Oregon Revised Statutes Chapter 58 § 58.503 — Requirements for professional corporations organized to render professional

Requirements for professional corporations organized to render professional health care services. (1) As used in this section: (a) “Licensee” means an individual who has a license as a physician or a license as a physician associate from the Oregon Medical Board or who has a license as a nurse practitioner from the Oregon State Board of Nursing. (b) “Professional corporation” means a professional corporation that is organized for the purpose of enabling physicians, physician associates and nurse practitioners to jointly render professional health care services. (2) In a professional corporation, licensees must: (a) Hold a majority of each class of shares of the professional corporation that is entitled to vote; and (b) Be a majority of the directors of the professional corporation. (3) An individual whom the professional corporation employs, or an individual who owns an interest in the professional corporation, may not direct or control the professional judgment of a licensee who is practicing within the professional corporation and within the scope of practice permitted under the licensee’s license. (4) A licensee whom the professional corporation employs, or a licensee who owns an interest in the professional corporation, may not direct or control the services of another licensee who is practicing within the professional corporation unless the other licensee is also practicing within the scope of practice permitted under the licensee’s license. (5)(a) Except as provided in paragraph (b) of this subsection, a professional corporation may not provide in the professional corporation’s articles of incorporation or bylaws, or by means of a contract or other agreement or arrangement, for removing a director described in subsection (2)(b) of this section from the professional corporation’s board of directors, except by a majority vote of the shareholders described in subsection (2)(a) of this section or, as appropriate, a majority vote of the directors described in subsection (2)(b) of this section. (b) A professional corporation may remove a director by means other than a majority vote of the shareholders described in subsection (2)(a) of this section or a majority vote of the directors described in subsection (2)(b) of this section if the director that is subject to removal: (A) Violated a duty of care, a duty of loyalty or another fiduciary duty to the professional corporation; (B) Was the subject of a disciplinary proceeding by the regulatory board that governs the director’s practice as a licensee in which the board suspended or revoked the director’s license; (C) Engaged in fraud, misfeasance or malfeasance with respect to the director’s performance of duties for or on behalf of the professional corporation; (D) Resigned, separated or was terminated from employment with the professional corporation; or (E) Failed to meet standards or criteria the professional corporation established for a position as a director. (6) A professional corporation may relinquish or transfer control over the professional corporation’s administrative, business or clinical operations only if the professional corporation executes a shareholder agreement exclusively between or among and for the benefit of a majority of shareholders described in subsection (2)(a) of this section and the shareholder agreement complies with the provisions of ORS 60.265. (7) A professional corporation that is subject to ORS 58.500 may elect to become subject to this section by amending the professional corporation’s articles of incorporation or bylaws. [Formerly 58.376]