14 CRR-NY 841.16NY-CRR
14 CRR-NY 841.16
14 CRR-NY 841.16
841.16 Related party transactions.
(a) The determination as to whether two parties are related will be made by the office on a case-by-case basis. Such determination shall be based on the facts, circumstances, and history of the situation.
(b) Relatedness will be determined based on association, affiliation, control, common ownership, or an immediate family relationship.
(c) Two parties shall be deemed related if one party is, to a significant extent, associated or affiliated with, or has control of or is controlled by, the other party. Association and affiliation shall include, but is not limited to, both business partnerships and familial relationships. Control shall exist where an individual or an organization has the power, directly or indirectly, to significantly influence or direct the actions or policies of another organization or institution.
(d) Common ownership shall exist when an individual or individuals possess significant ownership or equity in both parties.
(e) The existence of an immediate family relationship shall create an irrebuttable presumption of relatedness through control or attribution of ownership or equity interests where the significance tests outlined in subdivision (d) of this section and this subdivision are met. The following persons are considered immediate family:
(1) husband and wife;
(2) natural parent and child;
(3) siblings;
(4) adopted child and adopted parent;
(5) stepparent, stepchild, stepsister, and stepbrother; father-in-law, mother-in-law, sister- in-law, brother-in-law, son-in-law, and daughter-in-law; and
(6) grandparent and grandchild.
(f) The commissioner will determine whether two parties are related. A provider may provide information to the commissioner to assist in making this determination, however the commissioner's determination will be final.
(g) The existence of any of the conditions in paragraphs (1) through (5) of this subdivision will create a presumption that a transaction is between a provider and a related party. This list should not be considered to be all inclusive:
(1) The provider is a partnership and the other party to the transaction is a partner of the provider.
(2) The provider is a corporation or a limited liability company and the other party to the transaction is an officer, director, trustee, principal stockholder or controlling party of the provider.
(3) The provider is a corporation or a limited liability company and the other party to the transaction is a corporation, or limited liability company where someone is an officer, director, trustee, principal stockholder or controlling party of both corporations.
(4) The provider is a natural person and the other party to the transaction is either:
(i) a member of the provider's immediate family;
(ii) a partnership in which the provider is a partner;
(iii) a co-partner;
(iv) a corporation or a limited liability company in which the provider is an officer, director, trustee, principal stockholder or controlling party;
(v) a corporation or a limited liability company in which a member of the provider's immediate family is an officer, director, trustee, principal stockholder or controlling party a corporation in which any partnership in which the provider is a partner is a principal stockholder;
(vi) a corporation or a limited liability company in which a co-partner of the provider is an officer, director, trustee, principal stockholder or controlling party; or
(vii) a corporation or a limited liability company in which another corporation is a principal stockholder, where the provider is an officer, director, trustee, principal stockholder or a controlling party of such other corporation.
(5) The provider is an unincorporated association and the other party to the transaction is either:
(i) someone who is a member of the provider;
(ii) someone, a member of whose immediate family is a member of the provider;
(iii) a partnership in which one partner is a member of the provider;
(iv) a corporation or a limited liability corporation in which a member of the provider is an officer, director, trustee, principal stockholder or controlling party;
(v) a corporation or a limited liability corporation in which a member of the provider has an immediate family member who is an officer, director, trustee, principal stockholder or controlling party;
(vi) a corporation or a limited liability corporation or a partnership, in which a member of the provider is a partner or a principal stockholder;
(vii) a corporation or a limited liability corporation in which a co-partner of a member of the provider is an officer, director, trustee, principal stockholder or controlling party; or
(viii) a corporation or a limited liability corporation in which another corporation is principal stockholder, where a member of the provider is an officer, director, trustee, principal stockholder or a controlling party of such other corporation.
14 CRR-NY 841.16
Current through May 31, 2021
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IMPORTANT NOTE REGARDING CONTENT CURRENCY: JULY 31, 2023, is the date of the most recently produced official NYCRR supplement covering this rule section. For later updates to this section, if any, please: consult editions of the NYS Register published after this date; or contact the NYS Department of State Division of Admisnistrative Rules at [email protected]. See Help for additional information on the currency of this unofficial version of the NYS Rules.