NY-NPC Not-for-Profit Corporation Law NY

Short title.

This chapter shall be known as the "Not-for-Profit Corporation Law"

and may be cited as "N-PCL".

Definitions.

(a) As used in this chapter, unless the context otherwise requires,

the term:

(1) "Bonds" includes secured and unsecured bonds, debentures, and

notes.

(2) "By-laws" means the code or codes of rules adopted for the

regulation or management of the affairs of the corporation irrespective

of the name or names by which such rules are designated.

(3) "Certificate of incorporation" includes (A) the original

certificate of incorporation or any other instrument filed or issued

under any statute to form a domestic or foreign corporation, as amended,

supplemented or restated by certificates of amendment, merger or

consolidation or other certificates or instruments filed or issued under

any statute; or (B) a special act or charter creating a domestic or

foreign corporation, as amended, supplemented or restated.

(3-a) "Charitable corporation" means any corporation formed, or for

the purposes of this chapter, deemed to be formed, for charitable

purposes.

(3-b) "Charitable purposes" of a corporation means one or more of the

following purposes: charitable, educational, religious, scientific,

literary, cultural or for the prevention of cruelty to children or

animals.

(4) "Conducting of activities" of a corporation means the operations

for the conduct of which such corporation is formed and may constitute

"doing of business" or "transaction of business" as those terms are used

in the statutes of this state.

(5) "Corporation" or "domestic corporation" means a corporation (1)

formed under this chapter, or existing on its effective date and

theretofore formed under any other general statute or by any special act

of this state, exclusively for a purpose or purposes, not for pecuniary

profit or financial gain, for which a corporation may be formed under

this chapter, and (2) no part of the assets, income or profit of which

is distributable to, or enures to the benefit of, its members, directors

or officers except to the extent permitted under this statute.

(6) "Director" means any member of the governing board of a

corporation, whether designated as director, trustee, manager, governor,

or by any other title. The term "board" means "board of directors" or

any other body constituting a "governing board" as defined in this

section.

(6-a) "Entire board" means the total number of directors entitled to

vote which the corporation would have if there were no vacancies. If the

by-laws of the corporation provide that the board shall consist of a

fixed number of directors, then the "entire board" shall consist of that

number of directors. If the by-laws of any corporation provide that the

board may consist of a range between a minimum and maximum number of

directors, and the number within that range has not been fixed in

accordance with paragraph (a) of section seven hundred two of this

chapter, then the "entire board" shall consist of the number of

directors within such range that were elected or appointed as of the

most recently held election of directors, as well as any directors whose

terms have not yet expired.

(7) "Foreign corporation" means a corporation formed under laws other

than the statutes of this state, which, if formed under the statutes of

this state, would be within the term "corporation or domestic

corporation" as herein defined. "Authorized", when used with respect to

a foreign corporation, means having authority under Article 13 (Foreign

Corporations) to conduct activities of the corporation in this state.

(7-a) "Infant" or "minor" means any person who has not attained the

age of eighteen years.

(8) "Insolvent" means being unable to pay debts as they become due in

the usual course of the debtor's business.

(9) "Member" means one having membership rights in a corporation in

accordance with the provisions of its certificate of incorporation or

by-laws.

(9-a) "Non-charitable corporation" means any corporation formed under

this chapter, other than a charitable corporation, including but not

limited to one formed for any one or more of the following non-pecuniary

purposes: civic, patriotic, political, social, fraternal, athletic,

agricultural, horticultural, or animal husbandry, or for the purpose of

operating a professional, commercial, industrial, trade or service

association.

(10) "Not-for-profit corporation" means a corporation as defined in

subparagraph (5).

(11) "Office of a corporation" means the office the location of which

is stated in the certificate of incorporation of a domestic corporation,

or in the application for authority of a foreign corporation or an

amendment thereof. Such office need not be a place where activities are

conducted by such corporation.

(12) "Process" means judicial process and all orders, demands, notices

or other papers required or permitted by law to be personally served on

a domestic or foreign corporation, for the purpose of acquiring

jurisdiction of such corporation in any action or proceeding, civil or

criminal, whether judicial, administrative, arbitrative or otherwise, in

this state or in the federal courts sitting in or for this state.

(15) "Governing board" means the body responsible for the management

of a corporation or of an institutional fund.

(16) "Historic dollar value" means the aggregate fair value in dollars

of (i) an endowment fund at the time it became an endowment fund, (ii)

each subsequent donation to the fund at the time it is made, and (iii)

each accumulation made pursuant to a direction in the applicable gift

instrument at the time the accumulation is added to the fund. The

determination of historic dollar value made in good faith by the

corporation is conclusive.

(18) "Authorized person" means a person, whether or not a member,

officer, or director, who is authorized to act on behalf of a

corporation or foreign corporation.

(19) An "affiliate" of a corporation means any entity controlled by,

or in control of, such corporation.

(20) "Independent auditor" means any certified public accountant

performing the audit of the financial statements of a corporation

required by subdivision one of section one hundred seventy-two-b of the

executive law.

(21) "Independent director" means a director who: (i) is not, and has

not been within the last three years, an employee or a key person of the

corporation or an affiliate of the corporation, and does not have a

relative who is, or has been within the last three years, a key person

of the corporation or an affiliate of the corporation; (ii) has not

received, and does not have a relative who has received, in any of the

last three fiscal years, more than ten thousand dollars in direct

compensation from the corporation or an affiliate of the corporation;

(iii) is not a current employee of or does not have a substantial

financial interest in, and does not have a relative who is a current

officer of or has a substantial financial interest in, any entity that

has provided payments, property or services to, or received payments,

property or services from, the corporation or an affiliate of the

corporation if the amount paid by the corporation to the entity or

received by the corporation from the entity for such property or

services, in any of the last three fiscal years, exceeded the lesser of

ten thousand dollars or two percent of such entity's consolidated gross

revenues if the entity's consolidated gross revenue was less than five

hundred thousand dollars; twenty-five thousand dollars if the entity's

consolidated gross revenue was five hundred thousand dollars or more but

less than ten million dollars; one hundred thousand dollars if the

entity's consolidated gross revenue was ten million dollars or more; or

(iv) is not and does not have a relative who is a current owner, whether

wholly or partially, director, officer or employee of the corporation's

outside auditor or who has worked on the corporation's audit at any time

during the past three years. For purposes of this subparagraph, the

terms: "compensation" does not include reimbursement for expenses

reasonably incurred as a director or reasonable compensation for service

as a director as permitted by paragraph (a) of section 202 (General and

special powers) of this chapter; and "payment" does not include

charitable contributions, dues or fees paid to the corporation for

services which the corporation performs as part of its nonprofit

purposes, or payments made by the corporation at fixed or non-negotiable

rates or amounts for services received, provided that such services by

and to the corporation are available to individual members of the public

on the same terms, and such services received by the corporation are not

available from another source.

(22) "Relative" of an individual means (i) his or her spouse or

domestic partner as defined in section twenty-nine hundred ninety-four-a

of the public health law; (ii) his or her ancestors, brothers and

sisters (whether whole or half blood), children (whether natural or

adopted), grandchildren, great-grandchildren; or (iii) the spouse or

domestic partner of his or her brothers, sisters, children,

grandchildren, and great-grandchildren.

(23) "Related party" means (i) any director, officer or key person of

the corporation or any affiliate of the corporation; (ii) any relative

of any individual described in clause (i) of this subparagraph; or (iii)

any entity in which any individual described in clauses (i) and (ii) of

this subparagraph has a thirty-five percent or greater ownership or

beneficial interest or, in the case of a partnership or professional

corporation, a direct or indirect ownership interest in excess of five

percent.

(24) "Related party transaction" means any transaction, agreement or

any other arrangement in which a related party has a financial interest

and in which the corporation or any affiliate of the corporation is a

participant, except that a transaction shall not be a related party

transaction if: (i) the transaction or the related party's financial

interest in the transaction is de minimis, (ii) the transaction would

not customarily be reviewed by the board or boards of similar

organizations in the ordinary course of business and is available to

others on the same or similar terms, or (iii) the transaction

constitutes a benefit provided to a related party solely as a member of

a class of the beneficiaries that the corporation intends to benefit as

part of the accomplishment of its mission which benefit is available to

all similarly situated members of the same class on the same terms.

(25) "Key person" means any person, other than a director or officer,

whether or not an employee of the corporation, who (i) has

responsibilities, or exercises powers or influence over the corporation

as a whole similar to the responsibilities, powers, or influence of

directors and officers; (ii) manages the corporation, or a segment of

the corporation that represents a substantial portion of the activities,

assets, income or expenses of the corporation; or (iii) alone or with

others controls or determines a substantial portion of the corporation's

capital expenditures or operating budget.

Application.

(a) Except as otherwise provided in this section, this chapter applies

to every domestic corporation as herein defined, and to every foreign

corporation as herein defined which is authorized to conduct or which

conducts any activities in this state. This chapter also applies to any

other domestic corporation or foreign corporation of any kind to the

extent, if any, provided under this chapter or any law governing such

corporation and, if no such provision for application is made, to the

extent, if any, that the membership corporations law applied to such

corporation as of the effective date of this chapter. A corporation

formed by a special act of this state which has as its principal purpose

an education purpose and which is a member of the university of the

state of New York, is an "education corporation" under section two

hundred sixteen-a of the education law.

To the extent that the membership corporations law or the general

corporation law applied to it as of the effective date of this chapter,

the corresponding provisions of this chapter apply to a corporation

heretofore formed by or pursuant to a special act of this state other

than a religious corporation or an "education corporation" under clause

(b) of subdivision one of section two hundred sixteen-a of the education

law, if (1) its principal purpose is a religious, charitable or

education purpose, and (2) it is operated, supervised or controlled by

or in connection with a religious organization. Any such corporation may

at any time after the effective date of this chapter file a restated

certificate of incorporation under section 805 (restated certificate of

incorporation) including a statement that it elects to have this chapter

apply in all respects to it. The restated certificate of incorporation

shall conform with the requirements of section 402 (certificate of

incorporation; contents) for new corporations. Upon the filing of such

certificate by the department of state, this chapter shall apply in all

respects to such corporation.

This chapter also applies to any other corporation of any kind, formed

not-for-profit under any other chapter of the laws of this state except

a chapter of the consolidated laws, to the extent that provisions of

this chapter do not conflict with the provisions of such unconsolidated

law. If an applicable provision of such unconsolidated law relates to a

matter embraced in this chapter but is not in conflict therewith, both

provisions shall apply. Any corporation to which this chapter is made

applicable by this paragraph shall be treated as a "corporation" or

"domestic corporation" as such terms are used in this chapter, except

that the purposes of any such corporation formed or formable under such

unconsolidated law shall not thereby be extended. For the purpose of

this paragraph, the effective date of this chapter as to corporations to

which this chapter is made applicable by this paragraph shall be

September one, nineteen hundred seventy-three.

(b) The general corporation law does not apply to a corporation of any

kind to which this chapter applies. A reference in any statute of this

state which makes a provision of the general corporation law applicable

to a corporation of any kind to which this chapter is applicable or a

reference in any statute of this state, other than the membership

corporations law, which makes a provision of the membership corporations

law applicable to a corporation of any kind shall be deemed and

construed to refer to and make applicable the corresponding provision,

if any, of this chapter.

(c) If any provision in articles one to thirteen inclusive of this

chapter conflicts with a provision of any subsequent articles or of any

special act under which a corporation to which this chapter applies is

formed, the provision in such subsequent article or special act

prevails. A provision of any such subsequent article or special act

relating to a matter referred to in articles one to thirteen inclusive

and not in conflict therewith is supplemental and both shall apply.

Whenever the board of a corporation, formed under a special act,

reasonably makes an interpretation as to whether a provision of the

special act or this chapter prevails, or both apply, such interpretation

shall govern unless and until a court determines otherwise, if such

board has acted in good faith for a purpose which it reasonably believes

to be in the best interests of the corporation, provided however, that

such interpretation shall not bind any governmental body or officer.

(d) A corporation whose formation under this chapter is authorized by

another corporate law is, unless otherwise provided by such corporate

law, subject to all the provisions of this chapter that are applicable

to a charitable corporation formed under this chapter.

(e) This chapter applies to commerce with foreign nations and among

the several states, and to corporations formed by or under any act of

congress, only to the extent permitted under the constitution and laws

of the United States.

(f) The enactment of this chapter shall not affect the duration of a

corporation which is existing on the effective date of this chapter. Any

such existing corporation, its members, directors and officers shall

have the same rights and be subject to the same limitations,

restrictions, liabilities and penalties as a corporation formed under

this chapter, its members, directors and officers.

(g) This chapter shall not affect any cause of action, liability,

penalty or action or special proceeding, which on the effective date of

this chapter, is accrued, existing, incurred or pending but the same may

be asserted, enforced, prosecuted or defended as if this chapter had not

been enacted.

Certificates; requirements, signing, filing, effectiveness.

(a) Every certificate or other instrument relating to a domestic or

foreign corporation which is delivered to the department of state for

filing under this chapter, other than a certificate of existence under

section 1304 (Application for authority; contents), shall be in the

English language, except that the corporate name may be in another

language if written in English letters or characters.

(c) Whenever such instrument is required to set forth the date of

incorporation or the date when a certificate of incorporation was filed,

the original certificate of incorporation is meant. This requirement

shall be satisfied, in the case of a corporation created by special act,

by setting forth the chapter number and year of passage of such act.

(d) Every such certificate required under this chapter to be signed

and delivered to the department of state shall, except as otherwise

specified in the section providing for such certificate, be signed

either by an officer, director, attorney-in-fact or duly authorized

person and include the name and the capacity in which such person signs

such certificate.

(e) If an instrument which is delivered to the department of state for

filing complies as to form with the requirements of law and there has

been attached to it the consent or approval of the supreme court

justice, governmental body or officer, or, other person or body, if any,

whose consent to or approval of such instrument or the filing thereof is

required by any statute of this state and the filing fee and tax, if

any, required by any statute of this state in connection therewith have

been paid, the instrument shall be filed and indexed by the department

of state. No certificate of authentication or conformity or other proof

shall be required with respect to any verification, oath or

acknowledgment of any instrument delivered to the department of state

under this chapter, if such verification, oath or acknowledgment

purports to have been made before a notary public, or person performing

the equivalent function, of one of the states, or any subdivision

thereof, of the United States or the District of Columbia. Without

limiting the effect of section four hundred three of this chapter,

filing and indexing by the department of state shall not be deemed a

finding that a certificate conforms to law, nor shall it be deemed to

constitute an approval by the department of state of the name of the

corporation or the contents of the certificate, nor shall it be deemed

to prevent any person with appropriate standing from contesting the

legality thereof in an appropriate forum.

(f) Except as otherwise provided in this chapter, such instrument

shall become effective upon the filing thereof by the department of

state.

(g) The department shall make, certify and transmit electronically a

copy of each such instrument to the clerk of the county in which the

office of the domestic or foreign corporation is or is to be located.

The county clerk shall file and index such copy.

Fees.

Except as otherwise provided, the department of state shall collect

the following fees pursuant to this chapter:

(b) For the reservation of a corporate name pursuant to section three

hundred three of this chapter, ten dollars.

(c) For the resignation of a registered agent for service of process

pursuant to section three hundred five of this chapter, thirty dollars.

(d) For service of process on the secretary of state pursuant to

section three hundred six or three hundred seven of this chapter, forty

dollars. If the service is in an action brought solely to recover a sum

of money not in excess of two hundred dollars and the process is so

endorsed, or the process is served on behalf of a county, city, town or

village or other subdivision of the state, ten dollars.

(e) For filing a certificate of incorporation pursuant to section four

hundred two of this chapter, seventy-five dollars.

(f) For filing a certificate of amendment pursuant to section eight

hundred three of this chapter, thirty dollars.

(g) For filing a certificate of change pursuant to section eight

hundred three-A of this chapter, twenty dollars.

(h) For filing a restated certificate of incorporation pursuant to

section eight hundred five of this chapter, thirty dollars.

(i) For filing a certificate of merger or consolidation pursuant to

section nine hundred four of this chapter, thirty dollars.

(j) For filing a certificate of merger or consolidation of domestic

and foreign corporations pursuant to section nine hundred six of this

chapter, thirty dollars.

(k) For filing a certified copy of an order of approval of the supreme

court pursuant to section nine hundred seven of this chapter, thirty

dollars.

(l) For filing a certificate of dissolution pursuant to section one

thousand three of this chapter, thirty dollars.

(m) For filing a certificate of annulment of dissolution pursuant to

section one thousand twelve of this chapter, thirty dollars.

(n) For filing an application by a foreign corporation for authority

to do business in New York state pursuant to section thirteen hundred

four of this chapter, one hundred thirty-five dollars.

(o) For filing a certificate of amendment of an application for

authority by a foreign corporation pursuant to section thirteen hundred

nine of this chapter, thirty dollars.

(p) For filing a certificate of change of application for authority by

a foreign corporation pursuant to section thirteen hundred ten of this

chapter, twenty dollars.

(q) For filing a certificate of surrender of authority pursuant to

section thirteen hundred eleven of this chapter, thirty dollars.

(r) For filing a statement of the termination of existence of a

foreign corporation pursuant to section thirteen hundred twelve of this

chapter, thirty dollars. There shall be no fee for the filing by an

authorized officer of the jurisdiction of incorporation of a foreign

corporation of a certificate that the foreign corporation has been

dissolved or its authority or existence has been otherwise terminated or

cancelled in the jurisdiction of its incorporation.

(s) For filing any other certificate or instrument, thirty dollars.

Certificates; corrections.

(a) Corrections prior to filing by department of state. Any

certificate or other instrument relating to a domestic or foreign

corporation submitted to the department of state under this chapter may

be corrected with respect to any typographical, or similar non-material

error apparent on the face of the certificate or instrument, prior to

the filing of such certificate or instrument by the department of state.

Such correction shall be effected by the department of state upon

authorization in writing by the incorporator in a form acceptable to the

department. Such authorization may be delivered by mail or sent by

electronic mail to the department.

(b) Corrections following incorporation. Any certificate or other

instrument relating to a domestic or foreign corporation filed by the

department of state under this chapter may be corrected with respect to

any typographical or similar non-material error apparent on the face or

defect in the execution thereof including the deletion of any matter not

permitted to be stated therein. A certificate, entitled "Certificate of

correction of.......... (correct title of certificate and name of

corporation)" shall be signed and delivered to the department of state

by mail or electronic mail. It shall set forth the name of the

corporation, the date the certificate to be corrected was filed by the

department of state, the provision in the certificate as corrected or

eliminated and if the execution was defective, the proper execution. The

filing of the certificate by the department of state shall not alter the

effective time of the instrument being corrected, which shall remain as

its original effective time, and shall not affect any right or liability

accrued or incurred before such filing.

(c) A corporate name may not be changed or corrected under this

section other than to correct any typographical or similar non-material

error.

Certificates as evidence.

(a) Any certificate or other instrument filed by the department of

state relating to a domestic or foreign corporation and containing

statements of fact required or permitted by law to be contained therein,

shall be received in all courts, public offices and official bodies as

prima facie evidence of such facts and of the execution of such

instrument.

(b) Whenever by the laws of any jurisdiction other than this state,

any certificate by any officer in such jurisdiction or a copy of any

instrument certified or exemplified by any such officer may be received

as prima facie evidence of the incorporation, existence or capacity of

any foreign corporation incorporated in such jurisdiction, or claiming

so to be, such certificate when exemplified, or such copy of such

instrument when exemplified shall be received in all courts, public

offices and official bodies of this state, as prima facie evidence with

the same force as in such jurisdiction. Such certificate or certified

copy of such instrument shall be so received, without being exemplified,

if it is certified by the secretary of state, or official performing the

equivalent function as to corporate records, of such jurisdiction.

Corporate seal as evidence.

The presence of the corporate seal on a written instrument purporting

to be executed by authority of a domestic or foreign corporation shall

be prima facie evidence that the instrument was so executed.

When notice or lapse of time unnecessary; notices dispensed with

when delivery is prohibited.

(a) Whenever, under this chapter or the certificate of incorporation

or by-laws of any corporation or by the terms of any agreement or

instrument, a corporation or the board or any committee thereof is

authorized to take any action after notice to any person or persons or

after the lapse of a prescribed period of time, such action may be taken

without notice and without the lapse of such period of time, if at any

time before or after such action is completed the person or persons

entitled to such notice or entitled to participate in the action to be

taken or, in the case of a member, by his attorney-in-fact, submit a

signed waiver of notice of such requirements.

(b) Whenever any notice or communication is required to be given to

any person by this chapter, the certificate of incorporation or by-laws,

or by the terms of any agreement or instrument, or as a condition

precedent to taking any corporate action and communication with such

person is then unlawful under any statute of this state or of the United

States or any regulation, proclamation or order issued under said

statutes, then the giving of such notice or communication to such person

shall not be required and there shall be no duty to apply for license or

other permission to do so. Any affidavit, certificate or other

instrument which is required to be made or filed as proof of the giving

of any notice or communication required under this chapter shall, if

such notice or communication to any person is dispensed with under this

paragraph, include a statement that such notice or communication was not

given to any person with whom communication is unlawful. Such

affidavit, certificate or other instrument shall be as effective for all

purposes as though such notice or communication had been personally

given to such person.

(c) Whenever any notice or communication is required or permitted by

this chapter to be given by mail, it shall, except as otherwise

expressly provided in this chapter, be mailed to the person to whom it

is directed at the address designated by him for that purpose or, if

none is designated, at his last known address. Such notice or

communication is given when deposited, with postage thereon prepaid, in

a post office or official depository under the exclusive care and

custody of the United States post office department. Such mailing shall

be by first class mail except where otherwise required by this chapter.

Reservation of power.

The legislature reserves the right, at pleasure, to alter, amend,

suspend or repeal in whole or in part this chapter, or any certificate

of incorporation or any authority to do business in this state, of any

domestic or foreign corporation, whether or not existing or authorized

on the effective date of this chapter.

Effect of invalidity of part of chapter; severability.

If any provision of this chapter or application thereof to any person

or circumstances is held invalid, such invalidity shall not affect other

provisions or applications of this chapter which can be given effect

without the invalid provision or application, and to this end the

provisions of this chapter are declared severable.

References.

Unless otherwise stated, all references in this chapter to articles or

sections refer to the articles or sections of this chapter, and all

references in any section of this chapter to a lettered or numbered

paragraph or subparagraph refer to the paragraph or subparagraph so

lettered or numbered in such section.

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 carrying

on unauthorized activities;

(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

carry on activities in this state under section 1303 (Violations).

(7) To enforce any right given under this chapter to members, a

director or an officer of a charitable corporation. The attorney-general

shall have the same status as such members, director or officer.

(8) To compel the directors and officers, or any of them, of a

charitable corporation which has been dissolved under section 1011

(Dissolution for failure to file certificate of type of Not-for-Profit

Corporation Law under section 113) to account for the assets of the

dissolved corporation.

(9) Upon 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 enforce any right

given under this chapter to members, a director or an officer of a

non-charitable corporation. For such purpose, the attorney-general shall

have the same status as such members, director or officer.

(10) To enjoin, void or rescind any related party transaction, seek

damages and other appropriate remedies, in law or equity, in addition to

any actions pursuant to section 715 (Related party transactions) 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 six hundred nineteen-c of the code of criminal procedure.

(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 of any kind and foreign corporations

of any kind authorized to do business or carry on activities 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 or

activities 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 deposit 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 or

activities 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 of unauthorized foreign corporation) shall apply to process

served under paragraph (c).

Visitation of supreme court.

Charitable corporations, whether formed under general or special laws,

with their books and vouchers, shall be subject to the visitation and

inspection of a justice of the supreme court, or of any person appointed

by the court for that purpose. If it appears by the verified petition of

a member, director, officer or creditor of any such corporation, that

it, or its directors, officers, members, key persons or agents, have

misappropriated any of the funds or property of the corporation, or

diverted them from the purpose of its incorporation, or that the

corporation has acquired property in excess of the amount which it is

authorized by law to hold, or has engaged in any business other than

that stated in its certificate of incorporation, the court may order

that notice of at least eight days, with a copy of the petition, be

served on the corporation, the attorney general and the persons charged

with misconduct, requiring them to show cause at a time and place

specified, why they should not be required to make and file an inventory

and account of the property, effects and liabilities of such corporation

with a detailed statement of its transactions during the twelve months

next preceding the granting of such order. On the hearing of such

application, the court may make an order requiring such inventory,

account and statement to be filed, and proceed to take and state an

account of the property and liabilities of the corporation, or may

appoint a referee for that purpose. When such account is taken and

stated, after hearing all the parties to the application, the court may

enter a final order determining the amount of property so held by the

corporation, its annual income, whether any of the property or funds of

the corporation have been misappropriated or diverted to any other

purpose than that for which such corporation was incorporated, and

whether such corporation has been engaged in any activity not covered by

its certificate of incorporation. An appeal may be taken from the order

by any party aggrieved to the appellate division of the supreme court,

and to the court of appeals, as in a civil action. No corporation shall

be required to make and file more than one inventory and account in any

one year, nor to make a second account and inventory, while proceedings

are pending for the statement of an account under this section.

Power to solicit contributions for charitable purposes.

(a) No corporation required to obtain approval or provide notice of

formation pursuant to section 404 (Approvals, notices and consents) of

this chapter may solicit contributions for any purpose requiring such

approval or notice unless and until such corporation (1) obtains and

submits any approval or notice required thereunder, and (2) is in

compliance with the registration and reporting requirements of article

seven-A of the executive law and section 8-1.4 of the estates, powers

and trusts law.

(b) The attorney general may maintain an action or proceeding pursuant

to the provisions of subparagraph one of paragraph (a) of section one

hundred twelve of this article against any corporation that solicits

contributions in violation of paragraph (a) of this section. Such an

action may also be maintained in relation to a corporation hereinafter

incorporated if the name, purposes, objects or the activities of such

corporation may, in any manner, lead to the belief that the corporation

possesses or may exercise any of such purposes.

Purposes.

(a) A corporation, as defined in paragraph (a) of § 102 (Definitions),

may be formed under this chapter as a charitable corporation or a

non-charitable corporation unless it may be formed under any other

corporate law of this state, in which event it may not be formed under

this chapter unless such other corporate law expressly so provides.

(b) A corporation formed under this chapter on or after July first,

two thousand fourteen shall either be a charitable corporation or a

non-charitable corporation. Any corporation formed for both charitable

purposes and non-charitable purposes shall be deemed a charitable

corporation for purposes of this chapter. A type A not-for-profit

corporation formed prior to July first, two thousand fourteen shall be

deemed a non-charitable corporation under this chapter. Any submission

or filing by such corporation to any person or entity shall be deemed to

have been submitted or filed by a non-charitable corporation, and any

reference in any such filing or submission referring to the status of

such corporation as a type A corporation shall be deemed to refer to a

non-charitable corporation.

(c) A type B or C not-for-profit corporation formed prior to July

first, two thousand fourteen shall be deemed a charitable corporation

for all purposes under this chapter. Any submission or filing by such

corporation to any person or entity shall be deemed to have been

submitted or filed by a charitable corporation, and any reference in any

such filing or submission referring to the status of such corporation as

a type B or type C corporation shall be deemed to refer to a charitable

corporation.

(d) A type D not-for-profit corporation formed prior to July first,

two thousand fourteen for charitable purposes shall be deemed a

charitable corporation. Any submission or filing by such corporation to

any person or entity shall be deemed to have been submitted or filed by

a charitable corporation, and any reference in any such filing or

submission referring to the status of such corporation as a type D

corporation shall be deemed to refer to a charitable corporation. Any

other type D not-for-profit corporations formed prior to July first, two

thousand fourteen shall be deemed a non-charitable corporation. Any

submission or filing by such corporation to any person or entity shall

be deemed to have been submitted or filed by a non-charitable

corporation, and any reference in any such filing or submission

referring to the status of such corporation as a type D corporation

shall be deemed to refer to a non-charitable corporation.

General and special powers.

(a) Each corporation, subject to any limitations provided in this

chapter or any other statute of this state or its certificate of

incorporation, shall have power in furtherance of its corporate

purposes:

(1) To have perpetual duration.

(2) To sue and be sued in all courts and to participate in actions and

proceedings, whether judicial, administrative, arbitrative or otherwise,

in like cases as natural persons.

(3) To have a corporate seal, and to alter such seal at pleasure, and

to use it by causing it or a facsimile to be affixed or impressed or

reproduced in any other manner.

(4) To purchase, receive, take by grant, gift, devise, bequest or

otherwise, lease, or otherwise acquire, own, hold, improve, employ, use

and otherwise deal in and with, real or personal property, or any

interest therein, wherever situated.

(5) To sell, convey, lease, exchange, transfer or otherwise dispose

of, or mortgage or pledge, or create a security interest in, all or any

of its property, or any interest therein, wherever situated.

(6) To purchase, take, receive, subscribe for, or otherwise acquire,

own, hold, vote, employ, sell, lend, lease, exchange, transfer, or

otherwise dispose of, mortgage, pledge, use and otherwise deal in and

with, bonds and other obligations, shares, or other securities or

interests issued by others, whether engaged in similar or different

business, governmental, or other activities.

(7) To make capital contributions or subventions to other

not-for-profit corporations.

(8) To accept subventions from other persons or any unit of

government.

(9) To make contracts, give guarantees and incur liabilities, borrow

money at such rates of interest as the corporation may determine, issue

its notes, bonds and other obligations, and secure any of its

obligations by mortgage or pledge of all or any of its property or any

interest therein, wherever situated.

(10) To lend money, invest and reinvest its funds, and take and hold

real and personal property as security for the payment of funds so

loaned or invested.

(11) To conduct the activities of the corporation and have offices and

exercise the powers granted by this chapter in any jurisdiction within

or without the United States.

(12) To elect or appoint officers, employees and other agents of the

corporation, define their duties, fix their reasonable compensation and

the reasonable compensation of directors, and to indemnify corporate

personnel. Such compensation shall be commensurate with services

performed.

(13) To adopt, amend or repeal by-laws, including emergency by-laws

made pursuant to subdivision seventeen of section twelve of the state

defense emergency act, relating to the activities of the corporation,

the conduct of its affairs, its rights or powers or the rights or powers

of its members, directors or officers.

(14) To make donations, irrespective of corporate benefit, for the

public welfare or for community fund, hospital, charitable, educational,

scientific, civic or similar purposes, and in time of war or other

national emergency in aid thereof.

(15) To be a member, associate or manager of other non-profit

activities or to the extent permitted in any other jurisdiction to be an

incorporator of other corporations, and to be a partner in a

redevelopment company formed under the private housing finance law.

(16) To have and exercise all powers necessary to effect any or all of

the purposes for which the corporation is formed.

(b) If any general or special law heretofore passed, or any

certificate of incorporation, shall limit the amount of property a

corporation may take or hold, or the yearly income from the corporate

assets or any part thereof, such corporation may take and hold property

of the value of fifty million dollars or less, or the yearly income

derived from which shall be six million dollars or less, or may receive

yearly income from such corporate assets of six million dollars or less,

notwithstanding any such limitations. In computing the value of such

property, no increase in value arising otherwise than from improvements

made thereon shall be taken into account.

(c) When any corporation shall have sold or conveyed any part of its

real property, the supreme court, notwithstanding a restriction in any

general or special law, may authorize it to purchase and hold from time

to time other real property, upon satisfactory proof that the value of

the property so purchased does not exceed the value of the property so

sold and conveyed within the three years next preceding the application.

(d) A corporation formed under general or special law to provide

parks, playgrounds or cemeteries, or buildings and grounds for camp or

grove meetings. Sunday school assemblies, cemetery purposes, temperance,

missionary, educational, scientific, musical and other meetings, subject

to the ordinances and police regulations of the county, city, town, or

village in which such parks, playgrounds, cemeteries, buildings and

grounds are situated, may appoint from time to time one or more special

police officers, with power to remove the same at pleasure. Such special

police officers shall preserve order in and about such parks,

playgrounds, cemeteries, buildings and grounds, and the approaches

thereto, and to protect the same from injury, and shall enforce the

established rules and regulations of the corporation. Every police

officer so appointed shall within fifteen days after his or her

appointment and before entering upon the duties of his or her office,

take and subscribe the oath of office prescribed in the thirteenth

article of the constitution of the state of New York, which oath shall

be filed in the office of the county clerk of the county where such

grounds are situated. A police officer appointed under this section when

on duty shall wear conspicuously a metallic shield with the name of the

corporation which appointed him or her inscribed thereon. The

compensation of police officers appointed under this section shall be

paid by the corporation by which they are appointed.

(e) Any wilful trespass in or upon any of the parks, playgrounds,

buildings or grounds provided for the purposes mentioned in the

preceding paragraph, or upon the approaches thereto, and any wilful

injury to any of the said parks, playgrounds, buildings or grounds, or

to any trees, shrubbery, fences, fixtures or other property thereon or

pertaining thereto, and any wilful disturbance of the peace thereon by

intentional breach of the rules and regulations of the corporation, is a

misdemeanor.

(f) No corporation shall conduct activities in New York state under

any name, other than that appearing in its certificate of incorporation,

without compliance with the filing provisions of section one hundred

thirty of the general business law governing the conduct of business

under an assumed name.

(g) Every corporation receiving any kind of state funding shall ensure

the provision on any form required to be completed at application or

recertification for the purpose of obtaining financial assistance

pursuant to this chapter, that the application form shall contain a

check-off question asking whether the applicant or recipient or a member

of his or her family served in the United States military, and an option

to answer in the affirmative. Where the applicant or recipient answers

in the affirmative to such question, the not-for-profit corporation

shall ensure that contact information for the state department of

veterans' services is provided to such applicant or recipient in

addition to any other materials provided.

Defense of ultra vires.

(a) No act of a corporation and no transfer of real or personal

property to or by a corporation, otherwise lawful, shall, if duly

approved or authorized by a judge, court or administrative department or

agency as required, be invalid by reason of the fact that the

corporation was without capacity or power to do such act or to make or

receive such transfer, but such lack of capacity or power may be

asserted:

(1) In an action by a member against the corporation to enjoin the

doing of any act or the transfer of real or personal property by or to

the corporation. If the unauthorized act or transfer sought to be

enjoined is being, or is to be, performed or made under any contract to

which the corporation is a party, the court may, if all of the parties

to the contract are parties to the action and if it deems the same to be

equitable, set aside and enjoin the performance of such contract, and in

so doing may allow to the corporation or to the other parties to the

contract, as the case may be, such compensation as may be equitable for

the loss or damage sustained by any of them from the action of the court

in setting aside and enjoining the performance of such contract;

provided that anticipated profits to be derived from the performance of

the contract shall not be awarded by the court as a loss or damage

sustained.

(2) In an action by or in the right of the corporation to procure a

judgment in its favor against an incumbent or former officer or director

of the corporation for loss or damage due to his unauthorized act.

(3) In an action or special proceeding by the attorney-general to

annul or dissolve the corporation or to enjoin it from the carrying on

of unauthorized activities.

Limitation on activities.

Notwithstanding any other provision of this chapter or any other

general law, a corporation of any kind to which this chapter applies

shall conduct no activities for pecuniary profit or financial gain,

whether or not in furtherance of its corporate purposes, except to the

extent that such activity supports its other lawful activities then

being conducted.

Conveyance of real property to members for dwelling houses.

A not-for-profit corporation, if its by-laws so provide, and pursuant

to the provisions thereof, and without leave of the court, may convey to

a member of the corporation a portion of its real property for the

erection thereupon of a cottage or other dwelling-house with suitable

outbuildings. When so conveyed the title to such portion, together with

the buildings thereon, shall continue in such member and on his death

pass to his heirs or devisees, but the land shall not be alienable

except to the corporation or to a member thereof.

Corporate name; general.

(a) Except as otherwise provided in this chapter, the name of a

domestic or foreign corporation:

(1) Shall, unless the corporation is formed for charitable or

religious purposes, or for purposes for which the approval of the

commissioner of social services or the public health and health planning

council is required, or is a bar association, contain the word

"corporation", "incorporated" or "limited" or an abbreviation of one of

such words; or, in the case of a foreign corporation, it shall, for use

in this state, add at the end of its name one of such words or an

abbreviation thereof.

(2) (A) Shall be such as to distinguish it from the names of

corporations of any kind, or a fictitious name of an authorized foreign

corporation filed pursuant to article thirteen of this chapter, as such

names appear on the index of names of existing domestic and authorized

foreign corporations of any kind, including fictitious names of

authorized foreign corporations filed pursuant to article thirteen of

this chapter, in the department of state, division of corporations, or a

name the right to which is reserved.

(B) Shall be such as to distinguish it from (i) the names of domestic

limited liability companies, (ii) the names of authorized foreign

limited liability companies, (iii) the fictitious names of authorized

foreign limited liability companies, (iv) the names of domestic limited

partnerships, (v) the names of authorized foreign limited partnerships,

or (vi) the fictitious names of authorized foreign limited partnerships,

in each case, as such names appear on the index of names of existing

domestic and authorized foreign limited liability companies, including

fictitious names of authorized foreign limited liability companies, in

the department of state, or on the index of names of existing domestic

or authorized foreign limited partnerships, including fictitious names

of authorized foreign limited partnerships, in the department of state,

or names the rights to which are reserved; provided, however, that no

corporation that was formed prior to the effective date of this clause

and no foreign corporation that was qualified to conduct activities in

this state prior to such effective date shall be required to change the

name or fictitious name it had on such effective date solely by reason

of such name or fictitious name being indistinguishable from the name or

fictitious name of any domestic or authorized foreign limited liability

company or limited partnership or from any name the right to which is

reserved by or on behalf of any domestic or foreign limited liability

company or limited partnership.

(3) Shall not contain any word or phrase, or any abbreviation or

derivative thereof, the use of which is prohibited or restricted by

section 404 (Approvals, notices and consents) or any other statute of

this state, unless in the latter case the restrictions have been

complied with.

(4) Shall not contain any word or phrase, or any abbreviation or

derivative thereof, in a context which indicates or implies that the

corporation, if domestic, is formed or, if foreign, is authorized for

any purpose or is possessed in this state of any power other than a

purpose for which, or a power with which, the domestic corporation may

be and is formed or the foreign corporation is authorized.

(5) (A) Shall not contain any of the following phrases, or any

abbreviation or derivative thereof:

state police

state trooper

(B) Shall not contain any of the following words, or any abbreviation

or derivative thereof:

acceptance fidelity mortgage

annuity finance savings

assurance guaranty surety

bank indemnity title

bond insurance trust

casualty investment underwriter

doctor lawyer

endowment loan

unless the approval of the superintendent of financial services is

attached to the certificate of incorporation, or application for

authority or amendment thereof; or that the word "doctor", "lawyer", or

the phrase "state police" or "state trooper" or an abbreviation or

derivation thereof, may be used in the name of a corporation the

membership of which is composed exclusively of doctors, lawyers, state

police officers or state troopers, respectively.

