For the purposes of this chapter, the following terms shall have the meanings respectively ascribed to them by this section:

(1) PROFESSIONAL SERVICE. Any type of professional service which may be legally performed only pursuant to a license issued by a state court, state regulatory licensing board or other like agency pursuant to state laws.

(2) PROFESSIONAL ASSOCIATION. An unincorporated association organized under this chapter for the purpose of rendering professional service.

A professional association shall, within 30 days after the organization of the professional association pursuant to the provisions of this chapter and within 30 days after November 1 of each year thereafter, furnish a statement to the Secretary of State showing the names and post-office addresses of all members or shareholders in such professional association and shall certify that all members or shareholders are duly licensed or otherwise legally authorized to render professional service in this state. This report shall be made on such forms and shall be prescribed and furnished upon request by the Secretary of State, shall be signed by the president or vice-president of the professional association and acknowledged and sworn to before a notary public by the person signing the report and shall be filed in the office of the Secretary of State. Upon the failure or refusal of any professional association to make said return or report to the Secretary of State, the professional association shall be liable for a penalty of $50.00, and the Secretary of State is authorized to issue his execution therefor, including all costs incurred.

This chapter does not modify any law applicable to the relationship between a person furnishing professional services and a person receiving such service, including liability for tort arising out of such professional service and including the confidential relationship between the person rendering the professional service and the person receiving such professional service, if any; and all confidential relationships previously enjoyed under the laws of this state or hereinafter enacted shall remain inviolate. Subject to the foregoing provisions of this section, the members or shareholders of any professional association organized pursuant to the provisions of this chapter shall not be individually liable for the debts of, or claims against, the professional association unless such member or shareholder has personally participated in the transaction for which the debt or claim is made or out of which it arises.

A professional association may render professional services only through officers, employees and agents who are themselves duly licensed or otherwise legally authorized to render professional service within this state. The term "employee," as used in this section, does not include clerks, bookkeepers, technicians, nurses or other individuals who are not usually or ordinarily considered by custom and practice to be rendering professional services for which a license or other legal authorization is required in connection with the profession practiced by a particular professional association, nor does the term "employee" include any other person who performs all his employment under the direct supervision and control of an officer, agent or employee who is himself rendering professional service to the public on behalf of the professional association; provided, that no person shall under the guise of employment practice a profession unless duly licensed to practice that profession under the laws of this state.

If any member, shareholder, agent, or employee of a professional association becomes legally disqualified to render a professional service within the state or accepts employment or is elected to a public office that, pursuant to existing law, is a restriction or limitation upon rendering of professional service, he shall sever all employment with, or financial interest in, such professional association forthwith. A professional association's failure to comply or require compliance with this section shall be a ground for the forfeiture of its right to render professional service as a professional association pursuant to the provisions of this chapter. When a professional association's failure to comply with this section is brought to the attention of the Secretary of State, the Secretary of State shall certify that fact to the Attorney General for appropriate action to dissolve the professional association.

If the articles of association or bylaws of a professional association fail to fix a price at which a professional association or its members or shareholders may purchase the membership or shares of a deceased, retired, expelled or disqualified member or shareholder and if the articles of association or bylaws do not otherwise provide, then the price for such share or shares or membership shall be the book value of such share or shares or membership at the end of the month immediately preceding the death or disqualification of the member or shareholder. Book value shall be determined by an independent certified accountant employed for such purpose from the books and records of the professional association by the regular method of accounting employed by the professional association. The determination by the certified public accountant of book value shall be conclusive on the professional association and its members or shareholders.

Unless the articles of association expressly provide otherwise, a professional association shall continue as a separate entity independent of its members or shareholders for all purposes for such period of time as provided in the articles or until dissolved by a vote of two thirds of the members, and shall continue notwithstanding the death, insanity, incompetency, conviction for felony, resignation, withdrawal, transfer of membership or ownership of shares, retirement or expulsion of any one or more of the members or shareholders, the admission or transfer of membership or shares to any new member, members, shareholder or shareholders or the happening of any other event which, under the law of this state and under like circumstances, would work a dissolution of the partnership, it being the aim and intention of this section that such professional association shall have continuity of life independent of the life or status of its members or shareholders.

In the event of dissolution of a stock-type professional association, the board of governors, as trustees of the property of such professional association, shall apply the assets first to the payment of debts of the association and, secondly, to the holders of the stock as provided in the articles of association. In the event of dissolution of a nonstock-type association, the assets shall be distributed, or sold, and the net proceeds distributed first to the payment of debts of the association and, secondly, to or among the members of the association, as the articles of association shall provide.

