S T A T E O F N E W Y O R K
________________________________________________________________________
6249
I N S E N A T E
(PREFILED)
January 8, 2014
___________
Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and
when printed to be committed to the Committee on Rules
AN ACT to amend the education law and the not-for-profit corporation
law, in relation to implementing the non-profit revitalization act of
2013, and to repeal certain provisions of chapter 549 of the laws of
2013 enacting the non-profit revitalization act of 2013 relating to
reform of charitable organizations, and the not-for-profit corporation
law relating to reform of charitable organizations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 216 of the education law, as amended by chapter 549
of the laws of 2013, is amended to read as follows:
S 216. Charters. Under such name, with such number of trustees or
other managers, and with such powers, privileges and duties, and subject
to such limitations and restrictions in all respects as the regents may
prescribe in conformity to law, they may, by an instrument under their
seal and recorded in their office, incorporate any university, college,
academy, library, museum, or other institution or association for the
promotion of science, literature, art, history or other department of
knowledge, or of education in any way, associations of teachers,
students, graduates of educational institutions, and other associations
whose approved purposes are, in whole or in part, of educational or
cultural value deemed worthy of recognition and encouragement by the
university. No school; college; university or other entity providing
post secondary education; library; or museum or historical society shall
be incorporated under the business corporation law, the not-for-profit
corporation law, or any other general law without the consent of the
commissioner or, in the case of a college or university, without the
written authorization of the Regents. ANY OTHER ENTITY INCORPORATED FOR
EDUCATIONAL PURPOSES MAY BE FORMED UNDER THE BUSINESS CORPORATION LAW OR
THE NOT-FOR-PROFIT CORPORATION LAW WITHOUT THE CONSENT OF THE COMMIS-
SIONER, PROVIDED THAT SUCH INSTITUTION OR ASSOCIATION SUBMITS A CERTI-
FIED COPY OF THE CERTIFICATE OF INCORPORATION TO THE COMMISSIONER WITHIN
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13467-01-4
S. 6249 2
THIRTY DAYS AFTER THE CORPORATION RECEIVES CONFIRMATION FROM THE DEPART-
MENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED FOR FILING.
No individual, association, partnership, company or corporation not
authorized by special charter from the legislature of this state or by
charter from the regents to operate a museum, or arboretum shall know-
ingly use, advertise or transact business under the names "museum," or
"arboretum," or any name, title or descriptive material indicating or
tending to imply that said individual, association, partnership, company
or corporation conducts, carries on, or is such a business when it is
not, or that it is authorized to operate as such, unless the right to do
so has been granted by the regents or the commissioner in writing. Any
violation of this paragraph shall be a misdemeanor. Notwithstanding any
other provision of this section, an individual, association, partner-
ship, company or corporation doing business under any of such names on
the effective date of this paragraph may come into compliance with this
paragraph by obtaining consent of the regents or the commissioner within
one year of such effective date.
S 2. Subparagraph 3-b of paragraph (a) of section 102 of the not-for-
profit corporation law, as added by chapter 549 of the laws of 2013, is
amended to read as follows:
(3-b) "Charitable purposes" of a corporation means ONE OR MORE OF THE
FOLLOWING purposes [contained in the certificate of incorporation of the
corporation that are]: charitable, educational, religious, scientific,
literary, cultural or for the prevention of cruelty to children or
animals.
S 3. Paragraph (a) of section 103 of the not-for-profit corporation
law, as amended by chapter 549 of the laws of 2013, is amended to read
as follows:
(a) Except as otherwise provided in this section, this chapter
applies to every domestic corporation as herein defined, and to every
foreign corporation as herein defined which is authorized to conduct or
which conducts any activities in this state. This chapter also applies
to any other domestic corporation or foreign corporation of any kind to
the extent, if any, provided under this chapter or any law governing
such corporation and, if no such provision for application is made, to
the extent, if any, that the membership corporations law applied to such
corporation as of the effective date of this chapter. A corporation
formed by a special act of this state which has as its principal purpose
an education purpose and which is a member of the university of the
state of New York, is an "education corporation" under section two
hundred sixteen-a of the education law.
