§ 2853 — Nursing home companies; how created

New York § 2853

• Jurisdiction: New York
• Law PBH: Public Health
• Art. 28-A: Nursing Home Companies

Text

§ 2853. Nursing home companies; how created. 1. Notwithstanding the\nprovisions of any other law or requirement to the contrary, non-profit\nnursing home companies shall be incorporated and organized pursuant to\nthe not-for-profit corporation law and this article.\n In addition to those matters required to be set forth in the\ncertificate of incorporation by the not-for-profit corporation law, the\ncertificate shall state:\n a. That, among the purposes for which it is formed, the company is to\nplan, construct, erect, build, acquire, alter, reconstruct,\nrehabilitate, own, maintain and operate one or more nursing home\nprojects pursuant to this article.\n b. The number of directors, which shall be not less than three nor\nmore than thirty-five. One additional director may be designated by the\ncommissioner. In the absence of fraud or bad faith, the director\nappointed by the commissioner shall not be personally liable for the\ndebts, obligations or liabilities of the company.\n c. That the real property of the company shall not be sold,\ntransferred, encumbered or assigned except as permitted by the\nprovisions of this article.\n d. That the company has been organized exclusively to serve a public\npurpose and that it shall be and remain subject to the supervision and\ncontrol of the commissioner pursuant to the provisions of article\ntwenty-eight of this chapter and this article.\n e. That all income and earnings of the company shall be used\nexclusively for its corporate purposes.\n f. That no part of the net income or net earnings of the company shall\ninure to the benefit or profit of any private individual, firm or\ncorporation.\n 2. Notwithstanding the provisions of any other law or requirement to\nthe contrary, limited-profit nursing home companies shall be\nincorporated and organized pursuant to this article.\n A limited-profit nursing home company may be created by three or more\npersons, approved by the commissioner, by making, subscribing,\nacknowledging and filing with the secretary of state a certificate which\nshall state, in addition to those matters required to be set forth in\nsuch certificate by the business corporation law to the extent that such\nlaw is not inconsistent with this article:\n a. That among the purposes for which it is formed, the company is to\nplan, construct, erect, build, acquire, alter, reconstruct,\nrehabilitate, own, maintain and operate one or more nursing home\nprojects pursuant to this article.\n b. The number of directors, which shall not be less than three nor\nmore than thirty-five and who shall be elected by the shareholders of\nthe company. One additional director, who shall not be a shareholder and\nwho need not meet other qualifications which may be prescribed by the\ncertificate of incorporation or the by-laws, may be designated by the\ncommissioner. In the absence of fraud or bad faith, the director\nappointed by the commissioner shall not be personally liable for the\ndebts, obligations or liabilities of the company.\n c. That the real property of the company shall not be sold,\ntransferred, encumbered or assigned except as permitted by the\nprovisions of this article.\n d. That the company has been organized to serve a public purpose and\nthat it shall be and remain subject to the supervision and control of\nthe commissioner pursuant to the provisions of article twenty-eight of\nthis chapter and this article; that so long as this article remains\napplicable to any project of the company, all real and personal property\nacquired by it, and all structures erected or rehabilitated by it, shall\nbe deemed to be acquired, rehabilitated or created for the proper\neffectuation of the purposes of this article, and that the directors and\nshareholders or debenture holders of such company shall be deemed to\nhave agreed that they shall at no time receive or accept from such\ncompany in repayment of their investment in its shares or debentures any\nsums in excess of the par value of the share or debentures, together\nwith such dividends, interest or other compensation as are prescribed by\nor permitted under this article, and that, upon dissolution of the\ncompany, any surplus remaining after the payment of all its obligations\nshall be distributed and disposed of and title to the property may be\nconveyed in fee, only as prescribed by this article.\n e. That the entire amount to be paid in cash or property by the\nshareholders and debenture holders shall be at least five percentum of\nthe project cost.\n f. That in the event of a violation by a company of any provision of\nthe certificate of incorporation or of law or of the loan or mortgage\ncontract or any order of the commissioner or of any rules and\nregulations duly promulgated pursuant to the provisions of this chapter,\nthe commissioner may remove any or all of the existing directors of the\ncompany and appoint such person or persons whom the commissioner deems\nadvisable, including officers and employees of the department, as new\ndirectors to serve in the places of those removed; that directors so\nappointed by the commissioner who are officers or employees of the\ndepartment shall serve in such capacity without compensation; and that\nany directors so appointed by the commissioner shall serve only for a\nperiod coexistent with the duration of such violation or until the\ncommissioner is assured in a manner satisfactory to him against\nviolations of a similar nature.\n The provisions of section thirty-five-a of the social services law\nshall not be applicable to a limited-profit nursing home company,\nnotwithstanding any contrary provisions contained therein.\n