Source: Laws of New York, official NYS Legislature server (public.leginfo.state.ny.us, Legislative Bill Drafting Commission). Retrieved 2026-07-07. Database current through 2026 Chapters 1-165.
§ 101. Short title.
This chapter shall be known as the "Not-for-Profit Corporation Law"
and may be cited as "N-PCL".
§ 102. 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.
§ 103. 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.
§ 104. 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.
§ 104-A. 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.
§ 105. 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.
§ 106. 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.
§ 107. 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.
§ 108. 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.
§ 109. 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.
§ 110. 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.
§ 111. 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.
§ 112. 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).
§ 114. 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.
§ 115. 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.
§ 201. 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.
§ 202. 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.
§ 203. 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.
§ 204. 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.
§ 205. 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.
§ 301. 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.
§ 302. 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".
§ 303. 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.
§ 304. 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.
§ 305. 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.
§ 306. 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. (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.
(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.
§ 306-a. 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.
§ 307. 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.
§ 308. 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.
§ 309. 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.
§ 401. 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.
§ 402. 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.
§ 403. 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.
§ 404. 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.
§ 405. 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.
§ 406. 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).
§ 501. 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.
§ 502. 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.
§ 503. 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.
§ 504. 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.
§ 505. 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.
§ 506. 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.
§ 507. 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.
§ 508. 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.
§ 509. 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.
§ 510. 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.
§ 511. 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.
§ 511-a. 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.
§ 513. 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.
§ 514. 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.
§ 515. 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.
§ 516. 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).
§ 517. 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.
§ 519. 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.
§ 519-a. 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".
§ 520. 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.
§ 521. 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.
§ 550. Short title.
This article may be known and may be cited as the "New York prudent
management of institutional funds act".
§ 551. 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.
§ 552. 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.
§ 553. 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.
§ 554. 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).
§ 555. 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.
§ 556. 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.
§ 557. 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.
§ 558. 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).
§ 601. 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.
§ 602. 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.
§ 603. 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.
§ 604. 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
§ 606. 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.
§ 607. 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.
§ 608. 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.
§ 609. 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.
§ 610. 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.
§ 611. 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.
§ 612. 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.
§ 613. 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.
§ 614. 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.
§ 615. 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.
§ 616. 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.
§ 617. 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.
§ 618. 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.
§ 619. 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.
§ 620. 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.
§ 621. 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.
§ 622. 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.
§ 623. 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.
§ 624. 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.
§ 701. 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.
§ 702. 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.
§ 703. 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.
§ 704. 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.
§ 705. 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.
§ 706. 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.
§ 707. 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.
§ 708. 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.
§ 709. 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.
§ 710. 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.
§ 711. 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.
§ 712. 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.
§ 712-a. 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.
§ 713. 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.
§ 714. 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.
§ 715. 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.
§ 715-a. 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.
§ 715-b. 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.
§ 716. 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.
§ 717. 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.
§ 718. 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.
§ 719. 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.
§ 720. 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.
§ 720-a. 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.
§ 721. 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.
§ 722. 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.
§ 723. 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.
§ 724. 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.
§ 725. 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).
§ 726. 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.
§ 801. 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.
§ 802. 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.
§ 803. 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.
§ 803-A. 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.
§ 804. 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.
§ 805. 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.
§ 901. 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.
§ 902. 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.
§ 903. 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.
§ 904. 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.
§ 905. 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.
§ 906. 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.
§ 907. 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.
§ 907-a. 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.
§ 907-b. 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.
§ 908. 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.
§ 909. 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.
§ 910. 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.
§ 1001. 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.
§ 1002. 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.
§ 1002-a. 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.
§ 1003. 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.
§ 1004. 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.
§ 1006. 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.)
§ 1007. 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.
§ 1008. 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.
§ 1009. 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.
§ 1010. 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.
§ 1012. 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.
§ 1013. 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.
§ 1014. 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).
§ 1101. 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.
§ 1102. 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.
§ 1103. 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.
§ 1104. 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.
§ 1105. 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.
§ 1106. 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.
§ 1107. 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.
§ 1108. 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.
§ 1109. 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.
§ 1110. 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.
§ 1111. 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.
§ 1112. 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.
§ 1113. 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.
§ 1114. 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.
§ 1115. 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.
§ 1213. 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.
§ 1214. 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.
§ 1215. 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.
§ 1216. 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.
§ 1217. 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.
§ 1218. 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.
§ 1301. 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.
§ 1302. 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.
§ 1303. 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.
§ 1304. 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.
§ 1305. 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.
§ 1306. 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.
§ 1307. 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.
§ 1308. 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.
§ 1309. 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.
§ 1310. 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.
(c) A certificate of change of application for authority which changes
only the post office address to which the secretary of state shall mail
a copy of any process against an authorized foreign corporation served
upon him or her, 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 which changes
the address of its registered agent, provided such address 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, or who has been designated as registered agent for such
authorized foreign corporation, may be signed and delivered to the
department of state by such agent. The certificate of change of
application for authority shall set forth the statements required under
subparagraphs (1), (2), (3) and (4) of paragraph (b) of this section;
that a notice of the proposed change was mailed by the party signing the
certificate to the authorized foreign corporation 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 foreign corporation to whose address
the secretary of state is required to mail copies of process, and/or the
agent of such foreign corporation to whose email address the secretary
of state is required to email a notice of the fact that process against
it has been electronically served upon the secretary of state, 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.
§ 1311. Surrender of authority.
(a) An authorized foreign corporation desiring to surrender its
authority shall deliver to the department of state a certificate
entitled "Certificate of surrender of authority of ......... (name of
corporation) under section 1311 of the Not-for-Profit Corporation Law."
The certificate shall be signed. 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) That it surrenders its authority to conduct activities in this
state.
(5) That it revokes the authority of its registered agent, if any,
previously designated and consents that process against it in any action
or special proceeding based upon any liability or obligation incurred by
it within this state before the filing of the certificate of surrender
may be served on the secretary of state after the filing thereof in the
manner set forth in paragraph (b) of section 306 (Service of process).
(6) A 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.
(b) The department shall not file such certificate unless the consent
of the state tax commission to the surrender of authority is attached
thereto.
(c) The authority of the foreign corporation to conduct activities in
this state shall terminate on the filing by the department of state of
the certificate of surrender of authority.
(d) The post office address specified under subparagraph (a) (6) may
be changed by delivering to the department of state a certificate,
entitled "Certificate of amendment of certificate of surrender of
authority of .......... (name of corporation) under section 1311 of the
Not-for-Profit Corporation Law." The certificate shall be signed. It
shall set forth:
(1) The name of the foreign corporation.
(2) The jurisdiction of its incorporation.
(3) The date its certificate of surrender of authority was filed by
the department of state.
(4) The changed 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.
§ 1312. Termination of existence.
When an authorized foreign corporation is dissolved or its authority
or existence is otherwise terminated or cancelled in the jurisdiction of
its incorporation or when such foreign corporation is merged into or
consolidated with another foreign corporation, a certificate of the
secretary of state, or official performing the equivalent function as to
corporate records, of the jurisdiction of incorporation of such foreign
corporation attesting to the occurrence of any such event or a certified
copy of an order or decree of a court of such jurisdiction directing the
dissolution of such foreign corporation, the termination of its
existence or the cancellation of its authority shall be delivered to the
department of state. The filing of the certificate, order or decree
shall have the same effect as the filing of a certificate of surrender
of authority under section 1311 (Surrender of authority). The secretary
of state shall continue as agent of the foreign corporation 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 based upon any liability or obligation incurred by the
foreign corporation within this state prior to the filing of such
certificate, order or decree and he shall promptly cause a copy of any
such process to be mailed by certified mail, return receipt requested,
to such foreign corporation at the post office address on file in his or
her office specified for such purpose or a notice of the fact that
process against the corporation has been served on him or her to be
emailed to the foreign corporation at the email address on file in his
or her office specified for such purpose. The post office address and/or
email address may be changed by signing and delivering to the department
of state a certificate of change setting forth the statements required
under section 1310 (Certificate of change; contents) to effect a change
in the post office address and/or email address under subparagraph (a)
(7) of section 1308 (Amendments or changes).
§ 1313. Actions or special proceedings by unauthorized foreign
corporations.