(6) Shall not contain any words or phrases, or any abbreviation or

derivative thereof in a context which will tend to mislead the public

into believing that the corporation is an agency or instrumentality of

the United States or the state of New York or a subdivision thereof or

is a public corporation.

(7) Shall not contain the word "cooperative" or an abbreviation,

contraction or derivative thereof.

(8) Shall not contain any word or phrase, or any abbreviation or

derivation thereof, which, separately, or in context, shall be indecent

or obscene or shall ridicule or degrade any person, group, belief,

business or agency of government or indicate or imply any unlawful

activity.

(9) Notwithstanding any other provision of this chapter, may, in the

case of a foundation organized for the sole purpose of publishing the

literary works of a deceased person, include the word "doctor" or any

abbreviation or derivative thereof as part of its name if such word,

abbreviation or derivative is used to identify the person whose works

are to be published.

Corporate name; exceptions.

(a) Any reference to a corporation in this section except as otherwise

provided herein shall include both domestic and foreign corporations.

(b) The provisions of section 301 (Corporate name; general):

(1) Shall not require any corporation, existing or authorized under

any statute on the effective date of this chapter, to add to, modify or

otherwise change its corporate name.

(2) Shall not prevent a corporation with which another corporation is

merged, or which is formed by the consolidation of one or more other

corporations from having the same name as any of such corporations if at

the time such other corporation was authorized or existing under any

statute of this state.

(3) Shall not prevent a foreign corporation from being authorized

under a name which is similar to the name of a corporation of any kind

existing or authorized under any statute, if the department of state

finds, upon proof by affidavit or otherwise as it may determine, that a

difference between such names exists in the terms or abbreviations

indicating corporate character or otherwise, that the applicant has

conducted activities as a corporation under its said name for not less

than ten consecutive years immediately prior to the date of its

application, that the activities to be conducted in this state are not

the same or similar to the business or activities conducted by the

corporation with whose name it may conflict and that the public is not

likely to be confused or deceived, and if the applicant shall agree in

its application for authority to use with its corporate name, in this

state, to be placed immediately under or following such name, the words

"a ..... (name of jurisdiction of incorporation) corporation".

Reservation of name.

(a) A corporate name may be reserved by:

(1) Any person intending to form a domestic corporation.

(2) Any domestic corporation intending to change its name.

(3) Any foreign corporation intending to apply for authority to

conduct activities in this state.

(4) Any authorized foreign corporation intending to change its name.

(5) Any person intending to incorporate a foreign corporation and to

have it apply for authority to conduct activities in this state.

(6) Any domestic corporation intending to file the consent of the

attorney general to reinstate such corporation pursuant to section 1014

of this chapter.

(b) A fictitious name for use pursuant to section 1301 of this chapter

may be reserved by:

(1) Any foreign corporation intending to apply for authority to do

business in this state, pursuant to paragraph (d) of section 1301 of

this chapter.

(2) Any authorized foreign corporation intending to change its

fictitious name under which it conducts activities in this state.

(3) Any authorized foreign corporation which has changed its corporate

name in its jurisdiction, which new corporate name is not available in

this state.

(c) Application to reserve a corporate name shall be delivered to the

department of state. It shall set forth the name and address of the

applicant, the name to be reserved and a statement of the basis under

paragraph (a) or (b) for the application. The secretary of state may

require the applicant to set forth in his application the nature of the

activities to be conducted by the corporation. If the name is available

for corporate use, the department of state shall reserve the name for

the use of the applicant for a period of sixty days and issue a

certificate of reservation. The prohibitions, restrictions and

qualifications set forth in section 301 (Corporate name; general),

section 302 (Corporate name; exceptions) and section 404 (Approvals,

notices and consents) are not waived by the issuance of a certificate of

reservation. The certificate of reservation shall include the name of

the applicant, the name reserved and the date of the reservation. The

certificate of reservation (or in lieu thereof an affidavit by the

applicant or by his agent or attorney that the certificate of

reservation has been lost or destroyed) shall accompany the certificate

of incorporation or the application for authority when either is

delivered to the department of state.

(d) The secretary of state may extend the reservation for additional

periods of not more than sixty days each, upon the written request of

the applicant, his attorney or agent delivered to the department of

state, to be filed before the expiration of the reservation period then

in effect. Such request shall have attached to it the certificate of

reservation of name. Not more than two such extensions shall be granted.

(e) Upon the request of the applicant, delivered to the department of

state before the expiration of the reserved period, together with the

certificate of reservation, the department shall cancel the reservation.

(f) Any application or request under this section shall be signed by

the applicant, his attorney or agent.

Statutory designation of secretary of state as agent of domestic

corporations formed under article four of this chapter and

authorized foreign corporations for service of process.

(a) The secretary of state shall be the agent of every domestic

corporation formed under article four of this chapter and every

authorized foreign corporation upon whom process against the corporation

may be served.

(b) Any designation by a domestic corporation formed under article

four of this chapter or foreign corporation of the secretary of state as

such agent, which designation is in effect on the effective date of this

chapter, shall continue. Every domestic corporation formed under article

four of this chapter or foreign corporation, existing or authorized on

the effective date of this chapter, which has not designated the

secretary of state as such agent, shall be deemed to have done so.

(c) Any designation by a domestic corporation formed under article

four of this chapter or foreign corporation of an agent other than the

secretary of state which is in effect on the effective date of this

chapter shall continue in effect until changed or revoked as provided in

this chapter.

(d) Any designated post-office address to which the secretary of state

shall mail a copy of process served upon him or her as agent of a

domestic corporation formed under article four of this chapter or

foreign corporation, shall continue until the filing of a certificate or

other instrument under this chapter directing the mailing to a different

post-office address and any designated email address to which the

secretary of state shall email a notice of the fact that process has

been electronically served upon him or her as agent of a domestic

corporation or foreign corporation, shall continue until the filing of a

certificate or other instrument under this chapter changing or deleting

the email address.

Registered agent for service of process.

(a) Every domestic corporation or authorized foreign corporation may

designate a registered agent in this state upon whom process against

such corporation may be served. The agent shall be a natural person who

is a resident of or has a business address in this state or a domestic

corporation or foreign corporation of any kind formed, or authorized to

do business in this state, under this chapter or under any other statute

of this state.

(b) Any such designation of a registered agent may be made, revoked or

changed as provided in this chapter.

(c) A registered agent may resign as such agent. A certificate,

entitled "Certificate of resignation of registered agent of ...........

(name of designating corporation) under section 305 of the

Not-for-Profit Corporation Law", shall be signed by him and delivered to

the department of state. It shall set forth:

(1) That he resigns as registered agent for the designating

corporation.

(2) The date the certificate of incorporation or the application for

authority of the designating corporation was filed by the department of

state.

(3) That he has sent a copy of the certificate of resignation by

registered mail to the designating corporation at the post-office

address on file in the department of state specified for the mailing of

process or if such address is the address of the registered agent, then

to the office of the designating corporation in the jurisdiction of its

formation or incorporation.

(d) The designation of a registered agent shall terminate thirty days

after the filing by the department of state of a certificate of

resignation or a certificate containing a revocation or change of the

designation, whichever is filed earlier. A certificate designating a new

registered agent may be delivered to the department of state by the

corporation within the thirty days or thereafter.

Service of process.

(a) Service of process on a registered agent may be made in the manner

provided by law for the service of a summons, as if the registered agent

was a defendant.

(b) * Service of process on the secretary of state as agent of a

domestic corporation formed under article four of this chapter or an

authorized foreign corporation shall be made in the manner provided by

subparagraph one or two of this paragraph.

* NB Effective until February 24, 2027

* Service of process on the secretary of state as agent of a domestic

corporation formed under article four of this chapter or an authorized

foreign corporation shall be made in the manner provided by subparagraph

one, two or three of this paragraph.

* NB Effective February 24, 2027

(1) Personally delivering to and leaving with the secretary of state or

his or her deputy, or with any person authorized by the secretary of

state to receive such service, at the office of the department of state

in the city of Albany, duplicate copies of such process together with

the statutory fee, which fee shall be a taxable disbursement. Service of

process on such corporation shall be complete when the secretary of

state is so served. The secretary of state shall promptly send one of

such copies by certified mail, return receipt requested, to such

corporation, at the post office address, on file in the department of

state, specified for the purpose. If a domestic corporation formed under

article four of this chapter or an authorized foreign corporation has no

such address on file in the department of state, the secretary of state

shall so mail such copy to such corporation at the address of its office

within this state on file in the department. (2) Electronically

submitting a copy of the process to the department of state together

with the statutory fee, which fee shall be a taxable disbursement,

through an electronic system operated by the department of state,

provided the domestic or authorized foreign corporation has an email

address on file in the department of state to which the secretary of

state shall email a notice of the fact that process has been served

electronically on the secretary of state. Service of process on such

corporation shall be complete when the secretary of state has reviewed

and accepted service of such process. The secretary of state shall

promptly send a notice of the fact that process against such corporation

has been served electronically on him or her to such corporation at the

email address on file in the department of state, specified for the

purpose and shall make a copy of the process available to such

corporation.

* (3) Provided process is served by or on behalf of the state or a

city, town, village or other political subdivision of the state, by

electronically submitting a copy of the process to the department of

state, through an electronic system operated by and with capabilities

determined by the department of state, together with the statutory fee,

if required, which fee shall be a taxable disbursement. Service of

process on such corporation shall be complete when the secretary of

state has reviewed and accepted service of such process. The secretary

of state shall promptly either: (A) send a copy of such process by

certified mail, return receipt requested, to such corporation, at the

post office address, on file in the department of state, specified for

the purpose or, if a domestic corporation formed under article four of

this chapter or an authorized foreign corporation has no such address on

file in the department of state, the secretary of state shall so mail

such copy to such corporation at the address of its office within this

state on file in the department; or (B) email a notice of the fact that

process against the corporation has been served electronically on the

secretary of state to the email address on file in the department of

state, specified for the purpose and shall make a copy of the process

available to such corporation.

* NB Effective February 24, 2027

(c) If an action or special proceeding is instituted in a court of

limited jurisdiction, service of process may be made in the manner

provided in this section if the office of the domestic corporation

formed under article four of this chapter or foreign corporation is

within the territorial jurisdiction of the court.

(d) Nothing in this section shall affect the right to serve process in

any other manner permitted by law.

Electronic service of process.

The secretary shall advise any corporation subject to the laws of this

chapter in prominent written form as follows: (a) electronic service of

process authorized by the provisions of this chapter is an optional

program at no additional cost to the user; (b) any corporation subject

to the laws of this chapter will continue to receive service of process

by mail unless such corporation notifies the secretary of an affirmative

choice to receive service of process by way of the program through

electronic means, in which case digital copies will be made accessible

but paper documents will not be mailed; and (c) such choice may be

reversed by the corporation at any time and, thereafter, service by mail

will resume.

Service of process on unauthorized foreign corporation.

(a) In any case in which a non-domiciliary would be subject to the

personal or other jurisdiction of the courts of this state under article

three of the civil practice law and rules, a foreign corporation not

authorized to conduct activities in this state is subject to a like

jurisdiction. In any such case, process against such foreign corporation

may be served upon the secretary of state as its agent. Such process may

issue in any court in this state having jurisdiction of the subject

matter.

(b) (1) Service of such process upon the secretary of state shall be

made in the manner provided by items (i) or (ii) of this subparagraph.

Either option of service authorized pursuant to this paragraph shall be

available at no extra cost to the consumer. (i) Personally delivering to

and leaving with him or his deputy, or with any person authorized by the

secretary of state to receive such service, at the office of the

department of state in the city of Albany, a copy of such process

together with the statutory fee, which fee shall be a taxable

disbursement. (ii) Electronically submitting a copy of the process to

the department of state together with the statutory fee, which fee shall

be a taxable disbursement, through an electronic system operated by the

department of state.

(2) Service under this paragraph shall be sufficient if notice thereof

and a copy of the process are:

(i) Delivered personally without this state to such foreign

corporation by a person and in the manner authorized to serve process by

law of the jurisdiction in which service is made, or

(ii) Sent by or on behalf of the plaintiff to such foreign corporation

by registered mail with return receipt requested, at the post office

address specified for the purpose of mailing process, on file in the

department of state, or with any official or body performing the

equivalent function, in the jurisdiction of its incorporation, or if no

such address is there specified, to its registered or other office there

specified, or if no such office is there specified, to the last address

of such foreign corporation known to the plaintiff.

(c) (1) Where service of a copy of process was effected by personal

service, proof of service shall be by affidavit of compliance with this

section filed, together with the process, within thirty days after such

service, with the clerk of the court in which the action or special

proceeding is pending. Service of process shall be complete ten days

after such papers are filed with the clerk of the court.

(2) Where service of a copy of process was effected by mailing in

accordance with this section, proof of service shall be by affidavit of

compliance with this section filed, together with the process, within

thirty days after receipt of the return receipt signed by the foreign

corporation, or other official proof of delivery or of the original

envelope mailed. If a copy of the process is mailed in accordance with

this section, there shall be filed with the affidavit of compliance

either the return receipt signed by such foreign corporation or other

official proof of delivery or, if acceptance was refused by it, the

original envelope with a notation by the postal authorities that

acceptance was refused. If acceptance was refused, a copy of the notice

and process together with the notice of the mailing by registered mail

and refusal to accept shall be promptly sent to such foreign corporation

at the same address by ordinary mail and the affidavit of compliance

shall so state. Service of process shall be complete ten days after such

papers are filed with the clerk of the court. The refusal to accept

delivery of the registered mail or to sign the return receipt shall not

affect the validity of the service and such foreign corporation refusing

to accept such registered mail shall be charged with knowledge of the

contents thereof.

(d) Service made as provided in this section shall have the same force

as personal service made within this state.

(e) Nothing in this section shall affect the right to serve process in

any other manner permitted by law.

Records and certificates of department of state.

The department of state shall keep a record of each process served

upon the secretary of state under this chapter, including the date of

service. It shall, upon request made within ten years of such service,

issue a certificate under its seal certifying as to the receipt of the

process by an authorized person, the date and place of such service and

the receipt of the statutory fee. Process served upon the secretary of

state under this chapter shall be destroyed by him after a period of ten

years from such service.

Personal jurisdiction and service of process on non-domiciliary

resident director, officer, key person or agent.

A person, by becoming a director, officer, key person or agent of a

corporation is subject to the personal jurisdiction of the supreme court

of the state of New York, and in an action or proceeding by the attorney

general under this chapter process may be served upon such person as

provided in section three hundred thirteen of the civil practice law and

rules.

Incorporators.

One or more natural persons at least eighteen years of age may act as

incorporators of a corporation to be formed under this chapter.

Certificate of incorporation; contents.

(a) A certificate, entitled "Certificate of Incorporation of

.................... (name of corporation), under section 402 of the

Not-for-Profit Corporation Law," shall be signed by each incorporator

with his name and address included in such certificate and delivered to

the department of state. It shall set forth:

(1) The name of the corporation.

(2) That the corporation is a corporation as defined in subparagraph

(5) of paragraph (a) of section 102 (Definitions).

(2-a) the purpose or purposes for which it is formed, it being

sufficient to state that the purpose of the corporation is any purpose

for which corporations may be organized under this chapter as a

charitable or non-charitable corporation, and whether it is a charitable

corporation or a non-charitable corporation under section 201

(Purposes). Any corporation may also set forth any activities that it

intends to carry out in furtherance of such purpose or purposes;

provided that this subparagraph shall not be interpreted to require that

the certificate of incorporation set forth such activities or otherwise

state how the corporation's purposes will be achieved.

(2-b) If it is not formed to engage in any activity or for any purpose

requiring consent or approval of any state official, department, board,

agency or other body, a statement that no such consent or approval is

required. Such statement shall be deemed conclusive for purposes of

filing by the department of state. If subsequent to submitting the

certificate of incorporation for filing, the corporation plans to engage

in any activity requiring consent or approval pursuant to section 404

(approvals, notices and consents) of this chapter, the corporation shall

obtain such consent or approval and accordingly amend its certificate of

incorporation pursuant to article eight of this chapter.

(3) The county within the state in which the office of the corporation

is to be located. It may also set forth the post office address of an

office without the state, at which, pursuant to section 621 (Books and

records; right of inspection; prima facie evidence), the books and

records of account of the corporation shall be kept.

(4) The names and addresses of the initial directors.

(5) The duration of the corporation if other than perpetual.

(6) A designation of the secretary of state as agent of the

corporation upon whom process against it may be served and the post

office address within or without this state to which the secretary of

state shall mail a copy of any process against it served upon him or

her. The corporation may include an email address to which the secretary

of state shall email a notice of the fact that process against it has

been electronically served upon him or her.

(7) If the corporation is to have a registered agent, his name and

address within this state and a statement that the registered agent is

to be the agent of the corporation upon whom process against it may be

served.

(8) The statements, if any, with respect to special not-for-profit

corporations required under article 14 (Special not-for-profit

corporations).

(b) If the certificate is for the incorporation of an existing

unincorporated association or group it shall have annexed thereto an

affidavit of the subscribers of such certificate stating that they

constitute a majority of the members of a committee duly authorized to

incorporate such association or group.

(c) The certificate of incorporation may set forth any provision, not

inconsistent with this chapter or any other statute of the state, which

provision is (1) for the regulation of the internal affairs of the

corporation, including types or classes of membership and the

distribution of assets on dissolution or final liquidation, or (2)

required by any governmental body or officer or other person or body as

a condition for giving the consent or approval required for the filing

of such certificate of incorporation.

Certificate of incorporation; effect.

Upon the filing of the certificate of incorporation by the department

of state, the corporate existence shall begin, and such certificate

shall be conclusive evidence that all conditions precedent have been

fulfilled and that the corporation has been formed under this chapter,

except in an action or special proceeding brought by the

attorney-general. Where the certificate is for the incorporation of an

unincorporated association or group, the members of such association or

group shall be members of the corporation so created, and all property

owned by or held for it shall belong to and vest in the corporation,

subject to all existing incumbrances and claims as if incorporation had

not taken place. Where the certificate is for the reincorporation of a

corporation created by special law for purposes for which a corporation

may be formed under this chapter, such reincorporation shall not effect

a dissolution of the corporation but shall be a continuation of its

corporate existence, without affecting its then existing property rights

or liabilities, or the liabilities of its members or officers as such,

but thereafter it shall have only such rights, powers and privileges,

and be subject to such other duties and liabilities as a corporation

formed for the same purposes under this chapter.

Approvals, notices and consents.

(a) Every certificate of incorporation which includes among its

purposes the formation of a trade or business association shall have

endorsed thereon or annexed thereto the consent of the attorney-general.

(b) (1) Every certificate of incorporation which includes among its

purposes the care of destitute, delinquent, abandoned, neglected or

dependent children; the establishment or operation of any adult care

facility, or the establishment or operation of a residential program for

victims of domestic violence as defined in subdivision four of section

four hundred fifty-nine-a of the social services law, or the placing-out

or boarding-out of children or a home or shelter for unmarried mothers,

excepting the establishment or maintenance of a hospital or facility

providing health-related services as those terms are defined in article

twenty-eight of the public health law and a facility for which an

operating certificate is required by articles sixteen, nineteen,

twenty-two and thirty-one of the mental hygiene law; or the solicitation

of contributions for any such purpose or purposes, shall have endorsed

thereon or annexed thereto the approval of the commissioner of the

office of children and family services or with respect to any adult care

facility, the commissioner of health.

(2) A corporation whose statement of purposes specifically includes

the establishment or operation of a child day care center, as that term

is defined in section three hundred ninety of the social services law,

shall mail a certified copy of the certificate of incorporation, each

amendment thereto, and any certificate of merger, consolidation or

dissolution involving such corporation to the office of children and

family services within thirty days after receipt of confirmation of the

filing of such certificate, amendment, merger, consolidation or

dissolution with the department of state. This requirement shall also

apply to any foreign corporation filing an application for authority

under section thirteen hundred four of this chapter, any amendments

thereto, and any surrender of authority or termination of authority in

this state of such corporation.

(c) Every certificate of incorporation which includes among the

purposes of the corporation, the establishment, maintenance and

operation of a hospital service or a health service or a medical expense

indemnity plan or a dental expense indemnity plan as permitted in

article forty-three of the insurance law, shall have endorsed thereon or

annexed thereto the approval of the superintendent of financial services

and the commissioner of health.

(d) Every corporation whose certificate of incorporation includes

among its purposes the operation of a school; a college, university or

other entity providing post secondary education; a library; or a museum

or historical society shall have endorsed thereon or annexed thereto the

approval of the commissioner of education, or in the case of a college

or a university, the written authorization of the Regents of the

university of the state of New York. Any other corporation the

certificate of incorporation of which includes a purpose for which a

corporation might be chartered by the regents of the university of the

State of New York shall mail a certified copy of the certificate of

incorporation to the commissioner of education within thirty days after

receipt of confirmation of filing.

(e) Every certificate of incorporation of a cemetery corporation,

except those within the exclusionary provisions of section 1503

(Cemetery corporations) shall have endorsed thereon or annexed thereto

the approval of the cemetery board.

(f) Every certificate of incorporation of a fire corporation shall

have endorsed thereon or annexed thereto the approval, signed and

acknowledged, of the authorities of each city, village, town or fire

district in which the corporation proposes to act. Such authorities

shall be: in a city, the mayor; in a village, a majority of the

trustees; in a town, a majority of the members of the town board; in a

fire district, a majority of the fire commissioners. The members of the

town board of a town, or the trustees of a village, shall not consent to

the formation of a fire corporation as hereinbefore provided, until such

board shall have held a public hearing on the question of whether the

fire company should be incorporated. The notice shall be published at

least once in each week for two successive weeks in the official

newspaper published in the county in which such fire corporation intends

to locate, prior to the regular meeting of such board designated by the

chairman of the board to consider the matter. Such notice shall contain

the name of the proposed company, the names of the persons signing the

certificate of incorporation, a brief description of the territory to be

protected by the fire company and that all persons interested shall be

heard. If no newspaper is published in the county the publication of the

notice shall be in a newspaper in an adjoining county selected by the

chairman of such board. All expenses in connection with such publication

shall be borne by the parties making the application and paid before the

hearing.

(g) Every certificate of incorporation of a corporation for prevention

of cruelty to animals shall have endorsed thereon or annexed thereto the

approval of the American Society for the Prevention of Cruelty to

Animals, or, if such approval be withheld thirty days after application

therefor, a certified copy of an order of a justice of the supreme court

of the judicial district in which the office of the corporation is to be

located, dispensing with such approval, granted upon eight days' notice

to such society.

(h) Every certificate of incorporation of a Young Men's Christian

Association shall have endorsed thereon or annexed thereto the approval

of the chairman of the national board of Young Men's Christian

Associations.

(i) Every certificate of incorporation which indicates that the

proposed corporation is to solicit funds for or otherwise benefit the

armed forces of the United States or of any foreign country, or their

auxiliaries, or of this or any other state or any territory, shall have

endorsed thereon or annexed thereto the approval of the adjutant

general. The department of state, in conjunction with the division of

military and naval affairs, shall establish and maintain on the

department's website a public listing of all approved not-for-profit

corporations soliciting funds for or otherwise benefiting the armed

forces of the United States or of any foreign country, or their

auxiliaries, or of this or any other state or territory.

(j) Every certificate of incorporation which includes among its

purposes the organization of wage-earners for their mutual betterment,

protection and advancement; the regulation of hours of labor, working

conditions, or wages; or the performance, rendition or sale of services

as labor consultant, labor-management advisor, negotiator, arbitrator,

or specialist; and every certificate of incorporation in which the name

of the proposed corporation includes "union", "labor", "council" or

"industrial organization", or any abbreviation or derivative thereof in

a context that indicates or implies that the corporation is formed for

any of the above purposes, shall have endorsed thereon or annexed

thereto the approval of the industrial board of appeals. The board shall

make such inquiry into the purposes of the proposed corporation as it

shall deem advisable and shall order a hearing if necessary to determine

whether or not such purposes are in all respects consistent with public

policy and the labor law. Notice of the time and place of hearing shall

be given to the applicants and such other persons as the board may

determine.

(k) Every certificate of incorporation for a corporation which has as

its exclusive purpose the promotion of the interests of savings bank

life insurance or the promotion of the interests of member banks may, if

the approval of the superintendent of financial services is endorsed

thereon or annexed thereto, use as a part of the corporate name any of

the words or phrases, or any abbreviation or derivative thereof, set

forth in subparagraph (5) of paragraph (a) of section 301 (Corporate

name; general).

(l) Every certificate of incorporation for a corporation which has as

its exclusive purpose the creation of an association of licensed

insurance agents, licensed insurance brokers, or licensed insurance

underwriters and every application for authority of a foreign

corporation which is an independent laboratory engaged in testing for

public safety, or which has as its purpose the advancement of corporate,

governmental, and institutional risk and insurance management, or which

has as its exclusive purpose the creation of an association of insurers,

each of which is duly licensed in this state or, if it does no business

or is not licensed in this state, is duly licensed in another state or

foreign jurisdiction may, if the approval of the superintendent of

financial services is endorsed thereon or annexed thereto, use as a part

of the corporate name any of the words or phrases, or any abbreviation

or derivative thereof, set forth in subparagraph (5) of paragraph (a) of

section 301 (Corporate name; general).

(m) Every certificate of incorporation in which the name of the

proposed corporation includes the name of a political party shall have

endorsed thereon or annexed thereto the consent of the chairman of the

county committee of such political party of the county in which the

office of the corporation is to be located, except in cases where the

supreme court finds that the withholding of such consent of the county

chairman is unreasonable.

(n) Every certificate of incorporation in which the name of the

proposed corporation includes the words "American Legion," shall have

endorsed thereon or annexed thereto the approval of the Department of

New York, the American Legion, duly acknowledged by its commander or

adjutant.

(o) Every certificate of incorporation which includes among its

corporate purposes or powers the establishment or maintenance of any

hospital, as defined in article twenty-eight of the public health law,

or the solicitation of contributions for any such purpose, or purposes,

shall have endorsed thereon or annexed thereto the approval of the

public health and health planning council.

(p) Every certificate of incorporation of a medical corporation as

defined in article forty-four of the public health law and organized

pursuant thereto and pursuant to this chapter, shall have endorsed

thereon or annexed thereto the consent of the commissioner of health and

the approval of the public health and health planning council.

(q) Every certificate of incorporation which includes among its

corporate purposes or powers the establishment, or operation of a

facility for which an operating certificate from the commissioner of

mental health is required by article thirty-one of the mental hygiene

law, or the solicitation of contributions for any such purpose, shall

have endorsed thereon or annexed thereto the approval of the

commissioner of mental health.

(r) Every certificate of incorporation of a health maintenance

organization as defined in article forty-four of the public health law

and organized pursuant thereto and pursuant to this chapter, shall have

endorsed thereon or annexed thereto the consent of the commissioner of

health.

(t) Every certificate of incorporation which includes among its

purposes and powers the establishment or maintenance of a hospital or

facility providing health related services, as those terms are defined

in article twenty-eight of the public health law, or the solicitation of

contributions for any such purpose or two or more of such purposes,

shall have endorsed thereon the approval of the public health and health

planning council.

(u) Every certificate of incorporation which includes among the

purposes of the corporation, the establishment or operation of a

substance abuse, substance dependence, alcohol abuse, alcoholism, or

chemical abuse or dependence program, or the solicitation of

contributions for any such purpose, shall have endorsed thereon or

annexed thereto the consent of the commissioner of the office of

alcoholism and substance abuse services to its filing by the department

of state.

(v) Every certificate of incorporation which includes among the

purposes of the corporation, the establishment, maintenance and

operation of a nonprofit property/casualty insurance company, pursuant

to article sixty-seven of the insurance law, shall have endorsed thereon

or annexed thereto the approval of the superintendent of financial

services.

Organization meeting.

(a) After the corporate existence has begun, an organization meeting

of the initial directors, or, if directors are not designated in the

certificate of incorporation, of the incorporator or incorporators,

shall be held within or without this state, for the purpose of adopting

by-laws, electing directors to hold office as provided in the

certificate of incorporation or the by-laws, and the transaction of such

other business as may come before the meeting. The meeting may be held

at the call of any director or, if directors are not designated in the

certificate of incorporation, any incorporator who shall give at least

five days' notice thereof by mail to each other director or

incorporator, which notice shall set forth the time and place of the

meeting. Notice need not be given to any director or incorporator who

submits a signed waiver of notice before or after the meeting, or who

attends the meeting without protesting, prior thereto or at its

commencement, the lack of notice to him. If there are more than two

directors or incorporators, a majority shall constitute a quorum and the

act of the majority of those present at a meeting at which a quorum is

present shall be the act of the directors or incorporators. For the

purposes of this section an incorporator or director may act in person

or by proxy signed by him or his attorney in fact.

(b) Any action permitted to be taken at an organization meeting may be

taken without a meeting if each director or, if directors are not

designated in the certificate of incorporation, each incorporator or his

attorney-in-fact signs an instrument setting forth the action so taken.

(c) If a designated director or an incorporator dies or is for any

reason unable to act, the other or others may act. If there is no

designated director or incorporator able to act, any person for whom an

incorporator is acting as agent may act in his stead, or if such other

person also dies or is for any reason unable to act, his legal

representative may act.

Private foundation, as defined in the United States internal

revenue code of 1954: provisions included in the certificate of

incorporation.

(a) The following provisions are hereby included in the certificate of

incorporation of every domestic corporation, heretofore or hereafter

formed, to which this chapter applies in whole or in part, and which is

a "private foundation" as defined in section 509 of the United States

internal revenue code of 1954 ("code"):

(1) The corporation shall distribute such amounts for each taxable

year at such time and in such manner as not to subject the corporation

to tax on undistributed income under section 4942 of the code.

(2) The corporation shall not engage in any act or self-dealing which

is subject to tax under section 4941 of the code.

(3) The corporation shall not retain any excess business holdings

which are subject to tax under section 4943 of the code.

(4) The corporation shall not make any investments in such manner as

to subject the corporation to tax under section 4944 of the code.

(5) The corporation shall not make any taxable expenditures which are

subject to tax under section 4945 of the code.

Except as provided in paragraph (b), this paragraph applies

notwithstanding any other provision of the certificate of incorporation

or any direction in a gift instrument.

(b) Paragraph (a) shall not apply to the extent that it conflicts with

any mandatory direction in a gift instrument executed prior to the

effective date of this section unless such conflicting direction is

removed as impracticable under article eight of the estates, powers and

trusts law or in any other manner provided by law. The absence of a

specific provision in the gift instrument for the current use of the

principal of the fund, or the presence in such an instrument of a

provision, as to the principal of a fund, limited to the principal's

being held, invested and reinvested, is not such a conflicting mandatory

direction.

(b-1) A domestic, not-for-profit corporation that is a "private

foundation" as defined in section 509 of the code and that is required

by section 6104(d) of the code to make available for public inspection

its annual return shall publish notice of the availability of such

return for inspection. Such notice shall be published, not later than

the day prescribed for filing such annual return (determined with regard

to any extension of time for filing), in a newspaper designated by the

clerk of the county in which the principal office of the private

foundation is located, having general circulation in that county. When

such county is located within a city with a population of one million or

more, such designation shall be as though such notice were a notice of

judicial proceedings. The notice shall state that the annual return of

the private foundation is available at its principal office for

inspection during regular business hours by any citizen who requests it

within one hundred eighty days after the date of such publication, and

shall state the address and the telephone number of the private

foundation's principal office and the name of its principal manager. A

copy or notice published in a newspaper other than the newspaper or

newspapers designated by the county clerk shall not be deemed to be one

of the publications required by this paragraph.

(c) All references in this section to sections of the code shall be to

such sections as amended from time to time, or to corresponding

provisions of subsequent internal revenue laws.

(d) Nothing in this section shall impair the rights and powers of the

courts or the attorney-general of this state.

(e) For purposes of this section, the term gift instrument shall have

the meaning set forth in section 551 (Definitions).

Stock and shares prohibited; membership certificates authorized.

A corporation shall not have stock or shares or certificates for stock

or for shares, but may issue non-transferable membership certificates or

cards to evidence membership, whether or not connected with any

financial contribution to the corporation, as provided in section 601

(Members). The fact that the corporation is a not-for-profit

corporation, and that the membership certificate or card is

non-transferable shall be noted conspicuously on the face or back of

each such certificate or card.

Members' capital contributions.

(a) The certificate of incorporation may provide that members, upon or

subsequent to admission, shall make capital contributions in the amount

specified therein. The requirement of a capital contribution may apply

to all members, or to the members of a single class, or to members of

different classes in different amounts or proportions.

(b) A member's capital contribution shall consist of money or other

property, tangible or intangible, or labor or services actually received

by or performed for the corporation or for its benefit or in its

formation or reorganization, or a combination thereof. In the absence of

fraud in the transaction, the judgment of the board as to the value of

the consideration received by the corporation shall be conclusive.

(c) Neither obligations of the member for future payments nor future

services shall constitute payment or part payment of a member's capital

contribution.

(d) A member's capital contribution shall be evidenced by a capital

certificate which shall be non-transferable, except that the certificate

of incorporation of a non-charitable corporation may provide that its

capital certificates, or some of them, may be transferable to other

members with the consent of the corporation upon specified terms and

conditions.

(e) A member's capital contribution shall not be repaid or redeemed by

the corporation except upon dissolution of the corporation or upon

redemption of the capital certificate as provided in this chapter. A

corporation may provide in its certificate of incorporation that its

capital certificates, or some of them, shall be redeemable, in whole or

in part, at the option of the corporation only, at such price or prices

(not to exceed the amount of the capital contribution), within such

period or periods, and on such terms and conditions, not inconsistent

with this chapter, as are stated in the certificate of incorporation.

Capital certificates.

(a) Each capital certificate shall be signed by the chairman or

vice-chairman of the board or the president or a vice-president and the

secretary or an assistant secretary or the treasurer or an assistant

treasurer of the corporation, and may be sealed with the seal of the

corporation or a facsimile thereof. The signatures of the officers upon

a certificate may be facsimiles if the certificate is countersigned by a

transfer agent or registered by a registrar other than the corporation

itself or its employee. In case any officer who has signed or whose

facsimile signature has been placed upon a certificate shall have ceased

to be such officer before such certificate is issued it may be issued by

the corporation with the same effect as if he were such officer at the

date of issue.

(b) Each capital certificate shall when issued state upon the face

thereof:

(1) The name of the member to whom issued.

(2) The amount of the member's capital contribution evidenced by such

certificate.

(3) If appropriate, that the corporation is a non-charitable

corporation, and that its certificate of incorporation provides that the

capital certificate is transferable to other members with the consent of

the corporation.

(4) The fact that the corporation is a not-for-profit corporation, and

that the capital certificate is non-transferable or is transferable to

other members, with the consent of the corporation, shall be noted

conspicuously on the face or back of each such certificate.

Subventions.

(a) The certificate of incorporation may provide that the corporation

shall be authorized by resolution of the board to accept subventions

from members or non-members on terms and conditions not inconsistent

with this chapter, and to issue certificates therefor. Subvention

certificates shall be nontransferable unless such resolution provides

that they shall be transferable, either at will or subject to specified

restrictions.

(b) A subvention shall consist of money or other property, tangible or

intangible, actually received by the corporation or expended for its

benefit or for its formation or reorganization, or a combination

thereof. In the absence of fraud in the transaction, the judgment of the

board as to the value of the consideration received by the corporation

shall be conclusive.

(c) The rights of holders of subvention certificates shall at all

times be subordinate to the rights of creditors of the corporation.

(d) The resolution of the board may provide that holders of subvention

certificates shall be entitled to a fixed or contingent periodic payment

out of the corporate assets equal to a percentage of the original amount

or value of the subvention, but such payment shall not exceed two-thirds

of the maximum interest rate authorized pursuant to section 5-501 of the

general obligations law.

(e) The resolution of the board may provide that a subvention shall be

redeemable, in whole or in part, at the option of the corporation at

such price or prices (not to exceed the original amount or value of the

subvention plus any periodic payments due or accrued thereon), within

such period or periods, and on such terms and conditions, not

inconsistent with this chapter, as are stated in the resolution.

(f) The resolution of the board may provide that holders of all or

some subvention certificates shall have the right to require the

corporation after a specified period of time to redeem such

certificates, in whole or in part, at a price or prices that do not

exceed the original amount or value of the subvention plus any periodic

payments due or accrued thereon, upon an affirmative showing that the

financial condition of the corporation will permit the required payment

to be made without impairment of its operations or injury to its

creditors. The right to require redemption may in addition be

conditioned upon the occurrence of a specified event. For the purpose of

enforcing their rights under this paragraph, holders of subvention

certificates shall be entitled to inspect the books and records of the

corporation.

(g) Holders of subvention certificates, upon dissolution of the

corporation, shall be entitled, after the claims of creditors have been

satisfied, to a repayment of the original amount or value of the

subvention plus any periodic payments due or accrued thereon, unless a

lesser sum is specified in the certificate of incorporation or the

resolution of the board concerning such subvention.

Subvention certificates.

(a) Each subvention certificate shall be signed by the chairman or a

vice-chairman of the board or the president or a vice-president and the

secretary or an assistant secretary or the treasurer or an assistant

treasurer of the corporation, and may be sealed with the seal of the

corporation or a facsimile thereof. The signatures of the officers upon

a certificate may be facsimiles if the certificate is countersigned by a

transfer agent or registered by a registrar other than the corporation

itself or its employees. In case any officer who has signed or whose

facsimile signature has been placed upon a certificate shall have ceased

to be such officer before such certificate is issued, it may be issued

by the corporation with the same effect as if he were such officer at

the date of issue.

(b) Each subvention certificate shall when issued state upon the face

thereof:

(1) The name of the person or persons to whom issued.

(2) The amount of the subvention evidenced by such certificate.

(3) The amount of the periodic payment thereon, if any, authorized by

the resolution of the board.

(4) If appropriate, that the certificate is redeemable and a summary

of the conditions for redemption at the option of the corporation or of

the holder.

(5) If appropriate, that the certificate is transferable, either at

will or subject to specified restrictions.

(c) The fact that the corporation is a not-for-profit corporation and,

where appropriate, that the certificate is transferable at will or

subject to restrictions, shall be noted conspicuously on the face or

back of each such certificate.

Bonds and security interests.

(a) No corporation shall issue bonds except for money or other

property, tangible or intangible, or labor or services actually received

by or performed for the corporation or for its benefit or in its

formation or reorganization, or a combination thereof. In the absence of

fraud in the transaction, the judgment of the board as to the value of

the consideration received by the corporation shall be conclusive.

