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Title: Section 620.1 - Establishment of business corporations

Section 620.1 Establishment of business corporations. Persons seeking the approval of the Public Health Council for the formation of a business corporation to be established as the operator of a hospital shall file, in addition to the requirements of Part 600 of this Subchapter, information, documents and data as follows:

(a) A photocopy of the executed proposed certificate of incorporation which shall, in all respects, conform to the applicable provisions of the Business Corporation Law and all other pertinent laws of the State of New York. Such certificate of incorporation shall contain provisions to the following effect:

(1) The corporate powers and purposes shall be limited to the ownership and operation, or operation, of a hospital or hospitals specifically named and the location or locations of which are specifically designated by street address, city, town, village or locality and county; provided, however, that the corporate powers and purposes may also include the ownership and operation, or operation, of a hospice or hospices, as defined in article 40 of the Public Health Law, a certified home health agency or licensed home care services agency or agencies as defined in article 36 of the Public Health Law, or a health maintenance organization as defined in article 44 of the Public Health Law; if the corporation has received all approvals required under such law to own and operate, or operate, such hospice or hospices, home care services agency or agencies or health maintenance organization.

(2) The location of the principal office of the corporation which shall be at the same address as a hospital, hospice, home care services agency or health maintenance organization which is to be operated by the corporation in the State of New York.

(3) No person may own 10 percent or more of the stock of the corporation who has not been approved for the ownership of such stock by the Public Health Council.

(4) All stock certificates of the corporation shall bear on the face thereof the following:

(i) no person shall own 10 percent or more of the stock of the corporation unless he has been approved for such ownership by the Public Health Council;

(ii) a statement that any transfer, assignment or other disposition of 10 percent or more of the stock or of 10 percent of the voting rights thereunder of the corporation or the transfer, assignment or other disposition of the stock or voting rights of the corporation which results in the ownership or control of more than 10 percent of the stock or voting rights thereunder of the corporation by any person shall be subject to approval by the Public Health Council; and

(iii) a statement that no stock or voting rights thereunder of the corporation may be owned or controlled by another corporation.

(5) Stock shall consist of one class of common stock only.

(b) An affidavit from each applicant setting forth:

(1) that he is to be the sole beneficial owner of the voting shares of which he is to be the holder of record in the proposed corporation;

(2) the number of voting shares in the proposed corporation of which he is to be the holder of record; and

(3) that all stock authorized by the certificate of incorporation will be issued and outstanding.

(c) The proposed stock certificate, bearing imprinted on the face thereof legend that any transfer, assignment or other disposition of 10 percent or more of the stock or of the voting rights thereunder of the corporation, or the transfer, assignment or other disposition of the stock or voting rights of the corporation which results in the ownership or control of more than 10 percent of the stock or voting rights thereunder of the corporation by any person shall be subject to approval by the Public Health Council, and that another corporation is prohibited by law from owning or controlling any of the stock or voting rights thereunder of the corporation.

(d) Information as to the character, experience, competency and standing in their community of the proposed incorporators and directors.

(e) Such additional pertinent information or documents necessary for the Public Health Council's consideration, as requested.

(f) The person, or partners, who are operating a proprietary nursing home, in accordance with the provisions of applicable law, may apply to the Public Health Council for its approval of the incorporation of such business. In addition to the aforesaid requirements for business corporations, the applicant for such approval shall file a copy of the document giving approval of the establishment of the applicant as operator of the nursing home, or proof that such nursing home was being operated by the applicant, in accordance with applicable provisions of law.

(g) The ownership or control by another corporation of any of the stock or voting rights thereunder of the corporation shall constitute sufficient grounds for the revocation, limitation or annulment of the approval of establishment. (h) Within 30 days after approval of establishment, the corporation shall furnish to the New York State Department of Health a list of the names of all of the shareholders of the corporation, duly certified by the secretary of the corporation as to completeness and accuracy, and shall thereafter furnish such a certified list at annual intervals. Failure to comply with the provisions of this subdivision shall constitute sufficient grounds for the revocation, limitation or annulment of the approval of establishment.
 

Volume

VOLUME D (Title 10)

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