The law governing professional service corporations specifies that where an entity has two shareholders, both “shall be” the directors. N.J.S. 14A:17-6. This presents a dilemma to the professional who has been the sole shareholder of his own business, but now wishes to add a co-shareholder to the corporation. Does he or she have to choose between having a business partner and having full control of the business?
The Hobson’s Choice
For many years Dr. Krank has been the sole shareholder of a professional service corporation, Krank, M.D., P.A. He is not only a skilled physician, but also a shrewd and controlling business person who has always made the business and administrative decisions for his corporation. He likes it that way.
