Form 5871, Disclosure of Ownership and Control Statement

Effective Date: 6/2015

Availability

Word: 5871.doc
PDF: 5871.pdf

Instructions

Updated: 6/2015

Purpose

Form 5871 is completed and submitted as a condition of approval or renewal of a contract agreement between the disclosing entity (applicant/provider) and DADS for any services program. A full and accurate disclosure of ownership and control interest is required. Failure to submit requested information may result in denial of the disclosing entity's request to participate in DADS programs, or where the disclosing entity already participates, termination of the disclosing entity's contract with DADS.

Note: Governmental entities do not have to submit this form.

Instructions for DADS Staff

When to Prepare

Obtain a completed and signed Form 5871 for:

  • a new contract; and
  • a change in ownership or control interest.

Form Retention

Retain Form 5871 and attachments in accordance with the records retention requirements in the Contract Administration Handbook.

DISCLOSING ENTITY'S INSTRUCTIONS FOR COMPLETING FORM 5871

Section 1. Disclosing Entity Information

Legal Name of Disclosing Entity (applicant/provider) – Enter the full legal name of the disclosing entity, exactly as it was chartered, filed, registered or otherwise legally declared. If an individual, enter the individual’s full legal name.

Doing Business As (d/b/a), if applicable – If applicable, enter the d/b/a relevant to this contract. Note: A d/b/a is a "fictitious" business name; it is not the name of the legal entity that owns the business. Do not use a d/b/a to disclose the ownership interest of a legal entity.

Name of Contact Person – Enter the name of the person who can answer questions about the information furnished on the form.

Title or Relationship to Disclosing Entity – Enter the contact person's title or relationship to the disclosing entity. Examples of title or relationship are president, partner, manager, administrator, authorized representative, spouse, etc.

Area Code and Telephone No. – Self-explanatory.

Area Code and Fax No. – Self-explanatory.

Email Address – Self-explanatory.

Business Entity Type – Check the disclosing entity's applicable business entity type. If a for-profit corporation, check "Publicly Traded" if the corporation's shares are traded on an open market, such as a stock exchange.

Taxpayer Identification No. (EIN or SSN) – Enter the federal employer identification number (EIN) assigned to the disclosing entity by the Internal Revenue Service. Temporary taxpayer identification numbers are not acceptable. If the disclosing entity is a sole proprietorship or individual who does not have an EIN, enter the owner's or individual's Social Security number (SSN).

Provider Identifier No. (NPI or API) – Enter the National Provider Identifier (NPI) number assigned to the disclosing entity by the Centers for Medicare and Medicaid Services (CMS) or the Atypical Provider Identifier (API) number assigned by DADS, whichever is applicable.

Section 2. Disclosing Entity's Ownership and Control Interest Information

The disclosing entity is required to fully disclose all levels of ownership of 5% or more, and to fully disclose all entities and all individuals at each level of ownership, from the ownership of the disclosing entity to the ownership of each successive ownership entity. The 5% or more ownership interest may be direct, indirect or a combination of direct and indirect ownership interest.

Direct ownership interest is defined as the possession of stock, equity in capital or any interest in the profits of the disclosing entity. Indirect ownership interest is defined as ownership interest in an entity that has direct or indirect ownership interest in the disclosing entity. The amount of indirect ownership in the disclosing entity that is held by any other entity is determined by multiplying the percentage of ownership interest at each level. An indirect ownership must be reported if it equates to an ownership interest of 5% or more of the disclosing entity.

Example: If A owns 10% of the stock in a corporation that owns 80% of the stock of the disclosing entity, A's interest equates to an 8% indirect ownership and must be reported. Conversely, if B owns 80% of the stock of a corporation that owns 5% of the stock of the disclosing entity, B's interest equates to 4% indirect ownership in the disclosing entity and does not need to be reported.

The disclosing entity is also required to fully disclose all individuals that have a control interest at each level of ownership and all managing employees at each level of ownership. A managing employee is defined as a general manager, business manager, administrator, executive director or other individual who exercises operational or management control over, or who directly or indirectly conducts the day-to-day operation of an institution, organization or agency.

First, list business entities with a 5% or more ownership interest in 2.a. Then, list individuals with a 5% or more ownership interest in 2.b., followed by all individuals with a control interest and managing employees. If additional entries are required for full disclosure, copy this section and include as an attachment.

