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S 3. Section 114 of the not-for-profit corporation law, as added by
chapter 847 of the laws of 1970, is amended to read as follows:
S 114. Visitation of supreme court.
Type B [and Type C] corporations, whether formed under general or
special laws, with their books and vouchers, shall be subject to the
visitation and inspection of a justice of the supreme court, or of any
person appointed by the court for that purpose. If it appears by the
verified petition of a member or creditor of any such corporation, that
it, or its directors, officers or agents, have misappropriated any of
the funds or property of the corporation, or diverted them from the
purpose of its incorporation, or that the corporation has acquired prop-
erty in excess of the amount which it is authorized by law to hold, or
has engaged in any business other than that stated in its certificate of
incorporation, the court may order that notice of at least eight days,
with a copy of the petition, be served on the corporation and the
persons charged with misconduct, requiring them to show cause at a time
and place specified, why they should not be required to make and file an
inventory and account of the property, effects and liabilities of such
corporation with a detailed statement of its transactions during the
twelve months next preceding the granting of such order. On the hearing
of such application, the court may make an order requiring such invento-
ry, account and statement to be filed, and proceed to take and state an
account of the property and liabilities of the corporation, or may
appoint a referee for that purpose. When such account is taken and
stated, after hearing all the parties to the application, the court may
enter a final order determining the amount of property so held by the
corporation, its annual income, whether any of the property or funds of
the corporation have been misappropriated or diverted to any other
purpose than that for which such corporation was incorporated, and
whether such corporation has been engaged in any activity not covered by
its certificate of incorporation. An appeal may be taken from the order
by any party aggrieved to the appellate division of the supreme court,
and to the court of appeals, as in a civil action. No corporation shall
be required to make and file more than one inventory and account in any
one year, nor to make a second account and inventory, while proceedings
are pending for the statement of an account under this section.
S 4. Paragraphs (b) and (c) of section 201 of the not-for-profit
corporation law, paragraph (b) as amended by chapter 847 of the laws of
1970 and paragraph (c) as amended by chapter 1058 of the laws of 1971,
are amended and a new paragraph (d) is added to read as follows:
(b) A corporation, of a type and for a purpose or purposes as follows,
may be formed under this chapter, provided consents required under any
other statute of this state have been obtained:
Type A - A not-for-profit corporation of this type may be formed for
any lawful non-business purpose or purposes including, but not limited
to, any one or more of the following non-pecuniary purposes: civic,
patriotic, political, social, fraternal, athletic, agricultural, horti-
cultural, animal husbandry, and for a professional, commercial, indus-
trial, trade or service association.
Type B - A not-for-profit corporation of this type may be formed for
any one or more of the following non-business purposes: charitable,
educational, religious, scientific, literary, cultural or for the
prevention of cruelty to children or animals. [Type C - A] ADDI-
TIONALLY, A not-for-profit corporation of this type may be formed for
any lawful business purpose to achieve a lawful public or quasi-public
objective.
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Type D - A not-for-profit corporation of this type may be formed under
this chapter when such formation is authorized by any other corporate
law of this state for any business or non-business, or pecuniary or
non-pecuniary, purpose or purposes specified by such other law, whether
such purpose or purposes are also within types A[,] OR B[, C] above or
otherwise.
(c) If a corporation is formed for purposes which are within both type
A and type B above, it is a type B corporation. [If a corporation has
among its purposes any purpose which is within type C, such corporation
is a type C corporation.] A type D corporation is subject to all
provisions of this chapter which are applicable to a type B corporation
under this chapter unless provided to the contrary in, and subject to
the contrary provisions of, the other corporate law authorizing forma-
tion under this chapter of the type D corporation.
(D) NOTWITHSTANDING THE PROVISIONS OF ANY LAW TO THE CONTRARY OR ANY
CORPORATION'S CURRENT DESIGNATION AS A TYPE C CORPORATION, ANY SUCH
CORPORATION DESIGNATED AS TYPE C SHALL BE A TYPE B CORPORATION SUBJECT
TO ALL PROVISIONS OF THIS CHAPTER WHICH ARE APPLICABLE TO A TYPE B
CORPORATION UNDER THIS CHAPTER.
S 5. Subparagraphs 2 and 4 of paragraph (a) of section 402 of the
not-for-profit corporation law, subparagraph 2 as amended by chapter 847
of the laws of 1970 and subparagraph 4 as amended by chapter 679 of the
laws of 1985, are amended to read as follows:
(2) That the corporation is a corporation as defined in subparagraph
(a) (5) of section 102 (Definitions); the purpose or purposes for which
it is formed and the type of corporation it shall be under section 201
(Purposes); and in the case of a Type [C] B corporation FORMED FOR ANY
LAWFUL BUSINESS PURPOSE OR PURPOSES, the lawful public or quasi-public
objective which each business purpose will achieve.
(4) In the case of a Type A[,] OR Type B[, or Type C] corporation, the
names and addresses of the initial directors. In the case of a Type D
corporation, the names and addresses of the initial directors, if any,
may but need not be set forth.
