Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
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Jan 06, 2010 |
referred to corporations, authorities and commissions |
Feb 11, 2009 |
referred to corporations, authorities and commissions |
Senate Bill S2138
2009-2010 Legislative Session
Sponsored By
(D) Senate District
Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee
- Introduced
-
- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
2009-S2138 (ACTIVE) - Details
- Current Committee:
- Senate Corporations, Authorities And Commissions
- Law Section:
- Not-for-Profit Corporation Law
- Laws Affected:
- Amd §§402 & 720, N-PC L
- Versions Introduced in 2011-2012 Legislative Session:
-
S2121
2009-S2138 (ACTIVE) - Summary
Authorizes the certificate of incorporation of a not-for-profit corporation to eliminate or limit the personal liability of directors to the corporation or its members provided that liability for acts or omissions which were in bad faith, intentional misconduct or a knowing violation of law shall not be limited or eliminated; does not apply to medical or dental corporations.
2009-S2138 (ACTIVE) - Sponsor Memo
BILL NUMBER: S2138 TITLE OF BILL : An act to amend the not-for-profit corporation law, in relation to duty of directors and available relief for breach thereof PURPOSE : To permit not-for-profit corporations to protect their directors from personal liability for a breach of duty except where a director's actions were in bad faith, involved intentional misconduct, knowing violation of law, or personal gain, financial or otherwise. SUMMARY OF PROVISIONS : This bill would add to Section 402 of the Not-for-Profit Corporation Law a new subsection (d) to provide that the certificate of incorporation may limit a director's personal liability to the corporation or its members for damages for any breach of duty as director, unless the director's acts or omissions were in bad faith, involved intentional misconduct, a knowing violation of law or personal gain, financial or otherwise. Section 720 (a) (1) of the Not-for-Profit Corporation Law would be amended to conform with the possible limitation of liability provided under the new Section 402 (d). This bill will not apply to corporations organized pursuant to Article 43 of the insurance law. JUSTIFICATION : When the Not-for-Profit Corporation Law ("N-PCL") § 720-a was enacted in 1986, the legislature addressed the need to protect volunteer directors, officers and trustees of not-for-profit
2009-S2138 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 2138 2009-2010 Regular Sessions I N S E N A T E February 11, 2009 ___________ Introduced by Sen. KRUGER -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions AN ACT to amend the not-for-profit corporation law, in relation to duty of directors and available relief for breach thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 402 of the not-for-profit corporation law is amended by adding a new paragraph (d) to read as follows: (D) THE CERTIFICATE OF INCORPORATION MAY SET FORTH A PROVISION ELIMI- NATING OR LIMITING THE PERSONAL LIABILITY OF DIRECTORS TO THE CORPO- RATION OR ITS MEMBERS, IF ANY, FOR DAMAGES FOR ANY BREACH OF DUTY IN SUCH CAPACITY, PROVIDED THAT NO SUCH PROVISION SHALL ELIMINATE OR LIMIT THE LIABILITY OF ANY DIRECTOR IF A JUDGMENT OR OTHER FINAL ADJUDICATION ADVERSE TO SUCH PERSON ESTABLISHES THAT SUCH PERSON'S ACTS OR OMISSIONS WERE IN BAD FAITH OR INVOLVED INTENTIONAL MISCONDUCT OR A KNOWING VIOLATION OF LAW OR THAT SUCH PERSON PERSONALLY GAINED IN FACT A FINAN- CIAL PROFIT OR OTHER ADVANTAGE TO WHICH SUCH PERSON WAS NOT LEGALLY ENTITLED OR THAT SUCH PERSON'S ACTS VIOLATED SECTION 719 (LIABILITY OF DIRECTORS IN CERTAIN CASES). THE PROVISIONS OF THIS PARAGRAPH SHALL NOT APPLY TO CORPORATIONS ORGANIZED PURSUANT TO ARTICLE FORTY-THREE OF THE INSURANCE LAW. S 2. The opening paragraph of subdivision 1 of paragraph (a) of section 720 of the not-for-profit corporation law is amended to read as follows: [To] SUBJECT TO ANY PROVISION OF THE CERTIFICATE OF INCORPORATION AUTHORIZED PURSUANT TO PARAGRAPH (D) OF SECTION 402 (CERTIFICATE OF INCORPORATION; CONTENTS), TO compel the defendant to account for his official conduct in the following cases: S 3. This act shall take effect immediately. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08815-01-9
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