Exhibit A of the instructions when completing this section.

2.a. Business Entity Ownership Interest

Legal Name of Business Entity – Enter the legal name of the business entity.

Business Entity Type — Enter the applicable business entity type. For example, for-profit corporation, limited partnership, limited liability company, etc. Note: For corporations, see Form 5871, Attachment A, Corporation Addresses, for additional disclosure requirements.

Employer Identification No. (EIN) – Enter the federal employer identification number (EIN) assigned by the IRS.

Physical Address – Self-explanatory.

Shares Publicly Traded? – Indicate whether the business entity's shares are publicly traded. Check NA if not applicable. For example, a for-profit corporation should check Yes or No; a general partnership should check NA.

Publicly traded is defined as shares of a company that are traded on an open market, such as a stock exchange.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that is owned by the business entity.

2.b. Individual Ownership or Control Interest; Managing Employees

Name of Individual – Self-explanatory.

Social Security Number – Self-explanatory.

Date of Birth – Self-explanatory.

Title or Position Held with Disclosing Entity – Enter individual's title or position with the disclosing entity, if applicable. For example, director, president, general counsel, member, general partner, limited partner, trustee, etc.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that is owned by the individual, if applicable.

Physical Address – Self-explanatory.

Driver License No. (DLN) – Self-explanatory

State – Enter the abbreviation for the DLN state of issue.

2.c. For for-profit corporations only

Check Yes or No to indicate whether or not 100% ownership interest has been disclosed in this section. If No, check Yes or No to indicate whether or not each of the remaining shareholders owns less than 5%. If No, disclose remaining shareholders that have a 5% or more ownership interest or attach an explanation why these shareholders are not disclosed.

Section 3. Disclosing Entity's Ownership and Control Interest Information Next Level(s)

Based on the first level of ownership information in Section 2, complete the next level of ownership and control interest information. Complete this section for each business entity previously disclosed in 2.a and each successive business entity.

The disclosing entity is required to fully disclose all levels of ownership or control interest in the disclosing entity, and is required to disclose all entities and all individuals at each level of ownership, from the ownership of the disclosing entity to the ownership of each successive ownership entity. The disclosing entity is also required to disclose all managing employees at each level of ownership.

Use a separate page for each business entity disclosed at any level of ownership structure.

Legal Name of Business Entity Disclosed on This Page – Enter the legal name of the business entity previously listed in 2.a.

Disclose each business entity and individual with an ownership or control interest in the business entity being disclosed on this page. First, list business entities with an 5% or more ownership interest in 3.a. Then, list individuals with an 5% or more ownership interest in 3.b., followed by all individuals with a control interest and managing employees. If additional entries are required for full disclosure, copy this section and include as an attachment.

Exhibit A of the instructions when completing this section.

3.a. Business Entities Ownership Interest

Legal Name of Business Entity – Enter the legal name of the business entity with an ownership interest in the business entity being disclosed.

Business Entity Type – Enter the applicable business entity type. For example, for-profit corporation, limited partnership, limited liability company, etc. Note: For corporations, see Form 5871, Attachment A, Corporation Addresses, for additional disclosure requirements.

Employer Identification No. (EIN) – Enter the business entity's federal employer identification number (EIN) assigned by the internal Revenue Service (IRS).

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Shares Publicly Traded? – Indicate whether the business entity's shares are publicly traded. Check NA if not applicable. For example, a for-profit corporation should check Yes or No; a general partnership should check NA.

Publicly traded is defined as shares of a company that are traded on an open market, such as a stock market.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that is owned by the business entity.

3.b. Individual Ownership or Control Interest; Managing Employees

First Name of Individual – Self-explanatory.

Last Name of Individual – Self-explanatory.

MI and Jr., Sr., etc. – Self-explanatory.

Social Security No. – Self-explanatory.

Date of Birth – Self-explanatory.

Title or Position Held with Disclosed Entity – Enter individual's title or position with the business entity being disclosed, if applicable. For example, director, president, general counsel, member, general partner, limited partner, trustee, etc.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that is owned by the individual, if applicable.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Driver License No. – Self-explanatory.

State – Enter the abbreviation of the DLN state of issue.

