6E-2.0081. Change of Ownership or Control

(1) Pursuant to Section 1005.31(8), F.S., a licensed institution shall notify the Commission prior to a change of ownership or control. The notification shall be made in writing no less than 30 days prior to the change. The Commission shall review each case and, if the standards for licensure are met, take affirmative action to issue a new license after receipt and evaluation of the appropriate documentation and payment of the required fee. The Commission shall make the final determination as to whether a change of ownership or control has occurred.

(2) Change of ownership means a transfer, assignment, or conveyance of issued or outstanding stock or other instrument of ownership which results in a change in control of the institution.

(a) For a privately held corporation, a change of ownership occurs:

1. When a majority of stock or other instrument of ownership is conveyed; or

2. When an amount of stock or other instrument of ownership sufficient to increase an individual’s holdings to 50 percent or above is conveyed; or

3. When the majority of the institution’s governing board changes within a calendar year.

(b) For a publicly held corporation, a change of ownership occurs:

1. When there is a change of 50 percent or more of the voting members of the board of directors in any 12-month period; or

2. When there is a change in the number of voting members of the board of directors in any 12-month period that will allow a group of directors to exercise control who could not exercise control before the change; or

3. When there is an acquisition of outstanding voting shares by any entity or group whereby that entity or group owns 50 percent or more of the total outstanding voting shares; or

4. When any other transaction occurs that is deemed by an appropriate governmental agency to constitute a change of control, including but not limited to a transaction that requires the corporation to file a notice of change of ownership with the Securities and Exchange Commission of the United States.

(c) For a not-for-profit corporation, a change of ownership occurs:

1. When there is a change of 50 percent or more of the voting members of the controlling board in any 12-month period; or

2. When there is a change in the number of voting members of the controlling board in any 12-month period that will allow a group of members to exercise control who could not exercise control before the change.

(d) For a limited liability company, a change of ownership occurs:

1. When the transfer of 50 percent or more of the direct or beneficial ownership interest is conveyed from one member or members to another member or members; or

2. When there is a transfer of direct or beneficial ownership interest that results in the holding of 50 percent or more of the total direct or beneficial ownership interest by any member other than any previous member who owned 50 percent or more of the total direct or beneficial ownership interest; or

3. When there is a transfer of direct or beneficial ownership interest whereby a member’s direct or beneficial ownership interest decreases from more than 50 percent to less than 50 percent; or

4. When there is any other transaction whereby a member or group of members who previously could not exercise control of the company as described in this rule now can exercise control.

(e) For purposes of determining ownership, married couples shall be considered a single entity, and closely related family groups shall be considered a single entity when all of the present and future relevant stockholders actively participate in the management of the corporation. No change of ownership occurs when stock is transferred to a close family member by operation of law or inheritance upon the death of one of the stockholders.

(3) A change in control means any change in the organization of an institution which affects the authority to establish or modify institutional policies, standards, and procedures. A change in control occurs when a person acquires or loses control of an institution or of the parent corporation that owns the institution, whether by means of the sale of the institution, sale of the assets, transfer of the controlling interest of stock, conversion of the institution from nonprofit to for-profit or vice versa, or similar transaction. A change in control does not occur upon the retirement or death of the owner of an institution, if ownership and control passes to a member of the owner’s family or to a person with a pre-existing ownership interest in the institution.

(4) With the written notification provided to the Commission as required in subsection (1) of this rule, the institution shall provide:

(a) A written statement of the anticipated effects of such change upon the name, purpose, programs, personnel, administrative organization, finances, and other standards for licensure, and upon its accredited status, if accredited.

(b) A copy of the institution’s last application for licensure, or licensure review, annotated to disclose all changes to the materials previously submitted.

(c) The new owners, in the case of a change of ownership, shall provide a written sworn statement attesting to:

1. The accuracy and completeness of the materials presented to the Commission;

2. A guarantee that the new ownership will comply with the requirements of Chapter 1005, F.S., and these rules;

3. Confirmation that the new owner(s), chief administrative officers, directors, or registered agents are not ineligible to hold such positions in a licensed institution, pursuant to Section 1005.38(2), (3) and (4), F.S.

(d) Information and fee required for the criminal justice information investigation authorized by Section 1005.38(4), F.S.

(5) If a change of ownership or control occurs in the period between regularly scheduled Commission meetings, the materials submitted are complete and in compliance with Commission standards, and if it appears to be in the best interest of the students, interim executive approval of the change and interim Provisional Licensure shall be granted by the Executive Director and reported to the Commission at its next meeting for further action.

(6) The currently licensed institution shall be responsible for arranging and conducting a change in ownership or control in a manner and at a time so that there is no adverse impact on the opportunity of currently enrolled students to complete their training and receive student services. In addition, the institution shall remain responsible for properly completing the training of the enrolled students and for providing the student services, and shall be subject to disciplinary action for any violations of statutes and rules which may occur in that regard during the transition. A change of ownership or control of a institution, or the issuance of a new license, shall not in any manner release the institution from its legal obligations to enrolled students to provide education and services required under the student’s enrollment agreement, Chapter 1005, F.S., or the rules of the Commission. The new licensee shall be under a continuing obligation to fulfill the terms of all contracts with the enrolled students.

Rulemaking Authority 1005.31(8)(b) FS. Law Implemented 1005.31(5), (8) FS. History–New 4-2-03.