(a) The shares of a shorthand reporting corporation may be issued only to a licensed person and may be transferred only to a licensed person or to the issuing corporation.
(b) Where there are two or more shareholders in a shorthand reporting corporation and one of the shareholders:
(2) Becomes a disqualified person as defined in Section 13401(d) of the Corporations Code, for a period exceeding ninety (90) days, his shares shall be sold and transferred to a licensed person or to the issuing shorthand reporting corporation, on such terms as are agreed upon. Such sale or transfer shall not be later than six (6) months after any such death and not later than ninety (90) days after the date he became a disqualified person.
(c) A corporation and its shareholders may, but need not, agree that shares sold to it by a person who becomes a disqualified person may be resold to such person if and when he again ceases to become a disqualified person.
(d) The restrictions of subdivision (a) and, if appropriate, subdivision (b) of this section shall be set forth in the corporation's by-laws or articles of incorporation.
(e) The income of a shorthand reporting corporation attributable to shorthand reporting services rendered while a shareholder is a disqualified person shall not in any manner accrue to the benefit of such shareholder or his shares.
(f) The share certificates of a shorthand reporting corporation shall contain either:
(1) An appropriate legend setting forth the restriction of subdivision (a), and where applicable, the restriction of subdivision (b), or
(2) An appropriate legend stating that ownership and transfer of the shares are restricted and specifically referring to an identified section of the by-laws or articles of incorporation of the corporation wherein the restrictions are set forth.
Credits
Note: Authority cited: Sections 8007 and 8047, Business and Professions Code. Reference: Sections 8044, 8045 and 8047; and Section 13401, Corporations Code.
1. New Note filed 3-10-82 as procedural and organizational; effective upon filing (Register 82, No. 11).
This database is current through 4/26/24 Register 2024, No. 17.
Cal. Admin. Code tit. 16, § 2467, 16 CA ADC § 2467
