senate Bill S7328

Authorizes corporation to allow attendance of a meeting of shareholders by remote communication

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 02 / May / 2012
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 30 / May / 2012
    • 1ST REPORT CAL.945
  • 31 / May / 2012
    • 2ND REPORT CAL.
  • 04 / Jun / 2012
    • ADVANCED TO THIRD READING
  • 21 / Jun / 2012
    • COMMITTED TO RULES

Summary

Authorizes a corporation to allow attendance of a meeting of shareholders by remote communication.

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Bill Details

See Assembly Version of this Bill:
A1710A
Versions:
S7328
Legislative Cycle:
2011-2012
Current Committee:
Senate Rules
Law Section:
Business Corporation Law
Laws Affected:
Amd ยงยง602 & 605, BC L

Votes

6
0
6
Aye
0
Nay
0
aye with reservations
0
absent
0
excused
0
abstained
show Corporations, Authorities and Commissions committee vote details

Sponsor Memo

BILL NUMBER:S7328

TITLE OF BILL:
An act
to amend the business corporation law, in relation to attendance of a
meeting of shareholders by remote communication

PURPOSE:
This bill will offer the option to business corporations to
authorize, by action of the board of directors, to implement
reasonable measures to provide shareholders who are not physically
present at shareholder meetings with an opportunity to participate
long distance by electronic measures.

SUMMARY OF PROVISIONS:
Section 1 - amends paragraphs (b), (c) and (d)
of section 602 of the Business Corporation Law to offer as an option,
but not a mandate, the ability of corporations to have long distance
participation of shareholders in shareholder meetings by electronic
methods.

Section 2 - amends section 605 of the Business Corporation Law to
provide notice of means of electronic participation to shareholders
when such option is offered.

Section 3 - provides that this act shall take effect immediately.

JUSTIFICATION:
This bill has been suggested by the Business Law
Section of the New York State Bar Association. The bill recognizes
the advances that have been made in long distance telemeeting
technology and offers this option to corporations. This bill provides
more flexibility to corporations to offer long distance electronic
participation to shareholders if the board of directors determines
such method of participation is appropriate for their corporation,
and can potentially provide greater convenience to shareholders to
participate in meetings.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take place immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7328

                            I N  S E N A T E

                               May 2, 2012
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Corporations, Author-
  ities and Commissions

AN ACT to amend the business corporation law, in relation to  attendance
  of a meeting of shareholders by remote communication

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraphs (b), (c) and (d) of section 602 of the  business
corporation  law  are  relettered  paragraphs (c), (d) and (e) and a new
paragraph (b) is added to read as follows:
  (B) (I) A CORPORATION MAY, IF AUTHORIZED BY THE  BOARD  OF  DIRECTORS:
(1) IMPLEMENT REASONABLE MEASURES TO PROVIDE SHAREHOLDERS NOT PHYSICALLY
PRESENT  AT  A SHAREHOLDERS' MEETING A REASONABLE OPPORTUNITY TO PARTIC-
IPATE IN THE PROCEEDINGS OF THE MEETING SUBSTANTIALLY CONCURRENTLY  WITH
SUCH  PROCEEDINGS;  AND/OR  (2)  PROVIDE  REASONABLE  MEASURES TO ENABLE
SHAREHOLDERS TO VOTE OR GRANT PROXIES WITH RESPECT TO MATTERS  SUBMITTED
TO  THE  SHAREHOLDERS  AT A SHAREHOLDERS' MEETING BY MEANS OF ELECTRONIC
COMMUNICATION; PROVIDED THAT THE CORPORATION SHALL, IF  APPLICABLE,  (A)
IMPLEMENT  REASONABLE MEASURES TO VERIFY THAT EACH PERSON DEEMED PRESENT
AND PERMITTED TO VOTE AT THE MEETING BY  MEANS  OF  ELECTRONIC  COMMUNI-
CATION  IS  A SHAREHOLDER OF RECORD AND (B) KEEP A RECORD OF ANY VOTE OR
OTHER ACTION TAKEN BY A SHAREHOLDER PARTICIPATING AND VOTING BY MEANS OF
ELECTRONIC COMMUNICATIONS AT  A  SHAREHOLDERS'  MEETING.  A  SHAREHOLDER
PARTICIPATING  IN  A SHAREHOLDERS' MEETING BY THIS MEANS IS DEEMED TO BE
PRESENT IN PERSON AT THE MEETING.
  (II) NOTHING REQUIRED IN SUBPARAGRAPH  (I)  OF  THIS  PARAGRAPH  SHALL
LIMIT, RESTRICT OR SUPERSEDE OTHER FORMS OF VOTING AND PARTICIPATION.
  (III)  FOR  PURPOSES  OF  THIS  PARAGRAPH,  "REASONABLE MEASURES" WITH
RESPECT TO PARTICIPATING IN PROCEEDINGS SHALL INCLUDE, BUT NOT BE LIMIT-
ED TO, AUDIO WEBCAST OR OTHER BROADCAST OF THE MEETING  AND  FOR  VOTING
SHALL INCLUDE BUT NOT BE LIMITED TO TELEPHONIC AND INTERNET VOTING.
  S  2. Section 605 of the business corporation law, as amended by chap-
ter 746 of the laws of 1963, paragraph (a) as amended by chapter 498  of
the laws of 1998, is amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15703-01-2

