N.Y. Comp. Codes R. & Regs. tit. 9 § 113.9

Current through Register Vol. 46, No. 45, November 2, 2024

Section 113.9 - Registrations Non-transferable

(a) Registrations issued under this Part shall be effective only for the registered organization and shall specify:

(1) the name and address of the registered organization;

(2) name of the contact person for the registered organization;

(3) the activities the registered organization is permitted to perform under the registration for each approved location; and

(4) the real property, buildings and facilities that may be used for the permitted activities of the registered organization.

(b) Registrations are not transferable or assignable, including, without limitation, to another registered organization.

(c) A registered organization shall not change its composition, including but not limited to, a change in ownership, structure or control, without notification to the Board and without prior written approval of the Board. Failure to notify the Board and receive prior written approval of such changes may result in civil penalties or revocation of the registered organization's registration. For purposes of this subdivision, a change shall include, but not be limited to:

(1) the sale or acquisition of 5% or more equity in the registered organization or in an entity holding a controlling interest in the registered organization, except for the following situations:

(i) passive investments whereby the individual investor buys and holds a diversified mix of assets and who does not participate in the day-to-day decisions of running the company and has no control over the registered organization; or

(ii) where an individual owns employee stock options which gives the employee a right to buy or exercise a set number of shares of the registered organization's stock but does not convey actual ownership or control over the registered organization; or

(2) any change in control, where an individual, corporation or entity will be in a position to control the decision-making of a registered organization, including but not limited to:

(i) control of more than 50% of the voting rights or has the power to appoint more than 50% of the directors;

(ii) any individual or entity who has an agreement that specifies the way in which they may vote, to work collectively, and in the aggregate, have 50% or more of voting rights or has the power to appoint more than 50% of the directors;

(iii) contract away the rights to control the organization or the right to exercise control over the business, or other rights as determined by the Board, to a person or entity that is not a member of the governing body of the organization; or

(iv) right to veto significant events which may include, but are not limited to, any sale of all, or substantially all, of the registered organization's assets, a merger or consolidation, a change in ownership or control, liquidation, dissolution of a registered organization, or other events as determined by the Board, or

(3) the appointment or removal of any member of the governing body of such organization, including but not limited to, those who have control in the appointment of members to the governing body; or

(4) a change of ownership, or roles and responsibilities of any individual or entity, such that the net effect would cause a change in the power to direct, or cause the direction of, the management and policies of the organization.

(d) Registered organizations seeking to materially change their composition pursuant to subdivision (c) of this section, shall submit an application to the Board at least sixty (60) days prior to the proposed date of execution, acquisition or change. In determining whether to approve such application, the Board may set terms or conditions under which it may allow the continued operation of the registered organization. The Board shall consider whether to grant or deny the application utilizing the criteria set forth in section 113.7 of this Part. The fee for such amendment shall be $5,000.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 113.9

Adopted New York State Register February 22, 2023/Volume XLV, Issue 08, eff. 2/22/2023