(b) A corporation may pay reasonable interest on its bonds, may issue

its bonds at a reasonable discount and may pay a reasonable premium for

the redemption thereof prior to maturity, but the holders of its bonds

shall not be entitled at any time to receive any part of the income or

profit of the corporation nor at maturity to receive more than the

principal sum thereof plus interest due and accrued thereon. In the

absence of fraud in the transaction, the judgment of the board as to the

reasonableness of any such interest, discount or premium shall be

conclusive. However, with respect to bonds not a part of a public

offering, notwithstanding the terms of the instrument, no member of a

corporation shall be entitled to receive, directly or indirectly, as a

holder or beneficiary of such bond, prior to maturity or redemption,

more than simple interest thereon at a rate equal to the higher of (1)

the maximum interest authorized pursuant to section 5-501 of the general

obligations law or (2) one percent over the prime rate of interest

generally prevailing on the interest due date in the Federal Reserve

District of New York, nor at maturity or redemption, more than the

principal sum thereof plus any interest, not exceeding the maximum

interest herein specified, due and accrued thereon.

(c) A corporation may, in its certificate of incorporation or by-laws,

confer upon the holders of any bonds issued or to be issued by the

corporation, rights to inspect the corporate books and records and, upon

default of interest or principal, to vote in the election of directors.

The certificate of incorporation or the by-laws may apportion the number

of votes that may be cast with respect to bonds on the basis of the

amount of bonds held.

(d) The board may authorize any mortgage or pledge of, or the creation

of a security interest in, all or any part of the corporation's personal

property, or any interest therein. Unless the certificate of

incorporation provides otherwise, no vote or consent of the members

shall be required to approve such action by the board.

Fees, dues and assessments; fines and penalties.

(a) If authorized by its certificate of incorporation or by-laws and

subject to any limitations stated therein a corporation may levy

initiation fees, dues and assessments on its members, whether or not

they are voting members, and may impose reasonable fines or other

penalties upon its members for violations of its rules and regulations.

(b) Initiation fees, dues or assessments may be levied on all classes

of members alike or in different amounts or proportions for different

classes of members, as the certificate of incorporation or the by-laws

may provide, but in all cases the fees, dues and assessments payable by

members of one class shall be determined upon the same basis.

(c) The certificate of incorporation or the by-laws may contain such

provisions as are deemed necessary to enforce the collection of fees,

dues, assessments, fines or other penalties, including provisions for

the termination of membership, upon reasonable notice, for non-payment

of such fees, dues, assessments, fines or other penalties, and

provisions for reinstatement of membership.

(d) Subject to the provisions of this chapter, the certificate of

incorporation may provide that members paying initiation fees, dues or

assessments shall, upon dissolution of the corporation, have

distributive rights in its assets. The distributive rights may be

different for different classes of members, but in all cases the rights

of members of one class shall be the same.

Income from corporate activities.

A corporation whose lawful activities involve among other things the

charging of fees or prices for its services or products shall have the

right to receive such income and, in so doing, may make an incidental

profit. All such incidental profits shall be applied to the maintenance,

expansion or operation of the lawful activities of the corporation, and

in no case shall be divided or distributed in any manner whatsoever

among the members, directors, or officers of the corporation.

Purchase, sale, mortgage and lease of real property.

(a) No corporation shall purchase real property unless such purchase

is authorized by the vote of a majority of directors of the board or of

a majority of a committee authorized by the board, provided that if such

property would, upon purchase thereof, constitute all, or substantially

all, of the assets of the corporation, then the vote of two-thirds of

the entire board shall be required, or, if there are twenty-one or more

directors, the vote of a majority of the entire board shall be

sufficient.

(b) No corporation shall sell, mortgage, lease, exchange or otherwise

dispose of its real property unless authorized by the vote of a majority

of directors of the board or of a majority of a committee authorized by

the board; provided that if such property constitutes all, or

substantially all, of the assets of the corporation, then the vote of

two-thirds of the entire board shall be required, or, if there are

twenty-one or more directors, the vote of a majority of the entire board

shall be sufficient.

(c) If a corporation authorizes a committee to act pursuant to

paragraphs (a) and (b) of this section, the committee shall promptly

report any actions taken to the board, and in no event after the next

regularly scheduled meeting of the board.

Disposition of all or substantially all assets.

(a) A sale, lease, exchange or other disposition of all, or

substantially all, the assets of a corporation may be made upon such

terms and conditions and for such consideration, which may consist in

whole or in part of cash or other property, real or personal, including

shares, bonds or other securities of any other domestic or foreign

corporation or corporations of any kind, as may be authorized in

accordance with the following procedure:

(1) If there are members entitled to vote thereon, the board shall

adopt a resolution recommending such sale, lease, exchange or other

disposition. The resolution shall specify the terms and conditions of

the proposed transaction, including the consideration to be received by

the corporation and the eventual disposition to be made of such

consideration, together with a statement that the dissolution of the

corporation is or is not contemplated thereafter. The resolution shall

be submitted to a vote at a meeting of members entitled to vote thereon,

which may be either an annual or a special meeting. Notice of the

meeting shall be given to each member and each holder of subvention

certificates or bonds of the corporation, whether or not entitled to

vote. At such meeting by two-thirds vote as provided in paragraph (c) of

section 613 (Vote of members) the members may approve the proposed

transaction according to the terms of the resolution of the board, or

may approve such sale, lease, exchange or other disposition and may

authorize the board to modify the terms and conditions thereof.

(2) If there are no members entitled to vote thereon, such sale,

lease, exchange or other disposition shall be authorized by the vote of

at least two-thirds of the entire board, provided that if there are

twenty-one or more directors, the vote of a majority of the entire board

shall be sufficient.

(3) If the corporation is, or would be if formed under this chapter,

classified as a charitable corporation under section 201 (Purposes) such

sale, lease, exchange or other disposition shall in addition require

approval of the attorney general or the supreme court in the judicial

district or of the county court of the county in which the corporation

has its office or principal place of carrying out the purposes for which

it was formed in accordance with section 511 (Petition for court

approval) or section 511-a (Petition for attorney general approval) of

this article.

(b) After such authorization the board in its discretion may abandon

such sale, lease, exchange or other disposition of assets, subject to

the rights of third parties under any contract relating thereto, without

further action or approval.

Petition for court approval.

(a) To obtain court approval to sell, lease, exchange or otherwise

dispose of all or substantially all its assets, a corporation shall

present a verified petition to the supreme court of the judicial

district, or the county court of the county, wherein the corporation has

its office or principal place of carrying out the purposes for which it

was formed. The petition shall set forth:

1. The name of the corporation, the law under or by which it was

incorporated.

2. The names of its directors and principal officers, and their places

of residence.

3. The activities of the corporation.

4. A description, with reasonable certainty, of the assets to be sold,

leased, exchanged, or otherwise disposed of, or a statement that it is

proposed to sell, lease, exchange or otherwise dispose of all or

substantially all the corporate assets more fully described in a

schedule attached to the petition; and a statement of the fair value of

such assets, and the amount of the corporation's debts and liabilities

and how secured.

5. The consideration to be received by the corporation and the

disposition proposed to be made thereof, together with a statement that

the dissolution of the corporation is or is not contemplated thereafter.

6. That the consideration and the terms of the sale, lease, exchange

or other disposition of the assets of the corporation are fair and

reasonable to the corporation, and that the purposes of the corporation,

or the interests of its members will be promoted thereby, and a concise

statement of the reasons therefor.

7. That such sale, lease, exchange or disposition of corporate assets,

has been recommended or authorized by vote of the directors in

accordance with law, at a meeting duly called and held, as shown in a

schedule annexed to the petition setting forth a copy of the resolution

granting such authority with a statement of the vote thereon.

8. Where the consent of members of the corporation is required by law,

that such consent has been given, as shown in a schedule annexed to the

petition setting forth a copy of such consent, if in writing, or of a

resolution giving such consent, adopted at a meeting of members duly

called and held, with a statement of the vote thereon.

9. A request for court approval to sell, lease, exchange or otherwise

dispose of all or substantially all the assets of the corporation as set

forth in the petition.

(b) Upon presentation of the petition, the court shall direct that a

minimum of fifteen days notice be given by mail or in person to the

attorney general, and in its discretion may direct that notice of the

application be given, personally or by mail, to any person interested

therein, as member, officer or creditor of the corporation. The court

shall have authority to shorten the time for service on the attorney

general upon a showing of good cause. The notice shall specify the time

and place, fixed by the court, for a hearing upon the application. Any

person interested, whether or not formally notified, may appear at the

hearing and show cause why the application should not be granted.

(c) If the corporation be insolvent, or if its assets be insufficient

to liquidate its debts and liabilities in full, the application shall

not be granted unless all the creditors of the corporation shall have

been served, personally or by mail, with a notice of the time and place

of the hearing.

(d) If it shall appear, to the satisfaction of the court, that the

consideration and the terms of the transaction are fair and reasonable

to the corporation and that the purposes of the corporation or the

interests of the members will be promoted, it may authorize the sale,

lease, exchange or other disposition of all or substantially all the

assets of the corporation, as described in the petition, for such

consideration and upon such terms as the court may prescribe. The order

of the court shall direct the disposition of the consideration to be

received thereunder by the corporation.

Petition for attorney general approval.

(a) In lieu of obtaining court approval under section 511 (Petition

for court approval) of this article to sell, lease, exchange or

otherwise dispose of all or substantially all of its assets, the

corporation may alternatively seek approval of the attorney general by

verified petition, except in the following circumstances: (1) the

corporation is insolvent, or would become insolvent as a result of the

transaction, and must proceed on notice to creditors pursuant to

paragraph (c) of section 511 of this article; or (2) the attorney

general, in his or her discretion, concludes that a court should review

the petition and make a determination thereon.

(b) The verified petition to the attorney general shall set forth (1)

all of the information required to be included in a verified petition to

obtain court approval pursuant to subparagraphs one through nine of

paragraph (a) of section 511 of this article; (2) a statement that the

corporation is not insolvent and will not become insolvent as a result

of the transaction; and (3) a statement as to whether any persons have

raised, or have a reasonable basis to raise, objections to the sale,

lease, exchange or other disposition that is the subject of the

petition, including a statement setting forth the names and addresses of

such persons, the nature of their interest, and a description of their

objections. The attorney general, in his or her discretion, may direct

the corporation to provide notice of such petition to any interested

person, and the corporation shall provide the attorney general with a

certification that such notice has been provided.

(c) If it shall appear, to the satisfaction of the attorney general

that the consideration and the terms of the transaction are fair and

reasonable to the corporation and that the purposes of the corporation

or the interests of the members will be promoted, the attorney general

may authorize the sale, lease, exchange or other disposition of all or

substantially all the assets of the corporation, as described in the

petition, for such consideration and upon such terms as the attorney

general may prescribe. The authorization of the attorney general shall

direct the disposition of the consideration to be received thereunder by

the corporation.

(d) At any time, including if the attorney general does not approve

the petition, or if the attorney general concludes that court review is

appropriate, the petitioner may seek court approval on notice to the

attorney general pursuant to section 511 (Petition for court approval)

of this article.

Administration of assets received for specific purposes.

(a) A corporation which is, or would be if formed under this chapter,

a charitable corporation shall hold full ownership rights in any assets

consisting of funds or other real or personal property of any kind, that

may be given, granted, bequeathed or devised to or otherwise vested in

such corporation in trust for, or with a direction to apply the same to,

any purpose specified in its certificate of incorporation, and shall not

be deemed a trustee of an express trust of such assets. Any other

corporation subject to this chapter may similarly hold assets so

received, unless otherwise provided by law or in the certificate of

incorporation.

(b) Except as may be otherwise permitted under article eight of the

estates, powers and trusts law or section 555 (Release or modification

of restrictions on management, investment, or purpose), the governing

board shall apply all assets thus received to the purposes specified in

the gift instrument as defined in section 551 (Definitions) and to the

payment of the reasonable and proper expenses of administration of such

assets. The governing board shall cause accurate accounts to be kept of

such assets separate and apart from the accounts of other assets of the

corporation. Unless the terms of the particular gift instrument provide

otherwise, the treasurer shall make an annual report to the members (if

there be members) or to the governing board (if there be no members)

concerning the assets held under this section and the use made of such

assets and of the income thereof.

Delegation of investment management.

(a) Except as otherwise provided by the applicable gift instrument as

defined in section 551 (Definitions), the governing board may delegate

to its committees, officers or employees of the corporation or the fund

the authority to act in place of the governing board in investment and

reinvestment of institutional funds as defined in section 551

(Definitions). Each contract, if any, pursuant to which authority is so

delegated shall provide that it may be terminated by the governing board

at any time, without penalty, upon not more than sixty days' notice.

Section 554 (Delegation of management and investment functions) shall

govern external delegation.

(b) The governing board shall exercise the standard of care required

by section 717 (Duty of directors and officers) in the selection of

persons to whom authority is delegated or with whom contracts are made

under paragraph (a) of this section and in the continuation or

termination of such delegation or contracts. The governing board shall

be relieved of all liability for the investment and reinvestment of

institutional funds by, and for the other acts or omissions of, persons

to whom authority is so delegated or with whom contracts are so made.

Dividends prohibited; certain distributions of cash or property

authorized.

(a) A corporation shall not pay dividends or distribute any part of

its income or profit to its members, directors, or officers.

(b) A corporation may pay compensation in a reasonable amount to

members, directors, or officers, for services rendered, and may make

distributions of cash or property to members upon dissolution or final

liquidation as permitted by this chapter. No person who may benefit from

such compensation may be present at or otherwise participate in any

board or committee deliberation or vote concerning such person's

compensation; provided that nothing in this section shall prohibit the

board or authorized committee from requesting that a person who may

benefit from such compensation present information as background or

answer questions at a committee or board meeting prior to the

commencement of deliberations or voting relating thereto. Nothing in

this section or in paragraph (h) of section seven hundred fifteen of

this chapter shall be construed to prohibit a director from deliberating

or voting concerning compensation for service on the board that is to be

made available or provided to all directors of the corporation on the

same or substantially similar terms.

(c) A corporation may confer benefits upon members or nonmembers in

conformity with its purposes, may redeem its capital certificates or

subvention certificates, and may make other distributions of cash or

property to its members or former members, directors, or officers prior

to dissolution or final liquidation, as authorized by this article,

except when the corporation is currently insolvent or would thereby be

made insolvent or rendered unable to carry on its corporate purposes, or

when the fair value of the corporation's assets remaining after such

conferring of benefits, or redemption, or other distribution would be

insufficient to meet its liabilities.

Distributions to members upon termination of membership.

(a) Except as provided in this chapter or the certificate of

incorporation or the by-laws, the interest of a member in the property

of a corporation shall terminate upon the termination of his membership,

whether by expiration of the term of membership, or by the death,

voluntary withdrawal, or expulsion of the member, or otherwise. Such

termination shall be without prejudice to his rights, if any, as holder

of a capital or subvention certificate.

(b) In the event of a termination of membership, whether voluntary or

involuntary, and subject to any restrictions contained in this chapter

or the certificate of incorporation or the by-laws, a corporation may at

its option thereafter call for redemption any capital certificate or

certificates held by such former member, and redeem the same upon

payment of a sum of money equal to the redemption price thereof if such

certificates are by their terms redeemable, or upon payment of a sum of

money equal to the amount of the capital contribution evidenced by such

certificates if they are not by their express terms redeemable.

(c) If a member who would upon dissolution of the corporation have

distributive rights in its assets under paragraph (d) of section 507

(Fees, dues and assessments; fines and penalties) is expelled other than

for cause pursuant to a provision of the certificate of incorporation or

by-laws authorizing such expulsion, and the corporation is dissolved

within a period of five years after the date of such expulsion, the

expelled member shall be entitled to share in the distribution of assets

in the same manner as other members of the same class entitled to share

at that time, except that his share shall be charged with any arrearages

and all dues and assessments which he would have paid if he had remained

a member, plus interest on all such items.

(d) Nothing in this section shall authorize a corporation to make a

distribution of cash or property to a former member in contravention of

the provisions of section 515 (Dividends prohibited; certain

distributions of cash or property authorized).

Liabilities of members.

(a) The members of a corporation shall not be personally liable for

the debts, liabilities or obligations of the corporation.

(b) A member shall be liable to the corporation only to the extent of

any unpaid portion of the initiation fees, membership dues or

assessments which the corporation may have lawfully imposed upon him, or

for any other indebtedness owed by him to the corporation. No action

shall be brought by any creditor of the corporation to reach and apply

any such liability to any debt of the corporation until after final

judgment shall have been rendered against the corporation in favor of

the creditor and execution thereon returned unsatisfied, or the

corporation shall have been adjudged bankrupt, or a receiver shall have

been appointed with power to collect debts, and which receiver, on

demand of a creditor to bring suit thereon, has refused to sue for such

unpaid amount, or the corporation shall have been dissolved or ceased

its activities leaving debts unpaid. No such action shall be brought

more than three years after the happening of any one of such events.

Annual report of directors.

(a) The board shall present at the annual meeting of members a report,

verified by the president and treasurer or by a majority of the

directors, or certified by an independent public or certified public

accountant or a firm of such accountants selected by the board, showing

in appropriate detail the following:

(1) The assets and liabilities, including the trust funds, of the

corporation as of the end of a twelve month fiscal period terminating

not more than six months prior to said meeting.

(2) The principal changes in assets and liabilities, including trust

funds, during said fiscal period.

(3) The revenue or receipts of the corporation, both unrestricted and

restricted to particular purposes during said fiscal period.

(4) The expenses or disbursements of the corporation, for both general

and restricted purposes, during said fiscal period.

(5) The number of members of the corporation as of the date of the

report, together with a statement of increase or decrease in such number

during said fiscal period, and a statement of the place where the names

and places of residence of the current members may be found.

(b) The annual report of directors shall be filed with the records of

the corporation and either a copy or an abstract thereof entered in the

minutes of the proceedings of the annual meeting of members.

(c) The board of a corporation having no members shall direct the

president and treasurer to present at the annual meeting of the board a

report in accordance with paragraph (a), but omitting the requirement of

subparagraph (5). This report shall be filed with the minutes of the

annual meeting of the board.

Annual reports for certain transactions required.

(a) A condominium created pursuant to the real property law or a

cooperative housing corporation created pursuant to the business

corporation law, shall, at least once each year:

(1) require that each director, as defined in paragraph six of

subdivision (a) of section one hundred two of this chapter, receive a

copy of section seven hundred fifteen of this chapter; and

(2) provide an annual report to the members or to the governing board,

if there are no members, which shall be signed by each such director,

containing information on any contracts made, entered into, or otherwise

voted on by the board of directors that were considered a related party

transaction pursuant to section seven hundred fifteen of this chapter.

(b) The annual report required by subdivision (a) of this section

shall include, but not be limited to, the following:

(1) a list of all contracts voted on by the board of directors,

including information on the contract recipient, contract amount, and

the purpose of entering into the contract;

(2) the record of each meeting including director attendance, voting

records for contracts, and how each director voted on such contracts;

and

(3) the date of each vote on each contract, and the date the contract

would be and remain valid.

(c) If the annual report required by paragraph two of subdivision (a)

of this section would, notwithstanding the requirements of this section,

contain no information because of the absence of any actions taken by

the board that would otherwise qualify for inclusion in such annual

report, then the board shall instead submit to the members or to the

governing board, if there are no members, a document, signed by each

director, indicating: "No actions taken by the board were subject to the

annual report required pursuant to section 519-a of the Not-for-Profit

Corporation Law".

Reports of corporation.

Each domestic corporation, and each foreign corporation authorized to

conduct activities in this state, shall from time to time file such

reports on its activities as may be required by the laws of this state.

All registration and reporting requirements pursuant to article seven-A

of the executive law, and section 8-1.4 of the estates, powers and

trusts law, or related successor provisions, are, without limitation on

the foregoing, expressly included as reports required by the laws of

this state to be filed within the meaning of this section. Willful

failure of a corporation to file a report as required by law shall

constitute a breach of the directors' duty to the corporation and shall

subject the corporation, at the suit of the attorney-general, to an

action or special proceeding for dissolution under article 11 (Judicial

dissolution) in the case of a domestic corporation, or under section

1303 (Violations) in the case of a foreign corporation.

Liability for failure to disclose required information.

Failure of the corporation to comply in good faith with the notice or

disclosure or reporting provisions of section 501 (Stock and shares

prohibited; membership certificates authorized), or paragraph (c) of

section 503 (Capital certificates), or paragraph (c) of section 505

(Subvention certificates), or paragraph (b) of section 513

(Administration of assets received for specific purposes), or section

518 (Reports to comptroller), or section 519 (Annual report of

directors), or section 520 (Reports of corporation), shall make the

corporation liable for any damage sustained by any person in consequence

thereof.

Short title.

This article may be known and may be cited as the "New York prudent

management of institutional funds act".

Definitions.

As used in this article:

(a) "Charitable purpose" means the relief of poverty, the advancement

of education or religion, the promotion of health, the promotion of a

governmental purpose, or any other purpose the achievement of which is

beneficial to the community including any purpose that is charitable

under the laws of the state of New York.

(a-1) "Donor" means the person who grants or transfers property to an

institution pursuant to a gift instrument, or a person designated in the

applicable gift instrument to act in the place of the donor, but does

not otherwise include the person's executors, heirs, successors,

assigns, transferees, or distributees.

(b) "Endowment fund" means an institutional fund or part thereof that,

under the terms of a gift instrument, is not wholly expendable by the

institution on a current basis. The term does not include assets that an

institution may designate as an endowment fund for its own use,

consistent with the terms of the applicable gift instrument.

(c) "Gift instrument" means a record or records, including an

institutional solicitation, under which property is granted to,

transferred to, or held by an institution as an institutional fund.

(d) "Institution" means: (1) a person, other than an individual,

organized and operated exclusively for charitable purposes; (2) a trust

that had both charitable and noncharitable interests, after all

noncharitable interests have terminated; or (3) any corporation

described in subparagraph five of paragraph (a) of section 102

(Definitions). Whenever any provision of this article imposes any

obligation on, or requires any action to be taken by, an institution,

such obligation is imposed on, and such action shall be authorized by,

the governing board of such institution.

(e) "Institutional fund" means a fund held by an institution. This

term shall not include: (1) program-related assets; (2) a fund held for

an institution by a trustee that is not an institution; or (3) a fund in

which a beneficiary that is not an institution has an interest, other

than an interest that could arise upon violation or failure of the

purposes of the fund.

(f) "Notice" means information given by an institution as required by

this article. An institution will be considered to have given notice if

notice is given personally in writing or sent to the recipient's last

known address on record with the institution, or, if no address is on

record with the institution, if the institution makes reasonable efforts

to attempt to find and notify the recipient. If the notice is mailed,

such notice is given when deposited in the United States mail, with

postage thereon prepaid. If the notice is delivered by electronic means,

such as via facsimile or email, such notice is given when the notice is

sent.

(g) "Person" means an individual, corporation, business trust, estate,

trust, partnership, limited liability company, association, joint

venture, or any other legal entity.

(h) "Program-related asset" means an asset held by an institution not

for investment under the terms of the gift instrument, but primarily to

accomplish a programmatic purpose of the institution.

(i) "Record" means information that is inscribed on a tangible medium

or that is stored in an electronic or other medium and is retrievable in

perceivable form.

(j) A donor is "available" if such donor (1) is living or, if the

donor is not a natural person, is in existence and conducting

activities; and (2) can be identified and located with reasonable

efforts.

(k) "External agent" means an independent investment advisor,

investment counsel or manager, bank, or trust company.

Standard of conduct in managing and investing an institutional

fund.

(a) Subject to the intent of a donor expressed in a gift instrument,

an institution, in managing and investing an institutional fund, shall

consider the purposes of the institution and the purposes of the

institutional fund.

(b) In addition to complying with the duty of loyalty imposed by law

other than this article, each person responsible for managing and

investing an institutional fund shall manage and invest the fund in good

faith and with the care an ordinarily prudent person in a like position

would exercise under similar circumstances.

(c) In managing and investing an institutional fund, an institution

consistent with section 717 (Duty of Directors and Officers):

(1) may incur only costs that are appropriate and reasonable in

relation to the assets, the purposes of the institution, and the skills

available to the institution; and

(2) shall make a reasonable effort to verify facts relevant to the

management and investment of the fund.

(d) An institution may pool two or more institutional funds for

purposes of management and investment.

(e) Except as otherwise provided by a gift instrument, the following

rules apply:

(1) In managing and investing an institutional fund, the following

factors, if relevant, must be considered: (A) general economic

conditions; (B) the possible effect of inflation or deflation; (C) the

expected tax consequences, if any, of investment decisions or

strategies; (D) the role that each investment or course of action plays

within the overall investment portfolio of the fund; (E) the expected

total return from income and the appreciation of investments; (F) other

resources of the institution; (G) the needs of the institution and the

fund to make distributions and to preserve capital; and (H) an asset's

special relationship or special value, if any, to the purposes of the

institution.

(2) Management and investment decisions about an individual asset must

be made not in isolation but rather in the context of the institutional

fund's portfolio of investments as a whole and as a part of an overall

investment strategy having risk and return objectives reasonably suited

to the fund and to the institution.

(3) Except as otherwise provided by law other than this article, an

institution may invest in any kind of property or type of investment

consistent with this article.

(4) An institution shall diversify the investments of an institutional

fund unless the institution prudently determines that, because of

special circumstances, the purposes of the fund are better served

without diversification. An institution shall review a decision not to

diversify as frequently as circumstances require, but at least annually.

(5) Within a reasonable time after receiving property, an institution

shall make and carry out decisions concerning the retention or

disposition of the property or to rebalance a portfolio, in order to

bring the institutional fund into compliance with the purposes, terms,

and distribution requirements of the institution as necessary to meet

other circumstances of the institution and the requirements of this

article.

(6) A person that has special skills or expertise, or is selected in

reliance upon the person's representation that the person has special

skills or expertise, has a duty to use those skills or that expertise in

managing and investing institutional funds.

(f) Each institution shall adopt a written investment policy setting

forth guidelines on investments and delegation of management and

investment functions in accord with the standards of this article.

Appropriation for expenditure or accumulation of endowment fund;

rules of construction.

(a) Subject to the intent of a donor expressed in the gift instrument,

an institution may appropriate for expenditure or accumulate so much of

an endowment fund as the institution determines is prudent for the uses,

benefits, purposes, and duration for which the endowment fund is

established. Unless stated otherwise in the gift instrument, the assets

in an endowment fund are donor-restricted assets until appropriated for

expenditure by the institution. In making a determination to appropriate

or accumulate, the institution shall act in good faith, with the care

that an ordinarily prudent person in a like position would exercise

under similar circumstances, and shall consider, if relevant, the

following factors:

(1) the duration and preservation of the endowment fund;

(2) the purposes of the institution and the endowment fund;

(3) general economic conditions;

(4) the possible effect of inflation or deflation;

(5) the expected total return from income and the appreciation of

investments;

(6) other resources of the institution;

(7) where appropriate and circumstances would otherwise warrant,

alternatives to expenditure of the endowment fund, giving due

consideration to the effect that such alternatives may have on the

institution; and

(8) the investment policy of the institution.

For each determination to appropriate for expenditure, the institution

shall keep a contemporaneous record describing the consideration that

was given by the governing board to each of the factors enumerated in

this paragraph.

(b) To limit the authority to appropriate for expenditure or

accumulate under paragraph (a) of this section, a gift instrument must

specifically state the limitation. Terms in a gift instrument setting

forth a specific spending level, rate, or amount, or explicitly

modifying or overriding the provisions of paragraph (a) of this section,

will limit the authority of the institution to appropriate for

expenditure or accumulate under paragraph (a) of this section.

(c) Terms in a gift instrument designating a gift as an endowment, or

a direction or authorization in the gift instrument to use only

"income," "interest," "dividends," or "rents, issues, or profits," or

"to preserve the principal intact," or words of similar import:

(1) create an endowment fund of permanent duration unless other

language in the gift instrument limits the duration or purpose of the

fund; and

(2) do not otherwise limit the authority to appropriate for

expenditure or accumulate under paragraph (a) of this section.

(d) A rebuttable presumption of imprudence shall apply to gift

instruments executed upon or after the effective date of this article as

follows: The appropriation for expenditure in any year of an amount

greater than seven percent of the fair market value of an endowment

fund, calculated on the basis of market values determined at least

quarterly and averaged over a period of not less than five years

immediately preceding the year in which the appropriation for

expenditure is made, creates a rebuttable presumption of imprudence. For

an endowment fund in existence for fewer than five years, the fair

market value of the endowment fund must be calculated for the period the

endowment fund has been in existence. This subsection does not:

(1) apply to an appropriation for expenditure permitted under law

other than the chapter of the laws of 2010 that enacted this article or

by the gift instrument; or

(2) create a presumption of prudence for an appropriation for

expenditure of an amount less than or equal to seven percent of the fair

market value of the endowment fund.

(e)(1) With respect to a gift instrument executed by the donor before

the effective date of this article an institution must provide ninety

days notice to the donor, if the donor is then available, before

applying paragraph (a) of this section for the first time, during which

time the donor may clarify or amend the gift instrument to prohibit the

application of paragraph (a) of this section. Such notice shall include

a form for use by the donor, which shall contain language substantially

as follows:

Attention, Donor:

Please check Box #1 or #2 below and return to the address shown above.

( ) #1 The institution may spend as much of my gift as may be prudent.

( ) #2 The institution may not spend below the original dollar value of

my gift.

If you check Box #1 above, the institution may spend as much of

your endowment gift (including all or part of the original

value of your gift) as may be prudent under the criteria set

forth in Article 5-A of the Not-for-Profit Corporation Law (The

Prudent Management of Institutional Funds Act).

If you check Box #2 above, the institution may not spend below

the original dollar value of your endowment gift but may spend

the income and the appreciation over the original dollar value

if it is prudent to do so. The criteria for the expenditure of

endowment funds set forth in Article 5-A of the Not-for-Profit

Corporation Law (The Prudent Management of Institutional Funds

Act) will not apply to your gift.

If the donor does not respond within ninety days from the date notice

was given, paragraphs (a), (b), and (c) of this section shall be

applied.

(2) This paragraph shall not apply if: (A) the gift instrument permits

appropriation for expenditure from the endowment fund without regard for

the fund's historic dollar value; (B) the gift instrument limits the

institution's authority to appropriate for expenditure in accordance

with paragraph (b) of this section; or (C) the gift consists of funds

received as a result of an institutional solicitation without a separate

statement by the donor expressing a restriction on the use of funds.

(f) When an institution acts pursuant to paragraph (a) or (e) of this

section, it shall keep a record of such action.

Delegation of management and investment functions.

(a) Subject to any specific limitation set forth in a gift instrument

or in law other than this article, an institution may delegate to an

external agent the management and investment of an institutional fund to

the extent that an institution could prudently delegate under the

circumstances. An institution shall act in good faith, with the care

that an ordinarily prudent person in a like position would exercise

under similar circumstances as required by section seven hundred

seventeen of this chapter, in:

(1) selecting, continuing or terminating an agent, including assessing

the agent's independence including any conflicts of interest such agent

has or may have;

(2) establishing the scope and terms of the delegation, including the

payment of compensation, consistent with the purposes of the institution

and the institutional fund; and

(3) monitoring the agent's performance and compliance with the scope

and terms of the delegation.

(b) In performing a delegated function, an agent owes a duty to the

institution to exercise reasonable care, skill and caution to comply

with the scope and terms of the delegation.

(c) An institution that complies with paragraph (a) of this section is

not liable for the decisions or actions of an agent to which the

function was delegated.

(d) By accepting delegation of a management or investment function

from an institution that is subject to the laws of this state, an agent

submits to the jurisdiction of the courts of this state in all

proceedings arising from or related to the delegation or the performance

of the delegated function.

(e) Each contract, if any, pursuant to which authority is so delegated

shall provide that it may be terminated by the institution at any time,

without penalty, upon not more than sixty days notice.

(f) An institution may delegate management and investment functions to

its committees, officers, or employees as authorized by the laws of this

state other than this article, as set forth in, inter alia, section 514

(Delegation of investment management).

(g) Nothing in this article shall impair the operation of section 717

(Duty of directors and officers).

Release or modification of restrictions on management,

investment, or purpose.

(a) If the donor consents in a record, an institution may release or

modify, in whole or in part, a restriction contained in a gift

instrument on the management, investment, or purpose of an institutional

fund. A release or modification may not allow a fund to be used for a

purpose other than a charitable purpose of the institution.

(b) A court, upon application of an institution, may modify a

restriction contained in a gift instrument regarding the management or

investment of an institutional fund if the restriction has become

impracticable or wasteful, if it impairs the management or investment of

the fund, or if, because of circumstances not anticipated by the donor,

a modification of a restriction will further the purposes of the fund.

The institution shall notify the donor, if available, and the attorney

general of the application, and the attorney general and such donor must

be given an opportunity to be heard. To the extent practicable, any

modification must be made in accordance with the donor's probable

intention.

(c) If a particular purpose or a restriction contained in a gift

instrument on the use of an institutional fund becomes unlawful,

impracticable, impossible to achieve, or wasteful, the court, upon

application of an institution, may modify the purpose of the fund or the

restriction on the use of the fund in a manner consistent with the

purposes expressed in the gift instrument. The institution shall notify

the donor, if available, and the attorney general of the application,

and the attorney general and such donor must be given an opportunity to

be heard.

(d)(1) If an institution determines that a restriction contained in a

gift instrument on the management, investment, or purpose of an

institutional fund is unlawful, impracticable, impossible to achieve, or

wasteful, the institution, ninety days after notification to the

attorney general, may release or modify the restriction, in whole or

part, if:

(A) the institutional fund subject to the restriction has a total

value of less than one hundred thousand dollars;

(B) more than twenty years have elapsed since the fund was

established; and

(C) the institution uses the property in a manner consistent with the

purposes expressed in the gift instrument.

(2) Notice to the attorney general shall contain: (A) an explanation

of (i) the institution's determination that the restriction meets the

requirements set forth in subparagraph one of this paragraph and (ii)

the proposed release or modification; (B) a copy of a record of the

institution approving the release or modification; and (C) a statement

of the proposed use of the institutional fund after such release or

modification.

(3) If the attorney general does not notify the institution within

ninety days, the institution may proceed with the release or

modification.

(4) Notice shall also be given to the donor, as defined in paragraph

(a-1) of section 551 (Definitions), if available, provided, however,

that such notice shall not be required for funds described in clause (B)

of subparagraph two of paragraph (e) of section 553 (Appropriation for

expenditure or accumulation of endowment fund; rules of construction).

(e) For purposes of this section, an institution may apply to the

following courts to release or modify a restriction contained in a gift

instrument:

(1) to the supreme court of the judicial district wherein the

institution has its office or principal place of carrying out the

purposes for which it was formed; or

(2) where the applicable gift instrument is a will, to the surrogate's

court in which such will is probated.

(f) This chapter shall not limit the application of the doctrines of

cy pres and deviation.

Reviewing compliance.

Compliance with this article shall be determined in light of the facts

and circumstances existing at the time a decision is made or action is

taken, and not retrospectively.

Application to existing institutional funds.

This article shall apply to institutional funds existing on or

established after the effective date of this article. As applied to

institutional funds existing on the effective date of this article, this

article shall govern only decisions made or actions taken on or after

that date.

Relation to Electronic Signatures in Global and National Commerce

Act.

This article modifies, limits, and supersedes the Electronic

Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001

et seq., but does not modify, limit, or supersede Section 101 of that

act, 15 U.S.C. Section 7001(a), or authorize electronic delivery of any

of the notices described in Section 103 of that act, 15 U.S.C. Section

7003(b).

Members.

(a) A corporation shall have one or more classes of members, or, in

the case of a charitable corporation, may have no members, in which case

any such provision for classes of members or for no members shall be set

forth in the certificate of incorporation or the by-laws. Corporations,

joint-stock associations, unincorporated associations and partnerships,

as well as any other person without limitation, may be members, provided

however, that effective July first, two thousand nineteen, no

corporation except a corporation that has no members, shall have a

membership comprised of fewer than three persons. A corporation may have

a corporation, joint-stock association, unincorporated association or

partnership as a sole member, if such corporation, joint-stock

association, unincorporated association or partnership is owned or

controlled by no fewer than three persons.

(b) If the corporation has two or more classes of members, the

designation and characteristics of each class and the qualifications and

rights of, and limitations upon, the members of each class may be set

forth in the certificate of incorporation, the by-laws or, if the

by-laws so provide, a resolution of the board.

(c) If the corporation has members, membership may be effected and

evidenced by:

(1) Signature on the certificate of incorporation.

(2) Designation in the certificate of incorporation or the by-laws.

(3) Membership certificate or card or capital certificate.

(4) Such method, including but not limited to the foregoing, as is

prescribed by the certificate of incorporation or the by-laws.

(d) Membership certificates or cards shall not be transferable. If the

certificate of incorporation or by-laws permits transfer of membership,

upon each such transfer the certificate or card issued to a former

member shall be surrendered, and a new certificate or card shall be

issued to the new member.

(e) Except as otherwise provided in this chapter or the certificate of

incorporation or the by-laws, membership shall be terminated by death,

resignation, expulsion, expiration of a term of membership or

dissolution and liquidation under articles 10 and 11.

By-laws.

(a) The initial by-laws of a corporation may be adopted by its

incorporators at the organization meeting and, if not so adopted by the

incorporators, by its board. Any reference in this chapter to a "by-law

adopted by the members" includes a by-law adopted by the incorporators.

(b) Subject to section 612 (Limitations on right to vote), the by-laws

may be adopted, amended or repealed by the members at the time entitled

to vote in the election of directors and, unless otherwise provided in

the certificate of incorporation or the by-laws adopted by the members,

by the board.

(c) Any by-law adopted by the board may be amended or repealed by the

members and, unless otherwise provided in the certificate of

incorporation or the by-laws adopted by the members, any by-law adopted

by the members may be amended or repealed by the board.

(d) In the case of a corporation which is subject, under any other law

of this state, to regulation or control by a governmental body or

officer, such body or officer may, to the extent provided in such other

law, in furtherance of its or his authority to regulate or control:

(1) Adopt, amend or repeal by-laws.

(2) Amend or repeal any by-law adopted by the members or the board.

(e) If any by-law regulating an impending election of directors is

adopted, amended or repealed by the board, there shall be set forth in

the notice of the next meeting of the members for the election of

directors the by-law so adopted, amended or repealed, together with a

concise statement of the changes made.

(f) The by-laws may contain any provision relating to the business of

the corporation, the conduct of its affairs, its rights or powers or the

rights or powers of its members, directors or officers, not inconsistent

with this chapter or any other statute of this state or the certificate

of incorporation.

(g) In the case of residential not-for-profit corporations, changes

including the adoption, amendment or repeal of the by-laws by the board

of directors shall be provided to the members, stockholders, and

delegates of such corporation in writing, by physical or electronic

means, within ten days of such adoption.

