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A01025 Summary:

BILL NOA01025
 
SAME ASSAME AS S03917-A
 
SPONSORPaulin
 
COSPNSROtis, Galef, Vanel, Wallace
 
MLTSPNSR
 
Amd §§708 & 602, BC L; amd §§603 & 605, N-PC L; amd §28, Rel Corp L
 
Allows corporations to conduct business and meetings electronically either for the duration of the state disaster emergency or until December 31, 2021, whichever is later.
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A01025 Actions:

BILL NOA01025
 
01/07/2021referred to corporations, authorities and commissions
02/09/2021reported referred to codes
03/09/2021reported
03/11/2021advanced to third reading cal.162
03/17/2021substituted by s3917a
 S03917 AMEND=A BENJAMIN
 02/01/2021REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
 02/09/20211ST REPORT CAL.327
 02/10/20212ND REPORT CAL.
 02/22/2021AMENDED (T) 3917A
 02/22/2021ADVANCED TO THIRD READING
 03/05/2021PASSED SENATE
 03/05/2021DELIVERED TO ASSEMBLY
 03/05/2021referred to codes
 03/17/2021substituted for a1025
 03/17/2021ordered to third reading cal.162
 03/17/2021passed assembly
 03/17/2021returned to senate
 04/01/2021DELIVERED TO GOVERNOR
 04/06/2021SIGNED CHAP.98
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A01025 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1025
 
SPONSOR: 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 allowing corporations to conduct business and meetings electronically for a certain period of time   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 or December 31st, 2021, whichever comes later, 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 or until December 31, 2021, whichever is later, 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 or until December 31, 2021, whichever is later, 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 or until December 31, 2021, whichever is later, members to participate in in-person meetings via electronic communi- cations, 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 or until December 31, 2021, whichever is later, the notice of meeting for a members meeting include the means of elec- tronic 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. Section 28 of the religious corporations law is amended by explicitly authorizing the board of trustees of a religious corporation, for the duration of the COVID-19 state disaster emergency or until December 31, 2021, whichever is later, to determine that board or corpo- rate meetings may be held solely by means of electronic communications. Section 6. This act shall take effect immediately.   JUSTIFICATION: Since March of 2020, the Governor put forth several executive orders that encouraged social distancing in response to the COVID-19 pandemic, expressly allowing shareholder and member meetings to take place solely by electronic communication. Then, in June of 2020, the Governor signed legislation into law that would amend the New York State Business Corpo- ration Law, Not-For-Profit Corporation Law, and Religious Corporations law to authorize such meetings to take place electronically throughout the duration of the emergency declaration set forth in Executive Order 202.2. This ability to avoid in-person meetings is crucial during the ongoing pandemic. However, because Executive Orders must be renewed every thirty days, this leaves corporations with little certainty as to when the emergency declaration will end and makes it difficult to schedule and plan virtual shareholder, member, and board of trustee meetings in advance. This bill would amend the Business Corporation Law, Not-For-Profit Law, and Religious Corporation law to authorize shareholder, member, and board of trustee meetings to take place solely via electronic communi- cations throughout the duration of the emergency declaration or until December 31, 2021, whichever comes later. Having a set date will allow corporations to plan meetings ahead of time, particularly 2021 share- holder meetings. This will provide much-needed certainty, allowing corporations to make plans and operate as efficiently and safely as possible in these unprecedented times.   PRIOR LEGISLATIVE HISTORY: A.11150 of 2020, referred to corporations, authorities, and commissions.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None   EFFECTIVE DATE: This act shall take effect immediately, with provisions.
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