NY State Senate Bill S3265

Current Bill Status - On Floor Calendar

Introduced
In Committee
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Actions

view actions (4)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 01, 2021	advanced to third reading
Feb 24, 2021	2nd report cal.
Feb 23, 2021	1st report cal.414
Jan 28, 2021	referred to corporations, authorities and commissions

Votes

view votes

Feb 23, 2021 - Corporations, Authorities and Commissions committee Vote

S3265

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

show Corporations, Authorities and Commissions committee vote details

Corporations, Authorities and Commissions Committee Vote: Feb 23, 2021

aye (7)

Co-Sponsors

S3265 (ACTIVE) - Details

See Assembly Version of this Bill:: A213
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
2019-2020: S1897, S7361, A222

S3265 (ACTIVE) - Summary

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

S3265 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S3265

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.

S3265 (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3265
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 28, 2021
                                ___________
 
 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.

                                                            LBD01795-01-1

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The New York State Senate

senate Bill S3265

Sponsored By

Current Bill Status - On Floor Calendar

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Votes

Feb 23, 2021 - Corporations, Authorities and Commissions committee Vote

Corporations, Authorities and Commissions Committee Vote: Feb 23, 2021

Co-Sponsors

S3265 (ACTIVE) - Details

S3265 (ACTIVE) - Summary

S3265 (ACTIVE) - Sponsor Memo

S3265 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S3265

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Sponsored By

Leroy Comrie

Current Bill Status - On Floor Calendar

Your Voice

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Votes

Feb 23, 2021 - Corporations, Authorities and Commissions committee Vote

Corporations, Authorities and Commissions Committee Vote: Feb 23, 2021

Co-Sponsors

Patrick M. Gallivan

S3265 (ACTIVE) - Details

S3265 (ACTIVE) - Summary

S3265 (ACTIVE) - Sponsor Memo

S3265 (ACTIVE) - Bill Text download pdf

Comments