NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10498a
SPONSOR: Rules (Paulin) 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; and providing for the repeal of such provisions upon the
expiration thereof
PURPOSE OR GENERAL IDEA OF BILL:
This bill would allow business corporations, not-for-profit corpo-
rations, religious institutions, and cooperatives, for the duration of
the COVID-19 state disaster emergency, to hold meetings of shareholders,
members, trustees, etc., via electronic communication.
SUMMARY OF PROVISIONS:
Section 1. Paragraph (b) of section 708 of the business corporation law
is amended to allow, for the duration of the COVID-19 state disaster
emergency, 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, for the duration of the COVID-19 state disaster
emergency, 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, for the duration of the COVID-19 state
disaster emergency, members to participate in in-person meetings via
electronic communications, or for meetings of members to take place
solely via electronic communications, at the discretion of the board of
directors, and 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, for the duration of the COVID-19
state disaster emergency, 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 partic-
ipate 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, for the duration of the COVID-19 state disaster emergency,
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):
Limited the applicability of the provisions of this act to the duration
of the COVID-19 state disaster emergency.
JUSTIFICATION:
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
crucial during the ongoing pandemic. This legislation would codify this
policy for the duration of this emergency and give such affected organ-
ization the ability to safely and properly plan ahead.
PRIOR LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None
EFFECTIVE DATE:
This act shall take effect immediately and shall expire and be deemed
repealed December 31, 2021.