(a) A foreign corporation conducting activities in this state without
authority shall not maintain any action or special proceeding in this
state unless and until such corporation has been authorized to conduct
activities in this state and it has paid to the state all fees,
penalties and franchise taxes, if any, for the years or parts thereof
during which it conducted activities in this state without authority.
This prohibition shall apply to any successor in interest of such
foreign corporation.
(b) The failure of a foreign corporation to obtain authority to
conduct activities in this state shall not impair the validity of any
contract or act of the foreign corporation or the right of any other
party to the contract to maintain any action or special proceeding
thereon, and shall not prevent the foreign corporation from defending
any action or special proceeding in this state.
§ 1314. Actions or special proceedings by foreign corporations.
An action or special proceeding may be maintained by a foreign
corporation, in like manner and subject to the same limitations, as an
action or special proceeding brought by a domestic corporation, except
as otherwise prescribed by statute.
§ 1315. Actions or special proceedings against foreign corporations.
(a) An action or special proceeding against a foreign corporation may
be maintained by a resident of this state or by a domestic corporation
of any kind for any cause of action.
(b) Except as otherwise provided in this article, an action or special
proceeding against a foreign corporation may be maintained by another
foreign corporation of any kind or by a nonresident in the following
cases only:
(1) Where the action is brought to recover damages for the breach of a
contract made or to be performed within this state, or relating to
property situated within this state at the time of the making of the
contract.
(2) Where the subject matter of the litigation is situated within this
state.
(3) Where the cause of action arose within this state, except where
the object of the action or special proceeding is to affect the title of
real property situated outside this state.
(4) Where, in any case not included in the preceding subparagraphs, a
non-domiciliary would be subject to the personal jurisdiction of the
courts of this state under section three hundred two of the civil
practice law and rules.
(5) Where the defendant is a foreign corporation conducting activities
or authorized to conduct activities in this state.
(c) Paragraph (b) does not apply to a corporation which was formed
under the laws of the United States and which maintains an office in
this state.
§ 1316. Record of members.
(a) Any resident of this state who shall have been a member of record,
for at least six months immediately preceding his demand, of a foreign
corporation conducting activities in this state, or any resident of this
state authorized in writing by at least five percent of the members,
entitled to vote, of the foreign corporation, upon at least five days'
written demand may require such foreign corporation to produce a record
of its members setting forth the names and addresses of all members, the
number and class of capital certificates held by each and the dates when
they respectively became the owners of record thereof, and shall have
the right to examine in person or by agent or attorney at the office of
the foreign corporation in this state or at the office of its transfer
agent or registrar in this state or at such other place in any county in
this state in which the foreign corporation is conducting activities as
may be designated by the foreign corporation during the usual business
hours, a record of members or an exact copy of the record of members
certified as correct by the corporate officer or agent responsible for
keeping or producing such record and to make extracts therefrom. In the
case of a foreign corporation having shares, a record of shareholders
shall for the purpose of this section be regarded as a record of
members, and holders of voting trust certificates representing such
shares shall for the purpose of this section be regarded as members.
(b) An examination authorized by paragraph (a) may be denied to such
member or other person upon his refusal to furnish to the foreign
corporation or its transfer agent or registrar an affidavit that such
inspection is not desired for a purpose which is in the interests of a
business or object other than the activities of the foreign corporation
and that such member or other person has not within five years sold or
offered for sale any list or record of members of any corporation of any
kind, whether or not formed under the laws of this state, or aided or
abetted any person in procuring any such list or record of members for
any such purpose.
(c) Upon refusal by the foreign corporation or by an officer or agent
of the foreign corporation to produce for examination or to permit an
examination of the record of members as herein provided, the person
making the demand for production and examination may apply to the
supreme court in the judicial district where the office of the foreign
corporation within this state is located, upon such notice as the court
may direct, for an order directing the foreign corporation, its officer
or agent, to show cause why an order should not be granted directing
such production and permitting such examination 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 examination, the court shall
grant an order compelling such production for examination and awarding
such further relief as to the court may seem just and proper.
(d) Nothing herein contained shall impair the power of courts to
compel the production for examination of the books of a foreign
corporation. The record of members 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 foreign
corporation or any of its officers, directors or members.
§ 1317. Voting trust records.
(a) A voting trustee, appointed under a voting trust agreement to
vote the shares of a foreign corporation conducting activities in this
state, who either has an office in this state or has designated a
transfer agent within this state, shall produce for examination and
permit to be examined in this state, at the office of the foreign
corporation or at his office or at the office of such transfer agent, a
record of voting trust certificate holders setting forth their names,
alphabetically arranged, and addresses, the number and class of shares
represented by the certificates held by them respectively and the dates
when they respectively became the owners thereof, upon the written
demand of any resident of this state who shall have been a voting trust
certificate holder or a shareholder of the foreign corporation for at
least six months immediately preceding his demand, or of any resident of
this state holding, or thereunto authorized in writing by the holders
of, at least five percent of any class of the outstanding shares of such
foreign corporation, either directly or as holders of voting trust
certificates for such shares, subject to the same terms and conditions
set forth with respect to the right of examination of the record of
members of the foreign corporation in section 1316 (Record of members).
(b) The voting trustee shall deposit an exact copy of the voting
trust agreement with the foreign corporation at its office in this state
or at the office of the transfer agent in this state.
(c) The copy of the voting trust agreement shall be subject to the
same right of examination by voting trust certificate holders and by
shareholders of the foreign corporation as is the record of members of a
corporation under section 621 (Books and records; right of inspection,
prima facie evidence).
(d) Upon refusal by a voting trustee or his transfer agent to produce
for examination or to permit an examination of the record of voting
trust certificate holders or of such copy of the voting trust agreement
as herein provided, the person making the demand may apply to the
supreme court, upon such notice as the court may direct, for an order
directing the voting trustee or his transfer agent to show cause why an
order should not be granted directing such production and permitting
such examination. 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 entitled to such examination, the
court shall grant an order compelling such production for examination
and awarding such further relief as to the court may seem just and
proper.
(e) Where the voting trust agreement shall vest in the voting trustee
the right to vote the shares of a foreign corporation which has an
office in this state for conducting activities and either the principal
activity of which is conducted within this state or the greater part of
its property is located within this state, the voting trust agreement is
an express trust created under the laws of this state and the supreme
court upon the petition of a voting trust certificate holder may
exercise such power over the trustee named therein as is granted to the
court by section 7-2.6 of the estates, powers and trusts law.
§ 1318. Liabilities of directors and officers of foreign corporations.
(a) Except as otherwise provided in this chapter, the directors and
officers of a foreign corporation conducting activities in this state
are subject, to the same extent as directors and officers of a domestic
corporation, to the provisions of:
(1) Section 719 (Liability of directors in certain cases) except
subparagraph (a) (4) thereof, and
(2) Section 720 (Action against directors and officers for
misconduct)
(b) Any liability imposed by paragraph (a) may be enforced in, and
such relief granted by, the courts in this state, in the same manner as
in the case of a domestic corporation.
§ 1319. Liability of foreign corporations for failure to disclose
required information.
A foreign corporation conducting activities in this state shall, in
the same manner as a domestic corporation, disclose to its members of
record who are residents of this state the information required under
Article 5 and shall be liable as provided in section 521 (Liability for
failure to disclose required information) for failure to comply in good
faith with these requirements.
§ 1320. Applicability of other provisions.
(a) In additions to articles 1 (Short title; definitions;
application; certificates; miscellaneous) and 3 (Corporate name and
service of process) and the other sections of article 13, the following
provisions, to the extent provided therein, shall apply to a foreign
corporation conducting activities in this state, its directors, officers
and members:
(1) Section 623 (Members' derivative action brought in the right of
the corporation to procure a judgment in its favor).
(2) Sections 721 (Exclusivity of statutory provisions for
indemnification of directors and officers) through 727 (Insurance for
indemnification of directors and officers), inclusive.
(3) Section 906 (Merger or consolidation of domestic and foreign
corporations).
§ 1321. Exemption from certain provisions.
