FTC issues new guidance concerning nonprofit joint venture ASCs & similar entities

The Federal Trade Commission's Premerger Notification Office issued new guidance Oct. 26 on reporting transactions involving nonprofit entities, with specific examples pertaining to healthcare transactions, JDSupra reports. 

The office defined the three most common forms of nonprofit transactions:

  • Simple acquisition: an existing entity to hold assets of an acquired entity as a result of an acquisition transaction.
  • Consolidation: two existing nonprofit entities consolidate under a new holding company.
  • Joint venture formation: two existing nonprofit entities form a new entity.

Certain types of nonprofit transactions may be exempt from requirements to report the transaction. The office's Rule 802.40 provides an exemption for transactions involving the formation of nonprofit entities, such as joint ventures to own and operate an ASC.

The office cautioned organizations against focusing solely on board control to determine whether a proposed transaction would cause a change in beneficial ownership.

Click here to learn more about the new guidance.

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