Meetings of members.

* (a) Meetings of members may be held at such place, within or without

this state, as may be fixed by or under the by-laws or, if not so fixed,

as determined by the board of directors. For the duration of the state

disaster emergency declared by executive order two hundred two that

began on March seventh, two thousand twenty, or until December

thirty-first, two thousand twenty-one, whichever is later, the board of

directors may, in its sole discretion, determine that meetings of

members be held partially or solely by means of electronic

communication, the electronic service and/or platform by which the

meeting is held shall be the place of the meeting for purposes of this

article if a meeting is held solely by means of electronic

communication. Meetings conducted partially or solely by means of

electronic communications in reliance upon this paragraph and any

member's electronic participation in such meetings shall be subject to

those guidelines and procedures as the board adopts, provided the board

shall implement reasonable measures to: (1) verify that each person

participating electronically is a member or a proxy of a member; (2)

provide each member participating electronically with a reasonable

opportunity to participate in the meeting, including an opportunity to

propose, object to, and vote upon a specific action to be taken by the

members, and to see, read or hear the proceedings of the meeting

substantially concurrently with those proceedings; and (3) record and

maintain a record of any votes or other actions taken by electronic

communication at the meeting.

* NB Separately amended; cannot be put together

* (a) Meetings of members may be held at such place, within or without

this state, as may be fixed by or under the by-laws or, if not so fixed,

as determined by the board of directors. The board of directors may,

unless otherwise restricted by the certificate of incorporation or the

by-laws, in its sole discretion, determine that meetings of members be

held partially or solely by means of electronic communication, the

electronic service and/or platform by which the meeting is held shall be

the place of the meeting for purposes of this article if a meeting is

held solely by means of electronic communication. Meetings conducted

partially or solely by means of electronic communications in reliance

upon this paragraph and any member's electronic participation in such

meetings shall be subject to those guidelines and procedures as the

board adopts, provided the board shall implement reasonable measures to:

(1) verify that each person participating electronically is a member or

a proxy of a member; (2) provide each member participating

electronically with a reasonable opportunity to participate in the

meeting, including an opportunity to propose, object to, and vote upon a

specific action to be taken by the members, and to see, read or hear the

proceedings of the meeting substantially concurrently with those

proceedings; and (3) record and maintain a record of any votes or other

actions taken by electronic communication at the meeting.

* NB Separately amended; cannot be put together

(b) A meeting of the members shall be held annually for the election

of directors and the transaction of other business on a date fixed by or

under the by-laws. Failure to hold the annual meeting on the date so

fixed or to elect a sufficient number of directors to conduct the

business of the corporation shall not work a forfeiture or give cause

for dissolution of the corporation, except as provided in paragraph (a)

of section 1102 (Judicial dissolution; petition by directors or members;

petition in case of deadlock among directors or members).

(c) Special meetings of the members may be called by the board and by

such person or persons as may be authorized by the certificate of

incorporation or the by-laws. In any case, such meetings may be convened

by the members entitled to cast ten per cent of the total number of

votes entitled to be cast at such meeting, who may, in writing, demand

the call of a special meeting specifying the date and month thereof,

which shall not be less than two nor more than three months from the

date of such written demand. The secretary of the corporation upon

receiving the written demand shall promptly give notice of such meeting,

or if he fails to do so within five business days thereafter, any member

signing such demand may give such notice. The meeting shall be held at

the place fixed in the by-laws or, if not so fixed, at the office of the

corporation.

(d) A corporation may provide in its certificate of incorporation or

by-laws adopted by the members for the election of representatives or

delegates, who, when assembled within or without the state as directed

by the certificate of incorporation or the by-laws, shall have and may

exercise all of the powers, rights and privileges of members at an

annual meeting. When so exercising the powers, rights and privileges of

members, such representatives or delegates shall be subject in all

respects to the provisions of this chapter governing members.

Special meeting for election of directors.

(a) If, for a period of one month after the date fixed by or under the

by-laws for the annual meeting of members or, if no date has been so

fixed, for a period of thirteen months after the formation of the

corporation or the last annual meeting, there is a failure to elect a

sufficient number of directors to conduct the business of the

corporation, the board shall call a special meeting for the election of

directors. If such special meeting is not called by the board within

two weeks after the expiration of such period or if it is so called but

there is a failure to elect such directors for a period of two months

after the expiration of such period, members entitled to cast one

hundred votes or ten per cent of the total number of votes entitled to

be cast in an election of directors, whichever is lesser, may, in

writing, demand the call of a special meeting for the election of

directors specifying the date and month thereof, which shall not be less

than two nor more than three months from the date of such written

demand. The secretary of the corporation upon receiving the written

demand shall promptly give notice of such meeting or, if he fails to do

so within five business days thereafter, any member signing such demand

may give such notice. The meeting shall be held at the place fixed in

the by-laws or, if not so fixed, at the office of the corporation.

(b) At any such special meeting called on the demand of members,

notwithstanding section 608 (Quorum of members), the members attending,

in person or by proxy, and entitled to vote in an election of directors

shall constitute a quorum for the purpose of electing directors, but not

for the transaction of any other business.

* § 605. Notice of meeting of members.

(a) Whenever under the provisions of this chapter members are required

or permitted to take any action at a meeting, written notice shall state

the place, date and hour of the meeting, for the duration of the state

disaster emergency declared by executive order two hundred two that

began on March seventh, two thousand twenty, or until December

thirty-first, two thousand twenty-one, whichever is later, the means of

electronic communication, if any, by which members may participate in

the proceedings of the meeting pursuant to paragraph (a) of section six

hundred three of this article and, unless it is an annual meeting,

indicate that it is being issued by or at the direction of the person or

persons calling the meeting. Notice of a special meeting shall also

state the purpose or purposes for which the meeting is called. A copy of

the notice of any meeting shall be given, personally, by mail, or by

facsimile telecommunications or by electronic mail, to each member

entitled to vote at such meeting. If the notice is given personally, by

first class mail or by facsimile telecommunications or by electronic

mail, it shall be given not less than ten nor more than fifty days

before the date of the meeting; if mailed by any other class of mail, it

shall be given not less than thirty nor more than sixty days before such

date. If mailed, such notice is given when deposited in the United

States mail, with postage thereon prepaid, directed to the member at his

address as it appears on the record of members, or, if he shall have

filed with the secretary of the corporation a written request that

notices to him be mailed to some other address, then directed to him at

such other address. If sent by facsimile telecommunication or mailed

electronically, such notice is given when directed to the member's fax

number or electronic mail address as it appears on the record of

members, or, to such fax number or other electronic mail address as

filed with the secretary of the corporation. Notwithstanding the

foregoing, such notice shall not be deemed to have been given

electronically (1) if the corporation is unable to deliver two

consecutive notices to the member by facsimile telecommunication or

electronic mail; or (2) the corporation otherwise becomes aware that

notice cannot be delivered to the member by facsimile telecommunication

or electronic mail. An affidavit of the secretary or other person giving

the notice or of a transfer agent of the corporation that the notice

required by this section has been given shall, in the absence of fraud,

be prima facie evidence of the facts therein stated. Whenever a

corporation has more than five hundred members, the notice may be served

by publication in a newspaper published in the county in the state in

which the principal office of the corporation is located, once a week

for three successive weeks next preceding the date of the meeting,

provided that the corporation shall also prominently post notice of such

meeting on the homepage of any website maintained by the corporation

continuously from the date of publication through the date of the

meeting. A corporation shall send notice of meetings by first class mail

to any member who requests in writing that such notices be delivered by

such method.

(b) When a meeting is adjourned to another time or place, it shall not

be necessary, unless the by-laws require otherwise, to give any notice

of the adjourned meeting if the time and place to which the meeting is

adjourned and, for the duration of the state disaster emergency declared

by executive order two hundred two that began on March seventh, two

thousand twenty, or until December thirty-first, two thousand

twenty-one, whichever is later, the means of electronic communications,

if any, by which members may participate in the proceedings of the

meeting pursuant to paragraph (a) of section six hundred three of this

article are announced at the meeting at which the adjournment is taken,

and at the adjourned meeting any business may be transacted that might

have been transacted on the original date of the meeting. However, if

after the adjournment the board fixes a new record date for the

adjourned meeting, a notice of the adjourned meeting shall be given to

each member of record on the new record date entitled to notice under

paragraph (a) of this section.

(c) Nothing required in paragraphs (a) or (b) of this section shall

limit, restrict or supersede other forms of voting and participation.

* NB Separately amended; cannot be put together

* § 605. Notice of meeting of members.

(a) Whenever under the provisions of this chapter members are required

or permitted to take any action at a meeting, written notice shall state

the place, date and hour of the meeting, the means of electronic

communication, if any, by which members may participate in the

proceedings of the meeting pursuant to paragraph (a) of section six

hundred three of this article and, unless it is an annual meeting,

indicate that it is being issued by or at the direction of the person or

persons calling the meeting. Notice of a special meeting shall also

state the purpose or purposes for which the meeting is called. A copy of

the notice of any meeting shall be given, personally, by mail, or by

facsimile telecommunications or by electronic mail, to each member

entitled to vote at such meeting. If the notice is given personally, by

first class mail or by facsimile telecommunications or by electronic

mail, it shall be given not less than ten nor more than fifty days

before the date of the meeting; if mailed by any other class of mail, it

shall be given not less than thirty nor more than sixty days before such

date. If mailed, such notice is given when deposited in the United

States mail, with postage thereon prepaid, directed to the member at his

address as it appears on the record of members, or, if he shall have

filed with the secretary of the corporation a written request that

notices to him be mailed to some other address, then directed to him at

such other address. If sent by facsimile telecommunication or mailed

electronically, such notice is given when directed to the member's fax

number or electronic mail address as it appears on the record of

members, or, to such fax number or other electronic mail address as

filed with the secretary of the corporation. Notwithstanding the

foregoing, such notice shall not be deemed to have been given

electronically (1) if the corporation is unable to deliver two

consecutive notices to the member by facsimile telecommunication or

electronic mail; or (2) the corporation otherwise becomes aware that

notice cannot be delivered to the member by facsimile telecommunication

or electronic mail. An affidavit of the secretary or other person giving

the notice or of a transfer agent of the corporation that the notice

required by this section has been given shall, in the absence of fraud,

be prima facie evidence of the facts therein stated. Whenever a

corporation has more than five hundred members, the notice may be served

by publication in a newspaper published in the county in the state in

which the principal office of the corporation is located, once a week

for three successive weeks next preceding the date of the meeting,

provided that the corporation shall also prominently post notice of such

meeting on the homepage of any website maintained by the corporation

continuously from the date of publication through the date of the

meeting. A corporation shall send notice of meetings by first class mail

to any member who requests in writing that such notices be delivered by

such method.

(b) When a meeting is adjourned to another time or place, it shall not

be necessary, unless the by-laws require otherwise, to give any notice

of the adjourned meeting if the time and place to which the meeting is

adjourned and the means of electronic communications, if any, by which

members may participate in the proceedings of the meeting pursuant to

paragraph (a) of section six hundred three of this article are announced

at the meeting at which the adjournment is taken, and at the adjourned

meeting any business may be transacted that might have been transacted

on the original date of the meeting. However, if after the adjournment

the board fixes a new record date for the adjourned meeting, a notice of

the adjourned meeting shall be given to each member of record on the new

record date entitled to notice under paragraph (a) of this section.

(c) Nothing required in paragraphs (a) or (b) of this section shall

limit, restrict or supersede other forms of voting and participation.

* NB Separately amended; cannot be put together

Waivers of notice.

Notice of meeting need not be given to any member who submits a waiver

of notice, in person or by proxy, whether before or after the meeting.

Waiver of notice may be written or electronic. If written, the waiver

must be executed by the member or the member's authorized officer,

director, employee, or agent by signing such waiver or causing his or

her signature to be affixed to such waiver by any reasonable means,

including, but not limited to facsimile signature. If electronic, the

transmission of the waiver must be sent by electronic mail and set

forth, or be submitted with, information from which it can reasonably be

determined that the transmission was authorized by the member. The

attendance of any member at a meeting, in person or by proxy, without

protesting prior to the conclusion of the meeting the lack of notice of

such meeting, shall constitute a waiver of notice by him or her.

List or record of members at meetings.

A list or record of members entitled to vote, certified by the

corporate officer responsible for its preparation or by a transfer

agent, shall be produced at any meeting of members upon the request

therefor of any member who has given written notice to the corporation

that such request will be made at least ten days prior to such meeting.

If the right to vote at any meeting is challenged, the inspectors of

election, or the person presiding thereat, shall require such list or

record of members to be produced as evidence of the right of the persons

challenged to vote at such meeting, and all persons who appear from such

list or record to be members entitled to vote thereat may vote at such

meeting.

Quorum at meeting of members.

(a) Members entitled to cast a majority of the total number of votes

entitled to be cast thereat shall constitute a quorum at a meeting of

members for the transaction of any business, provided that when a

specified item of business is required to be voted on by a class of

members, voting as a class, members entitled to cast a majority of the

total number of votes entitled to be cast by such class shall constitute

a quorum for the transaction of such specified items of business.

(b) The certificate of incorporation or the by-laws may provide for

any lesser quorum not less than the members entitled to cast one hundred

votes or one-tenth of the total number of votes entitled to be cast,

whichever is lesser, and may, under section 615 (Greater requirement as

to quorum and vote of members), provide for a greater quorum.

(c) Action to amend the certificate of incorporation or by-laws to

conform to paragraph (b) may be taken at a special meeting of members at

which the quorum requirements applicable to the corporation immediately

prior to the effective date of this chapter are fulfilled, but action

may be taken only once under this paragraph.

(d) The members present may adjourn the meeting despite the absence of

a quorum.

(e) If for any reason it has proved to be impractical or impossible

for a corporation to obtain a quorum in order to conduct a meeting of

its members in the manner prescribed by its certificate or by-laws or by

statute, then upon the petition of a director, officer or member to the

supreme court in the judicial district where the office of the

corporation is or was located on notice to the attorney general or by

the attorney general, the supreme court may in its discretion dispense

with the requirement as to quorums that would otherwise be imposed by

the corporation's certificate of incorporation or by-laws or by statute.

The petition shall set forth the reasonable efforts the corporation has

made to obtain a quorum, including the manner in which the corporation

provided notice to its members of prior meetings. The supreme court

shall, in an order issued pursuant to this section, provide for a method

of notice reasonably designed to give actual notice to all persons who

would be entitled to notice of a meeting held pursuant to the

certificate of incorporation or by-laws or the statute, whether or not

the method results in actual notice to all such persons or conforms to

the notice requirements that would otherwise apply. In a proceeding

under this section the court may determine who are the members of the

corporation.

(f) For purposes of this section "person" means any association,

corporation, joint stock company, estate, general partnership (including

any registered limited liability partnership or foreign limited

liability partnership), limited association, limited liability company

(including a professional service limited liability company), foreign

limited liability company (including a foreign professional service

limited liability company), joint venture, limited partnership, natural

person, real estate investment trust, business trust or other trust,

custodian, nominee or any other individual or entity in its own or any

representative capacity.

Proxies.

(a) Except as otherwise provided in the certificate of incorporation

or the by-laws:

(1) Every member entitled to vote at a meeting of members or to

express consent or dissent without a meeting may authorize another

person or persons to act for him by proxy.

(2) No proxy shall be valid after the expiration of eleven months from

the date thereof unless otherwise provided in the proxy. Every proxy

shall be revocable at the pleasure of the member executing it, except as

otherwise provided in this section.

(3) The authority of the holder of a proxy to act shall not be revoked

by the incompetence or death of the member who executed the proxy

unless, before the authority is exercised, written notice of an

adjudication of such incompetence or of such death is received by the

corporate officer responsible for maintaining the list or record of

members.

(4) Except when other provision shall have been made by written

agreement between the parties, the record holder of capital certificates

which he holds as pledgee or otherwise as security or which belong to

another, shall issue to the pledgor or to such owner of such capital

certificates, upon demand therefor and payment of necessary expenses

thereof, a proxy to vote or take other action thereon.

(5) A member shall not sell his vote or issue a proxy to vote to any

person for any sum of money or anything of value, except as authorized

in this section and section 619 (Agreements as to voting).

(6) A proxy which is entitled "irrevocable proxy" and which states

that it is irrevocable is irrevocable when it is held by any of the

following or a nominee of any of the following:

(A) A pledgee.

(B) A person who has purchased or agreed to purchase the capital

certificates.

(C) A creditor or creditors of the corporation who extend or continue

credit to the corporation in consideration of the proxy if the proxy

states that it was given in consideration of such extension or

continuation of credit, the amount thereof, and the name of the person

extending or continuing credit.

(D) A person who has contracted to perform services as an officer of

the corporation, if a proxy is required by the contract of employment,

if the proxy states that it was given in consideration of such contract

of employment, the name of the employee and the period of employment

contracted for.

(E) A person designated by or under an agreement under section 619.

(7) Notwithstanding a provision in a proxy, stating that it is

irrevocable, the proxy becomes revocable after the pledge is redeemed,

or the debt of the corporation is paid, or the period of employment

provided for in the contract of employment has terminated, or the

agreement under section 619 has terminated; and, in a case provided for

in subparagraphs (6) (C) or (D), becomes revocable three years after the

date of the proxy or the end of the period, if any, specified therein,

whichever period is less, unless the period of irrevocability is renewed

from time to time by the execution of a new irrevocable proxy as

provided in this section. This paragraph does not affect the duration of

a proxy under subparagraph (2).

(8) A proxy may be revoked, notwithstanding a provision making it

irrevocable, by a purchaser of capital certificates without knowledge of

the existence of the provision unless the existence of the proxy and its

irrevocability is noted conspicuously on the face or back of the capital

certificate.

(b) Without limiting the manner in which a member may authorize

another person or persons to act for him as proxy pursuant to paragraph

(a) of this section, the following shall constitute a valid means by

which a member may grant such authority:

(1) A member may execute a writing authorizing another person or

persons to act for him as proxy. Execution may be accomplished by the

member or the member's authorized officer, director, employee or agent

signing such writing or causing his or her signature to be affixed to

such writing by any reasonable means including, but not limited to, by

facsimile signature.

(2) A member may authorize another person or persons to act for the

member as proxy by providing such authorization by electronic mail to

the person who will be the holder of the proxy or to a proxy

solicitation firm, proxy support service organization or like agent duly

authorized by the person, provided that any such authorization by

electronic mail shall either set forth information from which it can be

reasonably determined that the authorization by electronic mail was

authorized by the member. If it is determined that such authorization by

electronic mail is valid, the inspectors or, if there are no inspectors,

such other persons making that determination shall specify the nature of

the information upon which they relied.

(c) Any copy, facsimile telecommunication or other reliable

reproduction of the writing or electronic mail created pursuant to

paragraph (b) of this section may be substituted or used in lieu of the

original writing or transmission for any and all purposes for which the

original writing or transmission could be used, provided that such copy,

facsimile telecommunication or other reproduction shall be a complete

reproduction of the entire original writing or transmission.

Selection of inspectors at meetings of members; duties.

(a) If the by-laws require inspectors at any meeting of members, such

requirement is waived unless compliance therewith is requested by a

member present in person or by proxy and entitled to vote at such

meeting. Unless otherwise provided in the by-laws, the board, in advance

of any meeting of members, may appoint one or more inspectors to act at

the meeting or any adjournment thereof. If inspectors are not so

appointed, the person presiding at a meeting of members may, and on the

request of any member entitled to vote thereat shall, appoint one or

more inspectors. In case any person appointed fails to appear or act,

the vacancy may be filled by appointment made by the board in advance of

the meeting or at the meeting by the person presiding thereat. Each

inspector, before entering upon the discharge of his duties, shall take

and sign an oath faithfully to execute the duties of inspector at such

meeting with strict impartiality and according to the best of his

ability.

(b) The inspectors shall determine the number of membership

certificates or cards and capital certificates outstanding and the

voting power of each, the certificates and cards represented at the

meeting, the existence of a quorum, the validity and effect of proxies,

and shall receive votes, ballots or consents, hear and determine all

challenges, and questions arising in connection with the right to vote,

count and tabulate all votes, ballots or consents, determine the result,

and do such acts as are proper to conduct the election or vote with

fairness to all members. On request of the person presiding at the

meeting or any members entitled to vote thereat, the inspectors shall

make a report in writing of any challenge, question or matter determined

by them and execute a certificate of any fact found by them. Any report

or certificate made by them shall be prima facie evidence of the facts

stated and of the vote as certified by them.

Qualification of voters; fixing record date to determine

eligibility to vote; voting entitlement.

(a) The by-laws may provide or, in the absence of such provision, the

board may fix, in advance, a date as the record date for the purpose of

determining the members entitled to notice of any meeting of members or

any adjournment thereof. Such record date shall not be more than fifty

nor less than ten days before the date of the meeting.

(b) Any member in good standing, otherwise eligible to vote, is

entitled to vote at any meeting of members, except that, if the

certificate of incorporation or the by-laws so provide, the by-laws may

provide or, in the absence of such provision, the board may fix a date

as the record date for the purpose of determining the members entitled

to vote at any meeting of members or any adjournment thereof, or to

express consent to or dissent from any proposal without a meeting, or

for the purpose of determining members entitled to receive any

distribution or the allotment of any rights, or for the purpose of any

other action by the members. Such record date shall not be more than

fifty nor less than ten days before the date of the meeting.

(c) If the certificate of incorporation or the by-laws provide for a

record date, as authorized by paragraph (b), and no record date is

fixed:

(1) The record date for the determination of members entitled to vote

at a meeting of members shall be at the close of business on the day

next preceding the day on which notice is given, or, if no notice is

given, the day on which the meeting is held.

(2) The record date for determining members for any purpose other than

that specified in subparagraph (1) shall be at the close of business on

the day on which the resolution of the board relating thereto is

adopted.

(d) When a determination of members of record entitled to notice of or

to vote at any meeting of members has been made as provided in this

section, such determination shall apply to any adjournment thereof,

unless the board fixes a new record date under this section for the

adjourned meeting.

(e) In any case in which a member is entitled to vote, he shall have

no more than, nor less than, one vote; except that if a corporation has

an organization as a member, the certificate of incorporation or by-laws

may provide that such organization shall be entitled to votes

substantially proportionate to its membership.

Limitations on right to vote.

The certificate of incorporation or the by-laws may provide, either

absolutely or contingently, that the members of any class shall not be

entitled to vote, or it may limit or define the matters on, and the

circumstances in, which a member or a class of members shall be entitled

to vote, and, except as otherwise provided in this chapter, such

provisions of the certificate of incorporation or the by-laws shall

prevail, according to their tenor, in all elections and in all

proceedings, over the provisions of this chapter which authorize any

action by the members, but no such denial, limitation or definition of

voting rights shall be effective unless at the time one or more classes

of members, singly or in the aggregate, are entitled to full voting

rights.

Vote of members.

(a) Except as otherwise required by this chapter or by the certificate

of incorporation or the by-laws as permitted by this chapter, directors

shall be elected by a plurality of the votes cast at a meeting of

members by the members entitled to vote in the election.

(b) Whenever any corporate action, other than the election of

directors, is to be taken under this chapter by vote of the members, it

shall, except as otherwise required by this chapter or by the

certificate of incorporation or by by-laws as permitted by this chapter,

be authorized by a majority of the votes cast at a meeting of members by

the members entitled to vote thereon.

(c) Except as provided in paragraph (b), any reference in this chapter

to corporate action at a meeting of members by "majority vote" or

"two-thirds vote" shall require the action to be taken by such

proportion of the votes cast at such meeting, provided that the

affirmative votes cast in favor of any such action shall be at least

equal to the quorum. Blank votes or abstentions shall not be counted in

the number of votes cast.

Action by members without a meeting.

(a) Whenever, under this chapter, members are required or permitted to

take any action by vote, such action may be taken without a meeting upon

the consent of all of the members entitled to vote thereon, which

consent shall set forth the action so taken. Such consent may be written

or electronic. If written, the consent must be executed by the member or

the member's authorized officer, director, employee or agent by signing

such consent or causing his or her signature to be affixed to such

consent by any reasonable means including but not limited to facsimile

signature. If electronic, the transmission of the consent must be sent

by electronic mail or other electronic means and set forth, or be

submitted with, information from which it can reasonably be determined

that the transmission was authorized by the member. This paragraph shall

not be construed to alter or modify any provision in a certificate of

incorporation not inconsistent with this chapter under which the written

consent of less than all of the members is sufficient for corporate

action.

(b) Written or electronic consent thus given by all members entitled

to vote shall have the same effect as a unanimous vote of members and

any certificate with respect to the authorization or taking of any such

action which is delivered to the department of state shall recite that

the authorization was by unanimous written consent.

(c) When there are no members of record, such action may be taken on

the written consent signed by a majority in interest of the subscribers

for capital certificates whose subscriptions have been accepted or their

successors in interest or, if no subscription has been accepted, on the

written consent signed by the incorporator or a majority of the

incorporators. When there are two or more incorporators, if any dies or

is for any reason unable to act, the other or others may act. If there

is no incorporator able to act, any person for whom an incorporator was

acting as agent may act in his or her stead, or if such other person

also dies or is for any reason unable to act, his or her legal

representative may act.

Greater requirement as to quorum and vote of members.

(a) The certificate of incorporation or a by-law adopted by the

members may contain provisions specifying either or both of the

following:

(1) That the proportion of members, or of a class thereof, who shall

be present in person or by proxy at any meeting of members, including a

special meeting for election of directors under section 604 (Special

meeting for election of directors), in order to constitute a quorum for

the transaction of any business or of any specified item of business,

including amendments to the certificate of incorporation, shall be

greater than the proportion prescribed by this chapter in the absence of

such provision.

(2) That the proportion of votes of the members, or of a class

thereof, that shall be necessary at any meeting of members for the

transaction of any business or of any specified item of business,

including amendments to the certificate of incorporation, shall be

greater than the proportion prescribed by this chapter in the absence of

such provision.

(b) An amendment of the certificate of incorporation or a by-law

adopted by the members which adds a provision permitted by this section

or which changes or strikes out such a provision, shall be authorized at

a meeting of members by vote of the members entitled to cast two-thirds

of the total number of votes entitled to be cast thereon, or of such

greater proportion of such total number of votes or the total number of

votes of a class, as may be provided specifically in the certificate of

incorporation or a by-law adopted by the members for adding, changing or

striking out a provision permitted by this section.

(c) If the certificate of incorporation or a by-law adopted by the

members contains a provision authorized by this section, the existence

of such provision shall be noted conspicuously on the face or back of

every membership certificate or card or capital certificate issued by

such corporation.

Voting by class of members.

(a) The certificate of incorporation or the by-laws may contain

provisions specifying that any class or classes of members shall vote as

a class in connection with the transaction of any business or of any

specified item of business at a meeting of members, including amendments

to the certificate of incorporation.

(b) Where voting as a class is provided in the certificate of

incorporation or the by-laws, it shall be by the proportionate vote so

provided or, if no proportionate vote is provided, in the election of

directors, by a plurality of the votes cast at such meeting by the

members of such class entitled to vote in the election, or for any other

corporate action, by a majority of the votes cast at such meeting by the

members of such class entitled to vote thereon.

(c) Such voting by class shall be in addition to any other vote,

including vote by class, required by this chapter or by the certificate

of incorporation or the by-laws as permitted by this chapter.

Cumulative voting.

The certificate of incorporation or the by-laws of any corporation may

provide that in all elections of directors of such corporation each

member shall be entitled to as many votes as shall equal the number of

votes which, except for such provisions as to cumulative voting, he

would be entitled to cast for the election of directors multiplied by

the number of directors to be elected, and that he may cast all of such

votes for a single director or may distribute them among the number to

be voted for, or for any two or more of them, as he may see fit, which

right, when exercised, shall be termed cumulative voting.

Power of supreme court respecting elections.

Upon the petition of any member aggrieved by an election and upon

notice to the persons declared elected thereat, the corporation and such

other persons as the court may direct, the supreme court at a special

term held within the judicial district where the office of the

corporation is located shall forthwith hear the proofs and allegations

of the parties, and confirm the election, order a new election, or take

such other action as justice may require.

Agreements by members as to voting.

An agreement between two or more members, if in writing and signed by

the parties thereto, may provide that in exercising their voting rights

as members they shall vote as therein provided, or as they may agree, or

as determined in accordance with a procedure agreed upon by them.

Preemptive rights.

There shall be no preemptive rights in relation to membership

certificates or cards, capital certificates, subvention certificates, or

bonds. In the case of bonds having lawful voting rights, this section

shall not invalidate otherwise valid contract provisions designed to

protect such voting rights.

Books and records; right of inspection; prima facie evidence.

(a) Except as otherwise provided herein, every corporation shall keep,

at the office of the corporation, correct and complete books and records

of account and minutes of the proceedings of its members, board and

executive committee, if any, and shall keep at such office or at the

office of its transfer agent or registrar in this state, a list or

record containing the names and addresses of all members, the class or

classes of membership or capital certificates and the number of capital

certificates held by each and the dates when they respectively became

the holders of record thereof. A corporation may keep its books and

records of account in an office of the corporation without the state, as

specified in its certificate of incorporation. Any of the foregoing

books, minutes and records may be in written form or in any other form

capable of being converted into written form within a reasonable time.

(b) Any person who shall have been a member of record of a corporation

for at least six months immediately preceding his demand, or any person

holding, or thereunto authorized in writing by the holders of, at least

five percent of any class of the outstanding capital certificates, upon

at least five days written demand shall have the right to examine in

person or by agent or attorney, during usual business hours, its minutes

of the proceedings of its members and list or record of members and to

make extracts therefrom.

(c) An inspection authorized by paragraph (b) may be denied to such

member or other person upon his refusal to furnish to the corporation,

its transfer agent or registrar an affidavit that such inspection is not

desired and will not be used for a purpose which is in the interest of a

business or object other than the business of the corporation and that

he has not within five years given, sold or offered for sale any list or

record of members of any domestic or foreign corporation or aided or

abetted, or attempted or offered to aid or abet, any person in procuring

any such list or record of members for any such purpose.

(d) Upon refusal by the corporation or by an officer or agent of the

corporation to permit an inspection of the minutes of the proceedings of

its members or of the list or record of members, as herein provided, the

person making the demand for inspection may apply to the supreme court

in the judicial district where the office of the corporation is located,

upon such notice as the court may direct, for an order directing the

corporation, its officer or agent to show cause why an order should not

be granted permitting such inspection by the applicant. Upon the return

day of the order to show cause, the court shall hear the parties

summarily, by affidavit or otherwise, and if it appears that the

applicant is qualified and entitled to such inspection, the court shall

grant an order compelling such inspection and awarding such further

relief as to the court may seem just and proper.

(e) Upon the written request of any person who shall have been a

member of record for at least six months immediately preceding his

request, or of any person holding, or thereunto authorized in writing by

the holders of, at least five percent of any class of the outstanding

capital certificates, the corporation shall provide to such member an

annual balance sheet and profit and loss statement or a financial

statement performing a similar function for the preceding fiscal year,

and, if any interim balance sheet or profit and loss or similar

financial statement has been distributed to its members or otherwise

made available to the public, the most recent such interim balance sheet

or profit and loss or similar financial statement. The corporation shall

be allowed a reasonable time to prepare such annual balance sheet and

profit and loss or similar financial statement.

(e-1) In addition to those documents described in paragraph (e) of

this section, members of a homeowners association incorporated pursuant

to the provisions of this chapter shall also be entitled to review, upon

request to the homeowners association's governing board, invoices,

ledgers, bank accounts, reconciliations, contracts, and any documents

related to the expenditure of homeowners association dues.

(f) Nothing herein contained shall impair the power of courts to

compel the production for examination of the books and records of a

corporation.

(g) The books and records specified in paragraph (a) shall be prima

facie evidence of the facts therein stated in favor of the plaintiff in

any action or special proceeding against such corporation or any of its

officers, directors or members.

(h) Nothing in this chapter shall require an employee organization

certified or recognized for any collective negotiating unit of an

employer pursuant to article fourteen of the civil service law to

disclose the home address of any member or former member of such

organization.

Infant members.

(a) If the certificate of incorporation or the by-laws provide that a

member shall be of full age:

(1) A corporation may treat an infant who holds a membership

certificate or card or capital certificate or a bond of such corporation

as having capacity to receive and to empower others to receive payments

or distributions, to vote or express consent or dissent, in person or by

proxy, and to make elections and exercise rights relating to such

certificates or bonds, unless, in the case of membership certificates or

cards or capital certificates, the corporate officer responsible for

maintaining the list or record of members or the transfer agent of the

corporation or, in the case of bonds, the treasurer or paying officer or

agent has received written notice that such holder is an infant.

(2) An infant holder of a membership certificate or card or capital

certificate or a bond of a corporation who has received or empowered

others to receive payments or distributions, voted or expressed consent

or dissent, or made an election or exercised a right relating thereto,

shall have no right thereafter to disaffirm or avoid, as against the

corporation, any such act on his part, unless prior to such receipt,

vote, consent, dissent, election or exercise, as to membership

certificates or cards or capital certificates, the corporate officer

responsible for maintaining the list or record of members or its

transfer agent or, in the case of bonds, the treasurer or paying officer

or agent had received written notice that such holder was an infant.

Members' derivative action brought in the right of the

corporation to procure a judgment in its favor.

(a) An action may be brought in the right of a domestic or foreign

corporation to procure a judgment in its favor by five percent or more

of any class of members or by such percentage of the holders of capital

certificates or of the owners of a beneficial interest in the capital

certificates of such corporation.

(b) In any such action, it shall be made to appear that each plaintiff

is such a member, holder or owner at the time of bringing the action.

(c) In any such action, the complaint shall set forth with

particularity the efforts of the plaintiff or plaintiffs to secure the

initiation of such action by the board of the reason for not making such

effort.

(d) Such action shall not be discontinued, compromised or settled

without the approval of the court having jurisdiction of the action. If

the court shall determine that the interests of the members or of any

class or classes thereof will be substantially affected by such

discontinuance, compromise or settlement, the court, in its discretion,

may direct that notice, by publication or otherwise, shall be given to

the members or class or classes thereof whose interests it determines

will be so affected; if notice is so directed to be given, the court may

determine which one or more of the parties to the action shall bear the

expense of giving the same, in such amount as the court shall determine

and find to be reasonable in the circumstances, and the amount of such

expense shall be awarded as special costs of the action and recoverable

in the same manner as statutory taxable costs.

(e) If the action on behalf of the corporation was successful, in

whole or in part, or if anything was received by the plaintiff or

plaintiffs or a claimant or claimants as the result of a judgment,

compromise or settlement of an action or claim, the court may award the

plaintiff or plaintiffs, claimant or claimants, reasonable expenses,

including reasonable attorney's fees, and shall direct him or them to

account to the corporation for the remainder of the proceeds so received

by him or them. This paragraph shall not apply to any judgment rendered

for the benefit of injured members or non-record owners only and limited

to a recovery of the loss or damage sustained by them.

Notification to tenants.

Upon the adoption, amendment or repeal of the by-laws by the board of

directors pursuant to paragraph (g) of section 602 (By-laws), where such

change would have a direct effect on the resident's occupancy or the

rules of the building, the board of directors shall post the adopted,

amended, or repealed by-laws conspicuously to ensure tenants will be

aware of such adoption.

Board of directors.

(a) Except as otherwise provided in the certificate of incorporation,

a corporation shall be managed by its board of directors. Each director

shall be at least eighteen years of age; provided, however, that a

member of the board of directors of any girl scout council chartered by

Girl Scouts of the United States of America, Inc., or any Camp Fire

Girls club member serving as a member of the board of directors on the

National Board and National Council of Camp Fire Girls, Inc. or on the

local board of the Camp Fire Girls, Inc. or any member of Aspira of

America Inc. or Aspira of New York Inc. serving on the board of

directors, shall be at least sixteen years of age. Notwithstanding the

above, a corporation organized for educational purposes primarily for

the benefit of individuals below eighteen years of age may include one

director below eighteen years of age who is at least sixteen years of

age. Further, a corporation organized for recreational or youth

development and delinquency prevention purposes primarily for the

benefit of individuals below eighteen years of age may include one or

more directors, the number of which shall not exceed one-half of the

total number of directors for a quorum for the transaction of business,

who are at least sixteen years of age but not over eighteen years of

age. The certificate of incorporation or the by-laws may prescribe other

qualifications for directors, provided, however, any corporation

organized for recreation or youth development and delinquency prevention

purposes, when increasing the number of directors between the ages of

sixteen and eighteen years old to more than one, shall prescribe in its

certificate of incorporation the number of such directors not to exceed

the limitations of this paragraph.

(b) If the certificate of incorporation vests the management of the

corporation, in whole or in part, in one or more persons other than the

board, individually or collectively, such other person or persons shall

be subject to the same obligations and the same liabilities for

managerial acts or omissions as are imposed upon directors by this

chapter.

Number of directors.

(a) The number of directors constituting the entire board shall be not

less than three. Subject to such limitation, such number may be fixed by

the by-laws or by action of the members or of the board under the

specific provisions of a by-law allowing such action, or by any number

within a range set forth in the by-laws. If not otherwise fixed under

this paragraph, the number shall be three.

(b) The number of directors may be increased or decreased by amendment

of the by-laws or by action of the members, or of the board under the

specific provisions of a by-law, subject to the following limitations:

(1) If the board is authorized by the by-laws to change the number of

directors, whether by amending the by-laws or by taking action under the

specific provisions of a by-law, such amendment or action shall require

the vote of a majority of the entire board.

(2) No decrease shall shorten the term of any incumbent director.

Election and term of office of directors; alternates.

(a) A corporation may provide in its certificate of incorporation or

by-laws for directors to be elected or appointed at large, or by special

districts or membership sections, or by virtue of their office or former

office in the corporation or other entity, public or private, or by

bondholders pursuant to paragraph (c) of section 506 (Bonds and security

interests) voting as a class, or any combination thereof.

(b) Directors shall be elected or appointed in the manner and for the

term of office provided in the certificate of incorporation or the

by-laws. The term of office of directors, other than those elected or

appointed by virtue of their office or former office in the corporation

or other entity, public or private, shall not exceed five years; and, if

the board is classified under section 704 (Classification of directors),

such term shall not exceed a number of years equal to the number of

classes into which the board is classified. In the absence of a

provision fixing the term, it shall be one year.

(c) Each director shall hold office until the expiration of the term

for which he is elected or appointed, and until his successor has been

elected or appointed and qualified.

(d) If the certificate of incorporation or by-laws so provide, a

special district or membership section entitled to elect or appoint one

or more directors may elect or appoint an alternate for each such

director. In the absence of a director from a meeting of the board, his

alternate may, upon written notice to the secretary of the corporation,

attend such meeting and exercise therein the rights, powers, and

privileges of the absent director. When so exercising the rights,

powers, and privileges of the absent director, such alternate shall be

subject in all respects to the provisions of this chapter governing

directors.