(a) Notwithstanding any other provision of this chapter, a foreign
corporation conducting activities in this state which is authorized
under this article, its directors, officers and members, shall be exempt
from the provisions of paragraph (e) of section 1317 (Voting trust
records), subparagraph (1) of paragraph (a) of section 1318 (Liabilities
of directors and officers of foreign corporations), and subparagraph (2)
of paragraph (a) of section 1320 (Applicability of other provisions) of
this article if such provision would otherwise apply:
(1) The corporation is a non-charitable corporation under this
chapter; its principal activities are conducted outside this state; the
greater part of its property is located outside this state; and less
than one third of its members are residents of this state; or
(2) The corporation is a charitable corporation under this chapter;
its principal activities are conducted outside this state; the greater
part of its property is located outside this state; and less than ten
per cent of its annual revenues is derived from solicitation of funds
within this state.
§ 1401. Private and family cemetery corporations.
(a) Private cemetery corporation. Seven or more persons may become a
private cemetery corporation by setting off for a private cemetery
enclosed real property, to the extent of not more than three acres, and
by electing at a meeting of the owners of the property so set off, at
which not less than seven shall be present, three of their number to be
directors, to hold office for five years. The chairman and secretary of
such meeting shall make, sign and acknowledge, and file in the office of
the clerk of the county in which such real property is situated, a
certificate containing the name of the corporation, a description of the
lands so purchased or set apart, and the names of the directors. No such
cemetery shall be located within one hundred rods of any dwelling-house
without the written consent of the owner thereof. Additional lands not
exceeding three acres may be acquired by a private cemetery corporation;
but no additional lands so purchased or otherwise acquired shall be used
for the purpose of burial within three hundred feet of any dwelling
without the written consent of the owner thereof.
(b) Removal of remains from private cemeteries to other cemeteries.
The supervisor of any town containing a private cemetery may remove any
body interred in such cemetery to any other cemetery within the town, if
the owners of such cemeteries and the next of kin of the deceased
consent to such removal. The owners of a private cemetery may remove the
bodies interred therein to any other cemetery within such town, or to
any cemetery designated by the next of kin of the deceased. Notice of
such removal shall be given within twenty days before such removal
personally or by certified mail to the next of kin of the deceased if
known and to the clerk and historian of the county in which such real
property is situated and notice shall be given to the New York state
department of state, division of cemeteries. If any of the deceased are
known to be veterans, the owners shall also notify the department of
veterans' services. In the absence of the next of kin, the county clerk,
county historian or the department of veterans' services may act as a
guardian to ensure proper reburial.
(c) Family cemetery corporations. Any person, by deed or devise, may
dedicate land to be used exclusively for a family cemetery. The
executors, administrators or trustees of a deceased person, with the
written authority of all of his surviving heirs, next of kin, devisees
and legatees, executed in person or by an attorney, or if infants, by
legal guardian, may dedicate lands of such deceased person exclusively
for a family cemetery, or may purchase with the funds of the estate,
suitable lands therefor. The land so dedicated shall not exceed three
acres, not be located within one hundred rods of a dwelling-house,
without the consent of the owner, unless such land, at the time of
dedication, is in actual use for burial or cemetery purposes within the
limits of a city. The instrument dedicating such land shall describe the
same, may appoint directors to manage such cemetery, prescribe, or
provide for making rules, directions or by-laws for such management,
direct the manner of choosing successors to the directors, specify their
qualifications, and grant to them and their successors money or personal
property as a fund for maintaining, improving and embellishing the
cemetery, in accordance with the deed or will, or the written authority
of the heirs, next of kin, devisees and legatees. The instrument
dedicating land for a family cemetery, together with the authority, if
any, of the heirs, next of kin, devisees and legatees of the deceased
person, shall be filed in the office of the county clerk of each county
in which the cemetery is to be situated. The directors before entering
on their duties, shall file in the office of the county clerk of each
such county, a written acceptance of their appointment; and thereupon
they and their successors shall constitute a corporation under the name
designated in such instrument. A fund created by will for the purpose of
maintaining, improving and embellishing such a cemetery shall not exceed
ten per centum of the net value of the estate of the testator. Such
corporation before receiving any property, money or funds for improving,
maintaining and embellishing the cemetery, shall execute to the
surrogate of the county in which such real property is situated, a bond
with sureties, or the bond of a surety company, approved by him, in a
penalty of twice the principal sum of the fund placed in charge of the
corporation, conditioned for the faithful preservation and application
thereof according to the rules, directions or by-laws prescribed in the
instrument under which the appointment of such directors was made, and
renew such bond or execute a new bond whenever required so to do by such
surrogate. At least once in each year and oftener if required by the
surrogate the corporation shall file with him a verified account of its
receipts and expenditures on account of the funds in its hands, or under
its control, together with vouchers for all disbursements. Any person
may bequeath or transfer to, and any such corporation may take, money or
personal property by will, deed or other transfer, upon trust, to hold
and apply to dispose of the same for the purpose of maintaining,
improving and embellishing any lot, plot or portion of such cemetery,
either according to the discretion of the directors, or for such time
and upon such terms and conditions, if any, as to the application,
investment and reinvestment of the principal and income and otherwise as
shall be stated in the instrument creating the trust as agreed upon, but
no such trust fund created by will shall exceed ten per centum of the
net value of the estate of the testator. The corporation shall give
security and account for such money or personal property as hereinbefore
provided.
If security is furnished by a surety company bond, the reasonable
expense thereof shall be a charge against the funds of the corporation.
(d) Type of corporation. A family or private cemetery corporation is a
charitable corporation under this chapter.
(e) Private and family cemetery corporations; prohibitions. (1) No
private or family cemetery corporation shall, directly or indirectly:
(i) sell, or have, enter into or perform a lease of any of its real
property to a funeral entity, or use any of its property for location of
a funeral entity;
(ii) commingle its funds with a funeral entity;
(iii) direct or carry on its business or affairs with a funeral
entity;
(iv) authorize control of its business or affairs by a funeral entity;
(v) engage in any sale or cross-marketing of goods or services with a
funeral entity;
(vi) have, enter into or perform a management or service contract for
cemetery operations with a funeral entity; or
(vii) have, enter into or perform a management contract with any
entity, other than a not-for-profit cemetery corporation.
(2) Only the provisions of subparagraphs (i) and (ii) of subdivision
one of this paragraph shall apply to cemetery corporations with thirty
acres or less of real property dedicated to cemetery purposes, and only
to the extent the sale or lease is of real property dedicated to
cemetery purposes, and such cemeteries shall not engage in the sale of
funeral home goods or services, except if such goods and services are
otherwise permitted to be sold by cemeteries.
(3) For the purposes of this paragraph, "funeral entity" means a
person, partnership, corporation, limited liability company or other
form of business organization providing funeral home services, or
owning, controlling, conducting or affiliated with a funeral home, any
subsidiary thereof or an officer, director or stockholder having a ten
per centum or greater proprietary, beneficial, equitable or credit
interest in a funeral home.
§ 1402. Fire corporations.
(a) Certificate of incorporation; additional contents.
In addition to the requirements of section 402 (Certificate of
incorporation; contents), the certificate of incorporation of a fire
corporation shall state the precise boundaries of the territory in which
the corporation intends to operate.
(b) Type of corporation.
A fire corporation is a charitable corporation under this chapter.
(c) Appointment of firefighters.
(1) A person shall not be eligible to be named in the certificate of
incorporation of a fire corporation unless he shall be at least eighteen
years of age and a resident of a city, village, fire district, or town
outside of villages and fire districts, where the fire corporation
intends to operate.
(2) If the fire corporation becomes part of the fire department of a
city, village or fire district, a person shall not be eligible to be
elected as a member or to continue as a member except as provided by law
for volunteer members of the fire companies in such city, village or
fire district.
