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S03917 Summary:

BILL NOS03917A
 
SAME ASSAME AS A01025
 
SPONSORBENJAMIN
 
COSPNSR
 
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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S03917 Actions:

BILL NOS03917A
 
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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S03917 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         3917--A
            Cal. No. 327
 
                               2021-2022 Regular Sessions
 
                    IN SENATE
 
                                    February 1, 2021
                                       ___________
 
        Introduced  by Sen. BENJAMIN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Corporations,  Authorities
          and  Commissions -- reported favorably from said committee, ordered to
          first and second report, amended on second report, ordered to a  third
          reading,  and  to  be reprinted as amended, retaining its place in the
          order of third reading
 
        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.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05120-02-1

        S. 3917--A                          2
 
     1    § 2. Paragraph (a) of section 602 of the business corporation law,  as
     2  amended  by  chapter  122  of  the  laws  of 2020, is amended to read as
     3  follows:
     4    (a)  Meetings  of  shareholders  may  be held at such place, within or
     5  without this state, as may be fixed by or under the by-laws, or  if  not
     6  so  fixed,  as determined by the board of directors. For the duration of
     7  the state disaster emergency declared by executive order two hundred two
     8  that began on March seventh, two  thousand  twenty,  or  until  December
     9  thirty-first,  two thousand twenty-one, whichever is later, if, pursuant
    10  to this paragraph or the by-laws of the corporation, the board of direc-
    11  tors is authorized to determine the place of a meeting of  shareholders,
    12  the  board  of directors may, in its sole discretion, determine that the
    13  meeting be  held  solely  by  means  of  electronic  communication,  the
    14  platform/service  of which shall be the place of the meeting for purpose
    15  of this article.
    16    § 3. Paragraph (a) of section 603 of  the  not-for-profit  corporation
    17  law,  as  amended by chapter 122 of the laws of 2020, is amended to read
    18  as follows:
    19    (a) Meetings of members may be held at such place, within  or  without
    20  this state, as may be fixed by or under the by-laws or, if not so fixed,
    21  as  determined  by the board of directors. For the duration of the state
    22  disaster emergency declared by executive  order  two  hundred  two  that
    23  began  on  March seventh, two thousand twenty, or until December thirty-
    24  first, two thousand twenty-one, whichever is later, the board of  direc-
    25  tors  may, in its sole discretion, determine that meetings of members be
    26  held partially or solely by means of electronic communication, the elec-
    27  tronic service and/or platform by which the meeting is held shall be the
    28  place of the meeting for purposes of this article if a meeting  is  held
    29  solely by means of electronic communication. Meetings conducted partial-
    30  ly or solely by means of electronic communications in reliance upon this
    31  paragraph  and  any  member's  electronic participation in such meetings
    32  shall be subject to those guidelines and procedures as the board adopts,
    33  provided the board shall implement reasonable measures  to:  (1)  verify
    34  that  each person participating electronically is a member or a proxy of
    35  a member; (2) provide each member participating  electronically  with  a
    36  reasonable  opportunity  to  participate  in  the  meeting, including an
    37  opportunity to propose, object to, and vote upon a specific action to be
    38  taken by the members, and to see, read or hear the  proceedings  of  the
    39  meeting  substantially  concurrently  with  those  proceedings;  and (3)
    40  record and maintain a record of any votes  or  other  actions  taken  by
    41  electronic communication at the meeting.
    42    §  4. Section 605 of the not-for-profit corporation law, as amended by
    43  chapter 122 of the laws of 2020, is amended to read as follows:
    44  § 605. Notice of meeting of members.
    45    (a) Whenever under the provisions of this chapter members are required
    46  or permitted to take any action at a meeting, written notice shall state
    47  the place, date and hour of the meeting, for the duration of  the  state
    48  disaster  emergency  declared  by  executive  order two hundred two that
    49  began on March seventh, two thousand twenty, or until  December  thirty-
    50  first,  two  thousand twenty-one, whichever is later, the means of elec-
    51  tronic communication, if any, by which members may  participate  in  the
    52  proceedings  of  the  meeting  pursuant  to paragraph (a) of section six
    53  hundred three of this article and, unless it is an annual meeting, indi-
    54  cate that it is being issued by or at the direction  of  the  person  or
    55  persons  calling  the  meeting.  Notice  of a special meeting shall also
    56  state the purpose or purposes for which the meeting is called. A copy of

