BILL NUMBER:  S5008

 TITLE OF BILL :
An act to amend the business corporation law, in relation to
authorizing any shareholder owning twenty percent or more of the
issued shares to elect that proportion of the directors which is equal
to such shareholder's ownership of corporate shares


 PURPOSE OR GENERAL IDEA OF BILL :
Provides that any shareholder who owns twenty percent or more of a
corporation's shares shall be entitled to elect its leadership.

 SUMMARY OF SPECIFIC PROVISIONS :
This bill would amend section 618 the business corporation law by
adding a new subdivision that would allow a holder of 20% or more of
the shares of a corporation to require board of directors to establish
cumulative voting for the election of directors of the corporation.
The minority shareholder would be required to petition for cumulative
voting not less than 90 days before a scheduled election of directors.

 JUSTIFICATION :
It is the guiding principle of the united States, as per the Bill of
Rights, to provide within constitutional limitation, for fair
representation in all aspects of human endeavor. Exclusion, isolation,
and segregation in all walks of American life have been addressed by
              

all levels of the legislative and judicial systems in a quest to
eliminate and abolish the oppression that they manifest in our
society.

The concept of American Democracy is based on the rule of the majority
and that rule is regulated and tempered by the power of the
legislature that has been historically obligated to protect the rights
and interests of the minority.

In a corporation, the majority also wins and normally there are no
additional structures to protect the minority. For example, if a
corporation has two owners and one has 51 % of the shares and the
other 49% of the remaining outstanding shares, the owner holding 51 %
of shares can defeat the other owner in every vote, potentially,
without the knowledge of the minority shareholder. It is possible that
the minority shareholder would have no representation and no position
other than that of passive investor in the corporation and thus be
totally at the mercy of the majority shareholder.

Because a corporation does not provide the structures that make
protection of minority interests possible, it is important that the
NYS Legislature remedy this situation by establishing legal means for
the protection for corporate minority interests and to provide
shareholders with a minimum of twenty percent (20%) legal interest the
option of cumulative voting that would allow such a shareholder to
elect proportionate board membership.

 PRIOR LEGISLATIVE HISTORY :
2005-2006: A11473 - corporations, authorities and commissions
2007-2008: A6884-A - reported out of corporations, authorities and
commissions

 FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS :
None.

 EFFECTIVE DATE :
This act shall take effect on the first January next succeeding the
date on which it shall have become a law, and shall apply to elections
of directors occurring on or after such date.