1.A.2.a. Business entity

Rule

Documentation of legal business entity (e.g. incorporation, LLC documents or business license).

Levels

This rule applies to all levels of support.

Guidance

Accredited recovery residence providers must be a legal business entity (e.g., partnership, corporation, limited liability companies). Business entities are registered with the Secretary of State. A single provider may operate one or more properties, meaning multiple properties can operate under a single entity. However, some providers choose to establish a separate entity for each property.

Frequently Asked Questions (FAQs):

• Can Affiliates suggest what type of legal entity a provider should be? No. Affiliates can provide education, but should NOT provide legal or tax advice. The type of legal business entity most commonly used can greatly differ across levels. Providers should consult legal and tax professionals to determine which structure is most appropriate. Incorporation occurs at the state level, and laws can differ from state-to-state. Refer providers to state laws and rules.

• Can an accredited recovery residence operate using a doing business as (DBA) name? Yes, but the Affiliate will require the provider to be transparent and submit corresponding documents.

• Can an accredited recovery residence be owned by an organization based in another state? Yes, as long as required documents have been filed or registered with the state where the recovery residence is located. Laws about out-of-state entities doing business within a state differ from state to state.

Evaluation

• Is there documentation that confirms the recovery residence is being operated as a legal business entity?

• Does the entity name on the document match the entity name on the:

  • Accreditation application?

  • Resident agreement?

  • Insurance policy?

Evidence

• Policy and procedure

• Business entity document(s), which can include:

  • Incorporation documents from the Secretary of State OR

  • IRS determination letter OR

  • Business license

• Resident agreement
• Insurance policy

References

• NARR Standard 3.0

• NARR Standard 3.0 Compendium

• What business entity is right for me?

• How is this rule relevant to my accreditation application?