Classification of directors.

(a) The certificate of incorporation or a by-law may provide that

directors elected or appointed at large shall be divided into either

two, three, four or five classes for the purpose of staggering their

terms of office and that all or some of the directors elected or

appointed otherwise than at large shall be divided into the same or a

different number of classes, not exceeding five, for the same purpose.

All classes of each type shall be as nearly equal in number as possible

and, if provision has been made for cumulative voting under section 617

(Cumulative voting), no class shall include less than three directors.

(b) The terms of office of the directors initially classified shall be

as follows: that of the first class shall expire at the next annual

meeting of members if there be members, or of the board if there be no

members, the second class at the second succeeding annual meeting, the

third class, if any, at the third succeeding annual meeting, the fourth

class, if any, at the fourth succeeding annual meeting and the fifth

class, if any, at the fifth succeeding annual meeting. After such

initial classification, directors to replace those whose terms expire at

each annual meeting shall be elected or appointed at such meeting to

hold office for a full term in accordance with such classification.

(c) If directors are classified and the number of directors is

thereafter changed by action of the board:

(1) Any newly created directorships or any decrease in directorships

shall be so apportioned among the classes as to make all classes as

nearly equal in number as possible.

(2) If newly created directorships are filled by the board in a

corporation having members, there shall be no classification of the

additional directors until the next annual meeting of members.

Newly created directorships and vacancies.

(a) Newly created directorships resulting from an increase in the

number of directors elected or appointed at large, and vacancies among

such directors for any reason, may be filled by vote of a majority of

the directors then in office, regardless of their number, unless the

certificate of incorporation or the by-laws provide that such newly

created directorships or vacancies shall be filled by vote of the

members.

(b) Vacancies among directors elected or appointed by special

districts or membership sections, or by bondholders voting as a class,

shall be filled by action of the persons entitled to vote thereon;

except that, if a vacancy remains unfilled for six months after it

occurs, and by reason of the absence, illness, or other inability of one

or more of the remaining directors a quorum of the board cannot be

obtained, the remaining directors, or a majority of them, may appoint a

director to fill such vacancy.

(c) Unless otherwise provided in the certificate of incorporation or

bylaws, a director elected or appointed to fill a vacancy in an

unexpired term shall hold office until the end of the term which the

director was elected or appointed to fill, or for a term to be

determined by the board which ends at an annual meeting, subject to the

limitations on terms of office in paragraph (b) of section seven hundred

three of this article, and until his successor is elected or appointed

and qualified.

Removal of directors.

(a) Except as limited in paragraph (c), any or all of the directors

may be removed for cause by vote of the members, or by vote of the

directors provided there is a quorum of not less than a majority present

at the meeting of directors at which such action is taken.

(b) Except as limited in paragraph (c), if the certificate of

incorporation or the by-laws so provide, any or all of the directors may

be removed without cause by vote of the members.

(c) The removal of directors, with or without cause, as provided in

paragraphs (a) and (b) is subject to the following:

(1) In the case of a corporation having cumulative voting, no director

may be removed when the votes cast against his removal would be

sufficient to elect him if voted cumulatively at an election at which

the same total number of votes were cast and the entire board, or the

entire class of directors of which he is a member, were then being

elected; and

(2) When by the provisions of the certificate of incorporation or the

by-laws the members of any class or group, or the holders of bonds,

voting as a class, are entitled to elect one or more directors, any

director so elected may be removed only by the applicable vote of the

members of that class or group, or the holders of such bonds, voting as

a class.

(d) An action to procure a judgment removing a director for cause may

be brought by the attorney-general or by ten percent of the members

whether or not entitled to vote. The court may bar from re-election any

director so removed for a period fixed by the court.

Quorum of directors.

Unless a greater proportion is required by this chapter or by the

certificate of incorporation or by a by-law adopted by the members, a

majority of the entire board shall constitute a quorum for the

transaction of business or of any specified item of business, except

that the certificate of incorporation or the by-laws may fix the quorum

at less than a majority of the entire board, provided that in the case

of a board of fifteen members or less the quorum shall be at least

one-third of the entire number of members and in the case of a board of

more than fifteen members the quorum shall be at least five members plus

one additional member for every ten members (or fraction thereof) in

excess of fifteen.

Action by the board.

(a) Except as otherwise provided in this chapter, any reference in

this chapter to corporate action to be taken by the board shall mean

such action at a meeting of the board.

(b) Unless otherwise restricted by the certificate of incorporation or

the by-laws, any action required or permitted to be taken by the board

or any committee thereof may be taken without a meeting if all members

of the board or the committee consent to the adoption of a resolution

authorizing the action. Such consent may be written or electronic. If

written, the consent must be executed by the director by signing such

consent or causing his or her signature to be affixed to such consent by

any reasonable means including, but not limited to, facsimile signature.

If electronic, the transmission of the consent must be sent by

electronic mail or other electronic means and set forth, or be submitted

with, information from which it can reasonably be determined that the

transmission was authorized by the director. The resolution and the

written consents thereto by the members of the board or committee shall

be filed with the minutes of the proceedings of the board or committee.

(c) Unless otherwise restricted by the certificate of incorporation or

the by-laws, any one or more members of the board or of any committee

thereof who is not physically present at a meeting of the board or a

committee may participate by means of a conference telephone or similar

communications equipment or by electronic video screen communication.

Participation by such means shall constitute presence in person at a

meeting as long as all persons participating in the meeting can hear

each other at the same time and each director can participate in all

matters before the board, including, without limitation, the ability to

propose, object to, and vote upon a specific action to be taken by the

board or committee.

(d) Except as otherwise provided in this chapter, the vote of a

majority of the directors present at the time of the vote, if a quorum

is present at such time, shall be the act of the board. Directors who

are present at a meeting but not present at the time of a vote due to a

conflict of interest or related party transaction shall be determined to

be present at the time of the vote for purposes of determining if a

quorum is present at such time.

Greater requirement as to quorum and vote of directors.

(a) The certificate of incorporation or a by-law adopted by the

members may contain provisions specifying either or both of the

following:

(1) That the proportion of directors that shall constitute a quorum

for the transaction of business or of any specified item of business

shall be greater than the proportion prescribed by this chapter in the

absence of such provision.

(2) That the proportion of votes of directors that shall be necessary

for the transaction of business or of any specified item of business

shall be greater than the proportion prescribed by this chapter in the

absence of such provision.

(b) An amendment by the members of the certificate of incorporation or

of the by-laws which adds a provision permitted by this section or which

changes or strikes out such a provision, shall be authorized by vote of

two-thirds of the members entitled to vote or of such greater proportion

as may be provided specifically in the certificate of incorporation or

the by-law for adding, changing or striking out a provision permitted by

this section.

(c) If there are no members, an amendment by the board of directors of

the certificate of incorporation or the by-law which adds a provision

permitted by this section or which changes or strikes out such a

provision, shall be authorized at a meeting by vote of two-thirds of the

entire board, or of such greater proportion as may be provided

specifically in the certificate of incorporation or the by-law for

adding, changing or striking out a provision permitted by this section.

Place and time of meetings of the board.

(a) Meetings of the board, annual, regular or special, may be held at

any place within or without this state, unless otherwise provided by the

certificate of incorporation or the by-laws.

(b) The time and place for holding annual or regular meetings of the

board shall be fixed by or under the by-laws, or, if not so fixed, by

the board.

(c) A special meeting may be called at any time by the president or

other corporate officer as provided in the by-laws or as determined by

the board; and, in the case of a corporation without members, by any

director upon written demand of not less than one-fifth of the entire

board.

Notice of meetings of the board.

(a) Unless otherwise provided by the by-laws, regular meetings of the

board may be held without notice if the time and place of such meetings

are fixed by the by-laws or the board. Special meetings of the board

shall be held upon notice to the directors.

(b) The by-laws may prescribe what shall constitute notice of meeting

of the board. A notice, or waiver of notice, need not specify the

purpose of any regular or special meeting of the board, unless required

by the by-laws.

(c) Notice of a meeting need not be given to any alternate director,

nor to any director who submits a waiver of notice whether before or

after the meeting, or who attends the meeting without protesting, prior

thereto or at its commencement, the lack of notice to him. Such waiver

of notice may be written or electronic. If written, the waiver must be

executed by the director signing such waiver or causing his or her

signature to be affixed to such waiver by any reasonable means including

but not limited to facsimile signature. If electronic, the transmission

of the waiver must be sent by electronic mail and set forth, or be

submitted with, information from which it can reasonably be determined

that the transmission was authorized by the director.

(d) A majority of the directors present, whether or not a quorum is

present, may adjourn any meeting to another time and place. If the

by-laws so provide, notice of any adjournment of a meeting of the board

to another time or place shall be given to the directors who were not

present at the time of the adjournment and, unless such time and place

are announced at the meeting, to the other directors.

Executive committee and other committees.

(a) The certificate of incorporation, the by-laws, or the board may

create committees of the board, each consisting of three or more

directors. The board shall appoint the members of such committee of the

board, except that in the case of any executive committee or similar

committee however denominated, the appointment shall be made by a

majority of the entire board, provided that in the case of a board of

thirty members or more, the appointment shall be made by at least

three-quarters of the directors present at the time of the vote, if a

quorum is present at that time. In addition, the by-laws may provide

that directors who are the holders of certain positions in the

corporation shall be ex-officio members of specific committees. Each

such committee shall have the authority of the board to the extent

provided in a board resolution or in the certificate of incorporation or

by-laws, except that no committee of any kind shall have authority as to

the following matters:

(1) The submission to members of any action requiring members'

approval under this chapter.

(2) The filling of vacancies in the board of directors or in any

committee.

(3) The fixing of compensation of the directors for serving on the

board or on any committee.

(4) The amendment or repeal of the by-laws or the adoption of new

by-laws.

(5) The amendment or repeal of any resolution of the board which by

its terms shall not be so amendable or repealable.

(6) The election or removal of officers and directors.

(7) The approval of a merger or plan of dissolution.

(8) The adoption of a resolution recommending to the members action on

the sale, lease, exchange or other disposition of all or substantially

all the assets of a corporation or, if there are no members entitled to

vote, the authorization of such transaction.

(9) The approval of amendments to the certificate of incorporation.

(b) The board may designate one or more directors as alternate members

of any committee, who may replace any absent member or members at any

meeting of such committee.

(d) Each committee of the board shall serve at the pleasure of the

board. The designation of any such committee and the delegation thereto

of authority shall not alone relieve any director of his duty to the

corporation under section 717 (Duty of directors and officers).

(e) Committees, other than committees of the board, whether created by

the board or by the members, shall be committees of the corporation. No

such committee shall have the authority to bind the board. Members of

such committees of the corporation, who may be non-directors, shall be

elected or appointed in the manner set forth in the by-laws, or if not

set forth in the by-laws, in the same manner as officers of the

corporation.

Audit oversight.

(a) The board, or a designated audit committee of the board comprised

solely of independent directors, of any corporation required to file an

independent certified public accountant's audit report with the attorney

general pursuant to subdivision one of section one hundred seventy-two-b

of the executive law shall oversee the accounting and financial

reporting processes of the corporation and the audit of the

corporation's financial statements. The board or designated audit

committee shall annually retain or renew the retention of an independent

auditor to conduct the audit and, upon completion thereof, review the

results of the audit and any related management letter with the

independent auditor.

(b) The board, or a designated audit committee of the board comprised

solely of independent directors, of any corporation required to file an

independent certified public accountant's audit report with the attorney

general pursuant to subdivision one of section one hundred seventy-two-b

of the executive law and that in the prior fiscal year had or in the

current fiscal year reasonably expects to have annual revenue in excess

of one million dollars shall, in addition to those duties set forth in

paragraph (a) of this section:

(1) review with the independent auditor the scope and planning of the

audit prior to the audit's commencement;

(2) upon completion of the audit, review and discuss with the

independent auditor: (A) any material risks and weaknesses in internal

controls identified by the auditor; (B) any restrictions on the scope of

the auditor's activities or access to requested information; (C) any

significant disagreements between the auditor and management; and (D)

the adequacy of the corporation's accounting and financial reporting

processes;

(3) annually consider the performance and independence of the

independent auditor; and

(4) if the duties required by this section are performed by an audit

committee, report on the committee's activities to the board.

(d) If a corporation controls a group of corporations, the board or

designated audit committee of the board of the controlling corporation

may perform the duties required by this section for one or more of the

controlled corporations and, if independent directors, directors from

one or more of such controlled corporations may serve on any designated

audit committee of the board of such controlling corporation, and

perform the duties required by this section for each corporation and any

controlled corporations.

(e) Only independent directors may participate in any board or

committee deliberations or voting relating to matters set forth in this

section, provided that nothing in this paragraph shall prohibit the

board or designated audit committee from requesting that a person with

an interest in the matter present information as background or answer

questions at a committee or board meeting prior to the commencement of

deliberations or voting relating thereto.

(f) Any corporation that is a state authority or a local authority as

defined in section two of the public authorities law and that has

complied substantially with sections twenty-eight hundred two and

twenty-eight hundred twenty-four of such law shall be deemed in

compliance with this section.

Officers.

(a) The board may elect or appoint a chair or president, or both, one

or more vice-presidents, a secretary and a treasurer, and such other

officers as it may determine, or as may be provided in the by-laws.

These officers may be designated by such alternate titles as may be

provided in the certificate of incorporation or the by-laws. Any two or

more offices may be held by the same person, except the offices of

president and secretary, or the offices corresponding thereto.

(b) The certificate of incorporation or a by-law adopted by the

members may provide that all officers or that specified officers shall

be elected by the members instead of by the board, or it may authorize

the president to appoint the other officers, or some of them, subject to

approval by the board.

(c) Each officer shall hold office for the term for which he is

elected or appointed, and until his successor has been elected or

appointed and qualified. Unless otherwise provided in the certificate of

incorporation or the by-laws, all officers shall be elected or appointed

annually.

(d) The certificate of incorporation or the by-laws may provide that

any one or more officers shall be ex-officio members of the board, with

voting rights unless specified otherwise.

(e) All officers as between themselves and the corporation shall have

such authority and perform such duties in the management of the

corporation as may be provided in the by-laws or, to the extent not so

provided, by the board. The board may require any officer to give

security for the faithful performance of his duties.

(f) No employee of the corporation shall serve as chair of the board

or hold any other title with similar responsibilities, unless the board

approves such employee serving as chair of the board by a two-thirds

vote of the entire board and contemporaneously documents in writing the

basis for the board approval; provided, however, that no such employee

shall be considered an independent director for the purposes of this

chapter.

Removal of officers.

(a) Any officer elected or appointed by the board may be removed by

the board with or without cause. An officer elected by the members or a

class of members may be removed, with or without cause, only by the vote

of the members or such class of members, but his authority to act as an

officer may be suspended by the board for cause.

(b) The removal of an officer without cause shall be without prejudice

to his contract rights, if any. The election or appointment of an

officer shall not of itself create contract rights.

(c) An action to procure a judgment removing an officer for cause may

be brought by the attorney-general, by any director, by ten percent of

the members, whether or not entitled to vote, or by the holders of ten

percent of the face value of the outstanding capital certificates,

subvention certificates or bonds having voting rights. The court may bar

from re-election or reappointment any officer so removed for a period

fixed by the court.

Related party transactions.

(a) No corporation shall enter into any related party transaction

unless the transaction is determined by the board, or an authorized

committee thereof, to be fair, reasonable and in the corporation's best

interest at the time of such determination. Any director, officer or key

person who has an interest in a related party transaction shall disclose

in good faith to the board, or an authorized committee thereof, the

material facts concerning such interest.

(b) With respect to any related party transaction involving a

charitable corporation and in which a related party has a substantial

financial interest, the board of such corporation, or an authorized

committee thereof, shall:

(1) Prior to entering into the transaction, consider alternative

transactions to the extent available;

(2) Approve the transaction by not less than a majority vote of the

directors or committee members present at the meeting; and

(3) Contemporaneously document in writing the basis for the board or

authorized committee's approval, including its consideration of any

alternative transactions.

(c) The certificate of incorporation, by-laws or any policy adopted by

the board may contain additional restrictions on related party

transactions and additional procedures necessary for the review and

approval of such transactions, or provide that any transaction in

violation of such restrictions shall be void or voidable.

(d) Unless otherwise provided in the certificate of incorporation or

the by-laws, the board shall have authority to fix the compensation of

directors for services in any capacity.

(e) The fixing of compensation of officers, if not done in or pursuant

to the by-laws, shall require the affirmative vote of a majority of the

entire board unless a higher proportion is set by the certificate of

incorporation or by-laws.

(f) The attorney general may bring an action to enjoin, void or

rescind any related party transaction or proposed related party

transaction that violates any provision of this chapter or was otherwise

not reasonable or in the best interests of the corporation at the time

the transaction was approved, or to seek restitution, and the removal of

directors or officers, or seek to require any person or entity to:

(1) Account for any profits made from such transaction, and pay them

to the corporation;

(2) Pay the corporation the value of the use of any of its property or

other assets used in such transaction;

(3) Return or replace any property or other assets lost to the

corporation as a result of such transaction, together with any income or

appreciation lost to the corporation by reason of such transaction, or

account for any proceeds of sale of such property, and pay the proceeds

to the corporation together with interest at the legal rate; and

(4) Pay, in the case of willful and intentional conduct, an amount up

to double the amount of any benefit improperly obtained.

(g) The powers of the attorney general provided in this section are in

addition to all other powers the attorney general may have under this

chapter or any other law.

(h) No related party may participate in deliberations or voting

relating to a related party transaction in which he or she has an

interest; provided that nothing in this section shall prohibit the board

or authorized committee from requesting that a related party present

information as background or answer questions concerning a related party

transaction at a board or committee meeting prior to the commencement of

deliberations or voting relating thereto.

(i) In an action by any person or entity other than the attorney

general, it shall be a defense to a claim of violation of any provisions

of this section that a transaction was fair, reasonable and in the

corporation's best interest at the time the corporation approved the

transaction.

(j) In an action by the attorney general with respect to a related

party transaction not approved in accordance with paragraphs (a) or (b)

of this section at the time it was entered into, whichever is

applicable, it shall be a defense to a claim of violation of any

provisions of this section that (1) the transaction was fair, reasonable

and in the corporation's best interest at the time the corporation

approved the transaction and (2) prior to receipt of any request for

information by the attorney general regarding the transaction, the board

has: (A) ratified the transaction by finding in good faith that it was

fair, reasonable and in the corporation's best interest at the time the

corporation approved the transaction; and, with respect to any related

party transaction involving a charitable corporation and in which a

related party has a substantial financial interest, considered

alternative transactions to the extent available, approving the

transaction by not less than a majority vote of the directors or

committee members present at the meeting; (B) documented in writing the

nature of the violation and the basis for the board's or committee's

ratification of the transaction; and (C) put into place procedures to

ensure that the corporation complies with paragraphs (a) and (b) of this

section as to related party transactions in the future.

Conflict of interest policy.

(a) Except as provided in paragraph (d) of this section, the board

shall adopt, and oversee the implementation of, and compliance with, a

conflict of interest policy to ensure that its directors, officers and

key persons act in the corporation's best interest and comply with

applicable legal requirements, including but not limited to the

requirements set forth in section seven hundred fifteen of this article.

(b) The conflict of interest policy shall include, at a minimum, the

following provisions:

(1) a definition of the circumstances that constitute a conflict of

interest;

(2) procedures for disclosing a conflict of interest or possible

conflict of interest to the board or to a committee of the board, and

procedures for the board or committee to determine whether a conflict

exists;

(3) a requirement that the person with the conflict of interest not be

present at or participate in board or committee deliberation or vote on

the matter giving rise to such conflict, provided that nothing in this

section shall prohibit the board or a committee from requesting that the

person with the conflict of interest present information as background

or answer questions at a committee or board meeting prior to the

commencement of deliberations or voting relating thereto;

(4) a prohibition against any attempt by the person with the conflict

to influence improperly the deliberation or voting on the matter giving

rise to such conflict;

(5) a requirement that the existence and resolution of the conflict be

documented in the corporation's records, including in the minutes of any

meeting at which the conflict was discussed or voted upon; and

(6) procedures for disclosing, addressing, and documenting related

party transactions in accordance with section seven hundred fifteen of

this article.

(c) The conflict of interest policy shall require that prior to the

initial election of any director, and annually thereafter, such director

shall complete, sign and submit to the secretary of the corporation or a

designated compliance officer a written statement identifying, to the

best of the director's knowledge, any entity of which such director is

an officer, director, trustee, member, owner (either as a sole

proprietor or a partner), or employee and with which the corporation has

a relationship, and any transaction in which the corporation is a

participant and in which the director might have a conflicting interest.

The policy shall require that each director annually resubmit such

written statement. The secretary of the corporation or the designated

compliance officer shall provide a copy of all completed statements to

the chair of the audit committee or, if there is no audit committee, to

the chair of the board.

(d) A corporation that has adopted and possesses a conflict of

interest policy pursuant to federal, state or local laws that is

substantially consistent with the provisions of paragraph (b) of this

section shall be deemed in compliance with provisions of this section.

In addition, any corporation that is a state authority or a local

authority as defined in section two of the public authorities law, and

that has complied substantially with section twenty-eight hundred

twenty-four and subdivision three of section twenty-eight hundred

twenty-five of such law, shall be deemed in compliance with this

section.

(e) Nothing in this section shall be interpreted to require a

corporation to adopt any specific conflict of interest policy not

otherwise required by this section or any other law or rule, or to

supersede or limit any requirement or duty governing conflicts of

interest required by any other law or rule.

Whistleblower policy.

(a) Except as provided in paragraph (c) of this section, the board of

every corporation that has twenty or more employees and in the prior

fiscal year had annual revenue in excess of one million dollars shall

adopt, and oversee the implementation of, and compliance with, a

whistleblower policy to protect from retaliation persons who report

suspected improper conduct. Such policy shall provide that no director,

officer, key person, employee or volunteer of a corporation who in good

faith reports any action or suspected action taken by or within the

corporation that is illegal, fraudulent or in violation of any adopted

policy of the corporation shall suffer intimidation, harassment,

discrimination or other retaliation or, in the case of employees,

adverse employment consequence.

(b) The whistleblower policy shall include the following provisions:

(1) Procedures for the reporting of violations or suspected violations

of laws or corporate policies, including procedures for preserving the

confidentiality of reported information;

(2) A requirement that an employee, officer or director of the

corporation be designated to administer the whistleblower policy and to

report to the board or an authorized committee thereof, except that

directors who are employees may not participate in any board or

committee deliberations or voting relating to administration of the

whistleblower policy;

(3) A requirement that the person who is the subject of a

whistleblower complaint not be present at or participate in board or

committee deliberations or vote on the matter relating to such

complaint, provided that nothing in this subparagraph shall prohibit the

board or committee from requesting that the person who is subject to the

complaint present information as background or answer questions at a

committee or board meeting prior to the commencement of deliberations or

voting relating thereto; and

(4) A requirement that a copy of the policy be distributed to all

directors, officers, key persons, employees and to volunteers who

provide substantial services to the corporation. For purposes of this

subdivision, posting the policy on the corporation's website or at the

corporation's offices in a conspicuous location accessible to employees

and volunteers are among the methods a corporation may use to satisfy

the distribution requirement.

(c) A corporation that has adopted and possesses a whistleblower

policy pursuant to federal, state or local laws that is substantially

consistent with the provisions of paragraph (b) of this section shall be

deemed in compliance with provisions of this section. In addition, any

corporation that is a state authority or local authority as defined in

section two of the public authorities law, and that has complied

substantially with section twenty-eight hundred twenty-four of such law

and is subject to the provisions of section twenty-eight hundred

fifty-seven of such law, shall be deemed in compliance with the

provisions of this section.

(d) Nothing in this section shall be interpreted to relieve any

corporation from any additional requirements in relation to internal

compliance, retaliation, or document retention required by any other law

or rule.

Loans to directors, officers and key persons.

No loans, other than through the purchase of bonds, debentures, or

similar obligations of the type customarily sold in public offerings, or

through ordinary deposit of funds in a bank, shall be made by a

corporation to its directors, officers or key persons, or to any other

corporation, firm, association or other entity in which one or more of

its directors, officers or key persons are directors, officers or key

persons or hold a substantial financial interest, except a loan by one

charitable corporation to another charitable corporation. A loan made in

violation of this section shall be a violation of the duty to the

corporation of the directors or officers authorizing it or participating

in it, but the obligation of the borrower with respect to the loan shall

not be affected thereby.

Duty of directors, officers and key persons.

(a) Directors, officers and key persons shall discharge the duties of

their respective positions in good faith and with the care an ordinarily

prudent person in a like position would exercise under similar

circumstances. The factors set forth in subparagraph one of paragraph

(e) of section 552 (Standard of conduct in managing and investing an

institutional fund), if relevant, must be considered by a governing

board delegating investment management of institutional funds pursuant

to section 514 (Delegation of investment management) For purposes of

this paragraph, the term institutional fund is defined in section 551

(Definitions).

(b) In discharging their duties, directors, officers and key persons,

when acting in good faith, may rely on information, opinions, reports or

statements including financial statements and other financial data, in

each case prepared or presented by: (1) one or more officers or

employees of the corporation, whom the director believes to be reliable

and competent in the matters presented, (2) counsel, public accountants

or other persons as to matters which the directors, officers or key

persons believe to be within such person's professional or expert

competence or (3) a committee of the board upon which they do not serve,

duly designated in accordance with a provision of the certificate of

incorporation or the bylaws, as to matters within its designated

authority, which committee the directors, officers or key persons

believe to merit confidence, so long as in so relying they shall be

acting in good faith and with that degree of care specified in paragraph

(a) of this section. Persons shall not be considered to be acting in

good faith if they have knowledge concerning the matter in question that

would cause such reliance to be unwarranted. Persons who so perform

their duties shall have no liability by reason of being or having been

directors, officers or key persons of the corporation.

List of directors, officers and key persons.

(a) If a member or creditor of a corporation, in person or by his

attorney or agent, or a representative of the district attorney or of

the secretary of state, the attorney general, or other state official,

makes a written demand on a corporation to inspect a current list of its

directors, officers and key persons, the corporation shall, within two

business days after receipt of the demand and for a period of one week

thereafter, make the list available for such inspection at its office

during usual business hours.

(b) Upon refusal by the corporation to make a current list of its

directors, officers and key persons available, as provided in paragraph

(a) of this section, the person making a demand for such list may apply,

ex parte, to the supreme court at a special term held within the

judicial district where the office of the corporation is located for an

order directing the corporation to make such list available. The court

may grant such order or take such other action as it may deem just and

proper.

Liability of directors in certain cases.

(a) Directors of a corporation who vote for or concur in any of the

following corporate actions shall be jointly and severally liable to the

corporation for the benefit of its creditors or members or the ultimate

beneficiaries of its activities, to the extent of any injury suffered by

such persons, respectively, as a result of such action, or, if there be

no creditors or members or ultimate beneficiaries so injured, to the

corporation, to the extent of any injury suffered by the corporation as

a result of such action:

(1) The distribution of the corporation's cash or property to members,

directors or officers, other than a distribution permitted under section

515 (Dividends prohibited; certain distributions of cash or property

authorized).

(2) The redemption of capital certificates, subvention certificates or

bonds, to the extent such redemption is contrary to the provisions of

section 502 (Member's capital contributions), section 504 (Subventions),

or section 506 (Bonds and security interests).

(3) The payment of a fixed or contingent periodic sum to the holders

of subvention certificates or of interest to the holders or

beneficiaries of bonds to the extent such payment is contrary to the

provisions of section 504 or section 506.

(4) The distribution of assets in violation of section 1002-a

(Carrying out the plan of dissolution and distribution of assets) or

without paying or adequately providing for all known liabilities of the

corporation, excluding any claims not filed by creditors within the time

limit set in a notice given to creditors under articles 10 (Non-judicial

dissolution) or 11 (Judicial dissolution).

(5) The making of any loan contrary to section 716 (Loans to directors

and officers).

(b) A director who is present at a meeting of the board, or any

committee thereof, at which action specified in paragraph (a) is taken

shall be presumed to have concurred in the action unless his dissent

thereto shall be entered in the minutes of the meeting, or unless he

shall submit his written dissent to the person acting as the secretary

of the meeting before the adjournment thereof, or shall deliver or send

by registered mail such dissent to the secretary of the corporation

promptly after the adjournment of the meeting. Such right to dissent

shall not apply to a director who voted in favor of such action. A

director who is absent from a meeting of the board, or any committee

thereof, at which such action is taken shall be presumed to have

concurred in the action unless he shall deliver or send by registered

mail his dissent thereto to the secretary of the corporation or shall

cause such dissent to be filed with the minutes of the proceedings of

the board or committee within a reasonable time after learning of such

action.

(c) Any director against whom a claim is successfully asserted under

this section shall be entitled to contribution from the other directors

who voted for or concurred in the action upon which the claim is

asserted.

(d) Directors against whom a claim is successfully asserted under this

section shall be entitled, to the extent of the amounts paid by them to

the corporation as a result of such claims:

(1) Upon reimbursement to the corporation of any amount of an improper

distribution of the corporation's cash or property, to be subrogated to

the rights of the corporation against members, directors or officers who

received such distribution with knowledge of facts indicating that it

was not authorized by this chapter, in proportion to the amounts

received by them respectively.

(2) Upon reimbursement to the corporation of an amount representing an

improper redemption of a capital certificate, subvention or bond, to

have the corporation rescind such improper redemption and recover the

amount paid, for their benefit but at their expense, from any member or

holder who received such payment with knowledge of facts indicating that

such redemption by the corporation was not authorized by this chapter.

(3) Upon reimbursement to the corporation of an amount representing

all or part of an improper payment of a fixed or contingent periodic sum

to the holder of a subvention certificate, or of interest to the holder

or beneficiary of a bond, to have the corporation recover the amount so

paid, for their benefit but at their expense, from any holder or

beneficiary who received such payment with knowledge of facts indicating

that such payment by the corporation was not authorized by this chapter.

(4) Upon payment to the corporation of the claim of the attorney

general or of any creditor by reason of a violation of subparagraph (a)

(4), to be subrogated to the rights of the corporation against any

person who received an improper distribution of assets.

(5) Upon reimbursement to the corporation of the amount of any loan

made contrary to section 716 (Loans to directors and officers), to be

subrogated to the rights of the corporation against a director or

officer who received the improper loan.

(e) A director or officer shall not be liable under this section if,

in the circumstances, he discharged his duty to the corporation under

section 717 (Duty of directors and officers).

(f) This section shall not affect any liability otherwise imposed by

law upon any director or officer.

Actions against directors, officers and key persons.

(a) An action may be brought against one or more directors, officers,

or key persons of a corporation to procure a judgment for the following

relief:

(1) To compel the defendant to account for his official conduct in the

following cases:

(A) The neglect of, or failure to perform, or other violation of his

duties in the management and disposition of corporate assets committed

to his charge.

(B) The acquisition by himself, transfer to others, loss or waste of

corporate assets due to any neglect of, or failure to perform, or other

violation of his duties.

(2) To set aside an unlawful conveyance, assignment or transfer of

corporate assets, where the transferee knew of its unlawfulness.

(3) To enjoin a proposed unlawful conveyance, assignment or transfer

of corporate assets, where there are reasonable grounds for belief that

it will be made.

(b) An action may be brought for the relief provided in this section

and in paragraph (a) of section 719 (Liabilities of directors in certain

cases) by the attorney general, by the corporation, or, in the right of

the corporation, by any of the following:

(1) A director or officer of the corporation.

(2) A receiver, trustee in bankruptcy, or judgment creditor thereof.

(3) Under section 623 (Members' derivative action brought in the right

of the corporation to procure a judgment in its favor), by one or more

of the members thereof.

(4) If the certificate of incorporation or the by-laws so provide, by

any holder of a subvention certificate or any other contributor to the

corporation of cash or property of the value of $1,000 or more.

(c) In a corporation having no members, an action may be brought by a

director against third parties to obtain a judgment in favor of the

corporation. The complaint shall set forth with particularity the

efforts of the plaintiff to secure the initiation of such action by the

board or the reason for not making such efforts. The court in its

discretion shall determine whether it is in the interest of the

corporation that the action be maintained, and if the action is

successful in whole or in part, what reimbursement if any should be made

out of the corporate treasury to the plaintiff for his reasonable

expenses including attorney's fees, incurred in the prosecution of the

action.

Liability of directors, officers, trustees and key persons.

Except as provided in sections seven hundred nineteen and seven

hundred twenty of this chapter, and except any action or proceeding

brought by the attorney general or, in the case of a charitable trust,

an action or proceeding against a trustee brought by a beneficiary of

such trust, no person serving without compensation as a director,

officer, key person or trustee of a corporation, association,

organization or trust described in section 501 (c) (3) of the United

States internal revenue code shall be liable to any person other than

such corporation, association, organization or trust based solely on his

or her conduct in the execution of such office unless the conduct of

such director, officer, key person or trustee with respect to the person

asserting liability constituted gross negligence or was intended to

cause the resulting harm to the person asserting such liability. For

purposes of this section, such a director, officer, key person or

trustee shall not be considered compensated solely by reason of payment

of his or her actual expenses incurred in attending meetings or

otherwise in the execution of such office.

Nonexclusivity of statutory provisions for indemnification of

directors and officers.

The indemnification and advancement of expenses granted pursuant to,

or provided by, this article shall not be deemed exclusive of any other

rights to which a director or officer seeking indemnification or

advancement of expenses may be entitled, whether contained in the

certificate of incorporation or the by-laws or, when authorized by such

certificate of incorporation or by-laws, (a) a resolution of members,

(b) a resolution of directors, or (c) an agreement providing for such

indemnification, provided that no indemnification may be made to or on

behalf of any director or officer if a judgment or other final

adjudication adverse to the director or officer establishes that his

acts were committed in bad faith or were the result of active and

deliberate dishonesty and were material to the cause of action so

adjudicated, or that he personally gained in fact a financial profit or

other advantage to which he was not legally entitled. Nothing contained

in this article shall affect any rights to indemnification to which

corporate personnel other than directors and officers may be entitled by

contract or otherwise under law.

Authorization for indemnification of directors and officers.

(a) A corporation may indemnify any person, made, or threatened to be

made, a party to an action or proceeding other than one by or in the

right of the corporation to procure a judgment in its favor, whether

civil or criminal, including an action by or in the right of any other

corporation of any kind, domestic or foreign, or any partnership, joint

venture, trust, employee benefit plan or other enterprise, which any

director or officer of the corporation served in any capacity at the

request of the corporation, by reason of the fact that he, his testator

or intestate, was a director or officer of the corporation, or served

such other corporation, partnership, joint venture, trust, employee

benefit plan or other enterprise in any capacity, against judgments,

fines, amounts paid in settlement and reasonable expenses, including

attorneys' fees actually and necessarily incurred as a result of such

action or proceeding, or any appeal therein, if such director or officer

acted, in good faith, for a purpose which he reasonably believed to be

in, or, in the case of service for any other corporation or any

partnership, joint venture, trust, employee benefit plan or other

enterprise, not opposed to, the best interests of the corporation and,

in criminal actions or proceedings, in addition, had no reasonable cause

to believe that his conduct was unlawful.

(b) The termination of any such civil or criminal action or proceeding

by judgment, settlement, conviction or upon a plea of nolo contendere,

or its equivalent, shall not in itself create a presumption that any

such director or officer did not act, in good faith, for a purpose which

he reasonably believed to be in, or, in the case of service for any

other corporation or any partnership, joint venture, trust, employee

benefit plan or other enterprise, not opposed to, the best interests of

the corporation or that he had reasonable cause to believe that his

conduct was unlawful.

(c) A corporation may indemnify any person made, or threatened to be

made, a party to an action by or in the right of the corporation to

procure a judgment in its favor by reason of the fact that he, his

testator or intestate, is or was a director or officer of the

corporation, or is or was serving at the request of the corporation as a

director or officer of any other corporation of any kind, domestic or

foreign, of any partnership, joint venture, trust, employee benefit plan

or other enterprise, against amounts paid in settlement and reasonable

expenses, including attorneys' fees, actually and necessarily incurred

by him in connection with the defense or settlement of such action, or

in connection with an appeal therein, if such director or officer acted,

in good faith, for a purpose which he reasonably believed to be in, or,

in the case of service for any other corporation or any partnership,

joint venture, trust, employee benefit plan or other enterprise, not

opposed to, the best interests of the corporation, except that no

indemnification under this paragraph shall be made in respect of (1) a

threatened action, or a pending action which is settled or otherwise

disposed of, or (2) any claim, issue or matter as to which such person

shall have been adjudged to be liable to the corporation, unless and

only to the extent that the court in which the action was brought, or,

if no action was brought, any court of competent jurisdiction,

determines upon application that, in view of all the circumstances of

the case, the person is fairly and reasonably entitled to indemnity for

such portion of the settlement amount and expenses as the court deems

proper.

(d) For the purpose of this section, a corporation shall be deemed to

have requested a person to serve an employee benefit plan where the

performance by such person of his duties to the corporation also imposes

duties on, or otherwise involves services by, such person to the plan or

participants or beneficiaries of the plan; excise taxes assessed on a

person with respect to an employee benefit plan pursuant to applicable

law shall be considered fines; and action taken or omitted by a person

with respect to an employee benefit plan in the performance of such

person's duties for a purpose reasonably believed by such person to be

in the interest of the participants and beneficiaries of the plan shall

be deemed to be for a purpose which is not opposed to the best interests

of the corporation.

Payment of indemnification other than by court award.

(a) A person who has been successful, on the merits or otherwise, in

the defense of a civil or criminal action or proceeding of the character

described in section 722 shall be entitled to indemnification as

authorized in such section.

(b) Except as provided in paragraph (a), any indemnification under

section 722 or otherwise permitted by section 721, unless ordered by a

court under section 724 (Indemnification of directors and officers by a

court), shall be made by the corporation, only if authorized in the

specific case:

(1) By the board acting by a quorum consisting of directors who are

not parties to such action or proceeding upon a finding that the

director or officer has met the standard of conduct set forth in section

722 or established pursuant to section 721, as the case may be, or,

(2) If a quorum under subparagraph (1) is not obtainable or, even if

obtainable, a quorum of disinterested directors so directs:

(A) By the board upon the opinion in writing of independent legal

counsel that indemnification is proper in the circumstances because the

applicable standard of conduct set forth in such sections has been met

by such director or officer, or

(B) By the members upon a finding that the director or officer has met

the applicable standard of conduct set forth in such sections.

(c) Expenses incurred in defending a civil or criminal action or

proceeding may be paid by the corporation in advance of the final

disposition of such action or proceeding upon receipt of an undertaking

by or on behalf of such director or officer to repay such amount as, and

to the extent, required by paragraph (a) of section 725.