(3) In towns outside of villages and fire districts, the consent of a
majority of the members of the town board to the formation of a fire
corporation shall constitute an appointment of the persons named in the
certificate of incorporation as town firefighters. Thereafter, other
eligible persons may be elected as members pursuant to the by-laws of
the fire corporation, but the election of a member must be approved by
the town board of each town which consented to the formation of the fire
corporation. Such a person shall be a resident of the territory
specified in the certificate of incorporation or of territory outside
such boundaries which is afforded fire protection by the fire
corporation pursuant to a contract for fire protection under which a
cash consideration is received by the corporation or for which
negotiations for renewal of such a contract are pending. The membership
of any volunteer member shall terminate when such member ceases to be a
resident of such inside or outside territory, except that the
corporation may authorize their continued membership where such member
notifies the secretary of the fire corporation (a) that they plan to
change their residence to a territory which is not in such inside or
outside territory, and (b) that by reason of such member's residence in
the vicinity or such member's usual occupation they will be available to
render active service as a volunteer firefighter in either such inside
or such outside territory. Voting for such authorization shall be
pursuant to the by-laws. Such authorization shall not become effective
unless approved by resolution of the town board of each town which
consented to the formation of the corporation. Any membership so
continued shall terminate when the member can no longer meet the
requirements of this subparagraph. A person who cannot meet the
residence requirements of this subparagraph may be elected to membership
as a volunteer member if by reason of such member's residence in the
vicinity or such member's usual occupation they will be available to
render active service as a volunteer firefighter in such inside or
outside territory. Voting for such election shall be pursuant to the
by-laws. Such election shall not become effective unless approved by
resolution of the town board of each town which consented to the
formation of the corporation. Such membership shall terminate when the
member can no longer meet the requirements of this subparagraph. The
election or continuance of any person as a member shall be deemed to
have been approved by the town board pursuant to this subparagraph in
the event that no action is taken by the town board, either approving or
disapproving, within forty days in the case of residents of the
territory specified in the certificate of incorporation or of outside
contract territory, and within seventy days in the case of all others,
after service of written notice of such election or continuance of
membership shall have been made by the secretary of the corporation upon
the town clerk, either personally or by mail. The membership of any
volunteer firefighter shall not be continued pursuant to this
subparagraph, and persons who do not reside in the territory specified
in the certificate of incorporation or in territory protected pursuant
to a contract for fire protection shall not be elected to membership,
if, by so doing, the percentage of such nonresident members in the fire
corporation would exceed forty-five per centum of the actual membership
thereof, provided, however, that the forty-five percent limit on
non-resident members shall not apply to the membership of the Huguenot
Fire Company, Inc., within the town of Deerpark, Orange county, to the
membership of the Prospect Terrace Fire Company, Inc., within the town
of Dickinson, Broome county, to membership of the Hopewell Volunteer
Fire Department, Inc., to membership of the Wales Center Volunteer Fire
Company, Inc., within the town of Wales, Erie county, to the membership
of the Nedrow Fire Department, within the town of Onondaga, Onondaga
county, to the membership of the Howlett Hill Fire Department, within
the town of Onondaga, Onondaga county, to the membership of the South
Onondaga Fire Department, within the town of Onondaga, Onondaga county,
to the membership of the Southwood Volunteer Fire Department, Inc.,
within the town of Onondaga, Onondaga county, to the membership of the
East Syracuse Fire Department, within the town of Dewitt, Onondaga
county, to the membership of the Camillus Volunteer Fire Department,
Inc., within the town of Camillus, Onondaga county, to the membership of
the Pleasant Square Fire Company, Inc. within the town of Johnstown,
Fulton county, to the membership of the East Amherst Fire Department,
Inc., within the town of Amherst, Erie county, to the membership of the
Crittenden Volunteer Fire Department, Inc., within the town of Alden,
Erie county, to membership of the fire departments within the town of
Fleming, Cayuga county, to membership of the Bushnell's Basin Fire
Department, in the town of Perinton, Monroe county, to the membership of
the East Dunkirk Volunteer Fire Company, Inc. within the town of
Dunkirk, Chautauqua county, to the membership of the Varna Volunteer
Fire Company, Inc., within the town of Dryden, Tompkins county, to the
membership of the Leeds Hose Company No. 1, Inc. within the town of
Catskill, Greene county or to membership of the Salina Consolidated Fire
District #2, in the town of Salina, Onondaga county. Nonresidents of the
territory specified in the certificate of incorporation whose volunteer
membership has been authorized or continued pursuant to this
subparagraph may be elected or appointed to any office in the fire
corporation and shall have all the powers, duties, immunities, and
privileges of resident volunteer members except a non-resident of this
state whose membership has been continued pursuant to this subparagraph,
or who was elected to membership pursuant to this subparagraph, shall
not be considered to be performing any firefighting duty, or to be
engaged in any firefighting activity, as a member of the fire company
while such member is outside of this state unless and until such member
has first reported to the officer or firefighter in command of their
fire department, or any company, squad or other unit thereof, engaged or
to be engaged in rendering service outside this state, or has received
orders or authorization from an officer of the fire department or fire
company to participate in or attend authorized activities outside of
this state in the same manner as resident members of the fire company. A
person shall not be eligible to volunteer membership in any other fire
corporation or fire company at one time. The provisions of this
subparagraph shall not be deemed to authorize the election or the
continuance of any person as a member of the corporation if such
election or continuance of membership shall be contrary to the by-laws,
rules or regulations of the fire corporation.
(4) A person who has been convicted of arson in any degree shall not
be eligible to be named in the certificate of incorporation of a fire
corporation, or to be elected or appointed as a volunteer member of a
fire corporation. The membership of any volunteer member of a fire
corporation shall immediately terminate if he is convicted of arson in
any degree while a member of a fire corporation.
(5) Upon application by any person for membership in a fire
corporation operating pursuant to this section, the fire chief shall
cause the applicant's background to be checked pursuant to section eight
hundred thirty-seven-o of the executive law for a criminal history
involving a conviction for arson and conviction of a crime which
requires the person to register as a sex offender under article six-C of
the correction law. Where such criminal history information includes
conviction of a crime which requires the person to register as a sex
offender under article six-C of the correction law, a fire company shall
determine whether or not such person shall be eligible to be elected or
appointed as a volunteer member of such fire company. Such determination
shall be made in accordance with the criteria established in sections
seven hundred fifty-two and seven hundred fifty-three of the correction
law.
(d) Incorporation of fire corporations in towns legalized.
Any fire, hose, protective or hook and ladder corporation heretofore
organized under any general law with the consent of the town board in
the territory served by such corporation is hereby legalized and
confirmed, notwithstanding the omission of any town board to appoint or
confirm the members of such corporations as town firefighters. Any such
corporation shall hereafter be subject to the provisions of this
section.
(e) Powers.
(1) A fire, hose, protective or hook and ladder corporation heretofore
incorporated under any general law or a fire corporation hereafter
incorporated under this section shall be under the control of the city,
village, fire district or town authorities having, by law, control over
the prevention or extinguishment of fires therein. Such authorities may
adopt rules and regulations for the government and control of such
corporations. Notwithstanding the provisions of any such local law, a
person who has been convicted of arson in any degree shall not be
eligible for nomination, election or appointment to any office of the
corporation, nor may such person serve as director of the corporation.
Any fire corporation officer or director who is convicted of arson in
any degree during his term of office shall be disqualified from
completing such term of office.
(2) Where a fire corporation formed outside of a city, village or fire
district furnishes fire protection to territory outside of the
boundaries specified in its certificate of incorporation, the fire
corporation and the members thereof shall be under the exclusive control
of the town board of the town in which the fire corporation maintains
its apparatus.
(3) The emergency relief squad of a fire corporation incorporated
under this section or subject to the provisions thereof shall have power
to furnish general ambulance service when duly authorized under the
provisions of section two hundred nine-b of the general municipal law.
(4) Any fire company incorporated under this section or subject to the
provisions thereof shall have power to engage in fund raising activities
pursuant to section two hundred four-a of the general municipal law.
(5) Any fire company incorporated under this section or subject to the
provisions thereof shall have power, subject to the approval or
authorization of the town board, to attend a funeral.
(6) Fire, hose, protective or hook and ladder corporations heretofore
incorporated under any general law or fire corporations hereafter
incorporated under this section or volunteer fire companies or fire
departments as defined in section three of the volunteer firefighters'
benefits law are hereby authorized to enter into contracts among
themselves and among municipal corporations for the joint purchase of
goods, supplies and services. Provided that the provisions of article
five-A of the general municipal law shall be controlling for any
proposed joint purchase between such fire corporation, company, or
department and a municipal corporation. For the purposes of this
subparagraph the term "municipal corporation" shall mean a county, city,
town, village, fire district, or ambulance district.
(f) Directors to file report.
