54.1, or one or more practitioners of the behavioral science professions,licensed under the provisions of Chapter 35 ( 54.1-3500 et seq.), 36 (54.1-3600 et seq.) or 37 ( 54.1-3700 et seq.) of Title 54.1, or one or morepractitioners of audiology or speech pathology, licensed under the provisionsof Chapter 26 ( 54.1-2600 et seq.) of Title 54.1, or one or more clinicalnurse specialists who render mental health services licensed under Chapter 30( 54.1-3000 et seq.) of Title 54.1 and registered with the Board of Nursing,or any combination of practitioners of the healing arts, optometry, physicaltherapy, the behavioral science professions, and audiology or speechpathology, and all of whose shares are held by or all of whose members arepersons duly licensed or otherwise legally authorized to perform the servicesof a practitioner of the healing arts, nurse practitioners, optometry,physical therapy, the behavioral science professions, audiology or speechpathology or of a clinical nurse specialist who renders mental healthservices, including the trustees of an eligible employee stock ownershipplan; however, nothing herein shall be construed so as to allow any member ofthe healing arts, optometry, physical therapy, the behavioral scienceprofessions, audiology or speech pathology or a nurse practitioner orclinical nurse specialist to conduct his practice in a manner contrary to thestandards of ethics of his branch of the healing arts, optometry, physicaltherapy, the behavioral science professions, audiology or speech pathology,or nursing, as the case may be.

"Professional service" means any type of personal service to the publicthat requires as a condition precedent to the rendering of such service oruse of such title the obtaining of a license, certification, or other legalauthorization and shall be limited to the personal services rendered bypharmacists, optometrists, physical therapists and physical therapistassistants, practitioners of the healing arts, nurse practitioners,practitioners of the behavioral science professions, veterinarians, surgeons,dentists, architects, professional engineers, land surveyors, certifiedlandscape architects, certified interior designers, public accountants,certified public accountants, attorneys-at-law, insurance consultants,audiologists or speech pathologists, and clinical nurse specialists. For thepurposes of this chapter, the following shall be deemed to be rendering thesame professional service:

1. Architects, professional engineers, and land surveyors; and

2. Practitioners of the healing arts, licensed under the provisions ofChapter 29 ( 54.1-2900 et seq.) of Title 54.1; nurse practitioners, licensedunder the provisions of Chapter 29 ( 54.1-2900 et seq.) of Title 54.1;optometrists, licensed under the provisions of Chapter 32 ( 54.1-3200 etseq.) of Title 54.1; physical therapists and physical therapist assistants,licensed under the provisions of Chapter 34.1 ( 54.1-3473 et seq.) of Title54.1; practitioners of the behavioral science professions, licensed under theprovisions of Chapters 35 ( 54.1-3500 et seq.), 36 ( 54.1-3600 et seq.),and 37 ( 54.1-3700 et seq.) of Title 54.1; and one or more clinical nursespecialists who render mental health services, licensed under Chapter 30 (54.1-3000 et seq.) of Title 54.1 and are registered with the Board of Nursing.

B. Persons who practice the healing art of performing professional clinicallaboratory services within a hospital pathology laboratory shall be legallyauthorized to do so for purposes of this chapter if such persons (i) hold adoctorate degree in the biological sciences or a board certification in theclinical laboratory sciences and (ii) are tenured faculty members of anaccredited medical college or university that is an "educationalinstitution" within the meaning of 23-14.

(1970, c. 77; 1972, c. 180; 1980, cc. 701, 757; 1981, c. 217; 1985, c. 576;1989, c. 665; 1990, cc. 481, 595; 1992, cc. 13, 16; 1994, c. 349; 1999, c.83; 2000, cc. 194, 688, 763; 2003, c. 678; 2006, cc. 672, 715.)