(a) Professional associations organized pursuant to this chapter shall be governed generally by all laws governing or applicable to corporations, where applicable, and not in conflict herewith. No such association shall be held or deemed to be a partnership, nor shall such association be governed by laws relating to partnerships.

(b) This chapter shall apply only to professional associations organized hereunder before January 1, 1984.

Actions by and against a professional association organized pursuant to this chapter shall be governed by Article 7 of Chapter 7 of Title 6.

Any one or more persons duly licensed to practice a profession under the laws of this state may form a professional association, as distinguished from a partnership or corporation, for the purpose of carrying on a profession upon compliance with the terms of this chapter; provided, that no professional association organized pursuant to the provisions of this chapter shall render professional service in more than one type of professional service.

Such person or persons may form a professional association by executing and recording articles of association in the office of the judge of probate of the county in which the principal office of such association is located, and must be by such judge recorded in a book kept for that purpose. After recording such articles of association, the probate judge shall endorse thereon his certificate of registration, showing the book and page where recorded, and for his services for recording the certificate shall receive $.15 for each 100 words of the articles of association and $2.50 for examining the articles.

The person or persons forming the association shall adopt such name for the association as they in their discretion may determine, provided that the name selected shall be followed by the words "Professional Association" or the abbreviation "P.A." Any dentist or dentists forming the association shall be governed by the rules of the regulating board of their profession in adopting a name for the association.

The articles of association may contain any provisions not in violation of law or the public policy of this state as the members of the association may decide.

Such articles may be amended or dissolved at any time and from time to time by agreement of two thirds of the members at any regular meeting or at a special meeting called for that purpose, upon likewise recording such amendment or instrument of dissolution in the same place or places as the original articles of association.

A professional association may be organized only for the purpose of rendering one specific kind of professional service and shall not engage in any business other than rendering the professional service for which it was organized. However, it may invest its funds in real estate, mortgages, stocks, bonds or any other type of investment and may own real or personal property necessary or appropriate for rendering professional service.

A professional association organized pursuant to the provisions of this chapter may issue stock or certificates of evidence of ownership of an interest in the assets of the professional association to the members of a stock-type association, or the association may be a nonstock organization with the members owning no individual interest in the assets of the association but with the rights and duties specified in the articles of association, or the association may be a nonstock organization with the members owning undivided interests in the assets of the association according to the articles of association. The stock or certificates of ownership, if a stock-type association, or a membership in a nonstock association, shall be freely transferable, except as may be lawfully restricted in the articles of association. A professional association may issue its capital stock to, if it is a stock-type association, or accept as members of the professional association, if a nonstock association, only persons who are duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized. Subject to the provisions of the articles of association, the estate of a member or shareholder who was a person duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized may continue to hold stock or membership pursuant to the articles of association for a reasonable period of administration of the estate, but shall not be authorized to participate in any decisions concerning the rendering of professional service.

A professional association organized pursuant to the provisions of this chapter shall be governed by a board of governors elected by the members or shareholders and represented by officers elected by the board of governors, so that centralization of management will be assured, and no member shall have the power to bind the association within the scope of the association's business or profession merely by virtue of his being a member or shareholder of the association. Members of the board of governors need not be members or shareholders of the professional association and officers need not be members of the board of governors; except, that the president shall be a member of the board of governors; provided, that no officer or member of the board of governors who is not duly licensed to practice the profession for which the professional association was organized shall participate in any decisions constituting the practice of said profession. The members may adopt such bylaws as they may deem proper, or the power to promulgate bylaws of the association may be delegated by the articles of association to the board of governors of the professional association, as the members or shareholders may decide. Each member or shareholder shall have such power to cast such vote or votes at the meeting of the members or shareholders as the articles of association shall provide. The officers of the professional association may employ such agents or employees of the association as they may deem advisable subject to the provisions of Section 10-10-12. The officers of the association shall include a president, vice-president, secretary, treasurer and such other officers as the board of governors may determine. Any one person may serve in more than one office; provided, that the president and the secretary of the professional association shall not be the same person.

A professional association organized pursuant to the provisions of this chapter may contract in its own name, take, hold and sell real and personal property in its own name, independent of its members, sue and be sued as independent entities as now provided by law. Any conveyance in the name of the professional association to a third person executed by the president and attested by the secretary shall be conclusively presumed to be properly executed and shall divest all right, title and interest of the professional association, its members and the board of governors thereof. The assets of a professional association shall not be liable to attachment for the individual debts of its members or shareholders.