It shall be the duty of the directors of all fire, hose, protective or
hook and ladder corporations incorporated under a general law or of a
fire corporation formed under this section in territory outside of
cities or villages, or a majority of them, on or before the fifteenth
day of January in each year, to make and file in the county clerk's
office, where the certificate of incorporation is filed a verified
certificate, stating the names of the directors and officers of the
corporation, containing an inventory of its property, a statement of its
liabilities and that the corporation has not engaged, directly or
indirectly, in any business other than that set forth in its certificate
of incorporation.
(g) Firefighters' exemption.
Every active firefighter who shall be a member of a corporation
subject to the provisions of this section shall be entitled to all the
rights granted by law to volunteer firefighters and every such active
firefighter who shall meet the requirements of section two hundred of
the general municipal law shall be entitled to the additional rights
granted by law to exempt volunteer firefighters.
(h) Legalization of membership of fire corporations in towns outside
villages and fire districts.
(1) Any person:
(A) who was recognized prior to the first day of July, nineteen
hundred fifty-four, as a volunteer member of a fire corporation subject
to the provisions of this section located in a town outside villages and
fire districts by the town board or by the officers and members of the
fire corporation, and
(B) who rendered active service with such fire corporation prior to
such date, and
(C) who was, at the time of his or her election to membership, a
resident of the territory specified in the certificate of incorporation
or of territory outside such boundaries which was afforded fire
protection by the fire corporation pursuant to a contract for fire
protection,
shall for all purposes in law be considered to have been duly elected
and confirmed as a member in such fire corporation as of the date of
such confirmation, if any, and, if none, then as of the date of such
election; notwithstanding that there may have been some legal defect in
such election, or the proceedings precedent thereto, or a failure of the
town board to confirm such member, as provided by the law in force at
the time of such election, and the status of such person as a volunteer
firefighter as of the date of such confirmation or election is hereby
legalized, validated and confirmed. This subparagraph shall not apply to
a person, if any, whose volunteer membership in a fire corporation was
declared invalid by a court of competent jurisdiction prior to the first
day of January, nineteen hundred fifty-five.
(2) Any person:
(A) who was recognized on or after the first day of July, nineteen
hundred fifty-four and prior to the first day of January, two thousand
eleven as a volunteer member of a fire corporation subject to the
provisions of this section located in a town outside villages and fire
districts by the town board or by the officers and members of the fire
corporation, and
(B) who rendered active service with such fire corporation between
such dates, and
(C) who was, at the time of his or her election to membership, a
resident of the territory specified in the certificate of incorporation
or of territory outside such boundaries which was afforded fire
protection by the fire corporation pursuant to a contract for fire
protection, or who was a nonresident elected to membership or who was
continued as a member, pursuant to the provisions of subparagraph (A)
shall for all purposes in law be considered to have been duly elected
and confirmed, or continued, as a member in such fire corporation as of
the date of such confirmation, if any, and, if none, then as of the date
of such election or, in the case of a continuance, as of the date of
approval, if any, by the town board and, if none, as of the date of
authorization of continuance by the fire corporation; notwithstanding
that there may have been some legal defect in such election, or the
proceedings thereto, or a failure of the town board to confirm the
election, or approve the continuance of membership, of such member, as
provided by the law in force at the time of such election or
continuance, and the status of such person as a volunteer firefighter as
of such date is hereby legalized, validated and confirmed. This
subparagraph shall not apply to a person, if any, whose volunteer
membership in a fire corporation was declared invalid by a court of
competent jurisdiction prior to the first day of January, two thousand
eleven.
(i) Discrimination because of race, color, creed or national origin
prohibited.
(1) It shall be an unlawful discriminatory practice for any volunteer
fire department, fire company or fire corporation, through any member or
members thereof, directors, officers, members of a town board, board of
fire commissioners or other body or office having power of appointment
of volunteer firefighters in any fire department, fire company or fire
corporation pursuant to this section, because of the race, creed, color,
national origin, sex or marital status of any individual, to exclude or
to expel from its volunteer membership such individual, or to
discriminate against any of its members because of the race, creed,
color, national origin, sex or marital status of such volunteer members.
(2) Any person claiming to be aggrieved by an unlawful discriminatory
practice pursuant to this paragraph may by himself or his attorney at
law make, sign and file with the state division of human rights, a
verified complaint which shall set forth the particulars of the alleged
unlawful discriminatory practice and contain such other information as
the division of human rights may require. The division shall thereupon
cause to be made an investigation and disposition of the charges
pursuant to the provisions of article fifteen of the executive law.
§ 1403. Corporations for the prevention of cruelty.
(a) Prohibition of new corporations in certain counties.
(1) A corporation for the prevention of cruelty to animals shall not
hereafter be incorporated for the purpose of conducting its operations
in the counties of New York, Kings, Queens, Richmond, Rensselaer, or
Westchester outside of the city of Yonkers; or in any other county if
thereby two or more such corporations would exist in such county except
as provided in subparagraph three hereof. Any corporation for the
prevention of cruelty to animals may exercise its powers and conduct its
operations in any adjacent county in which no such corporation exists
until the establishment of such a corporation therein.
(1-a) No corporation for the prevention of cruelty to children, or for
the dual purpose of prevention of cruelty to children and cruelty to
animals shall be incorporated on or after November first, nineteen
hundred eighty-nine. Any such corporations, incorporated prior to
November first, nineteen hundred eighty-nine, may exercise their powers
and conduct their operation in any adjacent county in which no such
corporations exist until the establishment of such corporations therein
prior to November first, nineteen hundred eighty-nine. The Brooklyn
society for the prevention of cruelty to children may exercise all its
powers in the county of Nassau until a society for the prevention of
cruelty to children shall be incorporated prior to November first,
nineteen hundred eighty-nine, and located therein, and may exercise all
its powers in the county of Suffolk until such a corporation is
incorporated prior to November first, nineteen hundred eighty-nine, and
located therein.
(2) In addition to the requirements of section 402, a certificate of
incorporation under which an additional corporation is formed in the
City of Yonkers must designate such city as the place where its
operations are to be conducted.
(3) In any county having a population of one hundred thousand or less,
where there is already in existence a corporation duly incorporated for
the prevention of cruelty to animals and where it appears that the
functions of such corporation are confined to a local area in such
county and where it further appears that part of such county is not
served by the existing corporation, an application may be made for the
incorporation of a second such corporation in such county. If it appears
to the satisfaction of the court that such existing corporation does not
serve the area from which the application for incorporation of a new
corporation is made, the court shall approve the proposed certificate of
incorporation.
(b) Special powers.
(1) A corporation formed for the purpose of preventing cruelty to
children, when represented by an attorney duly admitted to the practice
of law, may prosecute a complaint before any court, tribunal or
magistrate having jurisdiction, for the violation of any law enacted to
prevent (i) the abuse, maltreatment or neglect of a child, as those
terms are defined in section four hundred twelve of the social services
law and section one thousand twelve of the family court act, or (ii) the
exploitation of or harm to a child at the hands of an adult that would
constitute a violation of article one hundred twenty, one hundred
thirty, one hundred thirty-five, two hundred sixty or two hundred
sixty-three of the penal law, and may aid in presenting the law and
facts to such court, tribunal or magistrate in any proceeding therein.
(2) A corporation formed for the purpose of preventing cruelty to
animals may prefer a complaint before any court, tribunal or magistrate
having jurisdiction, for the violation of any law relating to or
affecting the prevention of cruelty to animals, and may aid in
presenting the law and facts to such court, tribunal or magistrate in
any proceeding therein.
(3) A corporation for the prevention of cruelty to children may be
appointed guardian of the person of a minor child during its minority by
a court of record, or a judge thereof, and may receive and retain any
child at its own expense on commitment by a court or magistrate.
(4) All magistrates, peace officers, acting pursuant to their special
duties and police officers shall aid such a corporation, its officers,
agents and members in the enforcement of laws enacted to prevent (i) the
abuse, maltreatment or neglect of a child, as those terms are defined in
section four hundred twelve of the social services law and section one
thousand twelve of the family court act, or (ii) the exploitation of or
harm to a child at the hands of an adult that would constitute a
violation of article one hundred twenty, one hundred thirty, one hundred
thirty-five, two hundred sixty or two hundred sixty-three of the penal
law, and for the prevention of cruelty to animals.
(c) Type of corporation.
A corporation for the prevention of cruelty is a charitable
corporation under this chapter.
§ 1404. Christian associations.