S 6. Subparagraph 3 of paragraph (a) of section 510 of the not-for-
profit corporation law, as amended by chapter 847 of the laws of 1970,
is amended to read as follows:
(3) If the corporation is, or would be if formed under this chapter,
classified as a Type B [or Type C] corporation under section 201,
(Purposes) such sale, lease, exchange or other disposition shall in
addition require leave of the supreme court in the judicial district or
of the county court of the county in which the corporation has its
office or principal place of carrying out the purposes for which it was
formed.
S 7. Subparagraph (ii) of paragraph (a) of section 804 of the not-for-
profit corporation law, as amended by chapter 139 of the laws of 1993,
is amended to read as follows:
(ii) Every certificate of amendment of a corporation classified as
type B [or type C] under section 201 (Purposes) which seeks to change or
eliminate a purpose or power enumerated in the corporation's certificate
of incorporation, or to add a power or purpose not enumerated therein,
shall have endorsed thereon or annexed thereto the approval of a justice
of the supreme court of the judicial district in which the office of the
corporation is located. Ten days' written notice of the application for
such approval shall be given to the attorney-general.
S 8. Paragraph (a) of section 907 of the not-for-profit corporation
law is amended to read as follows:
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(a) Where any constituent corporation or the consolidated corporation
is, or would be if formed under this chapter, a Type B [or a Type C]
corporation under section 201 (Purposes) of this chapter, no certificate
shall be filed pursuant to section 904 (Certificate of merger or consol-
idation; contents) or section 906 (Merger or consolidation of domestic
and foreign corporations) until an order approving the plan of merger or
consolidation and authorizing the filing of the certificate has been
made by the supreme court, as provided in this section. A certified copy
of such order shall be annexed to the certificate of merger or consol-
idation. Application for the order may be made in the judicial district
in which the principal office of the surviving or consolidated corpo-
ration is to be located, or in which the office of one of the domestic
constituent corporations is located. The application shall be made by
all the constituent corporations jointly and shall set forth by affida-
vit (1) the plan of merger or consolidation, (2) the approval required
by section 903 (Approval of plan) or paragraph (b) of section 906 (Merg-
er or consolidation of domestic and foreign corporations) for each
constituent corporation, (3) the objects and purposes of each such
corporation to be promoted by the consolidation, (4) a statement of all
property, and the manner in which it is held, and of all liabilities and
of the amount and sources of the annual income of each such corporation,
(5) whether any votes against adoption of the resolution approving the
plan of merger or consolidation were cast at the meeting at which the
resolution as adopted by each constituent corporation, and (6) facts
showing that the consolidation is authorized by the laws of the juris-
dictions under which each of the constituent corporations is incorpo-
rated.
S 9. Paragraphs (a) and (f) of section 908 of the not-for-profit
corporation law are amended to read as follows:
(a) One or more domestic or foreign corporations which is, or would be
if formed under this chapter, a type A or type [C] B corporation under
section 201 (Purposes) may be merged or consolidated into a domestic or
foreign corporation which is, or would be if formed under the laws of
this state, a corporation formed under the business corporation law of
this state if such merger or consolidation is not contrary to the law of
the state of incorporation of any constituent corporation. With respect
to such merger or consolidation, any reference in paragraph (b) of
section 901 [of this article] (POWER OF MERGER OR CONSOLIDATION) or
paragraph (b) of section 901 of the business corporation law to a corpo-
ration shall, unless the context otherwise requires, include both domes-
tic and foreign corporations.
(f) Where any constituent corporation is, or would be if formed under
this chapter, a Type [C] B corporation under section 201 (Purposes), no
certificate shall be filed pursuant to this section until an order
approving the plan of merger or consolidation and authorizing the filing
of the certificate has been made by the supreme court, as provided in
section 907 (Approval by the supreme court).
S 10. Paragraphs (b) and (c) of section 1001 of the not-for-profit
corporation law, as amended by chapter 434 of the laws of 2006, are
amended to read as follows:
(b) If the corporation is a Type B[, C] or D corporation and has no
assets to distribute and no liabilities at the time of dissolution, the
plan of dissolution shall include a statement to that effect.
(c) If the corporation is a Type B[, C] or D corporation and has no
assets to distribute, other than a reserve not to exceed twenty-five
thousand dollars for the purpose of paying ordinary and necessary
S. 3698 5
expenses of winding up its affairs including attorney and accountant
fees, and liabilities not in excess of ten thousand dollars at the time
of adoption of the plan of dissolution, the plan of dissolution shall
include a statement to that effect.