To the extent that the membership corporations law or the general
corporation law applied to it as of the effective date of this chapter,
the corresponding provisions of this chapter apply to a corporation
heretofore formed by or pursuant to a special act of this state other
than a religious corporation or an "education corporation" under clause
(b) of subdivision one of section two hundred sixteen-a of the education
law, if (1) its principal purpose is a religious, charitable or educa-
tion purpose, and (2) it is operated, supervised or controlled by or in
connection with a religious organization. ANY SUCH CORPORATION MAY AT
ANY TIME AFTER THE EFFECTIVE DATE OF THIS CHAPTER FILE A RESTATED
CERTIFICATE OF INCORPORATION UNDER SECTION 805 (RESTATED CERTIFICATE OF
INCORPORATION) INCLUDING A STATEMENT THAT IT ELECTS TO HAVE THIS CHAPTER
APPLY IN ALL RESPECTS TO IT. THE RESTATED CERTIFICATE OF INCORPORATION
SHALL CONFORM WITH THE REQUIREMENTS OF SECTION 402 (CERTIFICATE OF
INCORPORATION; CONTENTS) FOR NEW CORPORATIONS. UPON THE FILING OF SUCH
S. 6249 3
CERTIFICATE BY THE DEPARTMENT OF STATE, THIS CHAPTER SHALL APPLY IN ALL
RESPECTS TO SUCH CORPORATION.
This chapter also applies to any other corporation of any kind, formed
not-for-profit under any other chapter of the laws of this state except
a chapter of the consolidated laws, to the extent that provisions of
this chapter do not conflict with the provisions of such unconsolidated
law. If an applicable provision of such unconsolidated law relates to a
matter embraced in this chapter but is not in conflict therewith, both
provisions shall apply. Any corporation to which this chapter is made
applicable by this paragraph shall be treated as a "corporation" or
"domestic corporation" as such terms are used in this chapter, except
that the purposes of any such corporation formed or formable under such
unconsolidated law shall not thereby be extended. For the purpose of
this paragraph, the effective date of this chapter as to corporations to
which this chapter is made applicable by this paragraph shall be Septem-
ber one, nineteen hundred seventy-three.
S 4. Paragraphs (d), (e) and (f) of section 103 of the not-for-profit
corporation law are relettered paragraphs (e), (f) and (g) and a new
paragraph (d) is added to read as follows:
(D) A CORPORATION WHOSE FORMATION UNDER THIS CHAPTER IS AUTHORIZED BY
ANOTHER CORPORATE LAW IS, UNLESS OTHERWISE PROVIDED BY SUCH CORPORATE
LAW, SUBJECT TO ALL THE PROVISIONS OF THIS CHAPTER THAT ARE APPLICABLE
TO A CHARITABLE CORPORATION FORMED UNDER THIS CHAPTER.
S 5. Section 105 of the not-for-profit corporation law, as amended by
chapter 549 of the laws of 2013, is amended to read as follows:
S 105. Certificates; corrections.
(a) CORRECTIONS PRIOR TO FILING BY DEPARTMENT OF STATE. Any certif-
icate or other instrument relating to a domestic or foreign corporation
submitted to the department of state under this chapter may be corrected
with respect to any typographical, or similar non-material error appar-
ent on the face of the certificate or instrument, prior to the filing of
such certificate or instrument by the department of state. Such
correction shall be effected by the department of state upon authori-
zation in writing [or by electronic mail] by the incorporator[, or
following incorporation, by any person authorized by the corporation] IN
A FORM ACCEPTABLE TO THE DEPARTMENT. SUCH AUTHORIZATION MAY BE DELIVERED
BY MAIL OR SENT BY ELECTRONIC MAIL TO THE DEPARTMENT.
(b) CORRECTIONS FOLLOWING INCORPORATION. Any certificate or other
instrument relating to a domestic or foreign corporation filed by the
department of state under this chapter may be corrected with respect to
any typographical or similar non-material error apparent on the face or
defect in the execution thereof including the deletion of any matter not
permitted to be stated therein. A certificate, entitled "Certificate of
correction of.......... (correct title of certificate and name of corpo-
ration)" shall be signed and delivered to the department of state BY
MAIL OR ELECTRONIC MAIL. It shall set forth the name of the corpo-
ration, the date the certificate to be corrected was filed by the
department of state, the provision in the certificate as corrected or
eliminated and if the execution was defective, the proper execution. The
filing of the certificate by the department of state shall not alter the
effective time of the instrument being corrected, which shall remain as
its original effective time, and shall not affect any right or liability
accrued or incurred before such filing.
(C) A corporate name may not be changed or corrected under this
section other than to correct any typographical or similar non-material
error.
S. 6249 4
S 6. Paragraph (d) of section 201 of the not-for-profit corporation
law, as added by chapter 549 of the laws of 2013, is amended to read as
follows:
(d) A type D not-for-profit corporation formed prior to July first,
two thousand fourteen for charitable purposes [as that term is defined
in this chapter] shall be deemed a charitable corporation. Any
submission or filing by such corporation to any person or entity shall
be deemed to have been submitted or filed by a charitable corporation,
and any reference in any such filing or submission referring to the
status of such corporation as a type D corporation shall be deemed to
refer to a charitable corporation. Any other type D not-for-profit
corporations formed prior to July first, two thousand fourteen shall be
deemed a non-charitable corporation. Any submission or filing by such
corporation to any person or entity shall be deemed to have been submit-
ted or filed by a non-charitable corporation, and any reference in any
such filing or submission referring to the status of such corporation as
a type D corporation shall be deemed to refer to a non-charitable corpo-
ration.