(a) Certificate of incorporation; additional contents.
In addition to the requirements of section 402, the certificate of
incorporation of a Young Men's or a Young Women's Christian Association
shall state the qualifications of active membership; and may name, in
addition to the directors, six trustees and shall divide such trustees
into three classes to hold office for one, two and three years
respectively, or until their successors are elected by the board of
directors.
(b) Type of corporation.
A christian association is a charitable corporation under this
chapter.
(c) Directors and trustees.
(1) The trustees of a corporation organized for the purposes of a
young men's christian association or a young women's christian
association, with the president of the corporation shall be a board of
trustees thereof, and hold and control the real property of the
corporation and all gifts and bequests of money to be held in trust.
They or the directors if there is no board of trustees shall pay the
income of such property to the treasurer of the corporation so long as
the income shall be expended by the directors thereof for the purposes
for which the corporation was formed. Such association may, by amendment
to its certificate of incorporation, in the manner provided by law,
eliminate its board of trustees, in which case the real property, gifts,
bequests and other grants held in trust by such trustee shall be
transferred to its board of directors which shall hold and control the
real property of the corporation and all gifts and bequests of money to
be held in trust.
(2) The real property of such corporation shall not be liable for any
debt or obligation contracted without the approval of the board of
trustees.
(3) In all proceedings for the purchase, sale, mortgage and lease of
real property, the board of trustees of such a corporation shall perform
the functions of the board of directors.
(4) The board of directors shall have the management and control of
the property and affairs of the corporation, except as such management
and control is vested by law in the board of trustees.
(5) A young men's christian association incorporated prior to eighteen
hundred and eighty-seven may create a board of trustees possessing the
qualifications and divided into classes, and such board shall have the
powers set forth in this paragraph.
(6) A young men's christian association incorporated prior to nineteen
hundred and eight may divide its trustees into classes.
(d) Dissolution. Whenever any young men's christian association
subject to this section shall cease to carry out the objects set forth
in its certificate of incorporation, according to the general rules and
regulations of the national board of young men's christian associations,
or shall abandon or discontinue for one year the use of any of its
property for such objects, then upon the verified petition of a majority
of the directors of such association upon fourteen days' notice to the
national board by service thereof upon its chairman and secretary or in
the event of the failure of such directors to act, upon the verified
petition of the national board of young men's christian associations,
upon fourteen days' notice to such association by service thereof upon
its president or any director thereof, and upon one of the trustees
thereof, and upon notice to the attorney general, the supreme court,
upon satisfactory proof by affidavit or otherwise of such failure or
abandonment, must make a final order dissolving such corporation. Upon
the entry of such order, the corporation shall be dissolved, and
thereupon the national board of young men's christian associations may
take possession of the property of the corporation and manage the same,
or if authorized by the concurring vote of two-thirds of the members of
the national board may sell or lease the same and apply the proceeds
thereof after the payment of the debts, if any, of the corporation
solely to such purposes as those for which the corporation was
organized.
(e) Incorporation of county committees.
(1) Five or more men resident in any county of this state, appointed
by the national board of Young Men's Christian Associations, to act as
the county committee of Young Men's Christian Associations for such
county, may form a corporation under the provisions of this chapter
under the name of "The County Committee of the Young Men's Christian
Association of ..................... County," (the blank space being
filled by the name of the county in which the incorporators reside.)
(2) The management and control of the property and affairs of such
corporation shall be vested in its members and their successors in
office, except that the powers and duties of the trustees thereof shall
be those specified in paragraph (a); and the successors of such members
shall be elected annually at a meeting of the Young Men's Christian
Associations of the county for which such committee has been appointed,
at which meeting each association may be represented by one delegate for
each ten active members of such association. A plurality vote of the
delegates present, and voting at such meeting, shall be sufficient to
elect. If any vacancy in the membership of such corporation shall occur
during the interim between the regular elections, it may be filled by
the remaining members.
(3) The officers of the corporation shall consist of a chairman,
treasurer and secretary, and such other officers as the members may
decide; and shall be elected annually by such members from their own
number.
§ 1405. Soldiers' monument corporations.
(a) Property; erection of monuments.
A corporation formed for the purpose of erecting and maintaining a
monument or memorial, including a memorial hall or building to
perpetuate the memory of persons who served in the armed forces of the
United Colonies or of the United States in the Revolutionary War, the
Civil War, or in any other war in which the United States has been
engaged may acquire and hold real property necessary for its corporate
purposes, and may erect any such monument, monuments or memorial upon
any public street, square or ground of any town, city or village, with
the consent of the proper officers thereof, or may purchase or accept
the donation of land suitable for that purpose; and may take and hold
the property given, devised or bequeathed to it in trust, to apply the
same or the income or proceeds thereof for the erection, improvement,
embellishment, preservation, repair, renewal, care and maintenance of
such monument, monuments or memorial, or of any structure, fences or
walks upon its lands, or for planting or cultivating trees, shrubs,
flowers and plants, in and around or upon its lands, or for improving or
embellishing the same in any manner consistent with the design and
purposes of the association, according to the terms of such grant,
devise or bequest. It may take by gift or purchase any lots or lands in
any cemetery to be used and occupied exclusively for the burial of
honorably discharged members of the armed forces who served in any of
such wars, and for the erection of suitable monuments or memorials
therein.
(b) Type of corporation.
A soldiers' monument corporation is a charitable corporation.
(c) Town and village aid.
The town clerk of a town or the board of trustees of a village, upon
the petition of twenty-five resident taxpayers, shall submit to a
biennial town meeting or village election, as the case may be, a
proposition to raise by taxation a sum stated therein, not exceeding
five hundred dollars in any one year, to be spent during the fiscal year
for which such tax is to be levied, for the purpose of erecting such a
monument, or contributing to the expense of such a monument, erected by
a corporation specified in this article, or for repairing, improving and
maintaining the same and the grounds thereof; and such tax shall be
levied in the manner prescribed by law for levying general taxes in such
town or village, and when raised shall be applied to the purposes
specified in such proposition.
(d) Exemptions.
The property of a corporation specified in this section or of a
corporation formed under the laws of eighteen hundred and sixty-six,
chapter two hundred and seventy-three, as amended by laws of eighteen
hundred and eighty-eight, chapter two hundred and ninety-nine, shall be
exempt from levy and sale on execution, and from all public taxes, rates
and assessments, and no street, road, avenue or thoroughfare shall be
laid through the lands of such association held for the purposes
aforesaid without the consent of the trustees of such corporation,
except by special permission of the legislature of the state.
(e) Improvement taxes.
A tax may be levied and collected on the taxable property in a town,
village or city in which such monument, monuments or other memorial may
be erected, for the purpose of repairing or improving the same and the
grounds thereof; and such tax shall be levied in the manner prescribed
by law for levying general taxes in such town, village or city.
(f) Transfer of property from unincorporated association.
Any unincorporated association organized solely for one or more of the
purposes set forth in paragraph (a) by a majority vote of all its
members present at a meeting thereof, called as in this section
provided, may transfer to and vest in any incorporated association
created by general or special law having like objects any or all money
or other property which it shall have accumulated for such objects, but
the property so transferred shall be used exclusively for one or more of
the purposes mentioned in such paragraph. A vote upon the question of
transferring the funds or property of such unincorporated association
shall be had only at a meeting of such association called for that
purpose by the president or secretary or other managing officer thereof,
upon notice stating the object of the meeting of at least ten days
before the time fixed for such meeting, served personally or by mail on
each member of the association within the United States whose residence
or post office address is known.
§ 1406. Medical societies.
(a) Medical societies heretofore formed.
Any medical society now existing in any of the counties of the state
set apart prior to or since the passage of the act entitled "An act to
incorporate medical societies for the purpose of regulating the practice
of physic and surgery in this state," passed April tenth, eighteen
hundred and thirteen, and not heretofore duly incorporated under the
provisions of said act shall, upon complying with the provisions of this
section enjoy the same privileges and possess the same powers as the
societies incorporated by virtue of such act now enjoy and possess, but
subject, nevertheless, to the provisions of any acts or parts of acts
heretofore passed in relation to medical societies or to regulate the
practice of physic and surgery in this state.
(b) Type of corporation.
A medical society is a non-charitable corporation under this chapter.
(c) Certificate of incorporation, additional contents.
