A. 6128 2
otherwise) in conformity to the applicable provisions of the governing
instrument of the business trust.
b. "Business trust" shall mean an unincorporated organization which:
(1) is created by a trust instrument under which property is or will
be held, managed, administered, controlled, invested, reinvested or
operated, or business or professional activities are carried on or will
be carried on, by a trustee or trustees for the benefit of such person
or persons who are or may become entitled to a beneficial interest in
the trust property including but not limited to a trust of the type
known at common law as a "business trust" or "Massachusetts trust" or a
trust qualifying as a real estate investment trust under S 856, et seq.,
of the United States Internal Revenue Code of 1986, as amended, or under
any successor provision (whether or not a "business trust"; as such term
is used in the United States Bankruptcy Code, 11 U.S.C. S 101(9)), or a
trust qualifying as a real estate mortgage investment conduit under S
860D of the United States Internal Revenue Code of 1986, as amended, or
under any successor provision; and
(2) files a certificate of business trust pursuant to section two
hundred twelve of this chapter. Any such organization so organized shall
be a business trust and a separate legal entity. A business trust may be
organized to carry on any lawful business or activity, whether or not
conducted for profit, including without limitation for any of the
purposes referred to in paragraph one of this subdivision except to do
in this state any business for which another provision of law specif-
ically requires some other business entity or natural person to be
formed or used.
c. "Governing instrument" shall mean any written trust instrument
which creates a business trust, provides for the affairs of the business
trust and conduct of its business. The governing instrument:
(1) may provide that a person shall become a beneficial owner and
shall become bound by the governing instrument if such person, or a
representative authorized by such person orally, in writing or by other
action such as payment for a beneficial interest, complies with the
conditions for becoming a beneficial owner set forth in the governing
instrument or any other writing and acquires a beneficial interest; and
(2) may consist of one or more written agreements, instruments or
other writings, and may include or incorporate by-laws containing
provisions relating to the business of the business trust, the conduct
of its affairs and its rights or powers or the rights or powers of its
trustees, beneficial owners, agents or employees.
d. "Other business entity" shall mean any person other than a natural
person or domestic business trust.
e. "Person" shall mean any association, corporation, joint stock
company, estate, general partnership (including any registered limited
liability partnership or foreign limited liability partnership), limited
association, limited liability company (including a professional service
limited liability company), joint venture, limited partnership, natural
person, real estate investment trust, business trust or other trust,
custodian, nominee, or any other individual or entity in its own or any
representative capacity.
f. "Trustee" shall mean the person or persons appointed as a trustee
in accordance with the governing instrument of a business trust, and may
include all the beneficial owners or any number of such owners.
ARTICLE 2
BUSINESS TRUSTS
Section 201. Contributions by beneficial owners.
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202. Liability of beneficial owners, trustees and agents.
203. Business transactions of a beneficial owner with a business
trust.
204. Legal proceedings.
205. Rights of beneficial owners in trust property.
206. Management of business trust.
207. Trustee in state.
208. Existence of business trust.
209. Applicability of trust law.
210. Business trust name.
211. Reservation of business trust name.
212. Certificate of business trust.
213. Amendment of the certificate of business trust.
214. Cancellation of certificate of business trust.
215. Restated certificate of trust.
216. Execution of certificates.
217. Delivery to the department of state.
218. Execution, amendment or cancellation by judicial act.
S 201. Contributions by beneficial owners. a. A contribution of a
beneficial owner to a business trust may be made in cash, property or
services rendered, or by a promissory note or other obligation to
contribute cash or property or to perform services; provided, however,
that a person may become a beneficial owner of a business trust and may
receive a beneficial interest in a business trust without making a
contribution or being obligated to make a contribution to the business
trust.
b. Except as provided in the governing instrument, a beneficial owner
shall be obligated to the business trust to perform any promise, to
contribute cash or property or to perform services that is otherwise
enforceable pursuant to law, even if the beneficial owner is unable to
perform because of death, disability or any other reason. Except as
provided in the governing instrument, a beneficial owner who fails to
make the required contribution of property or services, shall be obli-
gated, at the option of the business trust, to contribute cash equal to
that portion of the value as stated in the records of the business
trust, if so stated, of the contribution that has not been made. Such
option shall be in addition to, not in lieu of, any other rights includ-
ing the right to specific performance that the business trust may
enforce against such beneficial owner under the governing instrument or
applicable law.
c. Unless otherwise provided in the governing instrument and except as
provided in section two hundred two of this article, the obligation of a
beneficial owner to make a contribution, or to return money or other
property paid or distributed in violation of this chapter may be compro-
mised only by the consent of all beneficial owners. A conditional obli-
gation of a beneficial owner to make a contribution, or return money or
other property to a business trust shall not be enforced unless the
conditions of the obligation have been satisfied or waived as to or by
such beneficial owner. Conditional obligations shall include contrib-
utions payable upon a discretionary call of a business trust or a bene-
ficial owner prior to the time the call occurs.
d. A governing instrument may provide that the interest of any benefi-
cial owner who fails to make any required contribution shall be subject
to specified consequences of such failure. Such consequences may
include, but are not limited to, reduction or elimination of the
defaulting beneficial owner's interest in the business trust, subordi-
A. 6128 4
nation of the defaulting beneficial owner's interest to those of nonde-
faulting beneficial owners, a forced sale of the defaulting beneficial
owner's beneficial interest, forfeiture of the defaulting beneficial
owner's beneficial interest, the lending by the other beneficial owners
of the amount necessary to meet the defaulting beneficial owner's
commitment, a fixing of the value of the defaulting beneficial owner's
beneficial interest by appraisal or by formula and redemption or sale of
such defaulting beneficial owner's beneficial interest at such value, or
any other consequences.
S 202. Liability of beneficial owners, trustees and agents. a. Neither
a beneficial owner or trustee of a business trust nor an agent of a
business trust (including a person having more than one such capacity)
shall be liable for any debts, obligations or liabilities of the busi-
ness trust or each other, whether arising in tort, contract or other-
wise, solely by reason of being a beneficial owner, trustee or agent
acting or omitting to act in such capacity or participating as an
employee, consultant, contractor or otherwise in the conduct of the
business of the business trust.
b. Notwithstanding the provisions of subdivision a of this section,
all or specified beneficial owners of a business trust may be liable for
all or specified debts, obligations or liabilities of a business trust
if (1) a statement to such effect is specifically contained in the
certificate of business trust of the business trust, and (2) any such
beneficial owner so liable shall have either (A) specifically consented
in writing (i) to the adoption of such provision, or (ii) to be bound by
such provision, or (B) specifically voted for the adoption of such
provision. The absence of either such statement in the certificate of
business trust or such consent or vote of any such beneficial owner
shall in no way affect or impair the ability of a beneficial owner to
act as a guarantor or surety for, provide collateral for or otherwise be
liable for the debts, obligations or liabilities of a business trust as
authorized pursuant to section two hundred three of this article.
S 203. Business transactions of a beneficial owner with a business
trust. Except as may be provided in the governing instrument of a busi-
ness trust, a beneficial owner may lend money to, borrow money from, act
as a guarantor or surety for, provide collateral for the obligations of,
and transact other business with the business trust and, subject to
other applicable provisions of law, have the same rights and obligations
with respect thereto as a person who is not a beneficial owner.