Indemnification of directors and officers by a court.

(a) Notwithstanding the failure of a corporation to provide

indemnification, and despite any contrary resolution of the board or of

the members in the specific case under section 723 (Payment of

indemnification other than by court award), indemnification shall be

awarded by a court to the extent authorized under section 722

(Authorization for indemnification of directors and officers), and

paragraph (a) of section 723 (Payment of indemnification other than by

court award). Application therefor shall be made on notice to the

attorney general and may be made, in every case, either:

(1) In the civil action or proceeding in which the expenses were

incurred or other amounts were paid, or

(2) To the supreme court in a separate proceeding, in which case the

application shall set forth the disposition of any previous application

made to any court for the same or similar relief and also reasonable

cause for the failure to make application for such relief in the action

or proceeding in which the expenses were incurred or other amounts were

paid.

(b) The application shall be made in such manner and form as may be

required by the applicable rules of court or, in the absence thereof, by

direction of a court to which it is made. Such application shall be upon

notice to the corporation. The court may also direct that notice be

given at the expense of the corporation to the members and such other

persons as it may designate in such manner as it may require.

(c) Where indemnification is sought by judicial action, the court may

allow a person such reasonable expenses, including attorneys' fees,

during the pendency of the litigation as are necessary in connection

with his defense therein, if the court shall find that the defendant has

by his pleadings or during the course of the litigation raised genuine

issues of fact or law.

Other provisions affecting indemnification of directors and

officers.

(a) All expenses incurred in defending a civil or criminal action or

proceeding which are advanced by the corporation under paragraph (c) of

section 723 (Payment of indemnification other than by court award) or

allowed by a court under paragraph (c) of section 724 (Indemnification

of directors and officers by a court) shall be repaid in case the person

receiving such advancement or allowance is ultimately found, under the

procedure set forth in this article, not to be entitled to

indemnification or, where indemnification is granted, to the extent the

expenses so advanced by the corporation or allowed by the court exceed

the indemnification to which he is entitled.

(b) No indemnification, advancement or allowance shall be made under

this article in any circumstance where it appears:

(1) That the indemnification would be inconsistent with the law of the

jurisdiction of incorporation of a foreign corporation which prohibits

or otherwise limits such indemnification; or

(2) That the indemnification would be inconsistent with a provision of

the certificate of incorporation, a by-law, a resolution of the board or

of the members, an agreement or other proper corporate action, in effect

at the time of the accrual of the alleged cause of action asserted in

the threatened or pending action or proceeding in which the expenses

were incurred or other amounts were paid, which prohibits or otherwise

limits indemnification; or

(3) If there has been a settlement approved by the court, that the

indemnification would be inconsistent with any condition with respect to

indemnification expressly imposed by the court in approving the

settlement.

(c) If any expenses or other amounts are paid by way of

indemnification, otherwise than by court order or action by the members,

the corporation shall prepare a statement specifying the persons paid,

the amounts paid, and the nature and status at the time of such payment

of the litigation or threatened litigation, and

(1) Not later than the next annual meeting of members, unless such

meeting is held within three months from the date of such payment, and,

in any event, within fifteen months of the date of such payment, shall

mail the statement to its members of record entitled at the time to vote

for the election of directors; or

(2) If the corporation has no members, shall include the statement in

the records of the corporation open to public inspection, or

(3) If the corporation is a cemetery corporation, as defined in

paragraph (a) of section 1502 (Definitions), which term, for the

purposes of this section, shall include a religious corporation having

members, (i) by including the statement required by this paragraph or

paragraph (d) of section 726 (Insurance for indemnification of directors

and officers), as the case may be in the records of the corporation open

to public inspection; (ii) by including the information required by the

statement in any notice published pursuant to the provisions of section

605 (Notice of meeting of members), except as otherwise provided by law;

(iii) by enclosing the statement with the notice of annual meeting if

such notice is in fact mailed to the members; and (iv) by raising the

issue for approval at the next annual meeting of the members.

(d) If any action with respect to indemnification of directors and

officers is taken by way of amendment of the by-laws, resolution of

directors, or by agreement, then the corporation shall, not later than

the next annual meeting of members, unless such meeting is held within

three months from the date of such action, and, in any event, within

fifteen months from the date of such action, mail to its members of

record at the time entitled to vote for the election of directors a

statement specifying the action taken. If the corporation has no

members, the statement shall be included in the records of the

corporation open to public inspection.

(e) The provisions of this article relating to indemnification of

directors and officers and insurance therefor shall apply to domestic

corporations and foreign corporations conducting activities in this

state, except as provided in section 1321 (Exemption from certain

provisions).

Insurance for indemnification of directors and officers.

(a) Subject to paragraph (b), a corporation shall have power to

purchase and maintain insurance:

(1) To indemnify the corporation for any obligation which it incurs as

a result of the indemnification of directors and officers under the

provisions of this article, and

(2) To indemnify directors and officers in instances in which they may

be indemnified by the corporation under the provisions of this article,

and

(3) To indemnify directors and officers in instances in which they may

not otherwise be indemnified by the corporation under the provisions of

this article provided the contract of insurance covering such directors

and officers provides, in a manner acceptable to the superintendent of

financial services, for a retention amount and for co-insurance.

(b) No insurance under paragraph (a) may provide for any payment,

other than cost of defense, to or on behalf of any director or officer:

(1) if a judgment or other final adjudication adverse to the insured

director or officer establishes that his acts of active and deliberate

dishonesty were material to the cause of action so adjudicated, or that

he personally gained in fact a financial profit or other advantage to

which he was not legally entitled, or

(2) in relation to any risk the insurance of which is prohibited under

the insurance law of this state.

(c) Insurance under any or all subparagraphs of paragraph (a) may be

included in a single contract or supplement thereto. Retrospective rated

contracts are prohibited.

(d) The corporation shall, within the time and to the persons provided

in paragraph (c) of section 725 (Other provisions affecting

indemnification of directors and officers), mail a statement in respect

to any insurance it has purchased or renewed under this section,

specifying the insurance carrier, date of the contract, cost of the

insurance, corporate positions insured, and a statement explaining all

sums, not previously reported in a statement to members, paid under any

indemnification insurance contract. Notwithstanding any other provision

of law, a cemetery corporation or a religious corporation having members

which purchases or renews any insurance under this section after the

effective date of the act which added this sentence to this paragraph,

which corporation had two hundred fifty or more interments in the

calendar year preceding such purchase or renewal, shall mail the

statement required by this section to every person to whom a care notice

or solicitation for services has been sent during such calendar year and

to every person to whom a notice of annual meeting was mailed during

such calendar year, but in no event to less than ten per centum of the

lot owners of record during such calendar year. Such corporation shall

not be required to mail such statement during any subsequent year,

unless such corporation elects to mail notices of annual meeting to its

members in which event the statement shall be enclosed as provided in

clause (iii) of paragraph (c) (3) of section 725 (Other provisions

affecting indemnification of directors and officers). A corporation

having less than two hundred fifty interments in the calendar year

preceding such purchase or renewal shall not be required to mail such

statement unless such corporation elects to mail notices of annual

meeting to its members in which event the statement shall be enclosed as

provided in clause (iii) of paragraph (c) (3) of section 725 (Other

provisions affecting indemnification of directors and officers).

(e) This section is the public policy of this state to spread the risk

of corporate management, notwithstanding any other general or special

law of this state or of any other jurisdiction, including the federal

government.

Right to amend certificate of incorporation.

(a) A corporation may amend its certificate of incorporation, from

time to time, in any and as many respects as may be desired, if such

amendment contains only such provisions as might be lawfully contained

in an original certificate of incorporation filed at the time of making

such amendment.

(b) In particular, and without limitation upon such general power of

amendment, a corporation may amend its certificate of incorporation,

from time to time, so as:

(1) To change its corporate name.

(2) To enlarge, limit or otherwise change its corporate purposes.

(3) To strike out, change or add any provision not inconsistent with

this chapter or any other statute relating to the affairs of the

corporation, its rights or powers or the rights or powers of its

members, directors or officers, including any provision required or

permitted to be set forth in the by-laws.

(4) To extend its duration, or revive its existence if it has ceased

to exist because of the expiration of its period of duration. A

corporation may not however reduce its corporate duration.

(5) To specify, change or revoke the voting rights of its directors or

members or of any class of members.

(6) To specify or change the location of the office of the

corporation.

(7) To specify or change the post office address to which the

secretary of state shall mail a copy of any process against the

corporation served upon him.

(8) To make, revoke or change the designation of a registered agent,

or to specify or change the address of its registered agent.

(9) To authorize the issuance of capital certificates and to fix the

face value and terms of such certificates and the rights and privileges

of their holders and the manner in which the terms, rights and

privileges may be amended and to confer upon the holders of such

certificates the right to vote in the election of directors and upon any

other matters as may be set forth.

(10) To specify, change or delete the email address to which the

secretary of state shall email a notice that process against the

corporation has been electronically served upon him or her.

(c) A corporation created by special act may accomplish any or all

amendments permitted in this article, in the manner and subject to the

conditions provided in this article.

Authorization of amendment or change, class vote.

(a) Amendment or change of the certificate of incorporation shall be

authorized:

(1) If there are members entitled to vote thereon, by majority vote of

such members at a meeting as provided in paragraph (c) of section 613

(Vote of members).

(2) If there are no members entitled to vote thereon, by vote of a

majority of the entire board.

(b) Notwithstanding any provision in the certificate of incorporation

or by-laws, members of a class shall be entitled to vote and to vote as

a class upon the authorization of an amendment and, in addition to the

authorization of the amendment required by paragraph (a) (1), the

amendment shall be authorized by majority vote of the members of the

class, when the proposed amendment would exclude or limit their right to

vote on any matter except as such right may be limited by voting rights

given to members of an existing class or of a new class.

(c) Any one or more of the following changes may be authorized by or

pursuant to authorization of the board:

(1) To specify or change the location of the office of the

corporation.

(2) To specify or change the post office address to which the

secretary of state shall mail a copy of any process against the

corporation served upon him.

(3) To make, revoke or change the designation of a registered agent,

or to specify or change the address of its registered agent.

(4) To specify, change or delete the email address to which the

secretary of state shall email a notice of the fact that process against

the corporation has been electronically served upon him or her.

(d) This section shall not alter the vote required under any other

section for the authorization of an amendment referred to therein, nor

alter the authority of the board to authorize amendments under any other

section.

Certificate of amendment; contents.

(a) To accomplish any amendment, a certificate of amendment entitled

"Certificate of amendment of the certificate of incorporation of

............................ (name of corporation) under section 803 of

the Not-for-Profit Corporation Law" shall be signed and delivered to the

department of state. It shall set forth:

(1) The name of the corporation and, if it has been changed, the name

under which it was formed.

(2) The date its certificate of incorporation was filed by the

department of state and the law under which it was formed.

(3) That the corporation is a corporation as defined in subparagraph

(a) (5) of section 102 (Definitions).

(4) Each amendment effected thereby, setting forth the subject matter

of each provision of the certificate of incorporation which is to be

amended or eliminated and the full text of the provision or provisions,

if any, which are to be substituted or added.

(5) The manner in which the amendment of the certificate of

incorporation was authorized.

(6) A designation of the secretary of state as agent of the

corporation upon whom process against it may be served and the post

office address within or without this state to which the secretary of

state shall mail a copy of any process against it served upon the

secretary. The corporation may include an email address to which the

secretary of state shall email a notice of the fact that process against

it has been electronically served upon him or her.

(b) Any number of amendments or changes may be included in one

certificate under this section. Such certificate may also include any

amendments or changes permitted by other sections and in that case the

certificate shall set forth any additional statement required by any

other section specifying the contents of a certificate to effect such

amendment or change.

Certificate of change; contents.

(a) Any one or more of the changes authorized by paragraph (c) of

section 802 (Authorization of amendment or change, class vote) may be

accomplished by filing a certificate of change which shall be entitled

"Certificate of Change of .................. (name of corporation) under

section 803-A of the Not-for-Profit Corporation Law" and shall be signed

and delivered to the department of state. It shall set forth:

(1) The name of the corporation and if it has been changed, the name

under which it was formed.

(2) The date its certificate of incorporation was filed by the

department of state.

(3) Each change effected thereby.

(4) The manner in which the change was authorized.

(b) A certificate of change which changes only the post office address

to which the secretary of state shall mail a copy of any process against

the corporation served upon him or her, and/or the email address to

which the secretary of state shall email a notice of the fact that

process against it has been electronically served upon the secretary of

state, and/or the address of the registered agent, provided such address

being changed is the address of a person, partnership or other

corporation whose address, as agent, is the address to be changed,

and/or the email address being changed is the email address of a person,

partnership or other corporation, whose email address, as agent, is the

email address to be changed, and/or who has been designated as

registered agent for such corporation, may be signed and delivered to

the department of state by such agent. The certificate of change shall

set forth the statements required under subparagraphs (1), (2) and (3)

of paragraph (a) of this section; that a notice of the proposed change

was mailed to the corporation by the party signing the certificate not

less than thirty days prior to the date of delivery to the department

and that such corporation has not objected thereto; and that the party

signing the certificate is the agent of such corporation to whose

address the secretary of state is required to mail copies of any process

against the corporation served upon him or her, and/or the agent of the

corporation to whose the email address the secretary of state is

required to email a notice of the fact that process against the

corporation has been electronically served upon him or her, and/or the

registered agent, if such be the case. A certificate signed and

delivered under this paragraph shall not be deemed to effect a change of

location of the office of the corporation in whose behalf such

certificate is filed.

Approvals, notices and effect.

(a) (i) A certificate of amendment shall not be filed if the amendment

adds, changes or eliminates a purpose, power or provision the inclusion

of which in a certificate of incorporation requires consent or approval

of a governmental body or officer or any other person or body, or if the

amendment changes the name of a corporation whose certificate of

incorporation had such consent or approval endorsed thereon or annexed

thereto, unless such consent or approval is no longer required or is

endorsed on or annexed to the certificate of amendment. A certificate of

amendment adding, changing or eliminating a purpose, power or provision

the inclusion of which in a certificate of incorporation requires the

incorporator to send such certificate to a governmental body or officer

or any other person or body, or if the amendment changes the name of a

corporation whose certificate of incorporation was required to be

delivered by the incorporator to a governmental body or officer or any

other person or body, shall be delivered by the person or entity filing

the certificate of amendment within thirty business days after the

corporation receives confirmation from the department of state that the

certificate has been accepted for filing.

(ii) Every certificate of amendment of a charitable corporation which

seeks to change or eliminate a purpose or power enumerated in the

corporation's certificate of incorporation, or to add a power or purpose

not enumerated therein, shall have endorsed thereon or annexed thereto

the approval of either (A) the attorney general, or (B) a justice of the

supreme court of the judicial district in which the office of the

corporation is located. At any time, including if the attorney general

does not approve a certificate of amendment submitted pursuant to clause

(A) of this subparagraph, or if the attorney general concludes that

court review is appropriate, the corporation may apply for approval of

the amendment to a justice of the supreme court of the judicial district

in which the office of the corporation is located. Any application for

approval of a certificate of amendment by the supreme court pursuant to

this paragraph shall be on ten days' written notice to the attorney

general.

(b) The department of state shall not file a certificate of amendment

reviving the existence of a corporation unless the consent or approval

of a governmental body or officer or any other person or body required

to be endorsed on or annexed to the certificate of incorporation of a

corporation formed for similar purposes, is attached thereto, or, if

notice to the attorney-general was required prior to the filing of its

certificate of incorporation, the certificate of amendment should

indicate that such notice has been given as required by law.

(c) The department of state shall not file a certificate of amendment

reviving the existence of a corporation if the name of the corporation

being revived is not available under section 301 (Corporate name;

general) for use by a corporation then being formed under this chapter,

unless the certificate of amendment shall change the name to one which

is available for such use.

(d) No amendment or change shall affect any existing cause of action

in favor of or against the corporation, or any pending suit to which it

shall be a party, or the existing rights of persons other than members;

and in the event the corporate name shall be changed, no suit brought by

or against the corporation under its former name shall abate for that

reason.

(e) Notwithstanding any law to the contrary, a certificate of

amendment of a corporation whose statement of purposes specifically

includes the establishment or operation of a child day care center, as

that term is defined in section three hundred ninety of the social

services law, shall provide a certified copy of such certificate to the

office of children and family services within thirty days after the

filing of such certificate with the department of state.

Restated certificate of incorporation.

(a) A corporation, when authorized by the board, may restate in a

single certificate the text of its certificate of incorporation without

making any amendment or change thereby, except that it may include any

one or more of the amendments or changes which may be authorized by the

board without a vote of members under this chapter. Alternatively, a

corporation may restate in a single certificate the text of its

certificate of incorporation as amended thereby to effect any one or

more of the amendments or changes authorized by this chapter, when

authorized as required by section 802 (Authorization of amendment or

change, class vote).

(b) A restated certificate of incorporation, entitled "Restated

certificate of incorporation of .................... (name of

corporation) under section 805 of the Not-for-Profit Corporation Law",

shall be signed and delivered to the department of state. It shall set

forth:

(1) The name of the corporation and, if it has been changed, the name

under which it was formed.

(2) The date its certificate of incorporation was filed by the

department of state.

(3) If the restated certificate restates the text of the certificate

of incorporation without making any amendment or change, then a

statement that the text of the certificate of incorporation is thereby

restated without amendment or change to read as therein set forth in

full.

(4) If the restated certificate restates the text of the certificate

of incorporation as amended or changed thereby, then a statement that

the certificate of incorporation is amended or changed to effect one or

more of the amendments or changes authorized by this chapter, specifying

each such amendment or change and that the text of the certificate of

incorporation is thereby restated as amended or changed to read as

therein set forth in full.

(5) The manner in which the restatement of the certificate of

incorporation was authorized.

(c) A restated certificate need not include statements as to the

incorporator or incorporators, or the first directors.

(d) Any amendment or change under this section shall be subject to any

other section, not inconsistent with this section, which would be

applicable if a separate certificate were filed to effect such amendment

or change.

(e) Notwithstanding that the corporation would be required by any

statute to secure from any supreme court justice, governmental body or

officer, or other person or body, any consent or approval to the filing

of its certificate of incorporation or a certificate of amendment, such

consent or approval shall not be required with respect to the restated

certificate if such certificate makes no amendment and if any previously

required consent or approval had been secured.

(f) Upon filing by the department, the original certificate of

incorporation shall be superseded and the restated certificate of

incorporation, including any amendments and changes made thereby, shall

be the certificate of incorporation of the corporation.

Power of merger or consolidation.

(a) Two or more domestic corporations may, as provided in this

chapter:

(1) Merge into a single corporation which shall be one of the

constituent corporations; or

(2) Consolidate into a single corporation which shall be a new

corporation to be formed pursuant to the consolidation.

(b) Whenever used in this article:

(1) "Merger" means a procedure of the character described in

subparagraph (a) (1).

(2) "Consolidation" means a procedure of the character described in

subparagraph (a) (2).

(3) "Constituent corporation" means an existing corporation that is

participating in the merger or consolidation with one or more other

corporations.

(4) "Surviving corporation" means the constituent corporation into

which one or more other constituent corporations are merged.

(5) "Consolidated corporation" means the new corporation in which two

or more constituent corporations are consolidated.

Plan of merger or consolidation.

(a) The board of each corporation proposing to participate in a merger

or consolidation under section 901 (Power of merger or consolidation)

shall adopt, by a vote of two-thirds of the directors present at the

time of the vote, if a quorum is present at that time, or by a vote of

the number of directors required under the certificate of incorporation,

by-laws, this chapter and any other applicable law, a plan of merger or

consolidation, setting forth:

(1) The name of each constituent corporation and if the name of any of

them has been changed, the name under which it was formed, and the name

of the surviving corporation, or the name or the method of determining

it, of the consolidated corporation.

(2) As to each constituent corporation, a description of the

membership and holders of any certificates evidencing capital

contributions or subventions, including their number, classification,

and voting rights, if any.

(3) The terms and conditions of the proposed merger or consolidation,

including the manner and basis of converting membership or other

interest in each constituent corporation into membership or other

interest in the surviving or consolidated corporation, or the cash or

other consideration to be paid or delivered in exchange for membership

or other interest in each constituent corporation, or a combination

thereof.

(4) In case of merger, a statement of any amendments or changes in the

certificate of incorporation of the surviving corporation to be effected

by such merger; in case of consolidation, all statements required to be

included in a certificate of incorporation for a corporation formed

under this chapter, except statements as to facts not available at the

time the plan of consolidation is adopted by the board.

(5) In case of a merger or consolidation under section 906 (Merger or

consolidation of domestic and foreign corporations), a statement of any

agreements required by subparagraph (2) (D) of paragraph (d) thereof.

Approval of plan.

(a) The board of each constituent corporation, upon approving such

plan of merger or consolidation shall submit such plan to a vote of the

members in accordance with the following:

(1) Notice of meeting shall be given to each member whether or not

entitled to vote. A copy of the plan of merger or consolidation or an

outline of the material features of the plan shall accompany such

notice.

(2) The plan of merger or consolidation shall be approved at a meeting

of the members by two-thirds vote as provided in paragraph (c) of

section 613 (Vote of members).

(3) If any merging or consolidating corporation has no members

entitled to vote thereon, a plan of merger or consolidation shall be

deemed approved by the members of the corporation when it is adopted by

the board of such corporation pursuant to section 902 (Plan of merger or

consolidation).

(b) Notwithstanding authorization as provided herein, at any time

prior to the filing of the certificate of merger or consolidation, the

plan of merger or consolidation may be abandoned pursuant to a provision

for such abandonment, if any, contained in the plan of merger or

consolidation.

Certificate of merger or consolidation; contents.

(a) After approval of the plan of merger or consolidation unless the

merger or consolidation is abandoned in accordance with paragraph (b) of

section 903 (Approval of plan) a certificate of merger or consolidation,

entitled "Certificate of merger (or consolidation) of .......... and

................ into (names of corporations) under section 904 of the

Not-for-Profit Corporation Law," shall be signed on behalf of each

constituent corporation and delivered to the department of state. It

shall set forth:

(1) The statements required by subparagraphs (a), (1), (2), and (4) of

section 902 (Plan of merger or consolidation).

(2) The effective date of the merger or consolidation if other than

the date of filing of the certificate of merger or consolidation by the

department of state.

(3) In the case of consolidation, any statement required to be

included in a certificate of incorporation for a corporation formed

under this chapter but which was omitted under subparagraph (a) (4) of

section 902.

(4) The date when the certificate of incorporation of each constituent

corporation was filed by the department of state or, in the case of

constituent corporations created by special law, the chapter number and

year of passage of such law.

(5) The manner in which the merger or consolidation was authorized

with respect to each constituent corporation.

(b) The surviving or consolidated corporation shall thereafter cause a

copy of such certificate certified by the department of state, to be

filed in the office of the clerk of each county in which the office of a

constituent corporation, other than the surviving corporation, is

located, and in the office of the official who is the recording officer

of each county in this state in which real property of a constituent

corporation, other than the surviving corporation, is situated.

Effect of merger or consolidation.

(a) Upon the filing of the certificate of merger and consolidation by

the department of state or on such date subsequent thereto, not to

exceed thirty days, as shall be set forth in such certificate, the

merger or consolidation shall be effected.

(b) When such merger or consolidation has been effected:

(1) Such surviving or consolidated corporation shall thereafter,

consistently with its certificate of incorporation as altered or

established by the merger or consolidation, possess all the rights,

privileges, immunities, powers and purposes of each of the constituent

corporations.

(2) All the property, real and personal, including causes of action

and every other asset of each of the constituent corporations, shall

vest in such surviving or consolidated corporation without further act

or deed, except as otherwise provided in paragraph (b) of section 907

(Approval by the Supreme Court). Except as the court may otherwise

direct, as provided in section 8-1.1 of the Estates, Powers and Trusts

Law, any disposition made in the will of a person dying domiciled in

this state or in any other instrument executed under the laws of this

state, taking effect after such merger or consolidation, to or for any

of the constituent corporations shall inure to the benefit of the

surviving or consolidated corporation. So far as is necessary for that

purpose, or for the purpose of a like result with respect to a

disposition governed by the law of any other jurisdiction, the existence

of each constituent domestic corporation shall be deemed to continue in

and through the surviving or consolidated corporation.

(3) The surviving or consolidated corporation shall assume and be

liable for all the liabilities, obligations and penalties of each of the

constituent corporations. No liability or obligation due or to become

due, claim or demand for any cause existing against any such

corporation, or any member, officer or director thereof, shall be

released or impaired by such merger or consolidation. No action or

proceeding, whether civil or criminal, then pending by or against any

such constituent corporation, or any member, officer or director

thereof, shall abate or be discontinued by such merger or consolidation,

but may be enforced, prosecuted, settled or comprised as if such merger

or consolidation had not occurred, or such surviving or consolidated

corporation may be substituted in such action or special proceeding in

place of any constituent corporation.

(4) In the case of a merger, the certificate of incorporation of the

surviving corporation shall be automatically amended to the extent, if

any, that changes in its certificate of incorporation are set forth in

the plan of merger; and, in the case of a consolidation, the statements

set forth in the certificate of consolidation and which are required or

permitted to be set forth in a certificate of incorporation of a

corporation formed under this chapter shall be its certificate of

incorporation.

Merger or consolidation of domestic and foreign corporations.

(a) One or more foreign corporations and one or more domestic

corporations may be merged or consolidated into a corporation of this

state or of another jurisdiction, if such merger or consolidation is

permitted by the laws of the jurisdiction under which each such foreign

corporation is incorporated. With respect to such merger or

consolidation, any reference in paragraph (b) of section 901 (Power of

merger or consolidation) to a corporation shall, unless the context

otherwise requires, include both domestic and foreign corporations.

(b) With respect to procedure, including the requirement of approval

by members, each domestic corporation shall comply with the provisions

of this chapter relating to merger or consolidation of domestic

corporations, and each foreign corporation shall comply with the

applicable provisions of the law of the jurisdiction under which it is

incorporated.

(c) if the surviving or consolidated corporation is, or is to be, a

domestic corporation, a certificate of merger or consolidation shall be

signed, verified and delivered to the department of state as provided in

section 904 (Certificate of merger or consolidation; contents). In

addition to the matters specified in such section, the certificate shall

set forth as to each constituent foreign corporation the jurisdiction

and date of its incorporation and the date when its application for

authority to conduct activities in this state was filed by the

department of state, and its fictitious name used in this state pursuant

to article thirteen of this chapter, if applicable, or, if no such

application has been filed, a statement to such effect.

(d) If the surviving or consolidated corporation is, or is to be,

formed under the law of any jurisdiction other than this state:

(1) It shall comply with the provisions of this chapter relating to

foreign corporations if it is to conduct activities in this state.

(2) It shall deliver to the department of state a certificate,

entitled "Certificate of merger (or consolidation) of ..........

and .......... into .......... (names of corporations) under section

906 of the Not-for-Profit Corporation Law", which shall be signed on

behalf of each constituent domestic and foreign corporation. It shall

set forth:

(A) The statements required by subparagraphs (a) (1) and (2) of

section 902 (Plan of merger or consolidation).

(B) The jurisdiction and date of incorporation of the surviving or

consolidated foreign corporation, the date when its application for

authority to conduct activities in this state was filed by the

department of state, and its fictitious name used in this state pursuant

to article thirteen of this chapter, if applicable, or, if no such

application has been filed, a statement to such effect and that it is

not to conduct activities in this state until an application for such

authority shall have been filed by such department.

(C) The date when the certificate of incorporation of each constituent

domestic corporation was filed by the department of state and the

jurisdiction and date of incorporation of each constituent foreign

corporation, other than the surviving or consolidated foreign

corporation, and; in the case of each such corporation authorized to

conduct activities in this state, the date when its application for

authority was filed by the department of state.

(D) An agreement that the surviving or consolidated foreign

corporation may be served with process in this state in any action or

special proceeding for the enforcement of any liability or obligation of

any domestic corporation or of any foreign corporation, previously

amenable to suit in this state, which is a constituent corporation in

such merger or consolidation, and an agreement that the surviving or

consolidated foreign corporation may be sued in this state in respect of

any property transferred or conveyed to it as provided in paragraph (c)

of section 907 (Approval by the supreme court), or the use made of such

property, or any transaction in connection therewith.

(E) A designation of the secretary of state as its agent upon whom

process against it may be served in the manner set forth in paragraph

(b) of section 306 (Service of process), in any action or special

proceeding described in subparagraph (D) and a post office address,

within or without this state, to which the secretary of state shall mail

a copy of the process in such action or special proceeding.

(F) The manner in which the plan of merger or consolidation was

approved with respect to each constituent domestic corporation and that

the merger or consolidation is permitted by the laws of the jurisdiction

of each constituent foreign corporation and is in compliance therewith.

(G) The effective date of the merger or consolidation if other than

the date of filing of the certificate of merger or consolidation by the

department of state.

(e) Upon the filing of the certificate of merger or consolidation by

the department of state or on such date subsequent thereto, not to

exceed thirty days as shall be set forth in such certificate, the merger

or consolidation shall be effected.

(f) The surviving or consolidated domestic or foreign corporation

shall thereafter cause a copy of such certificate, certified by the

department of state, to be filed in the office of the clerk of each

county in which the office of a constituent corporation, other than the

surviving corporation, is located, and in the office of the official who

is the recording officer of each county in this state in which real

property of a constituent corporation, other than the surviving

corporation, is situated.

(g) If the surviving or consolidated corporation is, or is to be,

formed under the law of this state, the effect of such merger or

consolidation shall be the same as in the case of the merger or

consolidation of domestic corporations under section 905 (Effect of

merger or consolidation). If the surviving or consolidated corporation

is, or is to be, incorporated under the law of any jurisdiction other

than this state, the effect of such merger or consolidation shall be the

same as in the case of the merger or consolidation of domestic

corporations, except in so far as the law of such other jurisdiction

provides otherwise.

Approval by the supreme court or attorney general.

Where any constituent corporation or the consolidated corporation is,

or would be if formed under this chapter, a charitable corporation under

section 201 (Purposes) of this chapter, no certificate shall be filed

pursuant to section 904 (Certificate of merger or consolidation;

contents) or section 906 (Merger or consolidation of domestic and

foreign corporations) until (a) the supreme court has granted an order

approving the plan of merger or consolidation and authorizing the filing

of the certificate, as provided in section 907-a (Application for

approval of the supreme court) of this article or (b) the attorney

general has approved the plan of merger or consolidation and authorized

the filing of the certificate, as provided in section 907-b (Application

for approval of the attorney general) of this article.

Application for approval of the supreme court.

(a) Application for an order approving the plan of merger and

authorizing the filing of the certificate may be made in the judicial

district in which the principal office of the surviving or consolidated

corporation is to be located, or in which the office of one of the

domestic constituent corporations is located. The application shall be

made by all the constituent corporations jointly and shall set forth by

affidavit: (1) the plan of merger or consolidation, (2) the approval

required by section 903 (Approval of plan) or paragraph (b) of section

906 (Merger or consolidation of domestic and foreign corporations) of

this article for each constituent corporation, (3) the objects and

purposes of each such corporation to be promoted by the merger or

consolidation, (4) a statement of all property, and the manner in which

it is held, and of all liabilities and of the amount and sources of the

annual income of each such corporation, (5) whether any votes against

adoption of the resolution approving the plan of merger or consolidation

were cast at the meeting at which the resolution was adopted by each

constituent corporation, and (6) facts showing that the consolidation is

authorized by the laws of the jurisdictions under which each of the

constituent corporations is incorporated.

(b) Upon the filing of the application the court shall fix a time for

hearing thereof and shall direct that notice thereof be given to such

persons as may be interested, including the attorney general, any

governmental body or officer and any other person or body whose consent

or approval is required by section 909 (Consent to filing) of this

article, in such form and manner as the court may prescribe. If no votes

against adoption of the resolution approving the plan of merger or

consolidation were cast at the meeting at which the resolution was

adopted by any constituent corporation the court may dispense with

notice to anyone except the attorney-general, any governmental body or

officer and any other person or body whose consent or approval is

required by section 909 (Consent to filing) of this article. Any person

interested may appear and show cause why the application should not be

granted.

(c) If the court shall find that any of the assets of any of the

constituent corporations are held for a charitable purpose or are

legally required to be used for a particular purpose, but not upon a

condition requiring return, transfer or conveyance by reason of the

merger or consolidation, the court may, in its discretion, direct that

such assets be transferred or conveyed to the surviving or consolidated

corporation subject to such purpose or use, or that such assets be

transferred or conveyed to the surviving or consolidated corporation or

to one or more other domestic or foreign corporations or organizations

engaged in substantially similar activities, upon an express trust the

terms of which shall be approved by the court.

(d) If the court shall find that the interests of non-consenting

members are or may be substantially prejudiced by the proposed merger or

consolidation, the court may disapprove the plan or may direct a

modification thereof. In the event of a modification, if the court shall

find that the interests of any members may be substantially prejudiced

by the proposed merger or consolidation as modified, the court shall

direct that the modified plan be submitted to vote of the members of the

constituent corporations, or if the court shall find that there is not

such substantial prejudice, it shall approve the agreement as so

modified without further approval by the members. If the court, upon

directing a modification of the plan of merger or consolidation, shall

direct that a further approval be obtained from members of the

constituent corporations or any of them, such further approval shall be

obtained in the manner specified in section 903 (Approval of plan) or

paragraph (b) of section 906 (Merger or consolidation of domestic and

foreign corporations) of this article.

(e) If it shall appear, to the satisfaction of the court, that the

provisions of this section have been complied with, and that the

interests of the constituent corporations and the public interest will

not be adversely affected by the merger or consolidation, it shall

approve the merger or consolidation upon such terms and conditions as it

may prescribe.

(f) A certified copy of such order shall be annexed to the certificate

of merger or consolidation.

Application for approval of the attorney general.

(a) In lieu of obtaining an order approving the plan of merger or

consolidation and authorizing the filing of the certificate, the

corporation may alternatively make an application to the attorney

general for approval, except where the attorney general, in his or her

discretion, concludes that a court should review the application and

make a determination thereon.

(b) The application to the attorney general shall be made by all the

constituent corporations jointly and shall set forth by affidavit: (i)

all of the information required to be included in an application to

obtain court approval pursuant to section 907-a (Application for

approval of the supreme court) of this article, (ii) all consents and

approvals required by section 909 (Consent to filing), and (iii) a

statement as to whether any persons have raised, or have a reasonable

basis to raise, objections to the merger or consolidation that is the

subject of the application, including a statement setting forth the

names and addresses of such persons, the nature of their interest, and a

description of their objections.

(c) Upon the filing of the application, the attorney general, in his

or her discretion, may direct that the constituent corporations provide

notice to such persons as may be interested, including any governmental

body or officer and any other person or body that is required either to

give consent or be notified under section 404 (Approvals, notices and

consents) of this article or 909 (Consent to filing) of this article.

The constituent corporations shall provide the attorney general with a

certification that such notice has been provided.

(d) If any assets of any of the constituent corporations are held for

a charitable purpose or are assets received for a specific purpose and

legally required to be used for a particular purpose, but not upon a

condition requiring return, transfer or conveyance by reason of the

merger or consolidation, the attorney general may, in his or her

discretion, direct that such assets be transferred or conveyed to the

surviving or consolidated corporation subject to such purpose or use.

(e) If the attorney general shall find that the interests of

non-consenting members are or may be substantially prejudiced by the

proposed merger or consolidation, the attorney general may disapprove of

the application or may condition approval of the application upon

modification of the plan of merger or consolidation in accordance with

this chapter and any other law or rule.

(f) If it shall appear, to the satisfaction of the attorney general,

that the provisions of this section have been complied with, and that

the interests of the constituent corporations and the public interest

will not be adversely affected by the merger or consolidation, the

attorney general shall approve the merger or consolidation upon such

terms and conditions as it may prescribe.

(g) The approval of the attorney general shall be annexed to the

certificate of merger or consolidation.

(h) At any time, including if the attorney general does not approve

the application, or if the attorney general concludes that court review

is appropriate, the constituent corporations may seek court approval on

notice to the attorney general pursuant to section 907-a (Application

for approval of the supreme court) of this article.

Merger or consolidation of business and not-for-profit

corporations.

(a) One or more domestic or foreign corporations which is, or would be

if formed under this chapter, a non-charitable corporation, or any

corporation formed as a type A corporation prior to July first, two

thousand fourteen, may be merged or consolidated into a domestic or

foreign corporation which is, or would be if formed under the laws of

this state, a corporation formed under the business corporation law of

this state if such merger or consolidation is not contrary to the law of

the state of incorporation of any constituent corporation. With respect

to such merger or consolidation, any reference in paragraph (b) of

section 901 (Power of merger or consolidation) of this article or

paragraph (b) of section 901 (Power of merger or consolidation) of the

business corporation law to a corporation shall, unless the context

otherwise requires, include both domestic and foreign corporations.

(b) With respect to procedure including authorization by shareholders

or approval by members, each domestic business corporation shall comply

with the business corporation law, each domestic not-for-profit

corporation shall comply with the provisions of this chapter and each

foreign corporation shall comply with the applicable provisions of the

law of the jurisdiction under which it is incorporated.

(c) The plan of merger or consolidation shall set forth all matter

required by section 902 of the business corporation law or section 902

of this chapter and the terms and conditions of the proposed merger or

consolidation, including the manner and basis of converting shares,

membership or other interest in each constituent corporation into

shares, bonds or other securities of the surviving or consolidated

corporation, or the cash or other consideration to be paid or delivered

in exchange for shares, membership or other interest in each constituent

corporation, or a combination thereof.

(d) After adoption of the plan of merger or consolidation by the board

and members or shareholders of each constituent corporation, unless the

merger or consolidation is abandoned in accordance with paragraph (b) of

section 903 (Approval by members) and paragraph (b) of section 903

(Authorization by shareholders) of the business corporation law, a

certificate of merger or consolidation, entitled "Certificate of merger

(or consolidation) of .......... and .......... into ..............

(names of corporations) under section 908 of the Not-for-Profit

Corporation Law", shall be signed on behalf of each constituent

corporation and delivered to the department of state.

(1) If the surviving or consolidated corporation is, or is to be, a

domestic corporation such certificate shall set forth the statements

required by section 904(a) of the business corporation law or section

904(a) of this chapter and, as to each constituent foreign corporation

the jurisdiction and date of its incorporation and the date when its

application for authority to conduct activities or do business in this

state was filed by the department of state or, if no such application

has been filed, a statement to such effect.

(2) If the surviving or consolidated corporation is, or is to be

formed under the law of any jurisdiction other than this state such

certificate shall set forth:

(A) The statements required by subparagraphs (a)(1) and (2) of section

902 of the business corporation law or subparagraphs (a)(1) and (2) of

section 902 (Plan of merger or consolidation) of this chapter, and the

manner in which the merger or consolidation was authorized with respect

to each constituent domestic corporation.