3.c. For for-profit corporations only

Check Yes or No to indicate whether or not 100% ownership interest has been disclosed in this section. If No, check Yes or No to indicate whether or not each of the remaining shareholders owns less than 5%. If No, disclose remaining shareholders that have a 5% or more ownership interest or attach an explanation why these shareholders are not disclosed.

Section 4. Management Company Information

Complete this section only if the disclosing entity contracts or proposes to contract with a management company to perform any services related to the disclosing entity's participation in DADS programs. Otherwise, leave sections 4-6 blank and go to Section 7.

Legal Name of Business Entity – Enter the legal name of the management company.

Business Entity Type – Enter the applicable business entity type. For example, for profit-corporation, limited partnership, limited liability company, etc.

Employer Identification Number (EIN) – Enter the federal employer identification number (EIN) assigned to the management company by the IRS.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Mailing Address (P.O. Box or Street, City, State, ZIP Code) – Self-explanatory.

Name of Contact Person – Enter the name of the person who can answer questions about the information furnished on the form.

Title or Relationship to Management Company – Enter the contact person's title or relationship to the management company. Examples of title or relationship are president, authorized representative, partner, manager, administrator, spouse, etc.

Area Code and Telephone No. – Self-explanatory.

Area Code and Fax No. – Self-explanatory.

Email Address – Self-explanatory.

Section 5. Management Company Ownership and Control Interest Information

Complete this section if Section 4 was completed.

The disclosing entity is required to fully disclose all levels of ownership or control interest in the management company, and is required to disclose all entities and all individuals at each level of ownership, from the ownership of the management company to the ownership of each successive ownership entity. The disclosing entity is also required to disclose all managing employees at each level of ownership.

First, list business entities with an 5% or more ownership interest in 5.a. Then, list individuals with an 5% or more ownership interest in 5.b., followed by all individuals with a control interest and managing employees. If additional entries are required for full disclosure, copy this section and include as an attachment.

Exhibit A of the instructions when completing this section.

5.a. Business Entity With An Ownership Interest

Legal Name of Business Entity – Enter the legal name of the business entity with an ownership interest in the management company.

Business Entity Type – Enter the applicable business entity type. For example, for-profit corporation, limited partnership, limited liability company, etc.

Employer Identification No. (EIN) – Enter the business entity's employer identification number (EIN) assigned by the IRS.

Physical Address (Street, City, State, ZIP Code)– Self-explanatory.

Shares Publicly Traded? – Indicate whether the business entity's shares are publicly traded. Check NA if not applicable. For example, a for-profit corporation should check Yes or No; a general partnership should check NA.

Publicly traded is defined as shares of a company that are traded on an open market, such as a stock market.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that is owned by the business entity.

5.b. Individual Ownership or Control Interest; Managing Employees

First Name of Individual – Self-explanatory.

Last Name – Self-explanatory.

MI; Jr., Sr., etc. – Self-explanatory.

Social Security No. – Self-explanatory.

Date of Birth – Self-explanatory.

Title or Position Held with Management Company – Enter individual's title or position with the management company, if applicable. For example, director, president, general counsel, member, general partner, limited partner, trustee, etc.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that are owned by the individual, if applicable.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Driver License No. – Self-explanatory.

State – Enter the abbreviation of the DLN state of issue.

5.c. For for-profit corporations only

Check Yes or No to indicate whether or not 100% ownership interest has been disclosed in this section. If No, check Yes or No to indicate whether or not each of the remaining shareholders owns less than 5%. If No, disclose remaining shareholders that have a 5% or more ownership interest or attach an explanation why these shareholders are not disclosed.

Section 6. Management Company Ownership and Control Interest Information: Next Level(s)

Based on the first level of ownership information in Section 5, complete the next level of ownership and control interest information. Complete this section for each business entity previously disclosed in 5.a and each successive business entity.

The disclosing entity is required to fully disclose all levels of ownership or control interest in the management company, and is required to disclose all entities and all individuals at each level of ownership, from the ownership of the management company to the ownership of each successive ownership entity. The disclosing entity is also required to disclose all managing employees at each level of ownership.

Use a separate page for each business entity disclosed at any level of ownership structure.

Legal Name of Business Entity Disclosed This Page – Enter the legal name of the business entity previously listed in 5.a.