S 204. Legal proceedings. a. A business trust may sue and be sued, and
service of process may be effectuated by service of a summons and
complaint, or a summons with notice, as provided by rule three hundred
five of the civil practice law and rules, upon at least one trustee of
the business trust or the registered agent for service of process of the
business trust, if any, as provided by subdivision three of section
three hundred eight and rule three hundred eighteen of the civil prac-
tice law and rules, in the manner provided by section three hundred
eight of the civil practice law and rules. Furthermore, a business trust
may be sued for debts and other obligations or liabilities contracted or
incurred by the trustees or by the duly authorized agents of such trus-
tees, in the performance of their duties under the governing instrument
of the business trust, and for any damages to persons or property
resulting from the negligence of such trustees or agents acting in the
performance of such duties. Notwithstanding any other provision of this
section, in the event that the governing instrument of a business trust
creates one or more series as provided in paragraph two of subdivision b
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of section two hundred six of this article, and if separate and distinct
records are maintained for any such series and the assets associated
with any such series are held and accounted for separately from the
other assets of the business trust, or any other series thereof, and if
the governing instrument so provides, and notice of the limitation on
liabilities of such series is set forth in the certificate of business
trust of the business trust, then the debts, liabilities, obligations
and expenses incurred, contracted for or otherwise existing with respect
to a particular series shall be enforceable against the assets of such
series only, and not against the assets of the business trust generally.
b. A trustee of a business trust or the registered agent of the busi-
ness trust for service of process as provided by subdivision three of
section three hundred eight and rule three hundred eighteen of the civil
practice law and rules, may be served with process in the manner
prescribed in subdivision a of this section in all civil actions or
proceedings brought in this state involving or relating to the activ-
ities of the business trust or a violation by a trustee of a duty to the
business trust or any beneficial owner thereof, whether or not the trus-
tee is a trustee at the time suit is commenced. Every resident or
nonresident of this state who accepts election or appointment as a trus-
tee or serves as a trustee of a business trust shall, by such acceptance
of service as a trustee, be deemed to have consented to the appointment
of the New York trustee or registered agent of the business trust as
required by section two hundred seven of this article, as such person's
agent upon whom service of process may be made as provided in this
section. Such acceptance of service shall signify the consent of such
trustee that any process when so served shall be of the same legal force
and validity as if served upon such trustee within this state and such
appointment of such New York trustee or registered agent shall be irrev-
ocable.
c. In the governing instrument of a business trust or other writing, a
trustee may consent to be subject to the nonexclusive jurisdiction of
the courts of or arbitration in a specified jurisdiction, or the exclu-
sive jurisdiction of the courts of this state, and to be served with
legal process in the manner prescribed in such governing instrument of
the business trust or other writing.
d. A partnership (whether general or limited), corporation or other
business entity formed or organized under the laws of any foreign coun-
try or other jurisdiction other than this state shall not be deemed to
be doing business in this state solely by reason of its being a trustee
of a business trust.
e. The secretary of state shall be the agent of every domestic busi-
ness trust and every authorized foreign business trust upon whom process
against the business trust may be served. No domestic or foreign busi-
ness trust may be formed or authorized to do business in this state
under this chapter unless in its certificate of business trust or in its
application for authority it designates the secretary of state as such
agent. Any designated post office address to which the secretary of
state shall mail a copy of process served upon him or her as agent of a
domestic business trust or a foreign business trust shall continue until
the filing of a certificate under this article directing the mailing to
a different post office address.
f. Service of process on the secretary of state as agent of a domestic
business trust or authorized foreign business trust shall be made by
delivering a copy personally to and leaving with the secretary of state
or his or her deputy, or with any person authorized by the secretary of
A. 6128 6
state to receive such service, at the office of the department of state
in the city of Albany, duplicate copies of such process together with
the statutory fee, which fee shall be a taxable disbursement. Service of
process on such business trust shall be complete when the secretary of
state is so served. The secretary of state shall promptly send one such
copy by certified mail, return receipt requested, to such business trust
at the post office address on file in the department of state specified
for such purpose. The secretary of state shall keep a record of each
process served upon the secretary of state pursuant to this chapter,
including the date of such service and the action taken by the secretary
of state with reference thereto.
g. Nothing in this section shall be construed in a manner inconsistent
with any provision of article three of the civil practice law and rules,
nor shall anything in this section limit or affect the right to serve
process in any other manner provided by law. This section is an exten-
sion of and not a limitation upon the right otherwise existing of
service of legal process upon nonresidents.
S 205. Rights of beneficial owners in trust property. a. Except as
otherwise provided in the governing instrument of a business trust, a
beneficial owner shall have an undivided beneficial interest in the
property of the business trust and shall share in the profits and losses
of the business trust in the proportion (expressed as a percentage) of
the entire undivided beneficial interest in the business trust owned by
such beneficial owner. The governing instrument of a business trust may
provide that the business trust or the trustees, acting for and on
behalf of the business trust, shall be deemed to hold beneficial owner-
ship of any income earned on the securities of the business trust issued
by any business entities formed, organized or existing under the laws of
any jurisdiction, including the laws of any foreign country.
b. No creditor of a beneficial owner shall have any right, in such
capacity, to obtain possession of or otherwise exercise legal or equita-
ble remedies with respect to the property of the business trust.
c. A beneficial owner's beneficial interest in a business trust shall
be personal property notwithstanding the nature of the property of the
trust. Except as otherwise provided in the governing instrument of a
business trust, a beneficial owner has no interest in any specific prop-
erty of the business trust.
d. A beneficial owner's beneficial interest in a business trust shall
be freely transferable, except as provided in the governing instrument
of the business trust.
e. Except as otherwise provided in the governing instrument of a busi-
ness trust, when a beneficial owner becomes entitled to receive a
distribution, such beneficial owner shall have the status of and be
entitled to all remedies available to a creditor of the business trust
with respect to the distribution. A governing instrument may provide for
the establishment of record dates with respect to allocations and
distributions by the business trust.
S 206. Management of business trust. a. The business and affairs of a
business trust shall be managed by or under the direction of its trus-
tees. To the extent provided in the governing instrument of a business
trust, any person (including a beneficial owner) shall be entitled to
direct the trustees in the management of a business trust. Except as
otherwise provided in the governing instrument of a business trust,
neither the power to give direction to a trustee nor the exercise there-
of by any person (including a beneficial owner) shall cause such person
to be a trustee.
A. 6128 7
b. A governing instrument may include any provision relating to the
management of the business and affairs of the business trust, and the
rights, duties and obligations of the trustees, beneficial owners and
other persons, which is not contrary to the provisions of this chapter
and, without limitation:
(1) may provide for classes, groups or series of trustees or benefi-
cial owners, or classes, groups or series of beneficial interests,
having such relative rights, powers and duties as the governing instru-
ment may provide, and may make provision for the future creation of
additional classes, groups or series of trustees, beneficial owners or
beneficial interests, having such relative rights, powers and duties as
may from time to time be established, including rights, powers and
duties senior or subordinate to existing classes, groups or series of
trustees, beneficial owners or beneficial interests;
(2) may establish or provide for the establishment of designated
series of trustees, beneficial owners or beneficial interests having
separate rights, powers or duties with respect to specified property or
obligations of the business trust or profits and losses associated with
specified property or obligations, and any such series may have a sepa-
rate business purpose or investment objective;
(3) may provide for the taking of any action, including amendment of
the governing instrument, the accomplishment of a merger or consol-
idation, the appointment of one or more trustees, the sale, lease,
exchange, transfer, pledge or other disposition of all or any part of
the assets of the business trust or the assets of any series, or the
dissolution of the business trust, or may provide for the taking of any
action to create a class, group or series of beneficial interests that
was not previously outstanding, in any case without the vote or approval
of any particular trustee or beneficial owner, or class, group or series
of trustees or beneficial owners;
(4) may grant or deny to all or certain trustees or beneficial owners,
or a specified class, group or series of trustees or beneficial owners,
the right to vote, separately or with any or all other classes, groups,
or series of the trustees or beneficial owners, on any matter, such
voting being on a per capita, number, financial interest, class, group,
series or any other basis;
(5) may, to the extent that voting rights are granted in the governing
instrument, establish provisions relating to notice of the time, place
or purpose of any meeting at which any matter is to be voted on, waiver
of any such notice, action by consent without a meeting, the establish-
ment of record dates, quorum requirements, voting in person, by proxy or
in any other manner, or any other matter with respect to the exercise of
any such right to vote;
(6) may provide for the present or future creation of more than one
business trust, including the creation of a future business trust to
which all or any part of the assets, liabilities, profits or losses of
any existing business trust will be transferred, and for the conversion
of beneficial interests in an existing business trust, or series thereof
into beneficial interests in the separate business trust or series ther-
eof; and
(7) may provide for the appointment, election or engagement, either as
agents or independent contractors of the business trust or as delegates
of the trustees, as officers, employees, managers or other persons who
may manage the business and affairs of the business trust and may have
such titles and such relative rights, powers and duties as the governing
instrument shall provide. Except to the extent otherwise provided in the
A. 6128 8
governing instrument of a business trust, the trustees shall choose and
supervise such officers, managers, employees and other persons.
c. To the extent that, at law or in equity, a trustee has duties
(including fiduciary duties) and liabilities relating thereto to a busi-
ness trust or to a beneficial owner:
(1) any such trustee acting under a governing instrument shall not be
liable to the business trust or to any such beneficial owner for the
trustee's good faith reliance on the provisions of such governing
instrument; and
(2) the trustee's duties and liabilities may be expanded or restricted
by provisions in a governing instrument.
d. To the extent that, at law or in equity, an officer, employee,
manager or other person designated pursuant to paragraph seven of subdi-
vision b of this section has duties (including fiduciary duties) and
liabilities relating thereto to a business trust, a beneficial owner or
a trustee:
(1) any such officer, employee, manager or other person acting under a
governing instrument shall not be liable to the business trust, any
beneficial owner or any trustee for such person's good faith reliance on
the provisions of such governing instrument; and
(2) the duties and liabilities of an officer, employee, manager or
other person acting pursuant to paragraph seven of subdivision b of this
section may be expanded or restricted by provisions in a governing
instrument.
