Section 1850.7 - Shares: Ownership and Transfer(a) The shares of a marriage and family therapist, licensed clinical social worker, or licensed professional clinical counselor corporation may be issued or transferred only to the issuing corporation or to an appropriately licensed person in accordance with Section 13401.5 of the Corporations Code.(b) Where there are two or more shareholders in a corporation and one of its shareholders dies, or becomes a disqualified person as defined in Section 13401(d) of the Corporations Code, for a period exceeding ninety (90) days, the person's shares shall be sold and transferred to a licensed person or to the issuing 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 the shareholder 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 the person 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 the corporation attributable to professional, licensed services rendered while a shareholder is a disqualified person shall not in any manner accrue to the benefit of such shareholder or the person's shares.(f) The share certificates of the corporation shall contain either:(1) An appropriate legend setting forth the restriction of subdivision (a) where appropriate, 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.Cal. Code Regs. Tit. 16, § 1850.7
1. Amendment of subsections (b), (c) and (e) filed 1-26-77; effective thirtieth day thereafter (Register 77, No. 5).
2. Amendment filed 9-15-83; effective thirtieth day thereafter (Register 83, No. 38).
3. Amendment filed 3-19-85; effective thirtieth day thereafter (Register 85, No. 12).
4. Change without regulatory effect of NOTE (Register 86, No. 41).
5. Change without regulatory effect amending subsection (a) filed 4-25-2005 pursuant to section 100, title 1, California Code of Regulations (Register 2005, No. 17).
6. Amendment of NOTE filed 5-24-2011; operative 5-24-2011 pursuant to Government Code section 11343.4 (Register 2011, No. 21).
7. Change without regulatory effect amending NOTE filed 3-21-2017 pursuant to section 100, title 1, California Code of Regulations (Register 2017, No. 12).
8. Amendment of section and NOTE filed 1-10-2023; operative 4-1-2023 (Register 2023, No. 2). Note: Authority cited: Sections 4980.60, 4988.2 and 4990.20, Business and Professions Code. Reference: Sections 4987.8, 4988, 4998.3, 4998.4, 4999.126 and 4999.127, Business and Professions Code; and Sections 13401, 13401.5, 13403 and 13407, Corporations Code.
1. Amendment of subsections (b), (c) and (e) filed 1-26-77; effective thirtieth day thereafter (Register 77, No. 5).
2. Amendment filed 9-15-83; effective thirtieth day thereafter (Register 83, No. 38).
3. Amendment filed 3-19-85; effective thirtieth day thereafter (Register 85, No. 12).
4. Change without regulatory effect of NOTE (Register 86, No. 41).
5. Change without regulatory effect amending subsection (a) filed 4-25-2005 pursuant to section 100, title 1, California Code of Regulations (Register 2005, No. 17).
6. Amendment of Note filed 5-24-2011; operative 5-24-2011 pursuant to Government Code section 11343.4(Register 2011, No. 21).
7. Change without regulatory effect amending Note filed 3-21-2017 pursuant to section 100, title 1, California Code of Regulations (Register 2017, No. 12).
8. Amendment of section and NOTE filed 1-10-2023; operative 4/1/2023 (Register 2023, No. 2).