S 11. Paragraphs (a) and (d) of section 1002 of the not-for-profit
corporation law, as amended by chapter 434 of the laws of 2006, are
amended to read as follows:
(a) Upon adopting a plan of dissolution and distribution of assets,
the board shall submit it to a vote of the members, if any, and such
plan shall be approved at a meeting of members by two-thirds vote as
provided in paragraph (c) of section 613 (Vote of members); provided,
however, that if the corporation is a Type B[, C] or D corporation,
other than a corporation incorporated pursuant to article 15 (Public
cemetery corporations), and has no assets to distribute, other than a
reserve not to exceed twenty-five thousand dollars for the purpose of
paying ordinary and necessary expenses of winding up its affairs includ-
ing attorney and accountant fees, and liabilities not in excess of ten
thousand dollars at the time of adoption of the plan of dissolution, the
vote required by the corporation's board of directors for adoption of
the plan of dissolution of such a corporation or by the corporation's
members for the authorization thereof shall be:
(1) In the case of a vote by the board of directors: (i) the number of
directors required under the certificate of incorporation, by-laws, this
chapter and any other applicable law; or
(ii) if the number of directors actually holding office as such at the
time of the vote to adopt the plan is less than the number required to
constitute a quorum of directors under the certificate of incorporation,
the by-laws, this chapter or any other applicable law, the remaining
directors unanimously;
(2) In the case of a vote by the members, (i) the number of members
required under the certificate of incorporation, by-laws, this chapter
and any other applicable law; or (ii) by the vote of members authorized
by an order of the supreme court pursuant to section 608 of this chapter
permitting the corporation to dispense with the applicable quorum
requirement.
Notice of a special or regular meeting of the board of directors or of
the members entitled to vote on adoption and authorization or approval
of the plan of dissolution shall be sent to all the directors and
members of record entitled to vote. Unless otherwise directed by order
of the supreme court pursuant to section 608 [of this chapter] (QUORUM
AT MEETING OF MEMBERS), the notice shall be sent by certified mail,
return receipt requested, to the last known address of record of each
director and member not fewer than thirty, and not more than sixty days
before the date of each meeting provided, however, that if the last
known address of record of any director or member is not within the
United States, the notice to such director shall be sent by any other
reasonable means.
(d) The plan of dissolution and distribution of assets shall have
annexed thereto the approval of a justice of the supreme court in the
judicial district in which the office of the corporation is located in
the case of a Type B[, C] or D corporation, and in the case of any other
corporation which holds assets at the time of dissolution legally
required to be used for a particular purpose, except that no such
approval shall be required with respect to the plan of dissolution of a
corporation, other than a corporation incorporated pursuant to article
15 (Public cemetery corporations), which has no assets to distribute at
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the time of dissolution, other than a reserve not to exceed twenty-five
thousand dollars for the purpose of paying ordinary and necessary
expenses of winding up its affairs including attorney and accountant
fees, and liabilities not in excess of ten thousand dollars, and which
has complied with the requirements of section 1001 (Plan of dissolution
and distribution of assets) and this section applicable to such a corpo-
ration. Application to the supreme court for an order for such approval
shall be by verified petition, with the plan of dissolution and distrib-
ution of assets and certified copies of the consents prescribed by this
section annexed thereto, and upon ten days written notice to the attor-
ney general accompanied by copies of such petition, plan and consents.
In such case where approval of a justice of the supreme court is not
required for a Type B[, C] or D corporation, a copy of such plan certi-
fied under penalties of perjury shall be filed with the attorney general
within ten days after its authorization.
S 12. Subparagraph 2 of paragraph (b) of section 1003 of the not-for-
profit corporation law, as amended by chapter 434 of the laws of 2006,
is amended to read as follows:
(2) By the attorney general in the case of a Type B[, C] or D corpo-
ration, or any other corporation that holds assets at the time of
dissolution legally required to be used for a particular purpose.
S 13. Subparagraph 6 of paragraph (a) of section 1012 of the not-for-
profit corporation law, as amended by chapter 726 of the laws of 2005,
is amended to read as follows:
(6) That, under section 201 (Purposes), it is a Type .............
(Insert A, B[, C] or D) not-for-profit corporation.
S 14. Subparagraph 4 of paragraph (a) of section 1304 of the not-for-
profit corporation law, as amended by chapter 847 of the laws of 1970
and as renumbered by chapter 590 of the laws of 1982, is amended to read
as follows:
(4) That the corporation is a foreign corporation as defined in
subparagraph (a) (7) of section 102 (Definitions); the type of corpo-
ration it shall be under section 201 (Purposes); a statement of its
purposes to be pursued in this state and of the activities which it
proposes to conduct in this state; a statement that it is authorized to
conduct those activities in the jurisdiction of its incorporation; and
in the case of a Type [C] B corporation THAT WILL PURSUE ANY LAWFUL
BUSINESS PURPOSE OR PURPOSES IN THIS STATE, the lawful public or quasi-
public objective which each business purpose will achieve.
S 15. Subparagraph 3 of paragraph (a) of section 1321 of the not-for-
profit corporation law, as amended by chapter 847 of the laws of 1970,
is amended to read as follows:
(3) [The] NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (A)(2) OF
THIS SECTION, THE corporation is a Type [C] B corporation under this
chapter AUTHORIZED TO PURSUE ANY LAWFUL BUSINESS PURPOSE OR PURPOSES IN
THIS STATE; its principal activities are conducted outside this state;
the greater part of its property is located outside this state; and less
than one half of its revenues for the preceding three fiscal years, or
such portion thereof as the foreign corporation was in existence, was
derived from sources within this state.
S 16. Paragraph (b) of section 1411 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation. A local development corporation is a Type
[C] B corporation under this chapter.
S 17. This act shall take effect immediately.