S. 7328                             2

S 605. Notice of meetings of shareholders.
  (a)  Whenever  under  the  provisions of this chapter shareholders are
required or permitted to take any action at a meeting, notice  shall  be
given  stating  the  place,  date  and hour of the meeting, THE MEANS OF
ELECTRONIC COMMUNICATIONS, IF ANY, BY WHICH SHAREHOLDERS AND  PROXYHOLD-
ERS  MAY PARTICIPATE IN THE PROCEEDINGS OF THE MEETING AND VOTE OR GRANT
PROXIES AT SUCH MEETING and, unless it is the annual meeting, indicating
that it is being issued by or at the direction of the person or  persons
calling  the  meeting.  Notice of a special meeting shall also state the
purpose or purposes for which the meeting is called. Notice of any meet-
ing of shareholders may be written or electronic. If,  at  any  meeting,
action is proposed to be taken which would, if taken, entitle sharehold-
ers  fulfilling  the  requirements  of section 623 (Procedure to enforce
shareholder's right to receive payment for shares)  to  receive  payment
for  their  shares, the notice of such meeting shall include a statement
of that purpose and to that effect and shall be accompanied by a copy of
section 623 or an outline of its material terms. Notice of  any  meeting
shall  be  given  not fewer than ten nor more than sixty days before the
date of the meeting, provided, however, that such notice may be given by
third class mail not fewer than twenty-four nor  more  than  sixty  days
before  the date of the meeting, to each shareholder entitled to vote at
such meeting. If mailed, such notice is  given  when  deposited  in  the
United States mail, with postage thereon prepaid, directed to the share-
holder  at  the  shareholder's  address  as  it appears on the record of
shareholders, or, if the shareholder shall have filed with the secretary
of the corporation a request that notices to the shareholder  be  mailed
to  some  other  address, then directed to him at such other address. If
transmitted electronically, such notice is given when  directed  to  the
shareholder's  electronic mail address as supplied by the shareholder to
the secretary of the corporation or as otherwise  directed  pursuant  to
the  shareholder's  authorization  or  instructions. An affidavit of the
secretary or other person giving the notice or of a  transfer  agent  of
the  corporation that the notice required by this section has been given
shall, in the absence of fraud, be prima facie  evidence  of  the  facts
therein stated.
  (b) When a meeting is adjourned to another time or place, it shall not
be  necessary,  unless the by-laws require otherwise, to give any notice
of the adjourned meeting if the time and place to which the  meeting  is
adjourned  AND  THE MEANS OF ELECTRONIC COMMUNICATIONS, IF ANY, BY WHICH
SHAREHOLDERS AND PROXYHOLDERS MAY PARTICIPATE IN THE PROCEEDINGS OF  THE
MEETING AND/OR VOTE OR GRANT PROXIES AT THE MEETING are announced at the
meeting  at which the adjournment is taken, and at the adjourned meeting
any business may be transacted that might have been  transacted  on  the
original  date  of  the  meeting.  However, if after the adjournment the
board fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given to each shareholder of  record  on  the
new record date entitled to notice under paragraph (a).
  (C)  NOTHING  REQUIRED IN PARAGRAPHS (A) AND (B) OF THIS SECTION SHALL
LIMIT, RESTRICT OR SUPERSEDE OTHER FORMS OF VOTING AND PARTICIPATION.
  S 3. This act shall take effect immediately.

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