In addition to the requirements of section 402, the certificate of
incorporation of a medical society shall state: (1) the name of such
society; (2) the date of its organization; (3) the names and residences
of its members; and (4) that such society, by a majority vote of its
members, has elected to become and be a body corporate under and by
virtue of the Act described in paragraph (a), and be subject to the
provisions of any acts or parts of acts heretofore enacted and now in
force, in relation to such societies or the practice of medicine or
surgery in this state.
(d) Regulations for county medical societies.
It shall be lawful for any county medical society in this state,
entitled to representation in the medical society of the state of New
York, or in the homeopathic medical society of the state of New York, to
establish such rules and regulations, not inconsistent with the laws of
the state, for the government of its members as such county society may
deem fit, provided such action receives the sanction of the state
medical society in which such county medical society is represented.
Such county medical society may fix the amount of the annual dues and
assessments to be collected from its members.
(e) Enforcement of discipline; appeal.
Every county medical society shall have full power and authority to
enforce discipline among its members and obedience to its rules and
regulations and to expel or otherwise discipline its members as it may
deem for the best interests of the society. Any member of such a society
who has been disciplined or an applicant for membership therein, who has
been refused membership, feeling aggrieved at the action of the society,
shall have the right to appeal to the medical society of the state of
New York, in which such county medical society is represented.
(f) Power to acquire property.
It shall be lawful for any county medical society heretofore or
hereafter incorporated and for the medical society of the state of New
York and for the homeopathic medical society of the state of New York to
acquire and hold for its corporate purposes real and personal property
without limitation of amount or value, notwithstanding any limitation
heretofore existing.
§ 1407. Alumni corporations.
(a) Alumni may be incorporated.
The alumni of any college or university, or of one or more colleges or
schools of any university, may be incorporated by executing and filing a
certificate pursuant to article 4 of this chapter.
(b) Type of corporation.
An alumni corporation is a charitable corporation.
(c) Powers.
An alumni corporation may create, manage and control a fund, to be
known as the alumni fund, and for that purpose acquire and hold real and
personal property. The principal of such fund, or the income derived
therefrom, may be transferred to the college or university with which
such corporation is identified, or used for and applied to such object
or objects connected with such college or university as such alumni
corporation shall direct.
(d) Alumni fund.
The directors of an alumni corporation shall have the custody and
management of the alumni fund but shall not dispose of the whole or any
part of the principal of any invested fund except as authorized by a
two-thirds vote of the members of such corporation, present at an annual
meeting thereof.
§ 1408. Historical societies.
(a) Historical societies may hold property.
Any incorporated historical society of this state is hereby authorized
to have and hold for the purposes of inclosure, preservation and the
erection of monuments, but not for business purposes, the sites of old
forts, battlegrounds and other historic sites, not exceeding six acres
in any one locality, which shall be exempt from taxation; and to receive
donations of articles of historic interest on the condition that in case
of its dissolution or inability to pay its debts otherwise than from its
effects, such articles shall revert to the donors or their heirs. Fees
may be charged by any such society for the exhibition of its property or
collections only to the extent that the proceeds thereof are used for
the preservation, maintenance and development of such property or
collections.
(b) Type of corporation.
An historical society is a charitable corporation under this chapter.
(c) Acquisition.
The acquisition by any such historical society of this state of any
real property for the purpose of inclosure, preservation and the
erection of monuments, is hereby declared to be for a public use. Such
property may be acquired in the manner prescribed by the eminent domain
procedure law.
§ 1409. Agricultural and horticultural corporations.
(a) Definition.
An agricultural or horticultural corporation or society is a
corporation formed under or by a general or special law for promoting
agriculture, horticulture and the mechanic arts.
(b) Type of corporation. An agricultural or horticultural corporation
is a non-charitable corporation under this chapter, except that any such
corporation which has received moneys from the state or has acted as
agent for the state under paragraph (c) of this section, or has acquired
or does acquire real property by condemnation is or becomes a charitable
corporation under this chapter.
(c) Condemnation.
In case any agricultural or horticultural corporation or any other
agricultural society which has received moneys from the state for
premiums paid for improving the breed of cattle, sheep and horses, or
has acted as agent for the state in disbursing moneys for such purpose
can not acquire real property needed for its corporate purposes upon
satisfactory terms, it may acquire such real property by condemnation.
Any real property acquired by condemnation, or otherwise, shall not be
subject to condemnation by any other private corporation except a
railroad corporation.
(d) Report of corporation receiving aid; disposition of property.
Any county agricultural corporation receiving after May tenth,
nineteen hundred and twenty, money from any county shall, through its
secretary, make annually to the board of supervisors a detailed
statement with vouchers showing the disbursement during the year of all
moneys so received. If such a corporation shall cease to exist, or
without satisfactory reason shall fail or neglect to hold its annual
exhibitions or fairs for a period of two years, the board of supervisors
on notice to the corporation may petition the supreme court of the
judicial district or the county court of the county to declare a
forfeiture to the county of the real and personal property of the
corporation in whole or in part or to confer on the county a lien upon
such property, whereupon such court may make a decree determining the
legal or equitable rights of the county in such property subject to the
rights of creditors of the corporation.
(e) Restrictions on the formation of corporations.
There shall be but one county corporation in a county, and but one
town corporation in a town, except that a second corporation may be
formed if it is to be the surviving corporation under a plan of merger
with the existing corporation, in which event, the certificate of
incorporation of such second corporation shall have endorsed thereon or
annexed thereto the approval of a justice of the supreme court of the
judicial district in which the office of such corporation is to be
located. Ten days written notice of the application for such approval,
accompanied by a copy of the proposed certificate, shall be given to the
attorney general. Whenever a new county shall be or shall have been
erected out of a part of an existing county in which a county
corporation existed at the time of the erection of such new county, the
existing corporation may at its option be continued as the county
corporation of both counties. The determination of an existing
corporation to be continued as a county corporation for both counties
shall be evidenced by a certificate thereof, signed and acknowledged by
a majority of the directors, and filed in the office of the secretary of
state and in the office of the clerk of each of such counties. A town
corporation may be formed for several towns, but the formation of such
corporation shall not prevent the formation of a separate town
corporation for any such town.
(f) Annual fairs and premiums.
Every agricultural or horticultural corporation, the American
institute in the city of New York, and the New York state agricultural
society, shall hold annual fairs and exhibitions, and distribute
premiums. Such corporations and societies shall regulate and award
premiums on such articles, productions and improvements as they deem
best calculated to promote the agricultural, horticultural, mechanic and
domestic arts of the state, having special reference to the net profits
which accrue or are likely to accrue from the mode of raising crops, or
stock, or fabricating the articles exhibited, so that the award be made
to the most economical or profitable mode of production. A county or
town corporation, by a two-thirds vote of the members present and voting
at a regular meeting or at a special meeting, duly called for that
purpose, may fix the place where the annual fair and exhibition of the
corporation shall be held.
(g) Regulation of shows on exhibition grounds.
Any agricultural or horticultural corporation, or the executive
committee of such board, may regulate or prevent all kinds of
theatrical, or circus, exhibitions and shows, huckstering and traffic in
fruits, goods, wares and merchandise, of whatever description, and shall
prevent all kinds of mountebank exhibitions or shows for gain on the
fair days on such fair grounds, and also within a distance of two
hundred yards of the fair grounds of the corporation, if it shall
determine that they obstruct or interfere with the free and
uninterrupted use of the highways around and approaching such fair
grounds.
(h) Capital stock.
An agricultural or horticultural corporation may have capital stock
aggregating not less than five thousand dollars, divided into shares of
not less than ten dollars each, and may issue such certificates at not
less than the par value thereof to raise money for its corporate
purposes, if provision therefor is made in its certificate of
incorporation or in a certificate filed pursuant to section 803
(Certificate of amendment; contents). An agricultural or horticultural
corporation, which has issued or shall hereafter issue capital stock,
entitling its shareholders to dividends from the profits of the
corporation, shall be subject to the business corporation law and not to
the provisions of this chapter in conflict therewith.
(i) Annual report.
On or before December fifteenth in each year, the directors of every
agricultural or horticultural corporation shall make a verified report
to the commissioner of agriculture and markets of the transactions of
the corporation for the preceding twelve months giving full details of
the receipts and expenditures thereof, with a list of premiums awarded
and to whom and for what awarded.