Disclose each business entity and individual with an ownership or control interest in the business entity being disclosed on this page. First, list all business entities with an ownership interest of 5% or more in 6.a. Then, list individuals with an ownership interest of 5% or more in 6.b., followed by all individuals with a control interest and managing employees. If additional entries are required for full disclosure, copy this section and include as an attachment.

Exhibit A of the instructions when completing this section.

6.a. Business Entity Ownership Interest

Legal Name of Business Entity – Enter the legal name of the business entity with an ownership interest in the business entity being disclosed.

Business Entity Type – Enter the applicable business entity type. For example, for-profit corporation, limited partnership, limited liability company, etc.

Employer Identification No. (EIN) – Enter the business entity's federal employer identification number (EIN) assigned by the IRS.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Shares Publicly Traded? – Indicate whether the business entity's shares are publicly traded. Check NA if not applicable. For example, a for-profit corporation should check Yes or No; a general partnership should check NA.

Publicly traded is defined as shares of a company that are traded on an open market, such as a stock market.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that is owned by the business entity.

6.b. Individual Ownership or Control Interest; Managing Employees

First Name of Individual – Self-explanatory.

Last Name – Self-explanatory.

Ml; Jr., Sr., etc. – Self-explanatory.

Social Security No. – Self-explanatory.

Date of Birth – Self-explanatory.

Title or Position Held with Disclosed Entity – Enter individual's title or position with the business entity being disclosed in this section, if applicable. For example, director, president, general counsel, member, general partner, limited partner, trustee, etc.

Percent of Ownership – Enter the percentage of shares, membership shares, equity, etc., that is owned by the individual, if applicable.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Driver License No. – Self-explanatory.

State – Enter the abbreviation of the DLN state of issue.

6.c. For for-profit corporations only

Check Yes or No to indicate whether or not 100% ownership interest has been disclosed in this section. If No, check Yes or No to indicate whether or not each of the remaining shareholders owns less than 5%. If No, disclose remaining shareholders that have a 5% or more ownership interest or attach an explanation why these shareholders are not disclosed.

Section 7. Other Ownership and Control Interest Information

If additional entries are required for full disclosure, copy this page and include as an attachment.

7.a.

Check Yes or No to answer the two questions. If both questions are answered Yes, provide the requested information. Note: A secured obligation with a business entity that is a financial institution regulated by a federal or state governmental agency does not have to be disclosed.

To determine ownership interest in a mortgage, deed of trust, note, or other obligation, the percentage of interest owned in the obligation is multiplied by the percentage of the disclosing entity's assets used to secure the obligation.

Example: If A owns 10% of a note secured by 60% of the disclosing entity's assets, A's interest equates to 6% and must be reported. Conversely, if B owns 40% of a note secured by 10% of the disclosing entity's assets, B's interest equates to 4% and does not need to be reported.

Legal Name of Business Entity – Enter the legal name of the business entity with a 5% or more ownership interest in an obligation secured by the disclosing entity's assets.

Employer Identification No. (EIN) – Enter the business entity's employer identification number (EIN) assigned by the IRS.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Name of individual – Self-explanatory.

Social Security No. – Self-explanatory.

Date of Birth – Self-explanatory.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Driver License No. – Self-explanatory

State – Enter the abbreviation of the DLN state of issue.

7.b.

Check Yes or No to answer the two questions. If both questions are answered Yes, provide the requested information.

Legal Name of Business Entity (Subcontractor) – Enter the legal name of the subcontractor's business entity.

Business Entity Type – Enter the applicable business entity type. For example, for-profit corporation, limited partnership, limited liability company, etc.

Employer Identification No. (EIN) – Enter the business entity's federal employer identification number (EIN) assigned by the IRS.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

Disclosing Entity's Percentage of Ownership in Subcontractor – Enter the disclosing entity's percentage of ownership interest in the subcontractor's business entity.

Provide the name, federal taxpayer ID number and address of all other individuals ...:

Name of Individual or Business Entity– Enter the name of the individual or business entity.

SSN or EIN – Enter Social Security number (SSN) for individuals and employer identification number (EIN) for business entities.

Physical Address (Street, City, State, ZIP Code) – Self-explanatory.

7.c.

Check Yes or No to answer the question. If answered Yes, provide the requested information.

Note: A step-relationship or adoptive relationship is considered the same as a natural relationship.

Name of First Individual – Enter the name of the individual who is related to another individual.