S 207. Trustee in state. a. Every domestic business trust shall at all
times have at least one trustee who, in the case of a natural person,
shall be a resident of this state or which, in all other cases, has its
principal place of business in this state.
b. Notwithstanding the provisions of subdivision a of this section, no
business trust which is, becomes or will become prior to or within one
hundred eighty days following the first issuance of beneficial inter-
ests, a registered investment company under the Investment Company Act
of 1940, as amended, shall be required to have a trustee who is a resi-
dent of this state or have a principal place of business in this state
as long as such business trust shall have and maintain in this state:
(1) a registered office, which need not be a place of business in this
state; and
(2) a registered agent for service of process on the business trust,
who may be either an individual resident in this state whose business
office is identical with such business trust's registered office, a
domestic corporation, or a foreign corporation authorized to transact
business in this state, having a business office identical with such
registered office.
c. Any business trust adopting or maintaining a registered office and
registered agent in this state under subdivision b of this section may,
upon adoption of such registered office and registered agent, change the
location of its registered office in this state to any other place in
the state, or may change the registered agent to any other person or
entity by filing an amendment to its certificate of business trust in
accordance with the applicable provisions of this article. If a business
trust which is an investment company registered as aforesaid maintains a
registered office and registered agent in this state under subdivision b
of this section, then the reference in paragraph three of subdivision a
of section two hundred twelve of this article to the "name and address
of at least one trustee that meets the requirements of this section"
shall be deemed a reference to the name and the business address of the
A. 6128 9
registered agent and registered office maintained under this section,
and the certificate of business trust filed under section two hundred
twelve of this article shall reflect such information in lieu of the
information otherwise required by paragraph three of subdivision a of
section two hundred twelve of this article.
d. Service of process upon a registered agent maintained by a business
trust pursuant to subdivision b of this section shall be effective as if
served upon one of the trustees of the business trust pursuant to
section two hundred four of this article.
S 208. Existence of business trust. a. Except as otherwise provided in
the governing instrument of a business trust, the business trust shall
have perpetual existence.
b. Except as otherwise provided in the governing instrument of a busi-
ness trust, the death, incapacity, dissolution, termination or bankrupt-
cy of a beneficial owner shall not result in the termination or dissol-
ution of a business trust.
S 209. Applicability of trust law. Except as otherwise provided in the
governing instrument of a business trust or in this chapter, the laws of
the state pertaining to trusts including the common law of business
trusts are applicable to business trusts organized under this chapter;
provided, however, that for purposes of taxation a business trust shall
be classified as a corporation, an association, a partnership, a trust
or otherwise, as shall be determined under the United States Internal
Revenue Code of 1986, as amended, or under any successor provision.
S 210. Business trust name. The name of each business trust as set
forth in its certificate of business trust and the name of each foreign
business trust as set forth in its application for authority:
a. shall contain without abbreviation the words "Business Trust" or
the abbreviation "B.T." or "BT";
b. shall be such as to distinguish it from the name of (1) any other
domestic business trust as defined in subdivision b of section one
hundred two of this chapter, (2) any foreign business trust authorized
to do business as a foreign business trust in this state, or (3) a
fictitious name of a foreign business trust authorized to do business as
a foreign business trust in this state appearing on an application filed
pursuant to section five hundred four of this chapter;
c. shall, unless the business trust or foreign business trust shall
have complied with the provisions of section one hundred thirty of the
general business law, be the name used by the business trust in its
conduct of business;
d. shall not contain any word or phrase, or any abbreviation or deriv-
ative thereof, the use of which is prohibited or restricted by any other
statute of this state, unless in the latter case the restrictions have
been complied with;
e. shall not contain the following words, phrases or any abbreviation
or derivative thereof:
board of trade state police urban development
chamber of commerce state trooper urban relocation
community renewal tenant relocation corporation
incorporated partnership limited liability company;
f. shall not contain the following words, or any abbreviation or
derivative thereof:
acceptance doctor lawyer
annuity endowment loan
A. 6128 10
assurance fidelity mortgage
attorney finance savings
bank guaranty surety
benefit indemnity title
bond insurance underwriter
casualty investment
unless the approval of the superintendent of banks or the superintendent
of insurance, as appropriate, is attached to the certificate of business
trust, application for authority or amendment thereof; or unless the
word "doctor" or "lawyer" or an abbreviation or derivative thereof is
used in a context which clearly denotes a purpose other than the prac-
tice of law or medicine;
g. shall not, unless the approval of the office of temporary and disa-
bility assistance or office of children and family services is attached
to the certificate of business trust or application for authority or
amendment thereof, contain the words "blind" or "handicapped" or the
phrase "physically or mentally challenged". Such approval shall be
granted by the office of temporary and disability assistance or office
of children and family services if in its opinion the words "blind" or
"handicapped" or "physically or mentally challenged" as used in the
proposed name will not tend to mislead or confuse the public into
believing that the business trust or foreign business trust is organized
for charitable or nonprofit purposes related to the blind or the hand-
icapped;
h. shall not, unless the approval of the attorney general is attached
to the certificate of business trust or application for authority,
contain the word "exchange" or any abbreviation or derivative thereof.
Such approval shall not be granted by the attorney general if in his or
her opinion the use of the word "exchange" in the business trust's
proposed name would falsely imply that the business trust conducts its
business at a place where trade is carried on in securities or commod-
ities by brokers, dealers or merchants; and
i. shall not contain any word or phrase, or any abbreviation or deriv-
ative thereof, the use of which is prohibited or restricted by any other
statute of this state, unless in the latter case the restrictions have
been complied with.
S 211. Reservation of business trust name. a. Subject to the
provisions of section two hundred ten of this article, the exclusive
right to the use of a name may be reserved by:
(1) any person intending to organize or cause the organization of a
business trust under this chapter;
(2) any domestic business trust or any foreign business trust author-
ized to do business in this state intending to change its name;
(3) any foreign business trust intending to apply for authority to do
business in this state and to adopt that name; and
(4) any person intending to organize a foreign business trust and
intending to have it apply for authority to do business in this state.
b. A fictitious name for use pursuant to section five hundred four of
this chapter may be reserved by:
(1) any foreign business trust intending to apply for authority to do
business in this state pursuant to subdivision a of section five hundred
four of this chapter;
(2) any authorized foreign business trust intending to change the
fictitious name under which it does business in this state; and
A. 6128 11
(3) any authorized foreign business trust that has changed its name in
its jurisdiction of organization, such new name not being available in
this state.
c. Application to reserve a business trust name shall be delivered to
the department of state. It shall set forth the name and address of the
applicant, the name to be reserved, and a statement of the basis for the
application under subdivision a or b of this section. The secretary of
state may require that there be included in the application a statement
as to the nature of the business to be conducted by the business trust,
it being sufficient to state either alone or with any other purposes,
that the business trust intends to conduct any lawful act or activity
for which business trusts may be formed under this chapter, provided
that it also shall state that it is not intended to be formed to engage
in any act or activity requiring the consent or approval of any state
official, department, board or agency or other body without such consent
or approval first being obtained. If the name is available for use by
the applicant for a business trust, the department of state shall
reserve the name for the use of the applicant for a period of sixty days
and issue a certificate of reservation. The restrictions and qualifica-
tions set forth in section two hundred ten of this article shall not be
waived by the issuance of a certificate of reservation. The certificate
of reservation shall include the name of the applicant, the name
reserved and the date of reservation. The certificate of reservation,
or in lieu thereof an affidavit by the applicant or by his or her agent
or attorney that the certificate of reservation has been lost or
destroyed, shall accompany the certificate of business trust or the
application for authority when either is delivered to the department of
state.
d. The department of state may extend the reservation for additional
periods of not more than sixty days each, upon the written request of
the applicant or his or her attorney in fact or agent delivered to the
department of state and filed before expiration of the reservation peri-
od then in effect. Such request shall have attached to it the certif-
icate of reservation of name. No more than two such extensions shall be
granted.
e. Upon request of the applicant delivered to the department of state
before the expiration of the reservation period, the department shall
cancel the reservation.
