California Physical Therapy Jurisprudence Exam 2026 – Complete Practice Resource

If a shareholder in a physical therapy corporation becomes disqualified for more than 90 days, the appropriate action is to transfer the shares to another licensed person. This requirement is rooted in the governing laws and regulations that ensure that a physical therapy corporation maintains its compliance with licensing and professional standards.

When a shareholder is disqualified, they can no longer meet the legal obligations necessary to hold shares in a corporation dedicated to providing physical therapy services. Thus, in order to uphold the integrity and licensure of the corporation, the shares must be transferred to an individual who is properly licensed and qualified to hold such shares. This process ensures that the corporation adheres to the regulations set forth by the practice act, which is essential for maintaining its operational legitimacy.

Other actions, such as holding a special meeting, selling shares back to the corporation, or freezing shares until reinstatement, do not address the immediate need for compliance in terms of licensing and could potentially expose the corporation to legal and operational risks. The transfer of shares to a qualified person is the most direct and compliant solution to the situation posed by the disqualification.