NY State Senate Bill 2019-S9110

Senate Bill S9110

2019-2020 Legislative Session

Relates to providing for the remote conduct of certain practices and procedures relating to board meetings

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Archive: Last Bill Status - In Senate Committee Rules 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

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 02, 2020	referred to rules

2019-S9110 (ACTIVE) - Details

Current Committee:: Senate Rules
Law Section:: Business Corporation Law
Laws Affected:: Amd §§708 & 602, BC L; amd §§603 & 605, N-PC L; amd §28, Rel Corp L
Versions Introduced in 2021-2022 Legislative Session:: S3917

2019-S9110 (ACTIVE) - Summary

Provides for the remote conduct of certain practices and procedures relating to board meetings for the duration of the state disaster emergency declared by executive order two hundred two that began on March seventh, two thousand twenty, or until December thirty-first, two thousand twenty-one, whichever is later.

2019-S9110 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S9110

SPONSOR: BENJAMIN
 
TITLE OF BILL:

An act to amend the business corporation law, the not-for-profit corpo-
ration law, and the religious corporations law, in relation to providing
for the remote conduct of certain practices and procedures relating to
board meetings

 
TITLE OF BILL:

An act to amend the business corporation law, the not-for-profit corpo-
ration law, and the religious corporations law, in relation to providing
for the remote conduct of certain practices and procedures relating to
board meetings.

 
PURPOSE OR GENERAL IDEA OF BILL:

Chapter 122, laws of 2020, allows not-for-profit corporations, religious
institutions, and cooperatives to hold meetings of shareholders,

members, trustees, etc., through remote communications to the extent the
board of that organization authorizes that participation. This bill
extends these provisions to the end of 2021.

 
SUMMARY OF PROVISIONS:

Section 1. Paragraph (b) of section 708 of the business corporation law
is amended to allow a director to give their written consent for the
board to take actions without a formal meeting via electronic means.

Section 2. Paragraph (a) of section 602 of the business corporation law
is amended to allow the board of directors to determine a shareholders
meeting shall take place solely via electronic communications, the
platform/service of which shall be the place of the meeting for purposes
of Article VI of the business corporations law.

Section 3. Paragraph (a) of section 603 of the not-for-profit corpo-
ration law is amended to allow members to participate in in-person meet-
ings via electronic communications, or for meetings of members to take
place solely via electronic communications, at the discretion of the
board of directors. Additionally, a new paragraph

(e) is added to provide minimum procedure guidelines for members taking
part in members meetings via electronic communications.

Section 4. Paragraph (a) of Section 605 of the not-for-profit corpo-
ration law is amended by requiring the notice of meeting for a members
meeting include the means of electronic communications, if any, by which
members may participate in the meeting. Additionally, paragraph (b) of
section 605 would be amended by requiring that, for a notice of meeting
of an adjourned meeting to another time and place to not be necessary,
the means of electronic communication, if any, by which members may
participate in said adjourned meeting must be announced at the meeting
where the adjournment is taking place.

Section 5 . The religious corporations law is amended by adding a new
section to explicitly authorize the board of trustees of a religious

corporation to determine that board or corporate meetings may be held
solely by means of electronic communications.

Section 6. This act shall take effect immediately.

 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):  N/A

 
JUSTIFICATION:

While chapter 122 of 2020 allows these practices, the continuing diffi-
culties associated with the COVID-19 pandemic necessitate extending to
the end of 2021.

The New York State Business Corporation Law and Not-For-Profit Corpo-
ration Law do not expressly authorize shareholder and member meetings,
respectively, to take place solely via electronic communications. The
New York State Religious Corporations Law, as it pertains to board of
trustee meetings and corporate meetings, in a general sense is similarly
deficient in that regard. Recent executive orders by the Governor in
regard to encouraging social distancing in response to the COVID-19
pandemic have expressly allowed such meetings to take place solely by
electronic communications. This ability to avoid in-person meetings is
not only crucial during the ongoing pandemic but will also allow organ-
izations to safely and properly plan ahead. This legislation would codi-
fy this policy, and further modernize how such business, not-for-profits
and religious institutions function.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately

2019-S9110 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9110
 
                             I N  S E N A T E
 
                             December 2, 2020
                                ___________
 
 Introduced  by Sen. BENJAMIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the business corporation law, the not-for-profit  corpo-
   ration law, and the religious corporations law, in relation to provid-
   ing  for the remote conduct of certain practices and procedures relat-
   ing to board meetings