S 212. Certificate of business trust. a. In order to form a business
trust, a certificate of business trust shall be executed in accordance
with section two hundred sixteen of this article. The certificate, enti-
tled "Certificate of business trust of ... (name of business trust)
under section two hundred twelve of the Business Trust Law," shall be
delivered to the department of state in accordance with section two
hundred seventeen of this article and shall set forth:
(1) the name of the business trust;
(2) if the business trust is to have a registered agent, the name and
address of such registered agent within this state and a statement that
the registered agent is to be the agent of the business trust upon whom
process against it may be served;
(3) the name and address of at least one trustee that meets the
requirements of section two hundred seven of this article and if differ-
ent the address of the principal place of business of the business
trust;
(4) the designation of the secretary of state as agent of the business
trust upon whom process against it may be served and the post office
A. 6128 12
address within or without this state to which the secretary of state
shall mail a copy of any process against the business trust served upon
him or her;
(5) the latest date upon which the business trust is to dissolve or
that its existence is perpetual;
(6) if all or specified classes of beneficial owners are to be liable
in their capacity as beneficial owners for all or specified debts, obli-
gations or liabilities of the business trust as authorized pursuant to
section two hundred two of this article, a statement that all or speci-
fied beneficial owners are so liable for such debts, obligations or
liabilities in their capacity as beneficial owners of the business trust
as authorized pursuant to section two hundred two of this article; and
(7) any other provisions, not inconsistent with law, that the trustees
determine to include therein including, but not limited to, the business
purpose for which the business trust is formed.
b. A business trust is formed at the time of the filing of the initial
certificate of business trust with the department of state or at any
later time not to exceed sixty days from the date of filing specified in
the certificate of business trust. The filing of the certificate shall,
in the absence of actual fraud, be conclusive evidence of the formation
of the business trust as of the time of filing or the effective date if
later, except in an action or special proceeding brought by the attorney
general.
c. Within one hundred twenty days after the effectiveness of the
initial certificate of business trust, a copy of the same or a notice
containing the substance thereof shall be published once in each week
for six successive weeks, in two newspapers of the county in which the
principal place of business of the business trust is located, to be
designated by the county clerk, one of which newspapers shall be a news-
paper published in the city or town in which the principal place of
business is intended to be located, if a newspaper be published therein,
or, if no newspaper is published therein, in the newspaper nearest ther-
eto, and proof of such publication by the affidavit of the printer or
publisher of each of such newspapers must be filed with the department
of state. The notice shall include: (1) the name of the business trust;
(2) the date of filing of the certificate of business trust with the
department of state; (3) the county within this state, in which the
principal place of business in this state of the business trust is to be
located; (4) a statement that the secretary of state has been designated
as agent of the business trust upon whom process against it may be
served and the post office address within or without this state to which
the secretary of state shall mail a copy of any process against it
served upon him or her; (5) if the business trust is to have a regis-
tered agent, his or her name and address within this state and a state-
ment that the registered agent is to be agent of the business trust upon
whom process against it may be served; (6) the name and address of at
least one trustee that meets the requirements of section two hundred
seven of this article and if different the address of the principal
place of business of the business trust; (7) the latest date upon which
the business trust is to dissolve or that its existence is perpetual;
and (8) the character or purpose of the business of such business trust.
Failure to cause such notice to be published or to file such proof with-
in one hundred twenty days of the effective date of the initial certif-
icate of business trust shall prohibit the business trust from maintain-
ing any action or special proceeding in this state unless and until such
business trust cause such notice to be published and files such proof of
A. 6128 13
publication. The failure of a business trust to cause such notice to be
published or to file proof of publication shall not impair the validity
of any contract or act of the business trust or the right of the busi-
ness trust or the right of any other party to the contract to maintain
any action or special proceeding thereon, and shall not prevent the
business trust from defending any action or special proceeding in this
state.
S 213. Amendment of the certificate of business trust. a. A certif-
icate of business trust is amended by delivery to the department of
state of a certificate of amendment thereto entitled "Certificate of
amendment of the certificate of business trust of... (name of business
trust) under section two hundred thirteen of the Business Trust Law,"
and executed in accordance with section two hundred sixteen of this
article.
b. The certificate of amendment may set forth only such provisions as
are included in the initial certificate of business trust on file at the
time of making such amendment.
c. The certificate of amendment shall set forth:
(1) the name of the business trust and, if it has been changed, the
name under which it was formed;
(2) the date of filing of its certificate of business trust; and
(3) each amendment effected thereby, setting forth the subject matter
of each provision of the certificate of business trust that is to be
amended or eliminated and the full text of the provision or provisions,
if any, which are to be substituted or added.
d. A trustee, who becomes aware that any statement in a certificate of
business trust was false in any material respect when made or that a
matter described has changed making the certificate inaccurate in any
material respect, shall amend the certificate within seventy-five days
of becoming aware of such fact.
e. A certificate of business trust may be amended at any time for any
other proper purpose which the trustees may determine.
f. A certificate of amendment shall be effective at the time of its
filing with the department of state.
S 214. Cancellation of certificate of business trust. a. Within ninety
days following the dissolution and the commencement of winding up of a
business trust, or at any time there are no trustees a certificate of
cancellation shall be filed with the department of state entitled,
"Certificate of cancellation of... (name of business trust) under
section two hundred fourteen of the Business Trust Law," and executed in
accordance with section two hundred sixteen of this article. The certif-
icate of cancellation shall set forth:
(1) the name of the business trust, and if it has been changed the
name under which it was formed;
(2) the date of filing of its certificate of business trust and each
subsequent amendment thereto;
(3) the event giving rise to the filing of the certificate of cancel-
lation; and
(4) any other information the trustees determine to include therein.
b. The cancellation of the certificate of business trust shall be
effective at the time of the filing of the certificate of cancellation.
c. The cancellation of the certificate of business trust shall not
affect the liability of the trustees or the beneficial owners during the
period of winding up and termination of the business trust.
S 215. Restated certificate of trust. a. A business trust may restate
in a single certificate the text of its certificate of trust, without
A. 6128 14
making any amendment thereby. Alternatively, a business trust may
restate in a single certificate the text of its certificate of trust and
as amended thereby to effect any one or more of the amendments author-
ized by this chapter.
b. The restated certificate of trust shall be executed by at least one
of the trustees in accordance with section two hundred sixteen of this
article.
c. The restated certificate shall be delivered to the department of
state in accordance with section two hundred seventeen of this article
and shall set forth:
(1) the name of the business trust and, if it has been changed, the
name under which it was formed;
(2) the date of filing of its certificate of trust;
(3) if the restated certificate restates the text of the certificate
of trust without making any amendments, then a statement that the text
of the certificate of trust is thereby restated without amendment to
read as therein set forth in full; and
(4) if the restated certificate restates the text of the certificate
of trust and is amended thereby, then a statement that the certificate
of trust is amended to effect one or more of the amendments authorized
by this chapter, specifying each such amendment and that the text of the
certificate of trust is thereby restated as amended to read as therein
set forth in full.
d. Any amendments affected by the restatement of the certificate of
trust shall be subject to the provisions of this chapter which would
apply if a separate certificate of amendment were filed to effect such
amendment.