Identified in Section – Check the applicable box to indicate the section the first individual is listed. More than one box may be checked, if applicable.

Name of Second Individual – Enter the name of the individual who is related to the first individual named above.

Identified in Section – Check the applicable box to indicate the section the second individual is listed. More than one box may be checked, if applicable.

Relationship of First Individual to Second Individual – Check the applicable box to indicate the relationship of the first individual to the second individual.

7.d.

Check Yes or No to answer the question. If answered Yes, provide the requested information.

Other disclosing entity is any other Medicaid entity and any entity that does not participate in Medicaid but is required to disclose certain ownership and control information because of participation in any of the programs established under Title V, XVIII, XX or XXI of the Social Security Act.

Name of Individual/Business Entity – Enter the name of the individual or business entity.

Identified in Section – Check the applicable box to indicate the section the individual or business entity is identified. More than one box may be checked, if applicable.

Name of Other Disclosing Entity – Enter the name of the other disclosing entity in which the individual or business entity named above has an ownership or control interest.

Section 8. General Disclosure Questions

Complete this section for all individuals and business entities listed in Sections 2, 3, 4, 5, 6 or 7. If any question is answered Yes, provide the information requested.

If additional entries are required for full disclosure, copy this page and include as an attachment.

8.a.

Name of Individual/Business Entity – Enter the name of the individual or business entity.

Identified in Section – Check the applicable box to indicate the section the individual or business entity is identified. More than one box may be checked, if applicable.

Date of Conviction – Enter the date on which the individual or business entity was found guilty of the crime.

Program Name and Offense – Enter the name of the program (Medicare, Medicaid, CHIP, etc.) and the crime of which the individual or business entity was convicted. For example, presenting false, fictitious or fraudulent claims; conspiracy to defraud the government; kickbacks; making false statements to the government, etc.

Terms of Sentence – Enter the terms of punishment given for the individual or business entity convicted of the crime, as ordered by the judge. For example, jail or prison time, fines, community service, restitution, terms of probation, etc,

8.b.

Name of Individual/Business Entity – Enter the name of the individual or business entity.

Identified in Section – Check the applicable box to indicate the section the individual or business entity is identified. More than one box may be checked, if applicable.

Program Name – Enter the name of the state or federal program. For example, Medicare, Medicaid, CHIP, etc.

State (if app.) – Enter the abbreviation for the state that excluded or debarred the individual or business entity, if applicable.

Reason – Enter the reason the individual or business entity was excluded or debarred. For example, making false statements, presenting fraudulent claims, fraud, etc.

Start Date – Enter the start date for the period of exclusion or debarment.

End Date – Enter the end date for the period of exclusion or debarment, if applicable.

Section 9. Disclosing Entity's Certification

The owner or an authorized representative of the disclosing entity must certify the information provided on the form and all attachments, if any, is true and complete. If the legal entity is not a sole proprietorship, the authorized representative  must be named on a current Form 2031, Governing Authority Resolution – Business Organization, that is on file with DADS.

Attachment A, Corporation Addresses

Complete this portion of Form 5871, if applicable, as directed in Section 2 and Section 3 of this form.

Exhibit A – Required Ownership and Control Interest Disclosures by Business Entity Type

Business Entity Type Ownership and Control Interest Disclosure
Sole Proprietorship
  • The sole proprietor
  • All managing employees
For-profit Corporation
  • All shareholders (entities and individuals) that have 5% or more ownership interest.
  • President
  • Secretary
  • Treasurer
  • All officers and directors
  • All trustees
  • All managing employees
Nonprofit Organization
  • President
  • Secretary
  • Treasurer
  • All officers and directors
  • All board members and/or board trustees
  • All managing employees
Limited Liability Company
  • All members and managers (percentages must total 100%). If there are membership units that are unassigned, include a note in the block following the last disclosed member that indicates the remaining membership units are unassigned.
  • All officers
  • All managing employees
General Partnership
  • All partners (percentages must total 100%)
  • All managing employees
Limited Partnership
  • All general partner(s)
  • All limited partners
    (percentages for general and limited partners must total 100%)
  • All managing employees
Limited Liability Partnership
  • All general partner(s)
  • All limited partners
    (percentages for general and limited partners must total 100%)
  • All managing employees
Trust, Living Trust or Estate
  • All trustees
  • All managing employees
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