NY State Senate Bill S7361

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

Introduced
In Committee
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- Passed Senate
- Passed Assembly
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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 21, 2020	referred to corporations, authorities and commissions

Co-Sponsors

S7361 (ACTIVE) - Details

See Assembly Version of this Bill:: A222
Current Committee:: Senate Corporations, Authorities And Commissions
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §§902 & 1002, N-PC L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S8637, A10304
2021-2022: S3265, A213

S7361 (ACTIVE) - Summary

Relates to requiring a two-thirds vote of the board in certain circumstances.

S7361 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S7361

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend the not-for-profit corporation law, in relation to
voting requirements of the board of certain corporations

 
PURPOSE::

To require a two-thirds vote of a corporation's board members present at
the time of the vote, for a proposed consolidation, merger or dissol-
ution of the corporation, so long as there is a quorum at that time.

 
SUMMARY OF SPECIFIC PROVISIONS::

Section one of the bill amends the opening paragraph of paragraph a of
section 902 of the not-for-profit corporation law to require that the
board of a corporation proposing to participate in a merger or consol-
idation shall adopt, by a vote of two-thirds of the board present, if a
quorum is present at that time, of each corporation, or by a vote of the

number of directors required under the certificate of incorporation,
by-laws, this chapter, and any other applicable law, a plan of merger or
consolidation.

Section two amends subparagraph 1 of paragraph a of section 1002 of the
not-for-profit corporation law to require a vote by two-thirds of the
directors present at the time of the vote, if a quorum is present at
that time in order to dissolve the corporation.

Section three provides the effective date.

 
JUSTIFICATION::

This bill will amend the Not-for-Profit Corporation Law (NPCL) in
relation to corporate consolidation, merger or dissolution.  Currently,
the NPCL allows boards to authorize such actions by a simple majority of
a quorum of the board, whereas the law requires a higher standard for
other corporate action. For example, to change the number of directors,
the vote of a majority of the entire board is required; to elect an
officer or to purchase or sell real property on behalf of the corpo-
ration, a two-thirds majority vote of the entire board is needed. Since
the decision to merge, consolidate, or dissolve is arguably the most
important decision that a corporation can make, this bill will amend the
NPCL to require a vote in favor of such action by two-thirds of the
directors present at the time of the vote, if a quorum is present at
that time, or alternatively, by a vote of the number of directors
required under the corporation's certificate of incorporation, its
by-laws, this chapter, and any other applicable law.

 
PRIOR LEGISLATIVE HISTORY::  2018: S.8637A/A.10304-B Referred to
Corporations, Authorities and Commissions/ Passed Assembly

 
FISCAL IMPLICATIONS::

None.

 
EFFECTIVE DATE::

On the ninetieth day after it shall have become a law.

S7361 (ACTIVE) - Bill Text download pdf


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

                                  7361

                            I N  S E N A T E

                            January 21, 2020
                               ___________

Introduced  by Sens. COMRIE, GALLIVAN -- 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
  voting requirements of the board of certain corporations

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

  Section  1.  The  opening paragraph of paragraph (a) of section 902 of
the not-for-profit corporation law is amended to read as follows:
  The board of each corporation proposing to participate in a merger  or
consolidation under section 901 (Power of merger or consolidation) shall
adopt,  BY  A VOTE OF TWO-THIRDS OF THE DIRECTORS PRESENT AT THE TIME OF
THE VOTE, IF A QUORUM IS PRESENT AT THAT TIME,  OR  BY  A  VOTE  OF  THE
NUMBER  OF  DIRECTORS  REQUIRED  UNDER THE CERTIFICATE OF INCORPORATION,
BY-LAWS, THIS CHAPTER AND ANY OTHER APPLICABLE LAW, a plan of merger  or
consolidation, setting forth:
  §  2.  Subparagraph 1 of paragraph (a) of section 1002 of the not-for-
profit corporation law, as amended by chapter 549 of the laws  of  2013,
is amended to read as follows:
  (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) TWO-THIRDS OF THE DIRECTORS PRESENT AT THE TIME OF THE VOTE, IF A
QUORUM IS PRESENT AT THAT TIME; OR
  (III)  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 incorpo-
ration, the by-laws, this chapter  or  any  other  applicable  law,  the
remaining directors unanimously;
  §  3.  This  act shall take effect on the ninetieth day after it shall
have become a law.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02091-01-9

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The New York State Senate

senate Bill S7361

Sponsored By

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

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Co-Sponsors

S7361 (ACTIVE) - Details

S7361 (ACTIVE) - Summary

S7361 (ACTIVE) - Sponsor Memo

S7361 (ACTIVE) - Bill Text download pdf

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senate Bill S7361

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Sponsored By

Leroy Comrie

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

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Co-Sponsors

Patrick M. Gallivan

S7361 (ACTIVE) - Details

S7361 (ACTIVE) - Summary

S7361 (ACTIVE) - Sponsor Memo

S7361 (ACTIVE) - Bill Text download pdf

Comments