        S. 3917--A                          3

     1  the notice of any meeting shall be given, personally,  by  mail,  or  by
     2  facsimile telecommunications or by electronic mail, to each member enti-
     3  tled  to  vote  at  such  meeting. If the notice is given personally, by
     4  first  class  mail  or  by facsimile telecommunications or by electronic
     5  mail, it shall be given not less than  ten  nor  more  than  fifty  days
     6  before the date of the meeting; if mailed by any other class of mail, it
     7  shall be given not less than thirty nor more than sixty days before such
     8  date.  If  mailed,  such  notice  is  given when deposited in the United
     9  States mail, with postage thereon prepaid, directed to the member at his
    10  address as it appears on the record of members, or,  if  he  shall  have
    11  filed  with  the  secretary  of  the  corporation a written request that
    12  notices to him be mailed to some other address, then directed to him  at
    13  such  other  address.  If  sent by facsimile telecommunication or mailed
    14  electronically, such notice is given when directed to the  member's  fax
    15  number  or  electronic  mail  address  as  it  appears  on the record of
    16  members, or, to such fax number or  other  electronic  mail  address  as
    17  filed with the secretary of the corporation. Notwithstanding the forego-
    18  ing,  such  notice shall not be deemed to have been given electronically
    19  (1) if the corporation is unable to deliver two consecutive  notices  to
    20  the member by facsimile telecommunication or electronic mail; or (2) the
    21  corporation  otherwise  becomes aware that notice cannot be delivered to
    22  the member by facsimile telecommunication or electronic mail. An affida-
    23  vit of the secretary or other person giving the notice or of a  transfer
    24  agent  of  the  corporation that the notice required by this section has
    25  been given shall, in the absence of fraud, be prima  facie  evidence  of
    26  the  facts  therein  stated.  Whenever  a corporation has more than five
    27  hundred members, the notice may be served by publication in a  newspaper
    28  published  in  the  county in the state in which the principal office of
    29  the corporation is located, once a week for three successive weeks  next
    30  preceding  the  date of the meeting, provided that the corporation shall
    31  also prominently post notice of such meeting  on  the  homepage  of  any
    32  website  maintained  by  the  corporation  continuously from the date of
    33  publication through the date of the meeting. A  corporation  shall  send
    34  notice  of  meetings  by  first class mail to any member who requests in
    35  writing that such notices be delivered by such method.
    36    (b) When a meeting is adjourned to another time or place, it shall not
    37  be necessary, unless the by-laws require otherwise, to give  any  notice
    38  of  the  adjourned meeting if the time and place to which the meeting is
    39  adjourned and, for the duration of the state disaster emergency declared
    40  by executive order two hundred two that  began  on  March  seventh,  two
    41  thousand  twenty,  or  until December thirty-first, two thousand twenty-
    42  one, whichever is later, the means of electronic communications, if any,
    43  by which members may participate  in  the  proceedings  of  the  meeting
    44  pursuant  to  paragraph (a) of section six hundred three of this article
    45  are announced at the meeting at which the adjournment is taken,  and  at
    46  the  adjourned  meeting  any  business may be transacted that might have
    47  been transacted on the original date of the meeting. However,  if  after
    48  the  adjournment  the  board  fixes  a new record date for the adjourned
    49  meeting, a notice of the adjourned meeting shall be given to each member
    50  of record on the new record date entitled to notice under paragraph  (a)
    51  of this section.
    52    (c)  Nothing  required  in paragraphs (a) or (b) of this section shall
    53  limit, restrict or supersede other forms of voting and participation.
    54    § 5. Section 28 of the religious corporations law, as added by chapter
    55  122 of the laws of 2020, is amended to read as follows:

        S. 3917--A                          4
 
     1    § 28. Meetings for  the  duration  of  the  state  disaster  emergency
     2  declared by executive order two hundred two that began on March seventh,
     3  two  thousand  twenty; electronic communication. For the duration of the
     4  state disaster emergency declared by executive  order  two  hundred  two
     5  that  began  on  March  seventh,  two thousand twenty, or until December
     6  thirty-first, two thousand twenty-one, whichever is later, notwithstand-
     7  ing any provision of law, certificate of incorporation or by-laws to the
     8  contrary, if the board of trustees of a religious corporation is author-
     9  ized to determine the place of trustee meetings or  corporate  meetings,
    10  the  board  of  trustees may, in its sole discretion, determine that the
    11  meeting shall be held solely by means of electronic  communication,  the
    12  electronic  service  and/or  platform  through which the meeting is held
    13  shall be the place of the meeting for purposes of this chapter.
    14    § 6. This act shall take effect immediately, provided, however, that:
    15    a. the amendments to paragraph (b) of  section  708  of  the  business
    16  corporation  law  made  by  section one of this act shall not affect the
    17  expiration of such paragraph and shall be deemed to expire therewith;
    18    b. the amendments to paragraph (a) of  section  602  of  the  business
    19  corporation  law  made  by  section two of this act shall not affect the
    20  expiration of such paragraph and shall be deemed to expire therewith;
    21    c. the amendments to paragraph (a) of section 603 of the  not-for-pro-
    22  fit  corporation  law made by section three of this act shall not affect
    23  the expiration of such paragraph and shall be deemed  to  expire  there-
    24  with;
    25    d. the amendments to section 605 of the not-for-profit corporation law
    26  made by section four of this act shall not affect the expiration of such
    27  section and shall be deemed to expire therewith; and
    28    e. the amendments to section 28 of the religious corporations law made
    29  by  section five of this act shall not affect the repeal of such section
    30  and shall be deemed repealed therewith.
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