S 7. Section 43 of chapter 549 of the laws of 2013 enacting the non-
profit revitalization act of 2013 relating to reform of charitable
organizations, is REPEALED.
S 8. Paragraphs (b) and (c) of section 306 of the not-for-profit
corporation law, as amended by chapter 549 of the laws of 2013, are
amended to read as follows:
(b) Service of process on the secretary of state as agent of a domes-
tic corporation FORMED UNDER ARTICLE FOUR OF THIS CHAPTER or an author-
ized foreign corporation shall be made by personally delivering to and
leaving with the SECRETARY OF STATE OR HIS OR HER deputy [of the secre-
tary of state], or with any person authorized by the secretary of 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 stat-
utory fee, which fee shall be a taxable disbursement. Service of proc-
ess on such corporation shall be complete when the secretary of state is
so served. The secretary of state shall promptly send one of such copies
by certified mail, return receipt requested, to such corporation, at the
post office address, on file in the department of state, specified for
the purpose. If a domestic corporation FORMED UNDER ARTICLE FOUR OF THIS
CHAPTER or an authorized foreign corporation has no such address on file
in the department of state, the secretary of state shall so mail such
copy to such corporation at the address of its office within this state
on file in the department.
(c) If an action or special proceeding is instituted in a court of
limited jurisdiction, service of process may be made in the manner
provided in this section if the office of the domestic corporation
FORMED UNDER ARTICLE FOUR OF THIS CHAPTER or foreign corporation is
within the territorial jurisdiction of the court.
S 9. Subparagraph 2 of paragraph (a) of section 402 of the not-for-
profit corporation law, as amended by chapter 549 of the laws of 2013,
is amended and a new subparagraph 2-b is added to read as follows:
(2) That the corporation is a corporation as defined in subparagraph
[(a) (5)] (5) OF PARAGRAPH (A) of section 102 (Definitions)[,].
(2-A) the purpose or purposes for which it is formed, IT BEING SUFFI-
CIENT TO STATE THAT THE PURPOSE OF THE CORPORATION IS ANY PURPOSE FOR
WHICH CORPORATIONS MAY BE ORGANIZED UNDER THIS CHAPTER AS A CHARITABLE
OR NON-CHARITABLE CORPORATION, and whether it is a charitable corpo-
ration or a non-charitable corporation under section 201 (Purposes).
S. 6249 5
Any corporation may also set forth any activities that it intends to
carry out in furtherance of such purpose or purposes; provided that this
subparagraph shall not be interpreted to require that the certificate of
incorporation set forth such activities or otherwise state how the
corporation's purposes will be achieved.
(2-B) IF IT IS NOT FORMED TO ENGAGE IN ANY ACTIVITY OR FOR ANY PURPOSE
REQUIRING CONSENT OR APPROVAL OF ANY STATE OFFICIAL, DEPARTMENT, BOARD,
AGENCY OR OTHER BODY, A STATEMENT THAT NO SUCH CONSENT OR APPROVAL IS
REQUIRED. SUCH STATEMENT SHALL BE DEEMED CONCLUSIVE FOR PURPOSES OF
FILING BY THE DEPARTMENT OF STATE. IF SUBSEQUENT TO SUBMITTING THE
CERTIFICATE OF INCORPORATION FOR FILING, THE CORPORATION PLANS TO ENGAGE
IN ANY ACTIVITY REQUIRING CONSENT OR APPROVAL PURSUANT TO SECTION 404
(APPROVALS, NOTICES AND CONSENTS) OF THIS CHAPTER, THE CORPORATION SHALL
OBTAIN SUCH CONSENT OR APPROVAL AND ACCORDINGLY AMEND ITS CERTIFICATE OF
INCORPORATION PURSUANT TO ARTICLE EIGHT OF THIS CHAPTER.
S 10. Paragraph (w) of section 404 of the not-for-profit corporation
law, as added by chapter 549 of the laws of 2013, is REPEALED.
S 11. Subparagraph 6 of paragraph (a) of section 803 of the not-for-
profit corporation law, as amended by chapter 168 of the laws of 1982
and as renumbered by chapter 145 of the laws of 1983, is amended to read
as follows:
(6) A designation of the secretary of state as agent of the corpo-
ration 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] THE SECRE-
TARY.
S 12. This act shall take effect on the same date and in the same
manner as chapter 549 of the laws of 2013, takes effect.
