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This entry was published on 2014-09-22
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SECTION 109
Actions or special proceedings by attorney-general
Business Corporation (BSC) CHAPTER 4, ARTICLE 1
§ 109. Actions or special proceedings by attorney-general.

(a) The attorney-general may maintain an action or special proceeding:

(1) To annul the corporate existence or dissolve a corporation that
has acted beyond its capacity or power or to restrain it from the doing
of unauthorized business;

(2) To annul the corporate existence or dissolve any corporation that
has not been duly formed;

(3) To restrain any person or persons from acting as a domestic or
foreign corporation within this state without being duly incorporated or
from exercising in this state any corporate rights, privileges or
franchises not granted to them by the law of the state;

(4) To procure a judgment removing a director of a corporation for
cause under section 706 (Removal of directors);

(5) To dissolve a corporation under article 11 (Judicial dissolution);

(6) To restrain a foreign corporation or to annul its authority to do
business in this state under section 1303 (Violations).

(7) Upon written application, ex parte, for an order to the supreme
court at a special term held within the judicial district where the
office of the corporation is located, and if the court so orders, to
inspect the books and records of the corporation to the extent that such
inspection is available to shareholders and directors under the law of
this state. Such application shall contain a statement that the
inspection is necessary to protect the interests of the people of this
state. This paragraph applies to every corporation, no shares of which
are listed on a national securities exchange or regularly quoted in an
over-the-counter market by one or more members of a national or an
affliated securities association. This paragraph does not apply to a
corporation all shares of which are owned either directly or through a
wholly owned subsidiary by a corporation or corporations to which this
paragraph does not apply.

(8) To collect any fines payable to the department of state pursuant
to section four hundred nine of this chapter.

(b) In an action or special proceeding brought by the attorney-general
under any of the provisions of this chapter:

(1) If an action, it is triable by jury as a matter of right.

(2) The court may confer immunity in accordance with the provisions of
section 50.20 of the criminal procedure law.

(3) A temporary restraining order to restrain the commission or
continuance of the unlawful acts which form the basis of the action or
special proceeding may be granted upon proof, by affidavit, that the
defendant or defendants have committed or are about to commit such acts.
Application for such restraining order may be made ex parte or upon such
notice as the court may direct.

(4) If the action or special proceeding is against a foreign
corporation, the attorney-general may apply to the court at any stage
thereof for the appointment of a temporary receiver of the assets in
this state of such foreign corporation, whenever it has assets or
property of any kind whatsoever, tangible or intangible, within this
state.

(5) When final judgment in such action or special proceeding is
rendered against the defendant or defendants, the court may direct the
costs to be collected by execution against any or all of the defendants
or by order of attachment or other process against the person of any
director or officer of a corporate defendant.

(6) In connection with any such proposed action or special proceeding,
the attorney-general may take proof and issue subpoenas in accordance
with the civil practice law and rules.

(c) In any such action or special proceeding against a foreign
corporation which has not designated the secretary of state as its agent
for service of process under section 304 (Statutory designation of
secretary of state as agent for service of process), any of the
following acts in this state by such foreign corporation shall
constitute the appointment by it of the secretary of state as its agent
upon whom process against such foreign corporation may be served:

(1) As used in this paragraph the term "resident" shall include
individuals, domestic corporations and foreign corporations authorized
to do business in the state.

(2) Any act done, or representation made as part of a course of the
solicitation of orders, or the issuance, or the delivery, of contracts
for, or the sale of, property, or the performance of services to
residents which involves or promotes a plan or scheme to defraud
residents in violation of the laws or the public policy of the state.

(3) Any act done as part of a course of conduct of business in the
solicitation of orders from residents for property, goods or services,
to be delivered or rendered within this state to, or on their behalf,
where the orders or contracts are executed by such residents within this
state and where such orders or contracts are accompanied or followed by
an earnest money desposit or other down payment or any installment
payment thereon or any other form of payment, which payment is either
delivered in or transmitted from the state.

(4) Any act done as part of the conduct of a course of business with
residents which defrauds such residents or otherwise involves or
promotes an attempt by such foreign corporation to circumvent the laws
of this state.

(d) Paragraphs (b), (c), (d) and (e) of section 307 (Service of
process on unauthorized foreign corporation) shall apply to process
served under paragraph (c).