2006 New York Code - Nursing Home Companies; How Created.

 
    §  2853.  Nursing  home companies; how created. 1. Notwithstanding the
  provisions of any other law or requirement to the  contrary,  non-profit
  nursing  home  companies shall be incorporated and organized pursuant to
  the not-for-profit corporation law and this article.
    In addition  to  those  matters  required  to  be  set  forth  in  the
  certificate  of incorporation by the not-for-profit corporation law, the
  certificate shall state:
    a. That, among the purposes for which it is formed, the company is  to
  plan,    construct,   erect,   build,   acquire,   alter,   reconstruct,
  rehabilitate, own,  maintain  and  operate  one  or  more  nursing  home
  projects pursuant to this article.
    b.  The  number  of  directors, which shall be not less than three nor
  more than thirty-five. One additional director may be designated by  the
  commissioner.    In  the  absence  of  fraud  or bad faith, the director
  appointed by the commissioner shall not be  personally  liable  for  the
  debts, obligations or liabilities of the company.
    c.  That  the  real  property  of  the  company  shall  not  be  sold,
  transferred,  encumbered  or  assigned  except  as  permitted   by   the
  provisions of this article.
    d.  That  the company has been organized exclusively to serve a public
  purpose and that it shall be and remain subject to the  supervision  and
  control  of  the  commissioner  pursuant  to  the  provisions of article
  twenty-eight of this chapter and this article.
    e. That  all  income  and  earnings  of  the  company  shall  be  used
  exclusively for its corporate purposes.
    f. That no part of the net income or net earnings of the company shall
  inure  to  the  benefit  or  profit  of  any private individual, firm or
  corporation.
    2. Notwithstanding the provisions of any other law or  requirement  to
  the   contrary,   limited-profit   nursing   home   companies  shall  be
  incorporated and organized pursuant to this article.
    A limited-profit nursing home company may be created by three or  more
  persons,   approved   by   the  commissioner,  by  making,  subscribing,
  acknowledging and filing with the secretary of state a certificate which
  shall state, in addition to those matters required to be  set  forth  in
  such certificate by the business corporation law to the extent that such
  law is not inconsistent with this article:
    a.  That  among the purposes for which it is formed, the company is to
  plan,   construct,   erect,   build,   acquire,   alter,    reconstruct,
  rehabilitate,  own,  maintain  and  operate  one  or  more  nursing home
  projects pursuant to this article.
    b. The number of directors, which shall not be  less  than  three  nor
  more  than  thirty-five  and who shall be elected by the shareholders of
  the company. One additional director, who shall not be a shareholder and
  who need not meet other qualifications which may be  prescribed  by  the
  certificate  of  incorporation  or the by-laws, may be designated by the
  commissioner. In the  absence  of  fraud  or  bad  faith,  the  director
  appointed  by  the  commissioner  shall not be personally liable for the
  debts, obligations or liabilities of the company.
    c.  That  the  real  property  of  the  company  shall  not  be  sold,
  transferred,   encumbered   or  assigned  except  as  permitted  by  the
  provisions of this article.
    d. That the company has been organized to serve a public  purpose  and
  that  it  shall  be and remain subject to the supervision and control of
  the commissioner pursuant to the provisions of article  twenty-eight  of
  this  chapter  and  this  article;  that so long as this article remains
  applicable to any project of the company, all real and personal property
  acquired by it, and all structures erected or rehabilitated by it, shall
  be deemed to be  acquired,  rehabilitated  or  created  for  the  proper
  effectuation of the purposes of this article, and that the directors and
  shareholders  or  debenture  holders  of such company shall be deemed to
  have  agreed  that  they  shall  at  no time receive or accept from such
  company in repayment of their investment in its shares or debentures any
  sums in excess of the par value of the  share  or  debentures,  together
  with such dividends, interest or other compensation as are prescribed by
  or  permitted  under  this  article,  and  that, upon dissolution of the
  company, any surplus remaining after the payment of all its  obligations
  shall  be  distributed  and disposed of and title to the property may be
  conveyed in fee, only as prescribed by this article.
    e. That the entire amount to be  paid  in  cash  or  property  by  the
  shareholders  and  debenture holders shall be at least five percentum of
  the project cost.
    f. That in the event of a violation by a company of any  provision  of
  the  certificate  of  incorporation or of law or of the loan or mortgage
  contract  or  any  order  of  the  commissioner  or  of  any  rules  and
  regulations duly promulgated pursuant to the provisions of this chapter,
  the  commissioner may remove any or all of the existing directors of the
  company and appoint such person or persons whom the  commissioner  deems
  advisable,  including  officers  and employees of the department, as new
  directors to serve in the places of those  removed;  that  directors  so
  appointed  by  the  commissioner  who  are  officers or employees of the
  department shall serve in such capacity without compensation;  and  that
  any  directors  so  appointed by the commissioner shall serve only for a
  period coexistent with the duration  of  such  violation  or  until  the
  commissioner  is  assured  in  a  manner  satisfactory  to  him  against
  violations of a similar nature.
    The provisions of section thirty-five-a of  the  social  services  law
  shall  not  be  applicable  to  a  limited-profit  nursing home company,
  notwithstanding any contrary provisions contained therein.