S 216. Execution of certificates. a. Each certificate required by this
chapter to be delivered to the department of state shall be executed in
the following manner:
(1) a certificate of business trust shall be signed by all of the
trustees of the business trust;
(2) a restated certificate of business trust or amended and restated
certificate of business trust shall be signed by at least one of the
trustees of the business trust;
(3) a certificate of cancellation shall be signed by all of the trus-
tees or as otherwise provided in the governing instrument of the busi-
ness trust;
(4) if a business trust is filing a certificate of merger or consol-
idation, the certificate of merger or consolidation shall be signed by
all of the trustees or as otherwise provided in the governing instrument
of the business trust, or if the certificate of merger or consolidation
is being filed by another business entity, the certificate of merger or
consolidation shall be signed by a person authorized to execute such
instrument on behalf of such other business entity; and
(5) all other certificates shall be signed by at least one trustee of
the business trust.
b. Any trustee may sign a certificate by an attorney in fact. Powers
of attorney relating to the signing of a certificate as an attorney in
fact need not be delivered to the department of state nor provided as
evidence of authority by the person filing, but shall be retained in the
records of the business trust.
c. Each certificate shall be signed and verified, or affirmed under
penalties of perjury.
d. Each certificate must be dated, and the name and capacity of each
signer shall be stated beneath or opposite his or her signature.
A. 6128 15
S 217. Delivery to the department of state. Every signed certificate
of business trust, a restated certificate of business trust and any
signed certificate of amendment or other certificates filed pursuant to
this article, and any judicial decree of amendment or cancellation shall
be delivered to the department of state. If the certificate delivered to
the department of state for filing complies as to form with the require-
ments of law and the filing fee, if any, required by any statute in
connection therewith has been paid, the certificate shall be filed and
indexed by the department of state. The department of state shall not
review such certificates for legal sufficiency, but shall limit its
review to the requirements set forth in this section.
S 218. Execution, amendment or cancellation by judicial act. If a
person required by section two hundred twelve, two hundred thirteen or
two hundred fourteen of this article to execute a certificate of busi-
ness trust, a restated certificate of business trust, or an amendment or
cancellation thereof fails or refuses to do so, any beneficial owner and
any permitted assignee of a beneficial owner, who is adversely affected
by the failure or refusal, may petition the supreme court in the judi-
cial district in which the office of the business trust is located to
direct the execution of such certificate. If the court finds that such
certificate should be executed and that such person has failed or
refused to execute such certificate, it shall order such person to file
the appropriate certificate.
ARTICLE 3
MERGER AND CONSOLIDATION
Section 301. Definitions.
302. Merger and consolidation.
303. Procedures for merger or consolidation.
304. Certificate of merger or consolidation; contents.
305. Effect of merger or consolidation.
S 301. Definitions. As used in this article:
a. "Consolidation" shall mean a procedure by which a business trust
and one or more other business trusts or other business entities consol-
idate into a single business trust or other business entity that shall
be a new business trust or other business entity to be formed pursuant
to the consolidation.
b. "Merger" shall mean a procedure by which a business trust and one
or more other business trusts or other business entities merge into a
single business trust or the business entity that shall be one of the
constituent business trusts or other business entities.
S 302. Merger and consolidation. Pursuant to an agreement of merger or
consolidation, and to the extent not expressly prohibited by law, a
domestic business trust may merge or consolidate with or into one or
more business trusts or other business entities formed or organized or
existing under the laws of this state, any other state, the United
States or any foreign country or other foreign jurisdiction, with such
domestic business trust or other business entity as the agreement shall
provide being the surviving or resulting entity.
S 303. Procedures for merger or consolidation. a. The rights or secu-
rities of, or interests in a business trust or other business entity
that is a constituent party to the merger or consolidation may be
exchanged for or converted into cash, property, rights or securities of,
or interest in the surviving or resulting business trust or other busi-
ness entity or, in addition to or in lieu thereof, may be exchanged for
or converted into cash, property, rights or securities of, or interest
A. 6128 16
in, a business trust or other business entity that is not the surviving
or resulting business trust or other business entity in the merger or
consolidation.
b. Every business trust or other business entity shall adopt an agree-
ment of merger or consolidation, setting forth the terms and conditions
of the conversion of the beneficial interests of the beneficial owners
of the business trust into interests in the surviving or resulting busi-
ness trust or other business entity or the cash or other consideration
to be paid or delivered in exchange for beneficial interests in each
business trust, or a combination thereof.
c. The agreement of merger or consolidation shall be approved on
behalf of each domestic business trust (1) by such beneficial owners and
trustees as shall be required by the governing instrument of the busi-
ness trust, which shall not be less than beneficial owners owning a
majority of the beneficial interests in the business trust, or (2) if no
provision is made, by all of the beneficial owners and all of the trus-
tees.
d. Notwithstanding an authorization by the relevant number of benefi-
cial owners and trustees, the agreement of merger or consolidation may
be terminated or amended pursuant to a provision for such termination or
amendment, if any, contained in the agreement of merger or consol-
idation.
S 304. Certificate of merger or consolidation; contents. After
approval of the agreement of merger or consolidation by each business
trust or other business entity merging or consolidating under this arti-
cle, unless the merger or consolidation is terminated pursuant to subdi-
vision d of section three hundred three of this article, a certificate
of merger or consolidation, entitled "Certificate of merger (or consol-
idation) of ... and ... into ... (names of business trusts or other
business entities)", shall be signed and verified or affirmed under
penalties of perjury on behalf of each business trust and other business
entity and delivered to the department of state. The certificate of
merger or consolidation shall set forth:
a. the name and jurisdiction of formation or organization of each of
the business trusts or other business entities which is to merge or
consolidate;
b. for each domestic business trust that is to merge or consolidate,
the date when its initial certificate of business trust was filed by the
department of state pursuant to this chapter, and, as to each foreign
business trust or other foreign business entity which is to merge or
consolidate, the jurisdiction and date of its formation and the date
when its application for authority to do business in this state was
filed by the department of state, and its fictitious name used within
this state pursuant to section two hundred ten of this chapter, if
applicable, or if no such application has been filed, a statement to
such effect;
c. that an agreement of merger or consolidation has been approved and
executed by each of the business trusts or other business entities which
is to merge or consolidate;
d. the name of the surviving or resulting business trust or other
business entity;
e. the future effective date or time, which shall be a date or time
certain, of the merger or consolidation in accordance with the agreement
of merger or consolidation, if it is not to be effective upon the filing
of the certificate of merger or consolidation;
A. 6128 17
f. if a domestic business trust is the surviving business trust, such
changes in its certificate of business trust as shall be necessary by
reason of the merger;
g. if a domestic business trust is the resulting business trust in a
consolidation, the matters required to be set forth under section two
hundred twelve of this chapter;
h. if the surviving or resulting entity is not a domestic business
trust, an agreement that such surviving or resulting entity may be
served with process in this state in any action or special proceeding
for the enforcement of any liability or obligation of any domestic busi-
ness trust previously amenable to suit in this state that is to merge or
consolidate, and for the enforcement as provided in this chapter of the
right of beneficial owners of any domestic business trust to receive
payment for their interests against the surviving or resulting entity;
i. a designation of the secretary of state as the agent for the
surviving or resulting entity upon whom process against it may be served
in the manner set forth in section two hundred four of this chapter in
any action or special proceeding, and a post office address, within or
without this state, to which the secretary of state shall mail a copy of
any process served upon him or her. Such post office address shall
supersede any prior address designated as the address to which process
shall be mailed;
j. that the agreement of merger or consolidation is on file at a place
of business of the surviving or resulting entity, and shall state the
address thereof; and
k. that a copy of the agreement of merger or consolidation will be
furnished by the surviving or resulting entity, on request and without
cost, to any beneficial owner or trustee of any domestic business trust
or any person holding an interest in any other business entity that is
to merge or consolidate.
