Senate Bill No. 358
(By Senators Wooton, Anderson, Buckalew, Dittmar,
Miller, Ross, Schoonover, Scott and Yoder)
[Originating in the Committee on the Judiciary;
reported February 9, 1996.]
A BILL to amend and reenact section five-a, article two, chapter
thirty of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, relating to authorizing shareholders
in legal corporations to sell or transfer stock to their
Be it enacted by the Legislature of West Virginia:
That section five-a, article two, chapter thirty of the code
of West Virginia, one thousand nine hundred thirty-one, as amended,
be amended and reenacted to read as follows:
ARTICLE 2. ATTORNEYS-AT-LAW.
§30-2-5a. Legal corporations.
One or more individuals, each of whom is licensed to practice
law within this state, may organize and become a shareholder or shareholders of a legal corporation. Individuals who may be
practicing law as an organization created otherwise than pursuant
to the provisions of this section may incorporate under and
pursuant to this section. This section is not intended to amend
the statutory or common law as it relates to associations or
partnerships, except to allow partnerships of lawyers to organize
as a legal corporation.
A legal corporation may render professional service only
through officers, employees and agents who are themselves duly
licensed to render legal service within this state. The term
"employee" or "agent" as used in this section, does not include
secretaries, clerks, typists, paralegal personnel or other
individuals who are not usually and ordinarily considered by custom
and practice to be rendering legal services for which a license is
This section does not modify the law as it relates to the
relationship between a person furnishing legal services and his
client, nor does it modify the law as it relates to liability
arising out of such a professional service relationship. Except
for permitting legal corporations, this section is not intended to
modify any legal requirement or court rule relating to ethical
standards of conduct required of persons providing legal service.
A legal corporation may issue its capital stock only to
persons who are duly licensed attorneys.
When not inconsistent with this section, the organization and
procedures of legal corporations shall conform to the requirements
of article one, chapter thirty-one of this code.
The West Virginia state bar may require that lawyers under its
licensing authority must obtain its prior authorization before
beginning to act as a legal corporation and may require a fee of
not more than fifty dollars for each application for authorization
to form a legal corporation. The state bar may adopt rules
regulations: (1) To set reasonable standards for granting or
refusing prior approval; (2) to require appropriate information
therefor from a legal corporation applicant; and (3) to notify the
secretary of state that certain persons have been given
authorization by the state bar to form a legal corporation.
Upon notification by the West Virginia state bar of its
approval, the secretary of state, upon compliance by the
incorporators with this section and the applicable provisions of
chapter thirty-one of this code, may issue to the incorporators a
certificate of incorporation for the legal corporation which then
may engage in practice through duly licensed or otherwise legally
authorized stockholders, employees and agents.
A shareholder of a legal corporation may only sell or transfer
his or her shares of stock in such corporation
only to his or her
spouse, to another individual who is duly licensed to practice law
in this state or back to the corporation.
The corporate name of a legal corporation shall contain the
last name or names of one or more of its shareholders: Provided,
That if the rules
or regulations of the state bar so permit the
corporate name may contain or include the name or names of former
shareholders or of persons who were associated with a predecessor
partnership or other organization. The corporate name shall also
contain the words "legal corporation" or the abbreviation "L.C.".
The use of the word "company," "corporation," or "incorporated" or
any other words or abbreviations in the name of a corporation
organized under this article which indicates that such corporation
is a corporation, other than the words "legal corporation" or the
abbreviation "L.C." is specifically prohibited.
(NOTE: The purpose of this bill is to authorize shareholders
in legal corporations to sell or transfer stock to their spouses.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would