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  (b) of section 708 of the business corporation
 law, as amended by chapter 122 of the laws of 2020, is amended  to  read
 as follows:
   (b) Unless otherwise restricted by the certificate of incorporation or
 the  by-laws,  any action required or permitted to be taken by the board
 or any committee thereof may be taken without a meeting if  all  members
 of  the  board  or the committee consent in writing to the adoption of a
 resolution authorizing  the  action.  The  resolution  and  the  written
 consents thereto by the members of the board or committee shall be filed
 with  the  minutes of the proceedings of the board or committee. For the
 duration of the state disaster emergency declared by executive order two
 hundred two that began on March seventh, two thousand twenty,  OR  UNTIL
 DECEMBER  THIRTY-FIRST,  TWO  THOUSAND  TWENTY-ONE,  WHICHEVER IS LATER,
 notwithstanding any provision  of  law  to  the  contrary,  the  written
 consent  of  a  member may be made electronically, where such consent is
 submitted via electronic mail along with information from which  it  can
 be  reasonably  determined  that the transmission was authorized by such
 member.
   § 2. Paragraph (a) of section 602 of the business corporation law,  as
 amended  by  chapter  122  of  the  laws  of 2020, is amended to read as
 follows:
   (a) Meetings of shareholders may be held  at  such  place,  within  or
 without  this  state, as may be fixed by or under the by-laws, or if not
 so fixed, as determined by the board of directors. For the  duration  of
 the state disaster emergency declared by executive order two hundred two
 that  began  on  March  seventh,  two thousand twenty, OR UNTIL DECEMBER
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD17585-01-0

 S. 9110                             2
 
 THIRTY-FIRST, TWO THOUSAND TWENTY-ONE, WHICHEVER IS LATER, if,  pursuant
 to this paragraph or the by-laws of the corporation, the board of direc-
 tors  is authorized to determine the place of a meeting of shareholders,
 the  board  of directors may, in its sole discretion, determine that the
 meeting be  held  solely  by  means  of  electronic  communication,  the
 platform/service  of which shall be the place of the meeting for purpose
 of this article.
   § 3. Paragraph (a) of section 603 of  the  not-for-profit  corporation
 law,  as  amended by chapter 122 of the laws of 2020, is amended to read
 as follows:
   (a) Meetings of members may be held at such place, within  or  without
 this state, as may be fixed by or under the by-laws or, if not so fixed,
 as  determined  by the board of directors. For the duration of the state
 disaster emergency declared by executive  order  two  hundred  two  that
 began  on  March seventh, two thousand twenty, OR UNTIL DECEMBER THIRTY-
 FIRST, TWO THOUSAND TWENTY-ONE, WHICHEVER IS LATER, the board of  direc-
 tors  may, in its sole discretion, determine that meetings of members be
 held partially or solely by means of electronic communication, the elec-
 tronic service and/or platform by which the meeting is held shall be the
 place of the meeting for purposes of this article if a meeting  is  held
 solely by means of electronic communication. Meetings conducted partial-
 ly or solely by means of electronic communications in reliance upon this
 paragraph  and  any  member's  electronic participation in such meetings
 shall be subject to those guidelines and procedures as the board adopts,
 provided the board shall implement reasonable measures  to:  (1)  verify
 that  each person participating electronically is a member or a proxy of
 a member; (2) provide each member participating  electronically  with  a
 reasonable  opportunity  to  participate  in  the  meeting, including an
 opportunity to propose, object to, and vote upon a specific action to be
 taken by the members, and to see, read or hear the  proceedings  of  the
 meeting  substantially  concurrently  with  those  proceedings;  and (3)
 record and maintain a record of any votes  or  other  actions  taken  by
 electronic communication at the meeting.
   §  4.  Paragraphs  (a)  and  (b)  of section 605 of the not-for-profit
 corporation law, as amended by chapter 122 of  the  laws  of  2020,  are
 amended to read as follows:
   (a) Whenever under the provisions of this chapter members are required
 or permitted to take any action at a meeting, written notice shall state
 the  place,  date and hour of the meeting, for the duration of the state
 disaster emergency declared by executive  order  two  hundred  two  that
 began  on  March seventh, two thousand twenty, OR UNTIL DECEMBER THIRTY-
 FIRST, TWO THOUSAND TWENTY-ONE, WHICHEVER IS LATER, the means  of  elec-
 tronic  communication,  if  any, by which members may participate in the
 proceedings of the meeting pursuant to  paragraph  (a)  of  section  six
 hundred three of this article and, unless it is an annual meeting, indi-
 cate  that  it  is  being issued by or at the direction of the person or
 persons calling the meeting. Notice of  a  special  meeting  shall  also
 state the purpose or purposes for which the meeting is called. A copy of
 the  notice  of  any  meeting shall be given, personally, by mail, or by
 facsimile telecommunications or by electronic mail, to each member enti-
 tled to vote at such meeting. If the  notice  is  given  personally,  by
 first  class  mail  or  by facsimile telecommunications or by electronic
 mail, it shall be given not less than  ten  nor  more  than  fifty  days
 before the date of the meeting; if mailed by any other class of mail, it
 shall be given not less than thirty nor more than sixty days before such
 date.  If  mailed,  such  notice  is  given when deposited in the United