S 305. Effect of merger or consolidation. a. Upon the effective date
of any merger or consolidation pursuant to this chapter, for all
purposes of the laws of this state, all of the rights, privileges, immu-
nities, powers and purposes of each of the business trusts and other
business entities that have merged or consolidated, and all property,
real, personal and mixed, tangible and intangible, and all debts, obli-
gations, liabilities, penalties and duties of such business trusts and
other business entities, as well as all other things belonging to each
of such business trusts and other business entities, shall be vested in
the surviving or resulting business trust or other business entity, and
shall thereafter be the property of the surviving or resulting business
trust or other business entity as they were of each of the business
trusts and other business entities that have merged or consolidated, and
the title to any real property vested by deed or otherwise, under the
laws of this state, in any such business trusts and other business enti-
ties shall not revert or be in any way impaired by reason of this chap-
ter; but all rights of creditors and all liens upon any property of any
such business trusts and other business entities shall be preserved
unimpaired, and all debts, obligations, liabilities, penalties and
duties of each of such business trusts and other business entities that
have merged or consolidated shall thenceforth attach to the surviving or
resulting business trust or other business entity and may be enforced
against it to the same extent as if such debts, obligations, liabilities
and duties have been incurred or contracted by it.
b. Upon the effective date of any merger or consolidation, no action,
suit or proceeding, civil or criminal, then pending by or against any
A. 6128 18
constituent business trust or other business entity in its common name
shall abate or be discontinued by reason of such merger or consol-
idation, but may be prosecuted by or may proceed against such surviving
or resulting business trust or other business entity.
c. Unless otherwise agreed by the entities participating in the merg-
er, a merger or consolidation of a domestic business trust, including a
domestic business trust that is not the surviving or resulting entity in
the merger or consolidation, shall not require such domestic business
trust to wind up its affairs under section four hundred one of this
chapter.
d. A certificate of merger or consolidation shall act as a certificate
of cancellation for a business trust that is not the surviving or
resulting entity in the merger or consolidation.
e. Notwithstanding any provision of the governing instrument of a
business trust, a governing instrument of a business trust containing a
specific reference to this subdivision may provide that an agreement of
merger or consolidation approved in accordance with subdivision a of
this section may:
(1) effect any amendment to the governing instrument of the business
trust, or
(2) effect the adoption of a new governing instrument of the business
trust if it is the surviving or resulting business trust in the merger
or consolidation. Any amendment to the governing instrument of a busi-
ness trust or adoption of a new governing instrument of the business
trust made pursuant to this paragraph shall be effective upon the effec-
tive date of the merger or consolidation. The provisions of this section
shall not be construed to limit the accomplishment of a merger or
consolidation or of any of the matters referred to in this subdivision
by any other means provided for in the governing instrument of a busi-
ness trust or other agreement or as otherwise permitted by law, includ-
ing that the governing instrument of any constituent business trust to
the merger or consolidation shall be the governing instrument of the
surviving or resulting domestic business trust.
ARTICLE 4
DISSOLUTION
Section 401. Dissolution.
402. Judicial dissolution.
403. Winding up.
404. Distribution of assets.
405. Winding up of a series.
S 401. Dissolution. A business trust shall be dissolved and its
affairs shall be wound up upon the happening of the occurrence of the
first of the following:
a. at the time, if any, provided in the certificate of business trust;
b. at the time or upon the happening of events specified in the
governing instrument of the business trust;
c. unless otherwise specified in the governing instrument of the busi-
ness trust, upon the consent of a majority of the beneficial owners; or
d. pursuant to a decree of judicial dissolution pursuant to section
four hundred two of this article.
Upon the winding up of a business trust pursuant to this section, a
certificate of cancellation of the business trust shall be filed by
applicant pursuant to section two hundred fourteen of this chapter.
A. 6128 19
S 402. Judicial dissolution. On application by a majority of the bene-
ficial owners or a trustee, the supreme court in the judicial district
in which:
a. the principal place of business of the business trust; or
b. the address of the trustee, as designated in the certificate of
business trust, is located, may decree dissolution of a business trust
whenever it is not reasonably practicable to carry on the business in
conformity with the governing instrument of the business trust. A certi-
fied copy of the order of dissolution shall be filed by the applicant
with the department of state within thirty days of its issuance. A
certificate of cancellation of the business trust shall be filed by the
applicant pursuant to section two hundred fourteen of this chapter.
S 403. Winding up. a. In the event of a dissolution of a business
trust, except for a dissolution pursuant to section four hundred two of
this article, unless otherwise provided in the governing instrument of
the business trust, the beneficial owners may wind up the affairs of the
business trust. Upon cause shown, the supreme court in the judicial
district in which the office of the business trust is located may wind
up the affairs of the business trust upon application of any trustee or
of the majority of beneficial owners, their legal representatives or
assignees, and in connection therewith may appoint a receiver or liqui-
dating trustee.
b. Upon dissolution of a business trust, the persons winding up the
affairs of the business trust may, in the name of and for and on behalf
of the business trust, prosecute and defend suits, whether civil, crimi-
nal or administrative, settle and close the business of the business
trust, dispose of and convey the property of the business trust,
discharge the liabilities of the business trust, and distribute to the
beneficial owners any remaining assets of the business trust, all with-
out affecting the liability of beneficial owners participating in the
winding up of the business trust's affairs.
S 404. Distribution of assets. Upon the winding up of a business
trust, the assets shall be distributed as follows:
a. to creditors of the business trust, including beneficial owners who
are creditors, to the extent permitted by law, in satisfaction of
liabilities of the business trust whether by payment or by establishment
of adequate reserves; and
b. except as provided in the governing instrument of the business
trust, to beneficial owners, first for the return of their contrib-
utions, if any, and secondly respecting their beneficial interests in
the business trust as set forth in section two hundred five of this
chapter.
S 405. Winding up of a series. Except to the extent otherwise provided
in the governing instrument of the business trust, a series established
in accordance with section two hundred six of this chapter may be
dissolved and its affairs wound up without causing the dissolution of
the business trust or any other series thereof. Unless otherwise
provided in the governing instrument of the business trust, the dissol-
ution, winding up, liquidation or termination of the business trust or
any series thereof shall not affect the limitation of liability with
respect to a series established in accordance with section two hundred
six of this chapter. A series established in accordance with section two
hundred six of this chapter is dissolved and its affairs shall be wound
up at the time or upon the happening of events specified in the govern-
ing instrument of the business trust. Except to the extent otherwise
provided in the governing instrument of a business trust, the death,
A. 6128 20
incapacity, dissolution, termination or bankruptcy of a beneficial owner
of such series shall not result in the termination or dissolution of
such series and such series may not be terminated or revoked by a bene-
ficial owner of such series or other person except in accordance with
the terms of the governing instrument of the business trust.
ARTICLE 5
MISCELLANEOUS
Section 501. Derivative actions.
502. Indemnification.
503. Fees.
504. Application for authority for a foreign business trust;
contents.
505. Amendments to application for authority.
506. Application for authority; effect.
507. Surrender of certificate of authority.
508. Termination of existence.
509. Doing business without certificate of authority.
510. Violations.
S 501. Derivative actions. a. A beneficial owner may bring a deriva-
tive action in the right of a business trust to recover a judgment in
its favor if the trustees with authority to do so have refused to bring
the action or if an effort to cause those trustees to bring the action
is not likely to succeed.
b. In any such action, the plaintiff shall be a beneficial owner at
the time of bringing the action and shall have been a beneficial owner
at the time of the transaction of which the plaintiff complains or the
plaintiff's status as a beneficial owner or interest shall have devolved
upon plaintiff by operation of law or pursuant to the terms of the
governing instrument of the business trust from a person who was a bene-
ficial owner at the time of the transaction.
c. In any such action, the complaint shall set forth with particulari-
ty the effort, if any, of the plaintiff to secure initiation of the
action by the trustees, or the reasons for not making such effort.
d. If a derivative action is successful, in whole or in part, or if
anything is received by a business trust as a result of a judgment,
compromise or settlement of such action, the court may award the plain-
tiff reasonable expenses, including reasonable attorney's fees. If
anything is so received by the plaintiff, the court shall make such
award of plaintiff's expenses payable out of those proceeds and direct
plaintiff to remit to the business trust the remainder thereof, and if
those proceeds are insufficient to reimburse plaintiff's reasonable
expenses, the court may direct that any such award of plaintiff's
expenses or a portion thereof be paid by the business trust.
e. A beneficial owner's right to bring a derivative action may be
subject to such additional standards and restrictions, if any, as are
set forth in the governing instrument of the business trust including,
without limitation, the requirement that beneficial owners owning a
specified minimum beneficial interest in the business trust join in the
bringing of the derivative action.
