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.
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.
STATE OF NEW YORK
________________________________________________________________________
1025
2021-2022 Regular Sessions
IN ASSEMBLY
January 7, 2021
___________
Introduced by M. of A. PAULIN -- read once and referred to the Committee
on Corporations, Authorities and Commissions
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
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (b) of section 708 of the business corporation
2 law, as amended by chapter 122 of the laws of 2020, is amended to read
3 as follows:
4 (b) Unless otherwise restricted by the certificate of incorporation or
5 the by-laws, any action required or permitted to be taken by the board
6 or any committee thereof may be taken without a meeting if all members
7 of the board or the committee consent in writing to the adoption of a
8 resolution authorizing the action. The resolution and the written
9 consents thereto by the members of the board or committee shall be filed
10 with the minutes of the proceedings of the board or committee. For the
11 duration of the state disaster emergency declared by executive order two
12 hundred two that began on March seventh, two thousand twenty, or until
13 December thirty-first, two thousand twenty-one, whichever is later,
14 notwithstanding any provision of law to the contrary, the written
15 consent of a member may be made electronically, where such consent is
16 submitted via electronic mail along with information from which it can
17 be reasonably determined that the transmission was authorized by such
18 member.
19 § 2. Paragraph (a) of section 602 of the business corporation law, as
20 amended by chapter 122 of the laws of 2020, is amended to read as
21 follows:
22 (a) Meetings of shareholders may be held at such place, within or
23 without this state, as may be fixed by or under the by-laws, or if not
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04852-01-1
A. 1025 2
1 so fixed, as determined by the board of directors. For the duration of
2 the state disaster emergency declared by executive order two hundred two
3 that began on March seventh, two thousand twenty, or until December
4 thirty-first, two thousand twenty-one, whichever is later, if, pursuant
5 to this paragraph or the by-laws of the corporation, the board of direc-
6 tors is authorized to determine the place of a meeting of shareholders,
7 the board of directors may, in its sole discretion, determine that the
8 meeting be held solely by means of electronic communication, the
9 platform/service of which shall be the place of the meeting for purpose
10 of this article.
11 § 3. Paragraph (a) of section 603 of the not-for-profit corporation
12 law, as amended by chapter 122 of the laws of 2020, is amended to read
13 as follows:
14 (a) Meetings of members may be held at such place, within or without
15 this state, as may be fixed by or under the by-laws or, if not so fixed,
16 as determined by the board of directors. For the duration of the state
17 disaster emergency declared by executive order two hundred two that
18 began on March seventh, two thousand twenty, or until December thirty-
19 first, two thousand twenty-one, whichever is later, the board of direc-
20 tors may, in its sole discretion, determine that meetings of members be
21 held partially or solely by means of electronic communication, the elec-
22 tronic service and/or platform by which the meeting is held shall be the
23 place of the meeting for purposes of this article if a meeting is held
24 solely by means of electronic communication. Meetings conducted partial-
25 ly or solely by means of electronic communications in reliance upon this
26 paragraph and any member's electronic participation in such meetings
27 shall be subject to those guidelines and procedures as the board adopts,
28 provided the board shall implement reasonable measures to: (1) verify
29 that each person participating electronically is a member or a proxy of
30 a member; (2) provide each member participating electronically with a
31 reasonable opportunity to participate in the meeting, including an
32 opportunity to propose, object to, and vote upon a specific action to be
33 taken by the members, and to see, read or hear the proceedings of the
34 meeting substantially concurrently with those proceedings; and (3)
35 record and maintain a record of any votes or other actions taken by
36 electronic communication at the meeting.
37 § 4. Section 605 of the not-for-profit corporation law, as amended by
38 chapter 122 of the laws of 2020, is amended to read as follows:
39 § 605. Notice of meeting of members.