 S. 9110                             3
 
 States mail, with postage thereon prepaid, directed to the member at his
 address as it appears on the record of members, or,  if  he  shall  have
 filed  with  the  secretary  of  the  corporation a written request that
 notices  to him be mailed to some other address, then directed to him at
 such other address. If sent by  facsimile  telecommunication  or  mailed
 electronically,  such  notice is given when directed to the member's fax
 number or electronic mail  address  as  it  appears  on  the  record  of
 members,  or,  to  such  fax  number or other electronic mail address as
 filed with the secretary of the corporation. Notwithstanding the forego-
 ing, such notice shall not be deemed to have been  given  electronically
 (1)  if  the corporation is unable to deliver two consecutive notices to
 the member by facsimile telecommunication or electronic mail; or (2) the
 corporation otherwise becomes aware that notice cannot be  delivered  to
 the member by facsimile telecommunication or electronic mail. An affida-
 vit  of the secretary or other person giving the notice or of a transfer
 agent of the corporation that the notice required by  this  section  has
 been  given  shall,  in the absence of fraud, be prima facie evidence of
 the facts therein stated. Whenever a  corporation  has  more  than  five
 hundred  members, the notice may be served by publication in a newspaper
 published in the county in the state in which the  principal  office  of
 the  corporation is located, once a week for three successive weeks next
 preceding the date of the meeting, provided that the  corporation  shall
 also  prominently  post  notice  of  such meeting on the homepage of any
 website maintained by the corporation  continuously  from  the  date  of
 publication  through  the  date of the meeting. A corporation shall send
 notice of meetings by first class mail to any  member  who  requests  in
 writing that such notices be delivered by such method.
   (b) When a meeting is adjourned to another time or place, it shall not
 be  necessary,  unless the by-laws require otherwise, to give any notice
 of the adjourned meeting if the time and place to which the  meeting  is
 adjourned and, for the duration of the state disaster emergency declared
 by  executive  order  two  hundred  two that began on March seventh, two
 thousand twenty, OR UNTIL DECEMBER THIRTY-FIRST,  TWO  THOUSAND  TWENTY-
 ONE, WHICHEVER IS LATER, the means of electronic communications, if any,
 by  which  members  may  participate  in  the proceedings of the meeting
 pursuant to paragraph (a) of section six hundred three of  this  article
 are  announced  at the meeting at which the adjournment is taken, and at
 the adjourned meeting any business may be  transacted  that  might  have
 been  transacted  on the original date of the meeting. However, if after
 the adjournment the board fixes a new  record  date  for  the  adjourned
 meeting, a notice of the adjourned meeting shall be given to each member
 of  record on the new record date entitled to notice under paragraph (a)
 of this section.
   § 5. Section 28 of the religious corporations law, as amended by chap-
 ter 122 of the laws of 2020, is amended to read as follows:
   § 28. Meetings for  the  duration  of  the  state  disaster  emergency
 declared by executive order two hundred two that began on March seventh,
 two  thousand  twenty; electronic communication. For the duration of the
 state disaster emergency declared by executive  order  two  hundred  two
 that  began  on  March  seventh,  two thousand twenty, OR UNTIL DECEMBER
 THIRTY-FIRST, TWO THOUSAND TWENTY-ONE, WHICHEVER IS LATER, notwithstand-
 ing any provision of law, certificate of incorporation or by-laws to the
 contrary, if the board of trustees of a religious corporation is author-
 ized to determine the place of trustee meetings or  corporate  meetings,
 the  board  of  trustees may, in its sole discretion, determine that the
 meeting shall be held solely by means of electronic  communication,  the

 S. 9110                             4
 
 electronic  service  and/or  platform  through which the meeting is held
 shall be the place of the meeting for purposes of this chapter.
   §  6.  This act shall take effect immediately, provided, however, that
 the amendments to paragraph (b) of section 708 of  the  business  corpo-
 ration law made by section one of this act, paragraph (a) of section 602
 of  the  business corporation law made by section two of this act, para-
 graph (a) of section 603 of the not-for-profit corporation law  made  by
 section  three of this act, paragraphs (a) and (b) of section 605 of the
 not-for-profit corporation law made by section four  of  this  act,  and
 section  28  of  the  religious corporations law made by section five of
 this act, shall not affect the expiration or repeal of  such  paragraphs
 or such section and shall be deemed to expire or repeal therewith.

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