(B) The jurisdiction and date of incorporation of the surviving or

consolidated foreign corporation, the date when its application for

authority to do business in this state was filed by the department of

state or, if no such application has been filed, a statement to such

effect and that it is not to do business in this state until an

application for such authority shall have been filed by such department.

(C) The date when the certificate of incorporation of each constituent

domestic corporation was filed by the department of state and the

jurisdiction and date of incorporation of each constituent foreign

corporation, other than the surviving or consolidated foreign

corporation, and, in the case of each such corporation authorized to do

business or conduct activities in this state, the date when its

application for authority was filed by the department of state.

(D) An agreement that the surviving or consolidated foreign

corporation may be served with process in this state in any action or

special proceeding for the enforcement of any liability or obligation of

any domestic corporation or of any foreign corporation, previously

amenable to suit in this state, which is a constituent corporation in

such merger or consolidation, and for the enforcement, as provided in

the business corporation law, of the rights of shareholders of any

constituent domestic business corporation to receive payment for their

shares against the surviving or consolidated corporation.

(E) An agreement that, subject to the provisions of section 623 of the

business corporation law, the surviving or consolidated foreign

corporation will promptly pay to the shareholders of each constituent

domestic business corporation the amount, if any, to which they shall be

entitled under the provisions of the business corporation law relating

to the right of shareholders to receive payment for their shares.

(F) A designation of the secretary of state as his agent upon whom

process against it may be served in the manner set forth in paragraph

(b) of section 306 (Service of process), in any action or special

proceeding described in subparagraph (D) and a post office address,

within or without the state, to which the secretary of state shall mail

a copy of the process in such action or special proceeding.

(e) The department of state shall not file a certificate delivered to

it under subparagraph (d) (2) unless the consent of the state tax

commission to the merger or consolidation is attached thereto.

(g) Upon the filing of the certificate of merger or consolidation by

the department of state or on such dates subsequent thereto, not to

exceed thirty days, as shall be set forth in such certificate, the

merger or consolidation shall be effected.

(h) The surviving or consolidated domestic or foreign corporation

shall thereafter cause a copy of such certificate, certified by the

department of state, to be filed in the office of the clerk of each

county in which the office of a constituent corporation, other than the

surviving corporation, is located, and in the office of the official who

is the recording officer of each county in this state in which real

property of a constituent corporation, other than the surviving

corporation, is situated.

(i) When such merger or consolidation has been effected:

(A) If the surviving or consolidated corporation is, or is to be,

formed under the law of this state, it shall be subject to the business

corporation law and the effect of such merger or consolidation shall be

the same as in the case of the merger or consolidation of domestic

corporations under section 906 (Effect of merger or consolidation) of

the business corporation law, except that in subparagraph (b) (3) of

such section the word "shareholder" shall be read to include the word

"member" as the latter is defined in this chapter.

(B) If the surviving or consolidated corporation is, or is to be,

incorporated under the law of any jurisdiction other than this state,

the effect of such merger or consolidation shall be as provided in

subparagraph (A), except insofar as the law of such other jurisdiction

provides otherwise.

Consent to filing; notices.

(a) If the purposes of any constituent or consolidated corporation

would require the approval or consent of any governmental body or

officer or any other person or body under section 404 (Approvals,

notices and consents) of this chapter no certificate of merger or

consolidation shall be filed pursuant to this article unless such

approval or consent is endorsed thereon or annexed thereto. A

corporation whose statement of purposes specifically includes the

establishment or operation of a child day care center, as that term is

defined in section three hundred ninety of the social services law,

shall mail a certified copy of any certificate of merger or

consolidation involving such corporation to the office of children and

family services within thirty days after receipt of confirmation of the

filing of such merger or consolidation with the department of state.

(b) If the purposes of any constituent or consolidated corporation

would require the certificate of incorporation or any other notice to be

delivered to any person or entity under section 404 (Approvals, notices

and consents) of this chapter, the corporation shall provide to such

person or entity a certified copy of the certificate of incorporation

within thirty days after the corporation receives confirmation from the

department of state that the certificate has been accepted for filing.

Merger or consolidation of corporations formed under the

religious corporations law and certain other corporations

formed for religious purposes.

(a) One or more corporations formed under the religious corporations

law and one or more corporations formed for religious purposes to which

the not-for-profit corporation law applies by virtue of paragraph (a) of

section one hundred three of this chapter may be merged or consolidated

pursuant to section nine hundred one, with the effect provided in

section nine hundred one and paragraph (b) of section nine hundred five

of this chapter.

(b) Each corporation which is a party to such merger or consolidation

shall comply with the provisions of this section and of sections 902,

903, 904 and 907 of this chapter and, if and to the extent applicable,

sections 906 and 909 of this chapter.

(c) If the surviving corporation or consolidated corporation is a

domestic or authorized foreign corporation not formed under the

religious corporations law, then, a certificate of merger or

consolidation shall be filed with the department of state, and the

surviving or consolidated corporation shall thereafter cause a copy of

such certificate, certified by the department of state, to be filed in

the office of the clerk of the county in which each constituent

corporation other than the surviving corporation is located, the county

in which the certificate of incorporation of each constituent domestic

corporation or application for authority of each constituent authorized

foreign corporation, other than the surviving corporation, is filed and

the office of the official who is the recording officer of such county

in this state in which real property of a constituent corporation other

than the surviving corporation, is located.

(d) If the surviving corporation or consolidated corporation is a

corporation formed under the religious corporations law, then, the

certificate of merger or consolidation shall be filed with the office of

the official in which the certificate of incorporation of the surviving

or consolidated corporation was filed, and the surviving or consolidated

corporation shall thereafter cause a copy of such certificate, certified

by such office, to be filed in the office in which the certificate of

incorporation of each constituent domestic corporation or application

for authority of each authorized foreign corporation other than the

surviving corporation was filed, and in the office of the official who

is the recording officer of each county in this state in which real

property of a constituent corporation, other than the surviving or

consolidated corporation, is located.

(e) Such merger or consolidation shall become effective with respect

to each constituent corporation upon the filing of a certificate of

merger or consolidation or certified copy thereof pursuant to paragraph

(c) or paragraph (d) of this section with the appropriate state or

county official therein specified. With respect to the surviving

corporation, such merger may become effective on such date subsequent

thereto, not to exceed thirty days, as shall be set forth in such

certificate. The filing of a certified copy with the office of a

recording officer of a county in which real property is located shall

not be a condition precedent to such merger or consolidation becoming

effective.

Plan of dissolution and distribution of assets.

(a) The board shall adopt a plan for the dissolution of the

corporation and the distribution of its assets. Such plan shall

implement any provision in the certificate of incorporation prescribing

the distributive rights of members.

(b) If the corporation is a charitable corporation and has no assets

to distribute and no liabilities at the time of dissolution, the plan of

dissolution shall include a statement to that effect.

(c) If the corporation has no assets to distribute, other than a

reserve not to exceed twenty-five thousand dollars for the purpose of

paying ordinary and necessary expenses of winding up its affairs

including attorney and accountant fees, and liabilities not in excess of

ten thousand dollars at the time of adoption of the plan of dissolution,

the plan of dissolution shall include a statement to that effect.

(d) If the corporation has assets to distribute or liabilities, the

plan of dissolution shall contain:

(1) a description with reasonable certainty of the assets of the

corporation and their fair value, and the total amount of debts and

other liabilities incurred or estimated by the corporation, including

the total amount of any accounting and legal fees incurred or estimated,

in connection with the dissolution procedure.

(2) a statement as to whether any gifts or other assets are legally

required to be used for a particular purpose.

(3) if there are assets received and held by the corporation either

for a charitable purpose or which are legally required to be used for a

particular purpose, a statement that the assets owned by the

corporation, subject to any unpaid liabilities of the corporation, shall

be distributed as required by any gift instrument or to a charitable

corporation or organization or organizations exempt from taxation

pursuant to federal and state laws and engaged in activities

substantially similar to those of the dissolved corporation. Each such

recipient organization shall be identified and the governing instrument

and amendments thereto of each of the proposed recipient organizations

shall be annexed to such statement, along with the most recent financial

report of each recipient organization and a sworn affidavit from a

director and officer of each recipient organization stating the purposes

of the organization, and that it is currently exempt from federal income

taxation.

(4) if any of the assets of the corporation are to be distributed to a

recipient for a particular legally required purpose, an agreement by the

recipient to apply the assets received only for such purpose shall be

included.

Authorization of plan.

(a) Upon adopting a plan of dissolution and distribution of assets,

the board shall submit it to a vote of the members, if any, and such

plan shall be approved at a meeting of members by two-thirds vote as

provided in paragraph (c) of section 613 (Vote of members) of this

chapter; provided, however, that if the corporation is a charitable

corporation, other than a corporation incorporated pursuant to article

15 (Public cemetery corporations) of this chapter, the vote required by

the corporation's board of directors for adoption of the plan of

dissolution of such a corporation or by the corporation's members for

the authorization thereof shall be:

(1) In the case of a vote by the board of directors: (i) the number of

directors required under the certificate of incorporation, by-laws, this

chapter and any other applicable law;

(ii) two-thirds of the directors present at the time of the vote, if a

quorum is present at that time; or

(iii) if the number of directors actually holding office as such at

the time of the vote to adopt the plan is less than the number required

to constitute a quorum of directors under the certificate of

incorporation, the by-laws, this chapter or any other applicable law,

the remaining directors unanimously;

(2) In the case of a vote by the members, (i) the number of members

required under the certificate of incorporation, by-laws, this chapter

and any other applicable law; or (ii) by the vote of members authorized

by an order of the supreme court pursuant to section 608 (Quorum at

meeting of members) of this chapter permitting the corporation to

dispense with the applicable quorum requirement.

Notice of a special or regular meeting of the board of directors or of

the members entitled to vote on adoption and authorization or approval

of the plan of dissolution shall be sent to all the directors and

members of record entitled to vote. Unless otherwise directed by order

of the supreme court pursuant to section 608 (Quorum at meeting of

members) of this chapter, the notice shall be sent by certified mail,

return receipt requested, to the last known address of record of each

director and member not fewer than thirty, and not more than sixty days

before the date of each meeting provided, however, that if the last

known address of record of any director or member is not within the

United States, the notice to such director shall be sent by any other

reasonable means.

(b) If there are no members entitled to vote on the dissolution of the

corporation, the plan of dissolution and distribution of assets shall be

deemed authorized upon its adoption by the board.

(c) Whenever a statute creating, or authorizing the formation of, a

corporation requires approval by a governmental body or officer for the

formation of such corporation, dissolution shall not be authorized

without the approval of such body or officer.

(d) (1) The plan of dissolution and distribution of assets shall have

annexed thereto the approval of the attorney general in the case of a

charitable corporation, and in the case of any non-charitable

corporation which at the time of dissolution holds assets legally

required to be used for a particular purpose.

(2) Application to the attorney general for such approval shall be by

verified petition, with the plan of dissolution and distribution of

assets and certified copies of the consents prescribed by this section

annexed thereto.

(3) The attorney general may approve the petition if the corporation

has adopted a plan in accordance with the requirements of section 1001

(Plan of dissolution and distribution of assets) of this article, and

any other requirements imposed by law or rule. At any time, including if

the attorney general does not approve the petition, or the attorney

general concludes, in his or her discretion, that court review of the

petition is appropriate, the corporation may apply for approval to the

supreme court in the judicial district in which the principal office of

the corporation is located, or in which the office of one of the

domestic constituent corporations is located, for an order dissolving

the corporation. Application to the supreme court for an order for such

approval shall be by verified petition upon ten days written notice to

the attorney general, and shall include all information required to be

included in the application to the attorney general pursuant to this

section.

Carrying out the plan of dissolution and distribution of

assets.

Prior to filing the certificate of dissolution with the department of

state, a corporation, as applicable, shall:

(a) Carry out the plan of dissolution and distribution of assets, pay

its liabilities and distribute its assets in accordance therewith within

two hundred seventy days from the date the plan of dissolution and

distribution of assets shall have been (1) authorized as provided in

section 1002 (Authorization of plan) of this article, (2) approved by

any governmental body or officer whose approval is required pursuant to

paragraph (c) of section 1002 (Authorization of plan) of this article,

and (3) approved by either the attorney general or a justice of the

supreme court pursuant to paragraph (d) of section 1002 (Authorization

of plan) of this article. Evidence of the disposition of its assets and

payment of its liabilities pursuant to the plan of dissolution and

distribution of assets shall be submitted by the corporation to the

attorney general and any other governmental body or officer, as required

under applicable laws. If the plan of dissolution and distribution of

assets cannot be carried out within the prescribed time, the attorney

general may upon good cause shown extend such time, or any extended

period of time, by not fewer than thirty days nor more than one year;

(b) Pursuant to the plan of dissolution and distribution of assets,

fulfill or discharge its contracts, collect and sell its assets for cash

at public or private sale, discharge or pay its liabilities, and do all

other acts appropriate to liquidate its business;

(c) Distribute the assets of the corporation that remain after paying

or adequately providing for the payment of its liabilities, in the

following manner:

(1) assets received and held by the corporation either for a

charitable purpose or which are legally required to be used for a

particular purpose, shall be distributed to one or more domestic or

foreign corporations or other organizations engaged in activities

substantially similar to those of the dissolved corporation pursuant to

the plan of dissolution and distribution or, if applicable, as approved

by the attorney general or ordered by the supreme court pursuant to

section 1002 (Authorization of plan) of this article. Any disposition of

assets contained in a will or other instrument, in trust or otherwise,

made before or after the dissolution, to or for the benefit of any

corporation so dissolved shall inure to or for the benefit of the

corporation or organization acquiring such assets of the dissolved

corporation as provided in this section, and so far as is necessary for

that purpose the corporation or organization acquiring such disposition

shall be deemed a successor to the dissolved corporation with respect to

such assets; provided, however, that such disposition shall be devoted

by the acquiring corporation or organization to the purposes intended by

the testator, donor or grantor.

(2) assets other than those described by subparagraph one of this

paragraph, if any, shall be distributed in accordance with the

specifications of the plan of dissolution and distribution of assets or,

to the extent that the certificate of incorporation prescribes the

distributive rights of members, or of any class or classes of members,

as provided in such certificate;

(d) Within six months from the date fixed for the payment of the final

liquidating distribution pursuant to paragraph (a) of this section, pay

any assets distributable to a creditor or member who is unknown or

cannot be found, to the state comptroller pursuant to the abandoned

property law;

(e) Distribute assets that are not subject to subparagraph one of

paragraph (c) of this section under a plan of distribution, in

accordance with the following order of priorities:

(1) holders of certificates of subvention.

(2) holders of capital certificates.

(3) members, if permitted by law.

Certificate of dissolution; contents; approval.

(a) After the plan of dissolution and distribution of assets has been

adopted, authorized, approved and carried out pursuant to the terms of

the plan within the time period set forth pursuant to section 1002-a

(Carrying out the plan of dissolution and distribution of assets), a

certificate of dissolution, entitled "Certificate of dissolution

of ........ (name of corporation) under section 1003 of the

Not-for-Profit Corporation Law" shall be signed and, if required

pursuant to subparagraph two of paragraph (b) of this section, after the

attorney general has affixed thereon his or her consent to the

dissolution, such certificate of dissolution shall be delivered to the

department of state. It shall set forth:

(1) The name of the corporation and, if its name has been changed, the

name under which it was formed.

(2) The date its certificate of incorporation was filed by the

department of state.

(3) The name and address of each of its officers and directors.

(4) A statement as to whether the corporation is a charitable

corporation or a non-charitable corporation.

(5) A statement as to whether or not the corporation holds assets at

the time of authorization of its plan of dissolution and distribution of

assets as provided in section 1002 of this article (Authorization of

plan) which are legally required to be used for a particular purpose.

(6) That the corporation elects to dissolve.

(7) The manner in which the dissolution was authorized. If the

dissolution of the corporation is authorized by a vote of the directors

and/or members of the corporation that is less than that ordinarily

required by the certificate of incorporation, the by-laws, this chapter

or any other applicable law, as permitted by paragraph (a) of section

1002 (Authorization of plan) of this article, then the certificate of

dissolution shall so state.

(8) A statement that prior to delivery of such certificate of

dissolution to the department of state for filing, the plan of

dissolution and distribution of assets has been approved by the attorney

general or by a justice of the supreme court, if such approval is

required pursuant to section 1002 (Authorization of plan) of this

article. A copy of the approval of the attorney general or of the court

order shall be attached to the certificate of dissolution. In the case

of a corporation, other than a corporation incorporated pursuant to

article 15 (Public cemetery corporations), having no assets to

distribute, or having no assets to distribute other than a reserve not

to exceed twenty-five thousand dollars for the purpose of paying

ordinary and necessary expenses of winding up its affairs including

attorney and accountant fees, and liabilities not in excess of ten

thousand dollars at the time of dissolution, a statement that a copy of

the plan of dissolution which contains the statement prescribed by

paragraph (b) of section 1001 (Plan of dissolution and distribution of

assets) has been duly filed with the attorney general, if required.

(b) Such certificate of dissolution shall have endorsed thereon or

annexed thereto the approval of the dissolution:

(1) By a governmental body or officer, if such approval is required. A

corporation whose statement of purposes specifically includes the

establishment or operation of a child day care center, as that term is

defined in section three hundred ninety of the social services law,

shall provide a certified copy of any certificate of dissolution

involving such corporation to the office of children and family services

within thirty days after the filing of such dissolution with the

department of state.

(2) By the attorney general in the case of a charitable corporation,

or any other corporation that holds assets at the time of dissolution

legally required to be used for a particular purpose.

(c) The application to the attorney general for approval of the

certificate of dissolution pursuant to paragraph (b) of this section

shall be by verified petition and shall include a final financial report

showing disposition of all of the corporation's assets and liabilities,

the requisite governmental approvals and the appropriate fees, if any,

accompanied by the certificate of dissolution.

Certificate of dissolution; filing; effect.

(a) The department of state shall not file a certificate of

dissolution unless the consent of the state department of taxation and

finance to the dissolution is attached thereto. Upon filing the

certificate, the corporation is dissolved.

(b) Notwithstanding paragraph (a) of this section, with respect to any

corporation that has done business in the city of New York and incurred

liability for any tax or charge under chapter six, seven, eight, ten,

eleven, twelve, thirteen, fourteen, fifteen, twenty-one, twenty-four,

twenty-five or twenty-seven of title eleven of the administrative code

of the city of New York, the department of state shall not file a

certificate of dissolution unless the consent of the commissioner of

finance of the city of New York to the dissolution is also attached

thereto.

Corporate action and survival of remedies after dissolution.

(a) After dissolution, a corporation shall not commence any new

activities. A dissolved corporation, its directors, officers and members

may continue to function for the purpose of winding up the affairs of

the corporation in the same manner as if the dissolution had not taken

place, except as otherwise provided in this chapter or by court order.

In particular and without limiting the generality of the foregoing:

(1) The directors of a dissolved corporation shall not be deemed to be

trustees of its assets; title to such assets shall not vest in them, but

shall remain in the corporation until transferred by it in its corporate

name.

(2) Dissolution shall not change quorum or voting requirements for the

board or members, or provisions regarding election, appointment,

resignation or removal of, or filling vacancies among, directors or

officers, or provisions regarding amendment or repeal of by-laws or

adoption of new by-laws.

(3) Capital certificates may be transferred and determination of

members for any purpose may be made without closing the record of

members until such time, if any, as such record may be closed, and

either the board or the members may close it.

(4) The corporation may sue or be sued in all courts and participate

in actions and proceedings, whether judicial, administrative,

arbitrative or otherwise, in its corporate name, and process may be

served by or upon it.

(b) The dissolution of a corporation shall not affect any remedy

available to or against such corporation, its directors, officers or

members, for any right or claim existing or any liability incurred

before such dissolution, except as provided in sections 1007 (Notice to

creditors; filing or barring claims) or 1008 (Jurisdiction of supreme

court to supervise dissolution and liquidation.)

Notice to creditors by corporations intending to dissolve;

filing or barring claims.

(a) At any time after the plan of dissolution and distribution of

assets shall have been (1) authorized as provided in section 1002 of

this article (Authorization of plan), (2) approved by any governmental

body or officer whose approval is required pursuant to paragraph (c) of

section 1002 of this article, and (3) approved by either by the attorney

general or a justice of the supreme court pursuant to paragraph (d) of

section 1002 of this article, and prior to filing the certificate of

dissolution, the corporation may give a notice requiring all creditors

and claimants, including any with unliquidated or contingent claims and

any with whom the corporation has unfulfilled contracts, to present

their claims in writing and in detail at a specified place and by a

specified day, which shall not be less than six months after the first

publication of such notice. Such notice shall be published at least once

a week for two successive weeks in a newspaper of general circulation in

the county in which the office of the corporation was located at the

date of authorization of its plan of dissolution and distribution of

assets as provided in section 1002 of this article (Authorization of

plan). On or before the date of the first publication of such notice,

the corporation shall mail a copy thereof, postage prepaid, to each

person believed to be a creditor of or claimant against the corporation

whose current name and address are known to or can with due diligence be

ascertained by the corporation. The giving of such notice shall not

constitute a recognition that any person is a proper creditor or

claimant, and shall not revive or make valid, or operate as a

recognition of the validity of, or a waiver of any defense or

counterclaim in respect of any claim against the corporation, its

assets, directors, officers or members, which has been barred by any

statute of limitations or become invalid by any cause, or in respect of

which the corporation, its directors, officers or members, has any

defense or counterclaim.

(b) Any claims which shall have been filed as provided in such notice

and which shall be disputed by the corporation may be submitted for

determination to the supreme court under section 1008 (Jurisdiction of

supreme court to supervise dissolution and liquidation) or pursuant to

article 11 (Judicial dissolution). A claim filed by the trustee or

paying agent for the holders of bonds or coupons shall have the same

effect as if filed by the holder of any such bonds or coupons. Any

person whose claim is, at the date of the first publication of such

notice, barred by any statute of limitations is not a creditor or

claimant entitled to any notice under this section or such section 1008.

The claim of any such person and all other claims which are not timely

filed as provided in such notice except claims which are the subject of

litigation on the date of the first publication of such notice and all

claims which are so filed but are disallowed by the court under such

section 1008, shall be forever barred as against the corporation, its

assets, directors, officers and members, except to such extent, if any,

as the court may allow them against any remaining assets of the

corporation in the case of a creditor who shows satisfactory reason for

failure to file a claim as so provided. If the court requires a further

notice under such section 1008, any reference to a notice in this

section shall, to the extent that the court so orders, mean such further

notice, except that a claim which has been filed in accordance with a

notice under this section need not be refiled under such further notice.

(c) Notwithstanding this section and section 1008 (Jurisdiction of

supreme court to supervise dissolution and liquidation), tax claims and

other claims of this state, of the United States and of the department

of finance of the city of New York shall not be required to be filed

under those sections, and such claims shall not be barred because not so

filed, and distribution of the assets of the corporation, or any part

thereof, may be deferred until determination of any such claims.

(d) Laborer's wages shall be preferred claims and entitled to payment

before any other creditors out of the assets of the corporation in

excess of valid prior liens or encumbrances.

Jurisdiction of supreme court to supervise dissolution and

liquidation.

(a) At any time after the filing of a certificate of dissolution under

this article, the supreme court in the judicial district where the

office of the corporation was located at the date of its dissolution, in

a special proceeding instituted under this section, upon the petition of

the corporation or, in a situation approved by the court, upon the

petition of a creditor, claimant, director, officer, member, subscriber

for capital certificates, incorporator or the attorney general, may

suspend or annul the dissolution or continue the liquidation of the

corporation under the supervision of the court and may make all such

orders as it may deem proper in all matters in connection with the

dissolution or the winding up of the affairs of the corporation, and in

particular, and without limiting the generality of the foregoing, in

respect of the following:

(1) The determination of the validity of the authorization of the

dissolution of the corporation and of the execution and delivery of the

certificate of dissolution under this article.

(2) The adequacy of the notice given to creditors and claimants and,

if it is determined to have been inadequate, the requirement of such

further notice as the court may deem proper.

(3) The determination of the validity and amount of invalidity of any

claims which have been presented to the corporation.

(4) The barring of all creditors and claimants who have not timely

filed claims as provided in any such notice, or whose claims have been

disallowed by the court, as against the corporation, its assets,

directors, officers and members.

(5) The determination and enforcement of the liability of any

director, officer, member or subscriber for capital certificates, to the

corporation or for the liabilities of the corporation.

(6) The presentation and filing of intermediate and final accounts of

the directors, the hearing thereon, the allowance or disallowance

thereof, and the discharge of the directors, or any of them, from their

liabilities.

(7) The administration of any trust, or the disposition of any

property held in trust by or for the corporation.

(8) The adequacy of a plan of distribution.

(9) The payment, satisfaction or compromise of claims against the

corporation, the retention of assets for such purpose, and the

determination of the adequacy of provisions made for payment of the

liabilities of the corporation.

(10) The disposition or destruction of records, documents and papers

of the corporation.

(11) The appointment and removal of a receiver under article 12

(Receivership) who may be a director, officer or member of the

corporation.

(12) The issuance of injunctions for one or more of the purposes and

as provided in section 1113 (Injunction).

(13) The return of subscription payments to subscribers for capital

certificates, and the making of distributions, in cash or in kind or

partly in each, to the members.

(14) The payment to the state comptroller, as abandoned property, of

assets under paragraph (d) of section 1002-a (Carrying out the plan of

dissolution and distribution of assets).

(15) Where assets were received and held by the corporation either for

a charitable purpose or legally required to be used for a particular

purpose, the distribution of such assets to one or more domestic or

foreign corporations or other organizations engaged in activities

substantially similar to those of the dissolved corporation, on notice

to the attorney general and to such other persons, and in such manner,

as the court may deem proper.

(b) No order annulling a dissolution shall be made under this section

if the name of the corporation whose dissolution is to be annulled is no

longer available for use by such corporation, unless such corporation

submits with its petition for the annulment of the dissolution a

certificate of reservation of another available name.

(c) Orders under this section may be entered ex parte, except that if

such special proceeding was not instituted upon petition of the

corporation, notice shall be given to the corporation in such manner as

the court may direct. Notice shall be given to other persons interested,

and in such manner, as the court may deem proper, of any hearings and of

the entry of any orders on such matters as the court shall deem proper.

All orders made by the court under this section shall be binding upon

the attorney-general, the corporation, its directors, officers, members,

subscribers for capital certificates, incorporators, creditors and

claimants.

Applicability to dissolution under other provisions.

The provisions of paragraphs (c), (d) and (e) of section 1002-a of

this article (Carrying out the plan of dissolution and distribution of

assets), sections 1006 (Corporate action and survival of remedies after

dissolution), 1007 (Notice to creditors; filing or barring claims) and

1008 (Jurisdiction of supreme court to supervise dissolution and

liquidation) shall apply to a corporation dissolved by proclamation

pursuant to section 1014 (Dissolution of domestic corporations by

proclamation), by expiration of its period of duration or under section

203-a of the tax law, or to an incorporated firemen's benevolent

association created by act of the legislature if such act is

subsequently repealed.

Revocation of voluntary dissolution proceedings.

(a) At any time prior to the filing of a certificate of dissolution

by the department of state, a corporation may revoke the action taken to

dissolve the corporation in the following manner:

(1) If there are members entitled to vote thereon:

(A) Unless the certificate of incorporation dispenses with

dissolution action by the board, the board shall adopt a resolution

recommending that the voluntary dissolution proceedings be revoked and

directing submission of the proposed revocation to a vote of the members

entitled to vote thereon.

(B) Revocation of the voluntary dissolution proceedings shall be

authorized by two-thirds vote as provided in paragraph (c) of section

613 (Vote of members).

(2) If there are no members entitled to vote thereon, revocation of

the voluntary dissolution proceedings shall be authorized by the vote of

a majority of the directors then in office.

(3) If approval of the dissolution of a corporation by a governmental

body or officer is required, as provided in paragraph (c) of section

1002 (Authorization of plan), and such approval has been given,

revocation of the voluntary dissolution proceedings shall not be

authorized without approval thereof by such body or officer.

Certificate of annulment of dissolution and reinstatement of

corporate existence.

(a) Any corporation dissolved under former section 57 of the

membership corporations law may, at any time after the effective date of

this chapter, deliver to the department of state a signed certificate

which shall be entitled, "certificate of annulment of dissolution and

reinstatement of corporate existence of .............................

(name of corporation) pursuant to section 1012 of the Not-for-Profit

Corporation Law", and shall set forth:

(1) The name of the corporation and, if it has been changed, the name

under which it was formed.

(2) The date of the filing of its certificate of incorporation by the

department of state.

(3) The law under which it was formed.

(4) That it failed to deliver to the department of state a

certificate, as required by subdivision 1 of section 57 of the

membership corporations law.

(5) That it elects to be reinstated and to continue its corporate

existence.

(6) That it is a charitable corporation or a non-charitable

corporation, as applicable.

(b) Notwithstanding subparagraph one of paragraph (a) of section 1006

(Corporate action and survival of remedies after dissolution), the

directors of a corporation whose dissolution is annulled under this

section shall be deemed trustees of its assets, unless such assets have

been distributed pursuant to section 1002-a (Carrying out the plan of

dissolution and distribution of assets).

(c) The filing of such certificate by the department of state shall

have the effect of annulling all of the proceedings theretofore taken

for the dissolution of such corporation, and it shall thereafter have

such corporate powers, rights, privileges, immunities, duties and

liabilities as it had on the date of publication of the proclamation of

dissolution, as if such proclamation had not been made and published.

(d) The department of state shall not file a certificate of annulment

of dissolution and reinstatement of corporate existence if the name of

the corporation being reinstated is not available under section 301

(Corporate name; general) for use by a corporation then being formed

under this chapter, unless such certificate shall change the name to one

which is available for such use.

(e) If, after the publication of the proclamation of dissolution, it

shall appear that the name of any corporation was erroneously included

therein, the secretary of state shall make an appropriate entry on the

records of the department of state, which entry shall have the effect of

annulling all of the proceedings theretofore taken for the dissolution

of the corporation under this section, and it shall have such corporate

powers, rights, privileges, immunities, duties and liabilities as it had

on the date of such publication of the proclamation, as if such

proclamation had not been made and published.

(f) Whenever a corporation has complied with paragraph (a) or the

action specified in paragraph (e) has been taken, the secretary of state

shall publish a notice thereof in the state advertising bulletin and

shall send a copy of such bulletin to the clerk of the county in which

the office of the corporation is located. The county clerk shall file

such copy and make appropriate entry on his record without charge.

(g) Nothing in this section shall be deemed to extend the duration of

any corporation as stated in its certificate of incorporation.

(h) The fee of the secretary of state for filing a certificate under

this section shall be ten dollars.

Dissolution of certain firemen's benevolent associations.

(a) An incorporated firemen's benevolent association created by act of

the legislature may dissolve in accordance with the provisions of this

article.

(b) Any such corporation authorized to have paid to it foreign fire

insurance premium taxes imposed under sections 9104 and 9105 of the

insurance law shall, in addition to any other requirements of this

article, file with the superintendent of financial services a copy of

the certificate of dissolution. Moneys then due and owing to the

corporation under said sections, and moneys thereafter otherwise payable

to the corporation pursuant to such authorization, shall be distributed

as provided in said sections.

Dissolution of domestic corporations by proclamation.

Every corporation incorporated pursuant to this chapter, other than a

corporation incorporated pursuant to article 15 (Public cemetery

corporations), and registered or required to be registered pursuant to

article 7-A of the executive law or article 8 of the estates, powers and

trusts law shall be subject to dissolution for failure to register or to

file annual financial reports in accordance with the following

procedures:

(a) On or before the last day of March, June, September and December

in each calendar year, the attorney general may certify and transmit to

the department of state a list containing the names of any or all

corporations formed pursuant to this chapter and registered or required

to register pursuant to article 7-A of the executive law or article 8 of

the estates, powers and trusts law that have not filed annual financial

reports for each of the five years immediately preceding the date of

such certification. This section shall not be applicable to corporations

that filed reports deemed by the attorney general to be incomplete,

erroneous or otherwise deficient.

(b) No corporation shall be included in any list prepared pursuant to

paragraph (a) of this section unless (1) in each of the last two years

during which such corporation failed to file its annual report, the

attorney general has sent to such corporation by certified mail return

receipt requested notice that the corporation has failed to file and has

three months from the date of such notice to file all delinquent reports

and complete all registration requirements, provided, however, that if

the last known address of record of the corporation is not within the

United States, the notice to such corporation shall be sent by any other

reasonable means, (2) the second such notice was sent at least six

months prior to the date of the certification required by paragraph (a)

of this section and (3) the attorney general used reasonable diligence

to identify a current address for the corporation.

(c) If the secretary of state, upon comparing the names so certified

with his or her records, shall discover error, he or she may return the

list to the attorney general for correction.

(d) The secretary of state shall make a proclamation under his or her

hand and seal of office as to each list received from the attorney

general declaring any corporations whose names are included in such list

to be dissolved and their certificates of incorporation to be forfeited.

The secretary shall file the original proclamation in his or her office

and shall publish a copy thereof in the state register no later than

three months following receipt of the list by him or her.

(e) Upon the publication of such proclamation in the manner proscribed

in paragraph (d) of this section, each corporation named therein shall

be deemed dissolved without further legal proceedings.

(f) The secretary of state shall mail a copy of the state register

containing such proclamation to the clerk of each county in the state.

The county clerk shall file the copy without charge but need not record

it.

(g) The names of all corporations so dissolved shall be reserved for a

period of one year immediately following the publication of the

proclamation, and during such period no domestic business corporation,

not-for-profit corporation, limited liability company or limited

partnership shall be formed under a name the same as any name so

reserved or which may not be distinguished from any name so reserved,

nor shall any foreign business corporation, not-for-profit corporation,

limited liability company or limited partnership, within such period, be

authorized to do business or conduct activities in this state under a

name the same as any name so reserved or which may not be distinguished

from such any name so reserved.

(h) Any corporation so dissolved may file in the department of state a

written consent by the attorney general to the reinstatement of the

corporation. Such written consent shall be given if the attorney general

shall have received all annual financial reports and fees required by

article 7-A of the executive law and article 8 of the estates, powers

and trusts law and penalties and interest charges related thereto have

been paid or waived. The filing of such consent shall have the effect of

annulling all of the proceedings theretofore taken under the provisions

of this section for the dissolution of such corporation with the same

force and effect as if such proclamation had not been made or published.

The fee of the secretary of state for filing such consent shall be fifty

dollars. No such consent shall be filed if the name of a domestic

not-for-profit corporation, business corporation, not-for-profit

corporation, limited liability company or limited partnership formed

later than one year after the publication of the proclamation of

dissolution, or the name or fictitious name or of a foreign business

corporation, not-for-profit corporation, limited liability company or

limited partnership which has obtained authority to do business or

conduct activities in the state later than one year after such

proclamation, or name which has been reserved later than one year after

such proclamation, is the same as or may not be distinguished from the

name of the corporation filing such consent unless such corporation

simultaneously files in the department of state a certificate of

amendment to change the name of such corporation. Such certificate of

amendment shall be executed in like manner as if such corporation had

not been dissolved.

(i) If, after the publication of such proclamation, it shall appear

that the name of any corporation was erroneously included therein, the

attorney general shall so certify to the secretary of state, and the

secretary of state shall make appropriate entry on the records of the

department of state, which entry shall have the effect of annulling all

of the proceedings theretofore taken under the provisions of this

section for the dissolution of such corporation with the same force and

effect as if such proclamation had not been made or published.

(j) Whenever a corporation shall have complied with paragraph (h) of

this section or whenever the procedures specified in paragraph (i) of

this section shall have been taken, the secretary of state shall publish

a notice thereof in the state register and shall send a copy of such

notice to the county clerk of the county in which, according to his or

her records, the office of the corporation is located. Such county clerk

shall file such copy and make appropriate entry on his or her records

without charge.

(k) If, after the dissolution of any corporation, assets of the

corporation are located, the attorney general shall act with respect to

such assets in accordance with this article and article 11 (Judicial

dissolution).

Attorney-general's action for judicial dissolution.

(a) The attorney-general may bring an action for the dissolution of a

corporation upon one or more of the following grounds:

(1) That the corporation procured its formation through fraudulent

misrepresentation or concealment of a material fact.

(2) That the corporation has exceeded the authority conferred upon it

by law, or has violated any provision of law whereby it has forfeited

its charter, or carried on, conducted or transacted its business in a

persistently fraudulent or illegal manner, or by the abuse of its powers

contrary to public policy of the state has become liable to be

dissolved.

(b) An action under this section is triable by jury as a matter or

right.

(c) The enumeration in paragraph (a) of grounds for dissolution shall

not exlude actions or special proceedings by the attorney-general or

other state officials for the annulment or dissolution of a corporation

for other causes as provided in this chapter or in any other statute of

this state.

Judicial dissolution; petition by directors or members; petition

in case of deadlock among directors or members.

(a) A petition for the judicial dissolution of a corporation may be

presented:

(1) By a majority of the directors then in office, or by the members,

or such of them as are designated for such purpose, when authorized to

do so by a resolution adopted by majority vote as provided in paragraph

(c) of section 613 (Vote of members) (provided that, notwithstanding any

provision of the certificate of incorporation or the by-laws, a members'

meeting to consider such a resolution may be called, no more often than

once in any period of twelve consecutive months, by ten percent of the

members entitled to vote thereon or by such lesser percentage or number

of members as may be provided in the certificate of incorporation or

by-laws), in the following cases:

(A) The assets of the corporation are not sufficient to discharge its

liabilities.

(B) Dissolution will be beneficial to the members.

(2) By ten percent of the total number of members or by any director,

in the following cases:

(A) The directors are so divided respecting the management of the

corporation's affairs that the votes required for action by the board

cannot be obtained.

(B) The members are so divided that the votes required for the

election of directors cannot be obtained.

(C) There is internal dissension and two or more factions of members

are so divided that dissolution would be beneficial to the members.

(D) The directors or members in control of the corporation have

looted or wasted the corporate assets, have perpetuated the corporation

solely for their personal benefit, or have otherwise acted in an

illegal, oppressive or fraudulent manner.

(E) The corporation is no longer able to carry out its purposes.

(b) In any proceeding for judicial dissolution the attorney-general

shall be a necessary party.

Contents of petition for judicial dissolution.

A petition for dissolution shall specify the section, and the

subparagraph or subparagraphs thereof, under which it is authorized and

state the reasons why the corporation should be dissolved. It shall be

verified by the petitioner or by one of the petitioners.

Order to show cause; issuance; publication, service, filing.

