SB 248, as introduced, Wyland. Professional corporations.
The Moscone-Knox Professional Corporation Act provides for the formation of a corporation under the General Corporation Law for the purposes of qualifying as a professional corporation that is engaged in rendering professional services in a single profession, and permits a professional corporation to render professional services through persons who are licensed in that profession. Under the act, a medical corporation with more than 200 shareholders may provide that certain directors may have terms of office of up to 6 years.
This bill would extend the maximum term of office of a medical corporation director, as described above, to 7 years. The bill also would make technical, nonsubstantive changes.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 13403 of the Corporations Code is
2amended to read:
Thebegin delete provisions of theend delete General Corporation Law shall
4apply to professional corporations, except wherebegin delete such provisions in conflict with or inconsistent with
5areend deletebegin delete the provisions ofend delete this part.
6A professional corporationbegin delete whichend deletebegin insert thatend insert has only one shareholder
P2 1need have only one directorbegin insert,end insert
who shall bebegin delete suchend deletebegin insert thatend insert
shareholder
2and who shall also serve as the president and treasurer of the
3corporation. The other officers of the corporation inbegin delete suchend deletebegin insert thisend insert
4 situation need not be licensed persons. A professional corporation
5begin delete whichend deletebegin insert thatend insert has only two shareholders need have only two directorsbegin insert,end insert
6 who shall bebegin delete suchend deletebegin insert thoseend insert shareholders. The two
shareholders
7between them shall fill the offices of president, vice president,
8secretarybegin insert,end insert and treasurer.
9A professional medical corporation may establish in its articles
10or bylaws the manner in which its directors are selected and
11removed, their powers, duties, and compensation. Each term of
12office may not exceed three years. Notwithstanding the foregoing,
13the articles or bylaws of a professional medical corporation with
14more than 200 shareholders may provide that directors who are
15officers of the corporation or who are responsible for the
16management of all medical services at one or more medical centers
17may have terms of office, as directors, of up tobegin delete sixend deletebegin insert sevenend insert years;
18
however, no more than 50 percent of the members of the board,
19plus one additional member of the board, may havebegin delete six-yearend delete
20begin insert seven-yearend insert terms of office.
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