S 502. Indemnification. a. Subject to such standards and restrictions,
if any, as are set forth in the governing instrument of a business
trust, a business trust shall have the power to indemnify and hold harm-
less any trustee or beneficial owner or other person from and against
any and all claims and demands whatsoever.
A. 6128 21
b. The absence of a provision for indemnity in the governing instru-
ment of a business trust shall not be construed to deprive any trustee
or beneficial owner or other person of any right to indemnity which is
otherwise available to such person under the laws of this state or
otherwise.
S 503. Fees. Except as otherwise provided, the department of state
shall collect the following fees pursuant to this chapter:
a. For the reservation of a business trust name pursuant to section
two hundred eleven of this chapter, twenty dollars.
b. For filing a certificate of business trust pursuant to section two
hundred twelve of this chapter, two hundred dollars.
c. For filing a certificate of amendment to the certificate of busi-
ness trust pursuant to section two hundred thirteen of this chapter to
change the location of the registered office or to change the registered
agent, thirty dollars.
d. For filing a certificate of amendment to the certificate of busi-
ness trust pursuant to section two hundred thirteen of this chapter,
other than a change of or change of location of the registered office of
a registered agent, sixty dollars.
e. For filing a certificate of cancellation pursuant to section two
hundred fourteen of this chapter, sixty dollars.
f. For filing a restated certificate of business trust pursuant to
section two hundred fifteen of this chapter, two hundred dollars.
g. For filing a certificate of cancellation in accordance with a judi-
cial order pursuant to section two hundred eighteen of this chapter,
sixty dollars.
h. For filing a certificate of merger or consolidation pursuant to
section three hundred four of this chapter, sixty dollars.
i. For filing an application for authority pursuant to section five
hundred four of this article, two hundred dollars.
j. For filing an amendment to an application for authority pursuant to
section five hundred five of this article to change the registered agent
or the post office address or location of the registered agent, twenty
dollars.
k. For filing an amendment to an application for authority pursuant to
section five hundred six of this article, other than a change of, or
change of address or location of a registered agent, sixty dollars.
l. For filing a certificate of surrender of authority pursuant to
section five hundred seven of this article, sixty dollars.
m. For filing a certificate of termination of existence pursuant to
section five hundred eight of this article, sixty dollars.
n. For accepting service of process on behalf of a business trust,
forty dollars.
o. For filing an affidavit of publication pursuant to section two
hundred twelve or five hundred four of this chapter, twenty-five
dollars.
S 504. Application for authority for a foreign business trust;
contents. a. Before doing business in this state, a foreign business
trust shall apply for authority to do business in this state by submit-
ting to the department of state (1) a certificate of existence or, if no
such certificate is issued by the jurisdiction of organization, a certi-
fied copy of the certificate of business trust and all subsequent amend-
ments thereto or, if no certificate of business trust has been filed, a
certified copy of the instrument filed as its organizational basis and
all amendments thereof (if such certificate or instrument is in a
foreign language, a translation thereof under oath of the translator
A. 6128 22
shall be attached thereto) and (2) an application for authority as a
foreign business trust entitled "Application for authority of ... (name
of business trust) under S 504 of the Business Trust Law," signed and
verified or affirmed under penalties of perjury by a trustee and setting
forth:
(A) the name of the foreign business trust and, if a foreign business
trust's name is not acceptable for authorization pursuant to section two
hundred ten of this chapter, the fictitious name under which it proposes
to apply for authority to do business in this state, which name shall be
in compliance with section two hundred ten of this chapter and shall be
used by the foreign business trust in all its dealings with the depart-
ment of state and in the conduct of its business in this state. A filing
under section one hundred thirty of the general business law shall not
constitute the adoption of a fictitious name;
(B) the jurisdiction and date of its organization;
(C) a designation of the secretary of state as its agent upon whom
process against it may be served and post office address within this
state to which the secretary of state shall mail a copy of any process
against it served upon him or her;
(D) if it is to have a registered agent, the name and address within
the state of the registered agent and a statement that the registered
agent is to be its agent upon whom process may be served;
(E) the address of the office required to be maintained in the juris-
diction of its organization by the laws of that jurisdiction or, if not
so required, of the principal office of the foreign business trust;
(F) the name and business address of at least one trustee;
(G) a statement that the foreign business trust is in existence in the
jurisdiction of its organization at the time of the filing of such
application; and
(H) the name and business address of the authorized officer in its
jurisdiction of its organization where a copy of its certificate of
business trust is filed and, if no public filing of its certificate of
business trust is required by the law of its jurisdiction of organiza-
tion, a statement that the business trust shall provide, on request, a
copy thereof with all amendments thereto (if such documents are in a
foreign language, a translation in English thereof under oath of the
translator shall be attached thereto), and the name and post office
address of the person responsible for providing such copies.
b. Without excluding other activities which may not constitute doing
business in this state, a foreign business trust shall not be considered
to be doing business in this state for the purposes of this chapter, by
reason of carrying on in this state any one or more of the following
activities:
(1) maintaining or defending any action or proceeding, whether judi-
cial, administrative, arbitrative or otherwise, or effecting settlement
of claims or disputes;
(2) holding meetings of its trustees or beneficial owners;
(3) maintaining bank accounts; or
(4) maintaining offices or agencies only for the transfer, exchange
and registration of its beneficial ownership interests, or appointing
and managing depositories with relation to its beneficial ownership
interests.
c. The specification in subdivision b of this section shall not estab-
lish a standard for activities which may subject a foreign business
trust to service of process under this chapter or any other statute of
this state.
A. 6128 23
d. Within one hundred twenty days after the filing of the application
for authority with the department of state, a copy of the same or a
notice containing the substance thereof shall be published once in each
week for six successive weeks, in two newspapers of the county within
this state in which the principal place of business of the foreign busi-
ness trust is located, to be designated by the county clerk, one of
which newspapers shall be a newspaper published in the city or town in
which the principal place of business in this state of the foreign busi-
ness trust is intended to be located, if a newspaper be published there-
in; or if no newspaper is published therein, in the newspaper nearest
thereto, and proof of such publication by the affidavit of the printer
or publisher of each of such newspapers must be filed with the depart-
ment of state. The notice shall include: (1) the name of the foreign
business trust and any fictitious name under which it has applied for
authority to conduct business in this state; (2) the date of filing of
the application for authority with the department of state; (3) the
jurisdiction and date of its organization; (4) the county within this
state, in which the principal place of business in this state of the
foreign business trust is to be located; (5) a statement that the secre-
tary of state has been designated as agent of the foreign business trust
upon whom process against it may be served and the post office address
within or without this state to which the secretary of state shall mail
a copy of any process against it served upon him or her; (6) if the
foreign business trust is to have a registered agent, his or her name
and address within this state and a statement that the registered agent
is to be the agent of the foreign business trust upon whom process
against it may be served; (7) the address of the office required to be
maintained in the jurisdiction of its organization by the laws of that
jurisdiction or, if not so required, of the principal office of the
foreign business trust; (8) the name and business address of at least
one trustee; (9) the name and business address of the authorized officer
in its jurisdiction of organization where a copy of its certificate of
business trust is filed, or, if no public filing of its certificate of
organization is required by the law of its jurisdiction of organization,
a statement that the foreign business trust shall provide, on request, a
copy thereof with all amendments thereto (if such documents are in
foreign language, a translation in English thereof under oath of the
translator shall be attached thereto), and the name and post office
address of the person responsible for providing such copies; and (10)
the character or purpose of the business of such foreign business trust.
Failure to cause such notice to be published or to file such proof with-
in one hundred twenty days of the filing of the application for authori-
ty shall prohibit the foreign business trust from maintaining any action
or special proceeding in this state unless and until such foreign busi-
ness trust causes such notice to be published and files such proof of
publication. The failure of a foreign business trust to cause such
notice to be published or to file proof of publication shall not impair
the validity of any contract or act of the foreign business trust or the
right of any other party to the contract to maintain any action or
special proceeding thereon, and shall not prevent the foreign business
trust from defending any action or special proceeding in this state.
S 505. Amendments to application for authority. a. A foreign business
trust may amend its application for authority from time to time if the
amendments contain only such provisions as might be lawfully contained
in an application for authority at the time of making such amendment.