(a) Upon the presentation of such a petition, the court shall make an

order requiring the corporation and all persons interested in the

corporation to show cause before it, or before a referee designated in

the order, at a time and place therein specified, not less than four

weeks after the granting of the order, why the corporation should not be

dissolved. In connection therewith, the court may order the

corporation, its officers and directors, to furnish the court with a

schedule of all information, known or ascertainable with due diligence

by them, deemed pertinent by the court, including a statement of the

corporate assets and liabilities, and the name and address of each

member and of each creditor and claimant, including any with

unliquidated or contingent claims and any with whom the corporation has

unfulfilled contracts.

(b) A copy of the order to show cause shall be published as

prescribed therein, at least once in each of the three weeks before the

time appointed for the hearing thereon, in one or more newspapers,

specified in the order, of general circulation in the county in which

the office of the corporation is located at the date of the order.

(c) A copy of the order to show cause shall be served upon the state

tax commission and the corporation and upon each person named in the

petition, or in any schedule provided for in paragraph (a), as a member,

creditor or claimant, except upon a person whose address is stated to be

unknown and cannot with due diligence be ascertained by the corporation.

The service shall be made personally, at least ten days before the time

appointed for the hearing, or by mailing a copy of the order, postage

prepaid, at least twenty days before the time so appointed, addressed to

the person to be served at his last known address.

(d) A copy of the order to show cause and the petition shall be

filed, within ten days after the order is entered, with the clerk of the

county where the office of the corporation is located at the date of the

order. A copy of each schedule furnished to the court under this

section shall, within ten days thereafter, be filed with such clerk.

(e) Publication, service and filing provided for in this section

shall be effected by the corporation or such other persons as the court

may order.

Amending papers.

At any stage, before final order, the court may grant an order

amending the petition or any other paper filed in the action or special

proceeding, with like effect as though originally filed as amended, or

otherwise as the court may direct.

Referee.

If a referee was not designated in the order to show cause, the court,

in its discretion, may appoint a referee when or after the order is

returnable. The court may at any time appoint a successor referee.

Hearing and decision.

At the time and place specified in the order to show cause, or at any

other time and place to which the hearing is adjourned, the court or the

referee shall hear the allegations and proofs of the parties and

determine the facts. The decision of the court or the report of the

referee shall be made and filed with the clerk of the court with all

convenient speed.

Application for final order.

When the hearing is before a referee, a motion for a final order must

be made to the court upon notice to each party to the action or special

proceeding who has appeared therein. The notice of motion may be served

as prescribed for the service of papers upon an attorney in an action in

such court. When the hearing is before the court, a motion for a final

order may be made at the hearing or at such time and upon such notice as

the court prescribes.

Judgment or final order of dissolution.

(a) In an action or special proceeding under this article if, in the

court's discretion, it shall appear that the corporation should be

dissolved, it shall make a judgment or final order dissolving the

corporation.

(b) In making its decision, the court shall take into consideration

the following criteria:

(1) In an action brought by the attorney-general, the interest of the

public is of paramount importance.

(2) In a special proceeding brought by directors or members, the

benefit to the members of a dissolution is of paramount importance.

(c) If the judgment or final order shall provide for a dissolution of

the corporation, the court may, in its discretion, provide therein for

the distribution of the property of the corporation to those entitled

thereto according to their respective rights. Any property of the

corporation described in subparagraph one of paragraph (c) of section

1002-a (Carrying out the plan of dissolution and distribution of assets)

shall be distributed in accordance with that section.

(d) The clerk of the court or such other person as the court may

direct shall transmit certified copies of the judgment or final order of

dissolution to the department of state and to the clerk of the county in

which the office of the corporation was located at the date of the

judgment or order. Upon filing by the department of state, the

corporation shall be dissolved.

(e) The corporation shall promptly thereafter transmit a certified

copy of the judgment or final order to the clerk of each other county in

which its certificate of incorporation was filed.

Venue.

An action or special proceeding under this article shall be brought in

the supreme court in the judicial district in which the office of the

corporation is located at the time of the service on the corporation of

a summons in such action or of the presentation to the court of the

petition in such special proceeding.

Preservation of assets; appointment of receiver.

At any stage of an action or special proceeding under this article,

the court may, in its discretion, make all such orders as it may deem

proper in connection with preserving the property and carrying on the

business of the corporation, including the appointment and removal of a

receiver under article 12 (Receivership), who may be a director, officer

or member of the corporation.

Certain sales, transfers, security interests and judgments void.

A sale, mortgage, conveyance or other transfer of, or the creation of

a security interest in any property of a corporation made, without prior

approval of the court, after service upon the corporation of a summons

in an action, or of an order to show cause in a special proceeding,

under this article in payment of or as security for an existing or prior

debt or for any other or for no consideration, or a judgment thereafter

rendered against the corporation by confession or upon the acceptance of

any offer, shall be void as against such persons and, to such extent, if

any, as the court shall determine.

Injunction.

(a) At any stage of an action or special proceeding under this

article, the court may, in its discretion, grant an injunction,

effective during the pendency of the action or special proceeding or

such shorter period as it may specify in the injunction, for one or more

of the following purposes:

(1) Restraining the corporation and its directors and officers from

conducting any unauthorized activities and from exercising any corporate

powers, except by permission of the court.

(2) Restraining the corporation and its directors and officers from

collecting or receiving any debt or other property of the corporation,

and from paying out or otherwise transferring or delivering any property

of the corporation, except by permission of the court.

(3) Restraining the creditors of the corporation from beginning any

action against the corporation, or from taking any proceedings in an

action theretofore commenced, except by permission of the court. Such

injunction shall have the same effect and be subject to the same

provisions of law as if each creditor upon whom it is served was named

therein.

Discontinuance of action or special proceeding.

An action or special proceeding for the dissolution of a corporation

may be discontinued at any stage when it is established that the cause

for dissolution did not exist or no longer exists. In such event, the

court shall dismiss the action or special proceeding and direct any

receiver to redeliver to the corporation all its remaining property.

Applicability of other provisions.

(a) Subject to the provisions of this article, the provisions of

sections 1006 (Corporate action and survival of remedies after

dissolution), 1007 (Notice to creditors; filing or barring claims) and

1008 (Jurisdiction of supreme court to supervise dissolution and

liquidation) shall apply to a corporation dissolved under this article.

(b) Any orders provided for in section 1008, may be made at any stage

of an action or special proceeding for dissolution of a corporation

under this article, and if the corporation is dissolved under this

article, the court may retain jurisdiction for the purpose of making

such orders, after the dissolution, in such action or special

proceeding. The court may also make such orders in separate special

proceedings, as provided in section 1008.

(c) Notice to creditors and claimants, provided for in section 1007,

may also be given, by order of the court, at any stage of an action or

special proceeding for dissolution of a corporation under this article.

Action by judgment creditor for sequestration.

Where final judgment for a sum of money has been rendered against a

corporation, and an execution issued thereupon to the sheriff of the

county where the corporation conducts its activities, or where its

office is located, has been returned wholly or partly unsatisfied, the

judgment creditor may maintain an action to procure a judgment

sequestrating the property of the corporation and providing for a

distribution thereof.

Appointment of receiver of property of a domestic or foreign

corporation.

(a) A receiver of the property of a corporation can be appointed only

by the court, and in one of the following cases:

(1) An action or special proceeding brought under article 10

(Non-judicial dissolution) or 11 (Judicial dissolution).

(2) An action under section 1201 (Action by judgment creditor for

sequestration).

(3) An action brought by the attorney-general under section 112

(Actions or special proceedings by attorney-general), or brought by the

attorney-general or by a member to preserve the assets of a corporation,

which has no officer within this state qualified to administer them.

(4) An action to preserve the assets in this state, of any kind,

tangible or intangible, of a foreign corporation which has been

dissolved, nationalized or its authority or existence otherwise

terminated or cancelled in the jurisdiction of its incorporation or

which has ceased to conduct its activities, brought by any creditor or

member of such corporation or by one on whose behalf an order of

attachment against the property of such corporation has been issued.

(5) An action brought for the foreclosure of a mortgage upon property

of the corporation, where the mortgage debt or the interest thereon has

remained unpaid for at least thirty days after payment demanded and

where either the income of the property is specifically mortgaged or the

property itself appears to be insufficient to pay the mortgage debt. A

receiver appointed under this subparagraph shall be receiver only of the

property upon which the mortgage is being foreclosed.

(6) An application of the regents of the university, in aid of the

liquidation of a corporation whose dissolution they contemplate or have

decreed; or on the application of the trustees of such a corporation, on

notice to the regents.

(b) A receiver shall be subject to the control of the court at all

times and may be removed by the court at any time.

(c) All actions or special proceedings brought by or against a

receiver shall have a preference upon the calendars of all courts next

in order to actions or special proceedings brought by the people of the

state of New York.

Temporary and permanent receiver.

(a) At any stage before final judgment or final order in an action or

special proceeding brought under this article, the court may appoint one

or more receivers of the property of the corporation or of the property

in this state of a foreign corporation against which an action has been

brought under subparagraph (4) of paragraph (a) of section 1202 of this

article. Notice of an application shall be given to the

attorney-general, to each governmental body or officer whose consent is

required for the dissolution of such corporation, and to such other

persons and in such manner as the court directs. The determination by

the court of the necessity or advisability of appointing a receiver or

an attorney for a receiver, and the allowance of expenses, commissions

or compensation to the receiver or such attorney, shall be subject to

review on appeal. This provision shall not affect any other right to

review on appeal.

(b) A receiver appointed by or under a final judgment or order in an

action or special proceeding, or a temporary receiver who is continued

by the final judgment or order, is a permanent receiver. The court may

confer upon a temporary receiver the powers, and subject the temporary

receiver to the duties of a permanent receiver, or so much thereof as it

deems proper.

Oath and security.

A receiver, before entering upon his or her duties, shall: (a) Take

and subscribe an oath that he or she will faithfully, honestly and

impartially discharge the trust committed to him or her, and the oath

shall be filed with the clerk of the court in which the action or

special proceeding is pending.

(b) File with the clerk of such court a bond to the people, with at

least two sufficient sureties or a bond executed by any fidelity or

surety company authorized by the laws of this state to transact

business, in a penalty fixed by the court appointing him or her,

conditioned for the faithful discharge of his or her duties as receiver.

The court may at any time direct a receiver to give a new bond with new

sureties and with like condition.

Designation of depositories by court.

All orders appointing a receiver of a corporation shall designate

therein one or more places of deposit, wherein all funds of the

corporation not needed for immediate disbursement shall be deposited and

no other deposits and no investment of such funds shall be made, except

upon the order of the court.

Powers of permanent receiver.

(a) A permanent receiver, upon qualifying under section 1204 (Oath and

security), shall be vested with title to all the property of the

corporation wherever situated or of the property in this state of a

foreign corporation against which an action or special proceeding has

been brought under subparagraph (a) (4) of section 1202 (Appointment of

receiver of property of a domestic or foreign corporation), for the

benefit of the creditors and members of the corporation.

(b) A permanent receiver shall have the power:

(1) To sue in his own name or otherwise for the recovery of the

property, debts and causes of action of the corporation. No set-off or

counterclaim shall be allowed in any such action for any demand unless

it was owing by the corporation to the defendant before the commencement

of the action or special proceeding in which the receiver was appointed

or unless it shall have been incurred by the receiver subsequent to his

appointment.

(2) To sell at public or private sale all the property vested in the

permanent receiver, in such manner and on such terms and conditions as

the court shall direct, and to make necessary transfers and conveyances

thereof.

(3) To examine on oath, to be administered by the permanent receiver,

any person concerning any matter pertaining to or affecting the

receivership.

(4) To settle or compound any demands by or against the receivership.

(c) When more than one receiver is appointed, all provisions in this

article in reference to one receiver shall apply to them.

(d) When more than one receiver is appointed, the debts and property

of the corporation may be collected and received by any of them; when

more than two receivers are appointed, the powers and rights conferred

on them may be exercised by any two.

(e) When more than one receiver is appointed, the survivor or

survivors of such receivers shall have all the powers and rights of the

receivers.

Duties of receiver upon appointment.

(a) Upon appointment and qualification, a receiver shall have the

following duties:

(1) To give immediate notice of his or her appointment by publication

once a week for two successive weeks in two newspapers of general

circulation in the county where the office of the corporation is located

or, in the case of a foreign corporation against which an action has

been brought under subparagraph (4) of paragraph (a) of section 1202

(Appointment of receiver of property of a domestic or foreign

corporation), in a newspaper of general circulation as directed by the

court, requiring:

(A) All persons indebted to the corporation to render an account of

all debts owing by them to the corporation and to pay the same to the

receiver at a specified place and by a specified day.

(B) All persons having in their possession any property of the

corporation to deliver the same to the receiver at the specified place

and by the specified day.

(C) All creditors and claimants, including any with unliquidated or

contingent claims and any with whom the corporation has unfulfilled

contracts, to present their claims to the receiver in writing and in

detail at a specified place and by a specified day, which shall not be

less than six months after the first publication of such notice.

Whenever a receiver is appointed in dissolution proceedings under

article 10 (Non-judicial dissolution) or article 11 (Judicial

dissolution), section 1007 (Notice to creditors by corporations

intending to dissolve; filing or barring claims) of this chapter shall

apply and shall control the giving of notice to creditors and claimants

and the filing and barring of claims.

(2) To call a general meeting of the creditors of the corporation

within four months from the date of his appointment by a notice to be

published as directed in subparagraph (a) (1), setting forth the time

and place of such meeting, which time shall be not more than two months,

nor less than one month after the first publication of such notice. At

such meeting, or at an adjournment thereof, the receiver shall present a

statement of all accounts and demands for and against the corporation,

its subsisting contracts, and the money and other assets in his hands.

(3) To keep true books of account of all moneys received and expended

by him as receiver, which books shall be open for inspection at

reasonable times by creditors or other persons interested therein. On or

before the first day of February in each year, for the preceding

calendar year, and at such other times as the court shall direct, the

receiver shall file with the clerk of the court by which he was

appointed a verified statement showing the assets received, the

disposition thereof, the money on hand, all payments made, specifying

the persons to whom paid and the purpose of the payments, the amount

necessary to be retained to meet necessary expenses and claims against

the receiver, and the distributive share in the remainder of each person

interested therein. A copy of such statement shall be served by the

receiver upon the attorney-general within five days after the filing

thereof.

Penalty for concealing property from receiver.

Any persons having possession of property belonging to the

corporation, who shall wrongfully withhold such property from the

receiver after the day specified in the notice given under section 1207

(Duties of receiver upon appointment), shall forfeit to the receiver

double the value of such property, and the same may be recovered in an

action by the receiver.

Recovery of assets.

(a) Whenever a receiver, by verified petition to the supreme court at

a special term held in the judicial district in which the receiver was

appointed, shall show that he or she has good reason to believe that any

person has in his or her possession or under his or her control, or has

wrongfully concealed, withheld or disposed of, any property of the

corporation, or that any person can testify concerning such facts, the

court, with or without notice, shall make an order requiring such person

to appear before the court or a referee, at a time and place designated,

and submit to an examination concerning such facts. In such order, or at

any time thereafter, in its discretion, the court may enjoin and

restrain such person from disposing of any property of the corporation

in his or her possession or under his or her control.

(b) In any examination under such order, the court may confer immunity

in accordance with the provisions of section six hundred nineteen-c of

the code of criminal procedure; provided that no immunity shall be

conferred except upon twenty-four hours prior written notice to the

appropriate district attorney having an official interest therein.

(c) A person so ordered to appear shall be entitled to the same fees

and mileage, to be paid at the time of serving the order, as are allowed

by law to witnesses subpoenaed to attend and testify in an action in the

supreme court, and shall be subject to the same penalties upon failure

to appear and testify in obedience to such order as are provided by law

in the case of witnesses who fail to obey a subpoena to appear and

testify in an action.

(d) A person appearing for examination in obedience to such order

shall be sworn, and shall be entitled to be represented on such

examination by counsel, and may be cross-examined, or may make a

voluntary statement in his own behalf concerning the subject of his

examination.

(e) The testimony taken under such order shall be signed and sworn to

by the person examined, and be filed in the office of the clerk of the

county where the action or proceeding is pending. If it shall appear

that any person is wrongfully concealing or withholding, or has in his

or her possession or under his or her control, any property of the

corporation, on notice to such person, the court may make an order

requiring such person forthwith to deliver it to the receiver, subject

to the further order of the court.

Order of payment by receiver.

(a) Laborers' wages shall be preferred claims and entitled to payment

before any other creditors out of the assets of the corporation in

excess of valid prior liens or encumbrances.

(b) The receiver shall subject to any prior liens or encumbrances

distribute the residue of the moneys in his hands, among the creditors

whose claims have been proved and allowed, as follows:

(1) All debts due by such corporation to the United States, and all

debts entitled to a preference under the laws of the United States.

(2) All debts that may be owing by the corporation as trustee.

(3) Judgments against the corporation, to the extent of the value of

the real property on which they are liens.

(4) All other creditors in proportion to their respective demands,

without preference to specialty debts.

Final distribution by receiver.

(a) If there remains property of the corporation after the first

distribution, the receiver shall, within one year thereafter, make a

final distribution among the creditors entitled thereto. Notice that

such distribution will be the final distribution to creditors shall be

published once a week for two consecutive weeks in a newspaper of

general circulation in the county where the office of the corporation is

located and posted prominently and continuously for two consecutive

weeks on the homepage of any website maintained by the corporation.

(b) A creditor or claimant who failed to prove his claim before the

first distribution and who proves it before the final one shall receive

the sum he would have been entitled to on the first distribution before

any further distribution shall be made to other creditors or claimants.

(c) Unless the court shall otherwise direct, no other distribution

shall be made thereafter to creditors, except to those having pending

actions against the corporation or the receiver.

(d) After the final distribution to creditors, the receiver shall not

be answerable to any creditor or claimant, unless his claim shall have

been proved before or at the time specified in the notice of the final

distribution.

Disposition of moneys retained; surplus; unclaimed

distributions.

(a) When any action pending at the time of final distribution shall be

terminated, the receiver shall apply the moneys retained by the receiver

to the payment of the amount recovered, and the receiver's necessary

charges and expenses incurred therein.

(b) After the final distribution to creditors and after deducting the

receiver's charges and expenses, the receiver shall distribute any

surplus in the manner prescribed in section 1002-a of this chapter or,

if dissolution of the corporation is not involved, in such manner as the

court shall order.

Omission or default of receiver.

Upon notice to the attorney-general and upon such notice to creditors

or others interested as the court shall direct, the court may, in the

furtherance of justice, relieve a receiver from any omission or default,

on such conditions as may be imposed, and, on compliance therewith,

confirm the receiver's action.

Application by attorney-general for removal of receiver and to

close receivership.

(a) Whenever he or she deems it to be to the advantage of the members,

creditors or other persons interested in the assets of any corporation

for which a receiver has been appointed, the attorney-general may move:

(1) For an order removing the receiver and appointing another

receiver;

(2) To compel the receiver to account;

(3) For such other and additional orders as may facilitate the closing

of the receivership.

Resignation by receiver; filling any vacancy.

(a) A receiver may petition the appointing court for an order to show

cause why he or she should not be permitted to resign.

(b) The petition shall be accompanied by a verified account of all the

assets of the corporation received by the receiver, of all payments or

other disposition thereof made by the receiver, of the remaining assets

of the corporation in respect to which the receiver was appointed

receiver and the situation of the same, and of all his or her

transactions as receiver. Thereupon, the court shall grant an order

directing notice to be given to the sureties on his or her official bond

and to all persons interested in the property of the corporation to show

cause, at a time and place specified, why the receiver should not be

permitted to resign. Such notice shall be published once in each week

for six successive weeks in one or more newspapers as the court shall

direct. If it shall appear that the proceedings of the receiver in the

discharge of his or her trust have been fair and honest and that there

is no good cause to the contrary, the court shall make an order

permitting such receiver to resign. Thereupon the receiver shall be

discharged and his or her powers as receiver shall cease, but he or she

shall remain subject to any liability incurred prior to the making of

such order. The court, in its discretion, may require the expense of

such proceeding to be paid by the receiver presenting the petition.

(c) Any vacancy created by resignation, removal, death or otherwise,

may be filled by the court, and the property of the receivership shall

be delivered to the remaining receivers or, if there are none, to the

successor appointed by the court. The court may summarily enforce

delivery by order in the action or special proceeding in which the

receiver was appointed.

Final accounting; notice; duty of attorney-general.

(a) Within one year after qualifying, the receiver shall apply to the

court for a final settlement of his accounts and for an order for

distribution, or, upon notice to the attorney-general and to any

governmental body or officer whose consent is required for the

dissolution of the corporation, for an extension of time, setting forth

the reasons therefor. If the receiver has not so applied for a

settlement of his accounts or for such extension of time, the

attorney-general or any creditor or member may apply for an order that

the receiver show cause why an accounting and distribution should not be

had, and after the expiration of eighteen months from the time the

receiver qualified, it shall be the duty of the attorney-general to

apply for such an order on notice to the receiver.

(b) Before presenting a final account, the receiver shall give notice

of his intention to file it by publication, under subparagraph (a)(1) of

section 1207 (Duties of receiver upon appointment), setting forth the

time and place of filing and presentation to the court. The receiver

shall also give not less than eight days' written notice to the sureties

on his official bond.

(c) Upon presentation of such account, the court shall hear the

allegations, objections and proofs of all parties interested and allow

or disallow such account, in whole or in part, and make a final order.

The court may refer the account and the hearing, in whole or in part, to

a referee who shall report thereon to the court.

Commissions.

(a) A receiver shall be entitled, in addition to his necessary

expenses, to such commissions upon the sums received and disbursed as

may be allowed by the court, as follows:

(1) On the first twenty thousand dollars, not exceeding five percent;

(2) On the next eighty thousand dollars, not exceeding two and

one-half percent; and

(3) On the remainder, not exceeding one percent.

(b) If the commissions of the receiver so computed do not amount to

one hundred dollars, the court in its discretion may allow such sum not

exceeding one hundred dollars as shall be reasonable.

(c) When more than one receiver shall be appointed, the compensation

herein provided shall be divided between them, as the court directs.

Special provisions relating to actions or special proceedings

against foreign corporations.

(a) In any action or special proceeding brought against a foreign

corporation under this article, the following provisions shall apply:

(1) Service of the summons in such action may be made personally

within the state of New York, by delivery of the same to any officer or

director of the corporation, or by publication pursuant to an order

obtained as hereinafter provided.

(2) An order directing service by publication of the summons shall be

made upon application of a plaintiff in any such action and shall be

founded upon a verified complaint, alleging that the defendant is a

foreign corporation and has or may have or may be entitled to assets,

credits, choses in action or other property, tangible or intangible

within the state and that such corporation has been dissolved,

nationalized or that its authority or existence has been terminated or

cancelled in the jurisdiction of its incorporation, or that it has

ceased to conduct its activities, and upon an affidavit reciting that

personal service of the summons cannot be effected within the state with

due diligence and that a temporary receiver of its property within the

state of New York has been appointed pursuant to this article in such

action and that a copy of the order appointing the receiver has been

served personally by or on behalf of such receiver upon a person, firm

or corporation holding property, tangible or intangible, of the said

foreign corporation, or against whom a claim or demand in favor of such

foreign corporation exists and that demand therefor has been made upon

such person, firm or corporation by or on behalf of such receiver.

(3) The order directing service of the summons shall require the

publication thereof in a newspaper published in the state of New York in

the English language at least once a week for four successive weeks, and

shall also require the mailing on or before the date of the first

publication of a copy of the summons, complaint and order to the

corporation at its last known principal or head office in the state or

country of its incorporation.

(4) In any such action, the summons shall be served personally or an

order directing service thereof by publication shall be obtained and the

first publication thereof made within sixty days after the appointment

of the temporary receiver, and if served by publication, the service

shall be made complete by the continuance thereof.

(5) If served by publication, service of the summons shall be deemed

complete on the date of the last publication. The action shall be

deemed commenced upon the issuance of the summons. The order appointing

the receiver and the papers upon which the same is granted shall be

filed in the office of the clerk of the court where the action is

triable within ten days after the order is made.

(6) In the event that the defendant defaults in answering, or if

after a trial the court is satisfied that the defendant has ceased to

conduct its activities by reason of any thing or matter whatsoever, or

that it has been dissolved, nationalized, or its authority or existence

has been otherwise terminated or cancelled, the court shall thereupon

direct judgment, appointing a permanent receiver and directing the

receiver to liquidate the assets, credits, choses in action and

property, tangible and intangible, in the state of New York of the said

defendant, in the manner provided in this article.

(7) The time between the cessation of its activities by the

corporation or its dissolution or nationalization or the termination or

cancellation of its authority or existence and the appointment of a

receiver in this state pursuant to this article, whichever time is

longer, plus three years after such appointment, shall not be a part of

the time limited by domestic or foreign laws for the commencement of an

action or for the assertion of a claim therein by or on behalf of or

against said corporation or by or against said receiver, whether or not

said action or claim has heretofore been barred by any statute of

limitations of this state or of any other state or country.

(8) The existence of and causes of action of or against such

corporation existing at the time of its dissolution, nationalization, or

the termination or cancellation of its authority or existence, or

arising thereafter, shall not be deemed ended, abated or affected

thereby, nor shall actions brought by or against such corporation or a

receiver appointed hereunder or any remedy therein be deemed to have

ended or abated or to have been affected by reason of such dissolution,

nationalization, or termination or cancellation of its authority or

existence. This provision shall apply to all property, tangible and

intangible, debts, demands, and choses in action of such corporation

within the state of New York, and to all litigation heretofore or

hereafter brought in the courts of the state or of the United States to

which the corporation or the receiver of said corporation appointed

pursuant to the provisions of this article is a party. Any receiver

appointed pursuant to the provisions of this article may be substituted

for such corporation in any action or proceeding pending in the courts

of the state or of the United States to which such corporation is a

party and may intervene in any action or proceeding which relates to or

affects any of the assets or claims of the corporation and revive any

action which shall have heretofore or which may hereafter have abated,

and such dissolution, nationalization, or termination or cancellation of

its authority or existence in the jurisdiction of its incorporation, or

any confiscatory law or decree thereof, shall not be deemed to have any

extra-territorial effect or validity as to the property, tangible or

intangible, debts, demands or choses in action of such corporation

within the state or any debts or obligations owing to such corporation

from persons, firms or corporations residing, sojourning or doing

business in the state. Nothing contained in this subdivision shall be

deemed to validate claims for or causes of action or actions to recover

property located in or moneys payable in the jurisdiction of

incorporation which are unenforceable under the laws of such

jurisdiction.

(9) If any receiver or trustee has heretofore been appointed in this

state for such corporation or its property in any action or proceeding,

either before or supplementary to judgment, otherwise than in an action

brought pursuant to this article, such receiver or trustee may be

appointed or continued as the receiver in any action brought pursuant to

the provisions of this article.

(10) The appointment of a receiver or the pendency of an action for

the appointment of such receiver, shall until such receiver shall be

discharged or until such action shall have terminated, be a bar to any

subsequent application or action for the appointment of a receiver of

the assets of the same corporation.

(11) An action shall be commenced within three years from the

discovery by the plaintiff or his predecessor in interest, of any asset

of said corporation in the state of New York.

Authorization of foreign corporations.

(a) A foreign corporation shall not conduct activities in this state

until it has been authorized to do so as provided in this article. A

foreign corporation may be authorized to conduct in this state any

activities which may be conducted lawfully in this state by a domestic

corporation, to the extent that it is authorized to conduct such

activities in the jurisdiction of its incorporation, but no other

activities.

(b) Without excluding other acts which may not constitute conducting

activities in this state, a foreign corporation shall not be considered

to be conducting activities in this state, for the purposes of this

chapter, by reason of doing in this state any one or more of the

following acts:

(1) Maintaining or defending any action or proceeding, whether

judicial, administrative, arbitrative or otherwise, or effecting

settlement thereof or the settlement of claims or disputes.

(2) Holding meetings of its directors or its members.

(3) Maintaining bank accounts.

(4) Maintaining offices or agencies only for the transfer, exchange

and registration of its securities, or appointing and maintaining

trustees or depositaries with relation to its securities.

(5) Granting funds.

(6) Distributing information to its members.

(c) The specification in paragraph (b) does not establish a standard

for activities which may subject a foreign corporation to service of

process under this chapter or any other statute of this state.

(d) A foreign corporation whose corporate name is not acceptable for

authorization pursuant to sections 301 and 302 of this chapter, may

submit in its application for authority pursuant to section thirteen

hundred four of this chapter, a fictitious name under which it shall do

business in this state. A fictitious name submitted pursuant to this

section shall be subject to the provisions of subparagraphs 2 through 9

of paragraph (a) of section 301 and section 302 of this chapter. A

foreign corporation authorized to conduct activities in this state under

a fictitious name pursuant to this section, shall use such fictitious

name in all of its dealings with the secretary of state and in the

conduct of its activities in this state. The provisions of section one

hundred thirty of the general business law shall not apply to any

fictitious name filed by a foreign corporation pursuant to this section.

Application to existing authorized foreign corporations.

Every foreign corporation which on the effective date of this chapter

is authorized to conduct activities in this state under a certificate of

authority heretofore issued to it by the secretary of state shall

continue to have such authority. Such foreign corporation, its members,

directors, and officers shall have the same rights, franchises, and

privileges and shall be subject to the same limitations, restrictions,

liabilities, and penalties as a foreign corporation authorized under

this chapter, its members, directors, and officers respectively. A

foreign corporation may by amendment to its certificate of authority set

forth whether it is a charitable corporation or a non-charitable

corporation and in the absence of such amendment an authorized foreign

corporation shall be a charitable corporation. Reference in this chapter

to an application for authority shall, unless the context otherwise

requires, include the statement and designation and any amendment

thereof required to be filed by the secretary of state under prior

statutes to obtain a certificate of authority.

Violations.

The attorney-general may bring an action to restrain a foreign

corporation from conducting in this state without authority any

activities for the conduct of which it is required to be authorized in

the state, or from conducting in this state any activities not set forth

in its application for authority or certificate of amendment filed by

the department of state. The attorney-general may bring an action or

special proceeding to annul the authority of a foreign corporation to

conduct in this state any activities not set forth in its application

for authority or certificate of amendment or the authority of which was

obtained through fraudulent misrepresentation or concealment of a

material fact or to enjoin or annul the authority of any foreign

corporation which within this state contrary to law has done or omitted

any act which if done by a domestic corporation would be a cause for its

dissolution under section 1101 (Attorney-general's action for judicial

dissolution) or to annul the authority of a foreign corporation that has

been dissolved or has had its authority or existence otherwise

terminated or cancelled in the jurisdiction of its incorporation. The

attorney-general shall deliver a certified copy of the order of

annulment to the department of state. Upon the filing thereof by the

department of state the authority of the foreign corporation to conduct

activities in this state shall be annulled. The secretary of state shall

continue as agent of the foreign corporation upon whom process against

it may be served in any action or special proceeding based upon any

liability or obligation incurred by the foreign corporation within the

state prior to the filing of the certified copy of the order of

annulment by the department of state.

Application for authority; contents.

(a) A foreign corporation may apply for authority to conduct

activities in this state by filing an application entitled "Application

for authority of ........ (name of corporation) under section 1304 of

the Not-for-Profit Corporation Law." The application shall be signed and

delivered to the department of state. It shall set forth:

(1) The name of the foreign corporation.

(2) The fictitious name the corporation agrees to use in this state

pursuant to section 1301 of this chapter, if applicable.

(3) The jurisdiction and date of its incorporation.

(4) That the corporation is a foreign corporation as defined in

subparagraph (7) of paragraph (a) of section 102 (Definitions) of this

chapter, whether it would be a charitable corporation or non-charitable

corporation if formed in this state; a statement of its purposes to be

pursued in this state and of the activities which it proposes to conduct

in this state; and a statement that it is authorized to conduct those

activities in the jurisdiction of its incorporation.

(5) The county within this state in which its office is to be located.

(6) A designation of the secretary of state as its agent upon whom

process against it may be served and the post office address within or

without this state to which the secretary of state shall mail a copy of

any process against it served upon him.

(7) If it is to have a registered agent, the name and address of the

agent within this state and a statement that the registered agent is to

be its agent upon whom process against it may be served.

(8) A statement that the foreign corporation has not, since its

incorporation or since the date its authority to conduct activities in

this state was last surrendered, done any act in this state, except as

set forth in paragraph (b) of section 1301 (Authorization of foreign

corporations); or in lieu of such statement the consent of the state tax

commission to the filing of the application shall be attached thereto.

(9) Any provision required by any governmental body or officer or

other person or body as a condition for giving the consent or approval

required for the filing of such application for authority, provided such

provision is not inconsistent with this chapter or any other statute of

this state. A corporation whose statement of purposes to be conducted in

this state specifically includes the establishment or operation of a

child day care center, as that term is defined in section three hundred

ninety of the social services law, shall provide a certified copy of any

application for authority and any amendment thereto involving such

corporation to the office of children and family services within thirty

days after receipt of confirmation of the filing of such application or

amendment with the department of state.

(b) Attached to the application for authority shall be a certificate

by an authorized officer of the jurisdiction of its incorporation that

the foreign corporation is an existing corporation. If such certificate

is in a foreign language, a translation thereof under oath of the

translator shall be attached thereto.

(c) If the application for authority sets forth any purpose or

activity for which a domestic corporation could be formed only with the

consent or approval of any governmental body or officer, or other person

or body under section 404 (Approvals, notices and consents) of this

chapter, such consent or approval shall be endorsed thereon or annexed

thereto.

(d) If the application for authority sets forth any purpose or

activity requiring a domestic corporation to provide notice of the

filing of a certificate of incorporation to any person or entity under

section 404 (Approvals, notices and consents) of this chapter, then the

corporation shall send by certified mail, return receipt requested, a

certified copy of the certificate of authority to such person or entity

within ten business days after the corporation receives confirmation

from the department of state that the certificate has been accepted for

filing.

Application for authority; effect.

Upon filing by the department of state of the application for

authority the foreign corporation shall be authorized to conduct in this

state any activities set forth in the application. Such authority shall

continue so long as the corporation retains its authority to conduct

such activities in the jurisdiction of its incorporation and its

authority to conduct activities in this state has not been surrendered,

suspended or annulled in accordance with law.

Powers of authorized foreign corporations.

An authorized foreign corporation shall have such powers as are

permitted by the laws of the jurisdiction of its incorporation but no

greater powers than those of a domestic corporation formed for the

purposes set forth in the application for authority.

Tenure of real property.

A foreign corporation may acquire and hold real property in this state

in furtherance of its corporate purposes and may convey the same by deed

or otherwise in the same manner as a domestic corporation.

Amendments or changes.

(a) An authorized foreign corporation may amend or change its

application for authority from time to time in any and as many of the

following respects as may be desired if the amendments contain only such

provisions as might be lawfully contained in an application for

authority at the time of making such amendment:

(1) To change its corporate name if such change has been effected

under the laws of the jurisdiction of its incorporation.

(2) To change its fictitious name filed pursuant to paragraph (d) of

section 1301 of this chapter, to another fictitious name, if its true

corporate name is not available for use in this state.

(3) To delete its fictitious name filed pursuant to paragraph (d) of

section 1301 of this chapter, if its true corporate name is now

available for use in this state.

(4) To adopt a fictitious name when the corporate name is changed and

is not available in this state.

(5) To enlarge, limit or otherwise change the activities which it

proposes to conduct in this state.

(6) To change the location of its office in this state.

(7) To specify or change the post office address to which the

secretary of state shall mail a copy of any process against it served

upon him.

(8) To make, revoke or change the designation of a registered agent or

to specify or change his address.

Certificate of amendment; contents, effect.

(a) To accomplish such amendment a certificate, entitled "Certificate

of amendment of application for authority of ....... (name of

corporation) under section 1309 of the Not-for-Profit Corporation Law,"

shall be signed and delivered to the department of state. It shall set

forth:

(1) The name of the foreign corporation as it appears on the index of

names of existing domestic and authorized foreign corporations of any

kind in the department of state and the fictitious name the corporation

has agreed to use in this state pursuant to paragraph (d) of section

1301 of this article.

(2) The jurisdiction of its incorporation.

(3) The date it was authorized to conduct activities in this state.

(4) Each amendment effected thereby.

(5) If the true corporate name of the foreign corporation is to be

changed, a statement that the change of name has been effected under the

laws of the jurisdiction of its incorporation and the date the change

was so effected.

(6) If the activities it proposes to conduct in this state are to be

enlarged, limited or otherwise changed, a statement that it is

authorized to conduct in the jurisdiction of its incorporation the

activities which it proposes to conduct in this state.

(b) If an authorized foreign corporation has changed its name in the

jurisdiction of its incorporation, it shall deliver to the department of

state within twenty days after the change became effective in that

jurisdiction a certificate of amendment under paragraph (a). Upon its

failure to deliver such certificate, its authority to conduct activities

in this state shall upon the expiration of said twenty days be

suspended. The filing by the department of state of a certificate of

amendment changing the corporation name within one hundred twenty days

after the effective date of the change of name in the jurisdiction of

its incorporation shall annul the suspension and its authority to

conduct activities in this state shall be restored and continue as if no

suspension had occurred. The secretary of state shall continue, during

such suspension, as agent of the foreign corporation upon whom process

against the foreign corporation may be served in the manner set forth in

paragraph (b) of section 306 (Service of process).

(c) A certificate of amendment of application for authority shall not

be filed, if the amendment adds, changes or eliminates a purpose, power

or provision the inclusion of which in an application for authority

requires consent or approval of any governmental body or officer or

other person or body, or if the amendment changes the name of a

corporation whose application for authority had such consent or approval

endorsed thereon or annexed thereto, unless such consent or approval is

endorsed on or annexed to the certificate of amendment of application

for authority.

Certificate of change; contents.

(a) In lieu of a certificate of amendment, an authorized foreign

corporation, upon compliance with this section, may make any or all of

the following changes in its application for authority:

(1) To change the location of its office in this state.

(2) To specify or change the post office address to which the

secretary of state shall mail a copy of any process against it served

upon him.

(3) To make, revoke or change the designation of a registered agent or

specify or change his address.

(4) To specify, change or delete the email address to which the

secretary of state shall email a notice of the fact that process against

the corporation has been electronically served upon him or her.

(b) To accomplish such change, a certificate entitled "Certificate of

change of application for authority of .......... (name of corporation)

under section 1310 of the Not-for-Profit Corporation Law" shall be

signed and delivered to the department of state. It shall set forth:

(1) The name of the foreign corporation as it appears on the index of

names of existing domestic and authorized foreign corporations of any

kind in the department of state and the fictitious name the corporation

has agreed to use in this state pursuant to paragraph (d) of section

1301 of this article.

(2) The jurisdiction of its incorporation.

(3) The date it was authorized to conduct activities in this state.

(4) Each change effected thereby.