N.Y. Not-for-Profit Corporation Law § 1412: University faculty practice corporations

§ 1412. University faculty practice corporations.

(a) Organization. Notwithstanding any other provision of law, one or

more individuals who are duly authorized by law to render the same

professional service, which shall be the practice of medicine, the

practice of dentistry, the practice of chiropractics, the practice of

physical therapy or the practice of optometry, and who are members of

the faculty of the same accredited medical school, dental school,

chiropractic college, college or university with an accredited doctor of

physical therapy program or optometry college, as applicable, in the

state of New York may organize, or cause to be organized, a university

faculty practice corporation under this article (1) for the purpose of

supporting the educational mission of such school by providing clinical

instruction and supervision of students of such school, interns and

residents and, incident thereto, rendering professional services and (2)

which shall be operated in compliance with (A) section 501(c)(3) of the

United States internal revenue code and (B) the faculty practice plan

with which members of the faculty of such school are required to comply,

as amended from time to time.

(b) Definition. "University faculty practice corporation" means a

corporation organized or reincorporated under this section.

(c) Certificate of incorporation. The certificate of incorporation of

a university faculty practice corporation shall meet the requirements of

this chapter and shall have attached thereto a certificate or

certificates issued by the licensing authority certifying that each of

the proposed members, if any, directors and officers is authorized by

law to practice the profession which the corporation is being organized

to practice. The certificate shall also state (1) the name of the

medical school, dental school, chiropractic college, college or

university with an accredited doctor of physical therapy program or

optometry college, as applicable, in the state of New York of which the

proposed members, if any, directors and officers are faculty and (2)

that such corporation shall operate in compliance with (A) section

501(c)(3) of the United States internal revenue code and (B) the faculty

practice plan with which members of the faculty of such school are

required to comply, as amended from time to time.

(d) Type. A university faculty practice corporation is a charitable

corporation under this chapter.

(e) Applicability of laws; members, directors and officers. This

chapter shall be applicable to a university faculty practice corporation

except to the extent that the provisions thereof conflict with this

section. A university faculty practice corporation may consolidate or

merge only with another university faculty practice corporation. The

following provisions of article fifteen of the business corporation law

shall be applicable to a university faculty practice corporation except

that each reference in such provisions to a "shareholder" shall be

deemed to be a reference to a "member" and each reference in such

provisions to "shareholders" shall be deemed a reference to "members":

paragraphs (a), (b), (c) and (e) of section fifteen hundred one;

paragraphs (b), (c) and (d) of section fifteen hundred three; paragraphs

(a), (c) and (g) of section fifteen hundred four; section fifteen

hundred five; section fifteen hundred nine except to the extent such

section refers to section fifteen hundred ten; paragraph (a) of section

fifteen hundred twelve; section fifteen hundred fourteen; and section

fifteen hundred fifteen. No individual may be a member, director or

officer of a university faculty practice corporation unless such

individual is authorized by law to practice in this state the profession

which such corporation is authorized to practice and is a member of the

faculty of the medical school, dental school, chiropractic college,

college or university with an accredited doctor of physical therapy

program or optometry college which such corporation is organized to

support.

(f) Corporations heretofore incorporated. Any corporation heretofore

incorporated under article fifteen of the business corporation law and

operated in compliance with the requirements of section 501(c)(3) of the

United States internal revenue code may amend its certificate of

incorporation and be reincorporated as a university faculty practice

corporation organized under this section by making and filing in the

office of the secretary of state a certificate entitled "Certificate of

Reincorporation of...(name of incorporation) under section 1412 of the

Not-for-Profit Corporation Law." (1) Such reincorporation certificate

shall contain the provisions required, and any other provisions

permitted, by section 402 of this chapter and shall also set forth (A) a

statement that such corporation is filing such reincorporation

certificate under this section, (B) if the name of such corporation has

been changed, the name under which such corporation was originally

incorporated, (C) the date of incorporation of such corporation, (D) the

names and post-office addresses of the holders of record of all of the

outstanding shares of such corporation entitled to vote, (E) a statement

that such corporation has elected to become and be a university faculty

practice corporation organized and operated under by virtue of this

section and (F) the statements required by paragraph (c) of this

section. (2) Such reincorporation certificate shall be either (A)

subscribed in person or by proxy by all of the holders of record of all

of the outstanding shares of such corporation entitled to vote and shall

have annexed an affidavit of the secretary or an assistant secretary

that the persons who have executed the certificate, in person or by

proxy, constitute all of the holders of record of all of the outstanding

shares of the corporation entitled to vote or (B) subscribed by the

president or a vice president and the secretary or an assistant

secretary and shall have annexed an affidavit of such officers stating

that they have been authorized to execute and file such reincorporation

certificate by the votes, cast in person or by proxy, of all of the

holders of record of all of the outstanding shares of such corporation

entitled to vote at the meeting at which such votes were cast, and that

such votes were cast at a meeting of shareholders held on a date

specified, upon notice pursuant to section six hundred five of the

business corporation law. (3) A reincorporation pursuant to this

paragraph shall not effect a dissolution of such corporation, but shall

be deemed a continuation of its corporate existence, without affecting

its then-existing property rights or liabilities, or the liabilities of

its shareholders, directors or officers as such, but thereafter it shall

have only such rights, powers and privileges, and it and such

shareholders, directors and officers shall be subject only to such other

duties and liabilities, as a university faculty practice corporation and

members, directors and officers thereof. (4) Upon the filing of a

reincorporation certificate in the office of the secretary of state, (A)

any issued and outstanding shares of such corporation shall be purchased

by such corporation at a purchase price equal to the price for which

such shares were originally issued, or such other price as such

corporation shall agree to, such price to be paid out of the surplus of

the corporation, whereupon such shares shall be deemed cancelled as of

the date of such filing and (B) such reincorporation certificate shall

be deemed to replace the certificate of incorporation of such

corporation. The department of state shall not file such certificate of

reincorporation unless the consent of the commissioner of taxation and

finance is attached thereto. Such certificate of consent shall only be

given if the commissioner of taxation and finance ascertains that all

taxes imposed under article nine-A of the tax law, as well as penalties

and interest charges related thereto, accrued against the corporation

have been paid.

(g) Effect of section. University faculty practice corporations

incorporated or reincorporated under this section shall be organized and

operated exclusively for the purposes set forth in paragraph (a) of this

section and shall be subject to the restrictions and limitations imposed

by or pursuant to paragraphs (a) and (e) of this section.

Notwithstanding anything to the contrary in article twenty-eight of the

public health law or the regulations adopted pursuant thereto, no

corporation organized under this section shall be deemed to be

establishing or operating a hospital, diagnostic center and/or treatment

center requiring establishment or construction approval solely by reason

of being organized as a not-for-profit corporation. Insofar as the

provisions of this section are inconsistent with the provisions of any

other law, general or special, the provisions of this section shall be

controlling as to the corporations incorporated or reincorporated

hereunder.