A. 6128 24
b. Every foreign business trust which has received a filing receipt
evidencing authority, shall, within ninety days after the change of any
of the information required to be set forth in its application for
authority pursuant to section five hundred four of this article, deliver
an amendment to its application to the department of state entitled
"Certificate of amendment of application for authority of ... (name of
business trust) under S 505 of the Business Trust Law," signed and veri-
fied or affirmed under penalties of perjury by a trustee. The certif-
icate shall state:
(1) the name of the foreign business trust as it appears on the index
of names of existing domestic and authorized foreign business trusts of
any type or kind in the department of state, and the fictitious name, if
any, the foreign business trust has agreed to use in this state pursuant
to section five hundred four of this article;
(2) the jurisdiction of its organization;
(3) the date it was authorized to do business in this state;
(4) each amendment effected thereby; and
(5) if the true name of the foreign business trust is to be changed, a
statement that the change of name has been effected under the laws of
the jurisdiction of its organization and the date the change was so
effected.
S 506. Application for authority; effect. a. Upon filing by the
department of state of the application for authority, the foreign busi-
ness trust shall be authorized to do business in this state. Such
authority shall continue so long as it retains its authority to do busi-
ness in the jurisdiction of its organization and its authority to do
business has not been surrendered, suspended or annulled in accordance
with the law.
b. A foreign business trust which has received a certificate of
authority shall have such powers to conduct business in this state as
are permitted by the laws of the jurisdiction in which it was organized,
but not greater than those of a domestic business trust; provided, that
this subdivision shall not affect the powers of the foreign business
trust outside this state.
S 507. Surrender of certificate of authority. a. A foreign business
trust may surrender its certificate of authority by delivering to the
department of state a certificate entitled, "Certificate of surrender of
authority of ... (name of business trust)" signed and verified or
affirmed under penalties of perjury by a trustee, receiver or other
person authorized by law to wind up such business trust. The authority
of the foreign business trust to do business in this state shall termi-
nate on the filing by the department of state of the certificate of
surrender of authority. A surrender shall not terminate the authority of
the secretary of state to accept service of process on the foreign busi-
ness trust with respect to causes of action arising out of doing busi-
ness in this state.
b. The certificate of surrender of authority shall state:
(1) the name of the foreign business trust as it appears on the index
of names of existing domestic and authorized foreign business trusts of
any type or kind in the department of state, and the fictitious name, if
any, the foreign business trust has agreed to use in this state pursuant
to section five hundred four of this article;
(2) the jurisdiction where it was organized;
(3) the date on which its certificate of authority to do business in
this state was filed by the department of state;
(4) that it surrenders its authority to do business in this state;
A. 6128 25
(5) that it revokes the authority of its registered agent, if any,
previously designated, and that it consents that process against it in
any action or special proceeding based upon any liability or obligation
incurred by it within this state before the filing of the certificate of
surrender may be served on the secretary of state in the manner set
forth in section two hundred four of this chapter; and
(6) a post office address within or without this state to which the
secretary of state shall mail a copy of any process against it served
upon him or her. The post office address may be changed by delivering to
the department of state a certificate of amendment under section five
hundred five of this article.
S 508. Termination of existence. When a foreign business trust which
has received a certificate of authority is dissolved or its authority to
conduct its business or existence is otherwise terminated or cancelled
in the jurisdiction of its organization or when such foreign business
trust is merged into or consolidated with another foreign business enti-
ty, (a) a certificate of the secretary of state, or official performing
the equivalent function as to business trust records, in the jurisdic-
tion of organization of such business trust attesting to the occurrence
of any such event, or (b) a certified copy of an order or decree of a
court of such jurisdiction directing the dissolution of such foreign
business trust, the termination of its existence or the surrender of its
authority, shall be delivered to the department of state. The filing of
the certificate, order or decree shall have the same effect as the
filing of a certificate of surrender of authority under section five
hundred six of this article. The secretary of state shall continue as
agent of the foreign business trust upon whom process against it may be
served in the manner set forth in section two hundred four of this chap-
ter, in any action or proceeding based upon any liability or obligation
incurred by the foreign business trust within this state prior to the
filing of such certificate, order or decree.
S 509. Doing business without certificate of authority. a. A foreign
business trust doing business in this state without having received a
certificate of authority to do business in this state shall not maintain
any action, suit or special proceeding in any court of this state unless
and until such foreign business trust shall have received a certificate
of authority in this state and shall have filed proof of publication
pursuant to section five hundred four of this article.
b. The failure of a foreign business trust doing business in this
state to comply with the provisions of this chapter shall not impair the
validity of any contract or act of the foreign business trust or prevent
the foreign business trust from defending any action or special proceed-
ing in any court of this state.
c. By doing business in this state without authority, a foreign busi-
ness trust appoints the secretary of state as its agent for service of
process with respect to causes of action arising out of doing business
in this state. In any such case, process against such foreign business
trust may be served upon the secretary of state in the manner set forth
in section two hundred four of this chapter.
S 510. Violations. The attorney general shall, in his or her own
discretion or upon the motion of proper parties, bring an action to
restrain a foreign business trust without a certificate of authority
from doing any business in this state in violation of this chapter, or
from doing any business in this state which is prohibited under the laws
of this state. The attorney general may bring an action or special
proceeding to annul the authority of a foreign business trust which is
A. 6128 26
doing any business in this state which is prohibited under the laws of
this state. The attorney general shall deliver a certified copy of the
order of annulment to the department of state. Upon the filing thereof
by the department of state, the certificate of authority of the foreign
business trust to do business in this state shall be annulled, and the
provisions of section five hundred nine of this article shall thereafter
be applicable. The secretary of state shall continue as agent of the
foreign business trust upon whom process against it may be served in any
action, suit or special proceeding based upon any liability or obli-
gation incurred by the foreign business trust within the state prior to
the filing of the certified copy of the order of annulment by the
department of state.
ARTICLE 6
SAVINGS CLAUSES; EFFECTIVE DATE
Section 601. Severability.
602. Common law business trusts.
603. General associations law not applicable.
604. Reserved power of state to amend or repeal chapter.
605. Construction and application of chapter and governing
instrument.
606. Effective date.
S 601. Severability. The provisions of this chapter shall apply to
business trusts created on or after the effective date of this chapter.
If any provision of this chapter or its application to any person or
circumstances is held invalid, the invalidity shall not affect other
provisions or applications of this chapter which can be given effect
without the invalid provision or application, and to this end the
provisions of this chapter are severable.
S 602. Common law business trusts. This chapter shall have no effect
on the validity, powers, rights or liabilities of common law business
trusts created before or after the effective date of this chapter or the
trustees or beneficiaries thereof. Common law business trusts created
before or after the effective date of this chapter may elect to be
governed by the provisions of this chapter upon the filing of a certif-
icate of business trust in accordance with section two hundred twelve of
this chapter; provided, however, that a common law business trust
created before the effective date of this chapter shall not be governed
by the provisions of this chapter to the extent of any inconsistent
provisions contained in its governing instrument not thereafter modified
by amendment.
S 603. General associations law not applicable. The provisions of the
general associations law shall not apply to any unincorporated associ-
ation that is a business trust governed by the provisions of this chap-
ter.
S 604. Reserved power of state to amend or repeal chapter. All
provisions of this chapter may be altered from time to time or repealed
and all rights of business trusts, trustees, beneficial owners and other
persons are subject to this reservation.
S 605. Construction and application of chapter and governing instru-
ment. a. The rule that statutes in derogation of the common law are to
be strictly construed shall have no application to this chapter.
b. It is the policy of this chapter to give maximum effect to the
principle of freedom of contract and the enforceability of governing
instruments.
S 606. Effective date. This chapter shall take effect on the ninetieth
day after it shall have become a law.
A. 6128 27
S 2. Subdivision 2 of section 2 of the general associations law, as
amended by chapter 13 of the laws of 1938, is amended to read as
follows:
2. The term "business trust" means any association operating a busi-
ness under a written instrument or declaration of trust, the beneficial
interest under which is divided into shares represented by certificates,
BUT SHALL NOT INCLUDE A BUSINESS TRUST WHICH FILES A CERTIFICATE OF
BUSINESS TRUST OR AN APPLICATION FOR AUTHORITY PURSUANT TO THE BUSINESS
TRUST LAW.
S 3. This act shall take effect on the ninetieth day after it shall
have become a law.