Current through Register Vol. 46, No. 39, September 25, 2024
(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.