40 (a) Whenever under the provisions of this chapter members are required
41 or permitted to take any action at a meeting, written notice shall state
42 the place, date and hour of the meeting, for the duration of the state
43 disaster emergency declared by executive order two hundred two that
44 began on March seventh, two thousand twenty, or until December thirty-
45 first, two thousand twenty-one, whichever is later, the means of elec-
46 tronic communication, if any, by which members may participate in the
47 proceedings of the meeting pursuant to paragraph (a) of section six
48 hundred three of this article and, unless it is an annual meeting, indi-
49 cate that it is being issued by or at the direction of the person or
50 persons calling the meeting. Notice of a special meeting shall also
51 state the purpose or purposes for which the meeting is called. A copy of
52 the notice of any meeting shall be given, personally, by mail, or by
53 facsimile telecommunications or by electronic mail, to each member enti-
54 tled to vote at such meeting. If the notice is given personally, by
55 first class mail or by facsimile telecommunications or by electronic
56 mail, it shall be given not less than ten nor more than fifty days
A. 1025 3
1 before the date of the meeting; if mailed by any other class of mail, it
2 shall be given not less than thirty nor more than sixty days before such
3 date. If mailed, such notice is given when deposited in the United
4 States mail, with postage thereon prepaid, directed to the member at his
5 address as it appears on the record of members, or, if he shall have
6 filed with the secretary of the corporation a written request that
7 notices to him be mailed to some other address, then directed to him at
8 such other address. If sent by facsimile telecommunication or mailed
9 electronically, such notice is given when directed to the member's fax
10 number or electronic mail address as it appears on the record of
11 members, or, to such fax number or other electronic mail address as
12 filed with the secretary of the corporation. Notwithstanding the forego-
13 ing, such notice shall not be deemed to have been given electronically
14 (1) if the corporation is unable to deliver two consecutive notices to
15 the member by facsimile telecommunication or electronic mail; or (2) the
16 corporation otherwise becomes aware that notice cannot be delivered to
17 the member by facsimile telecommunication or electronic mail. An affida-
18 vit of the secretary or other person giving the notice or of a transfer
19 agent of the corporation that the notice required by this section has
20 been given shall, in the absence of fraud, be prima facie evidence of
21 the facts therein stated. Whenever a corporation has more than five
22 hundred members, the notice may be served by publication in a newspaper
23 published in the county in the state in which the principal office of
24 the corporation is located, once a week for three successive weeks next
25 preceding the date of the meeting, provided that the corporation shall
26 also prominently post notice of such meeting on the homepage of any
27 website maintained by the corporation continuously from the date of
28 publication through the date of the meeting. A corporation shall send
29 notice of meetings by first class mail to any member who requests in
30 writing that such notices be delivered by such method.
31 (b) When a meeting is adjourned to another time or place, it shall not
32 be necessary, unless the by-laws require otherwise, to give any notice
33 of the adjourned meeting if the time and place to which the meeting is
34 adjourned and, for the duration of the state disaster emergency declared
35 by executive order two hundred two that began on March seventh, two
36 thousand twenty, or until December thirty-first, two thousand twenty-
37 one, whichever is later, the means of electronic communications, if any,
38 by which members may participate in the proceedings of the meeting
39 pursuant to paragraph (a) of section six hundred three of this article
40 are announced at the meeting at which the adjournment is taken, and at
41 the adjourned meeting any business may be transacted that might have
42 been transacted on the original date of the meeting. However, if after
43 the adjournment the board fixes a new record date for the adjourned
44 meeting, a notice of the adjourned meeting shall be given to each member
45 of record on the new record date entitled to notice under paragraph (a)
46 of this section.
47 (c) Nothing required in paragraphs (a) or (b) of this section shall
48 limit, restrict or supersede other forms of voting and participation.
49 § 5. Section 28 of the religious corporations law, as added by chapter
50 122 of the laws of 2020, is amended to read as follows:
51 § 28. Meetings for the duration of the state disaster emergency
52 declared by executive order two hundred two that began on March seventh,
53 two thousand twenty; electronic communication. For the duration of the
54 state disaster emergency declared by executive order two hundred two
55 that began on March seventh, two thousand twenty, or until December
56 thirty-first, two thousand twenty-one, whichever is later, notwithstand-
A. 1025 4
1 ing any provision of law, certificate of incorporation or by-laws to the
2 contrary, if the board of trustees of a religious corporation is author-
3 ized to determine the place of trustee meetings or corporate meetings,
4 the board of trustees may, in its sole discretion, determine that the
5 meeting shall be held solely by means of electronic communication, the
6 electronic service and/or platform through which the meeting is held
7 shall be the place of the meeting for purposes of this chapter.
8 § 6. This act shall take effect immediately, provided, however, that:
9 a. the amendments to paragraph (b) of section 708 of the business
10 corporation law made by section one of this act shall not affect the
11 expiration of such paragraph and shall be deemed to expire therewith;
12 b. the amendments to paragraph (a) of section 602 of the business
13 corporation law made by section two of this act shall not affect the
14 expiration of such paragraph and shall be deemed to expire therewith;
15 c. the amendments to paragraph (a) of section 603 of the not-for-pro-
16 fit corporation law made by section three of this act shall not affect
17 the expiration of such paragraph and shall be deemed to expire there-
18 with;
19 d. the amendments to section 605 of the not-for-profit corporation law
20 made by section four of this act shall not affect the expiration of such
21 section and shall be deemed to expire therewith; and
22 e. the amendments to section 28 of the religious corporations law made
23 by section five of this act shall not affect the repeal of such section
24 and shall be deemed repealed therewith.