(j) Membership in state society.
The presidents of the county agricultural corporations, or delegates
to be chosen by such corporations annually, shall be ex officio members
of the New York state agricultural society.
(k) Exhibitions and entertainments on fair grounds to be exempt from
license.
The provisions of any special or local law or municipal ordinance,
requiring the payment of a license fee for exhibitions or entertainments
or requiring that an approval be obtained from any local government
except an approval required to protect the safety, health and well-being
of persons, shall not apply to any exhibition or entertainment held on
the grounds of a town or county corporation whether or not the
corporation derives a pecuniary profit from such exhibition or
entertainment by the lease of its grounds for such purpose and the
provisions of any special or local law or municipal ordinance shall not
be construed or applied to unreasonably prohibit or restrict any
agricultural or horticultural corporation receiving reimbursement
pursuant to article twenty-four of the agriculture and markets law from
the construction, improvement, renovation, relocation or demolition of
all or any of such agricultural or horticultural corporation grounds,
buildings and facilities.
§ 1410. Boards of trade and chambers of commerce.
(a) Definitions.
(1) A board of trade is a corporation formed for the purpose of
fostering trade and commerce, or the interests of those having a common
trade, business, financial or professional interest, to reform abuses
relative thereto, to secure freedom from unjust or unlawful exactions,
to diffuse accurate and reliable information as to the standing of
merchants and other matters, to procure uniformity and certainty in the
customs and usages of trade and commerce, and of those having a common
trade, business, financial or professional interest; to settle and
adjust differences between its members and others and to promote a more
enlarged and friendly intercourse among business people; to advance the
civic, commercial, industrial and agricultural interests of the
territory where the corporation is situate; to promote the general
welfare and prosperity of such territory and to stimulate public
sentiment to these ends; and to provide such civic, commercial,
industrial, agricultural and social features as will promote these
purposes.
(2) A chamber of commerce is a corporation, the members of which are
in diverse lines of business, membership in which is not restricted to,
nor in practice consists primarily of, persons, partnerships or
corporations engaged in or carrying on the same, allied or
interdependent lines of business, and which is formed for the purpose of
fostering trade and commerce, or the interests of those carrying on such
trade and commerce; to promote the general welfare and prosperity of the
state, territory or community in which such corporation is situate; to
reform abuses involving business, professional or financial interests,
to secure freedom from unjust or unlawful exactions, to diffuse accurate
and reliable information as to the standing of merchants and other
matters, to procure uniformity and certainty in the customs and usages
of trade and commerce; to settle and adjust differences between its
members and others, and to promote a more enlarged and friendly
intercourse among businessmen; to advance the civic, commercial,
industrial and agricultural interests of the territory where the
corporation is situate; to provide such features as will promote these
purposes, and to stimulate public sentiment to these ends. A corporation
formed before the first day of January, eighteen hundred seventy-five,
the purposes and activities of which are those of a chamber of commerce
as herein defined, shall be a chamber of commerce regardless of its
name, and shall not be required to change its existing name by reason of
this subparagraph.
(b) Type of corporation.
A board of trade or a chamber of commerce is a non-charitable
corporation under this chapter.
(c) Special powers.
(1) A board of trade or a chamber of commerce organized for the
purposes set forth in paragraph (a), shall have the power to be
appointed and to act under the order or appointment of any court of
competent jurisdiction as receiver or trustee of the property or estate
of any person or corporation in insolvency and bankruptcy proceedings,
and to act as assignee or trustee for the benefit of creditors in any
case in which a member or members of such board of trade or a chamber of
commerce are creditors of such insolvent or bankrupt estate; or of such
assignor for the benefit of creditors; or in any other instance where
the purposes of the corporation might reasonably be involved.
(2) A board of trade or chamber of commerce organized for the purposes
set forth in paragraph (a) may make loans to its members, directors or
officers, or to any other corporation, firm, association or other entity
in which one or more of its members, directors or officers are directors
or officers or hold a financial interest, in any case where its board of
directors finds that the making of such loan will be in furtherance of
its corporate purposes and for a lawful public or quasi-public
objective.
(3) A board of trade organized for the purposes set forth in paragraph
(a) of this section may make distributions of cash or property to, or
confer other benefits upon, its members, or former members, prior to
dissolution or final liquidation in any case where the board of
directors of such corporation finds that such cash, property or other
benefit is not required for the conduct of its corporate purposes;
provided, however, that no such action shall be taken 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 the taking of such
action would be insufficient to meet its liabilities.
(4) A board of trade organized for the purposes set forth in paragraph
(a) of this section may provide in its certificate of incorporation or
by-laws that the members or any class of members shall, with respect to
any matter on which the members of such class are entitled to vote, have
more than, or less than, one vote.
§ 1411. Local development corporations.
(a) Purposes.
This section shall provide an additional and alternate method of
incorporation or reincorporation of not-for-profit corporations for any
of the purposes set forth in this paragraph and shall not be deemed to
alter, impair or diminish the purposes, rights, powers or privileges of
any corporation heretofore or hereafter incorporated under this section
or under the stock or business corporation laws. Corporations may be
incorporated or reincorporated under this section as not-for-profit
local development corporations operated for the exclusively charitable
or public purposes of relieving and reducing unemployment, promoting and
providing for additional and maximum employment, bettering and
maintaining job opportunities, instructing or training individuals to
improve or develop their capabilities for such jobs, carrying on
scientific research for the purpose of aiding a community or
geographical area by attracting new industry to the community or area or
by encouraging the development of, or retention of, an industry in the
community or area, and lessening the burdens of government and acting in
the public interest, and any one or more counties, cities, towns or
villages of the state, or any combination thereof, or the New York job
development authority in exercising its power under the public
authorities law to encourage the organization of local development
corporations, may cause such corporations to be incorporated by public
officers or private individuals or reincorporated upon compliance with
the requirements of this section, and it is hereby found, determined and
declared that in carrying out said purposes and in exercising the powers
conferred by paragraph (b) such corporations will be performing an
essential governmental function.
(b) Type of corporation.
A local development corporation is a charitable corporation under this
chapter.
(c) Powers.
In furtherance of its purposes set forth in paragraph (a) but not for
any other purposes, a local development corporation incorporated or
reincorporated under this section shall have the following powers: to
construct, acquire, rehabilitate and improve for use by others
industrial or manufacturing plants in the territory in which its
operations are principally to be conducted, to assist financially in
such construction, acquisition, rehabilitation and improvement, to
maintain such plants for others in such territory, to disseminate
information and furnish advice, technical assistance and liaison with
federal, state and local authorities with respect thereto, to acquire by
purchase, lease, gift, bequest, devise or otherwise real or personal
property or interests therein, to borrow money and to issue negotiable
bonds, notes and other obligations therefor, and notwithstanding section
510 (Disposition of all or substantially all assets) without leave of
the court, to sell, lease, mortgage or otherwise dispose of or encumber
any such plants or any of its real or personal property or any interest
therein upon such terms as it may determine and, in connection with
loans from the New York job development authority, to enter into
covenants and agreements and to comply with all the terms, conditions
and provisions thereof, and otherwise to carry out its corporate
purposes and to foster and encourage the location or expansion of
industrial or manufacturing plants in the territory in which the
operations of such corporation are principally to be conducted,
provided, however, that no such corporation shall attempt to influence
legislation by propaganda or otherwise, or participate or intervene,
directly or indirectly, in any political campaign on behalf of or in
opposition to any candidate for public office.
(d) Purchase or lease of real property owned by a county, city, town
or village.
(1) The local legislative body of a county, city, town or village or,
if there is a board of estimate in a city, then the board of estimate,
may by resolution determine that specifically described real property
owned by the county, city, town or village is not required for use by
such county, city, town or village and authorize the county, city, town
or village to sell or lease such real property to a local development
corporation incorporated or reincorporated under this article; provided,
however, that title to such land be not declared inalienable as a forest
preserve or a parkland.
(2) Notwithstanding the provisions of any general, special or local
law, charter or ordinance to the contrary, such sale or lease may be
made without appraisal, public notice, (except as provided in
subparagraph (4)) or public bidding for such price or rental and upon
such terms as may be agreed upon between the county, city, town or
village and said local development corporation; provided, however, that
in case of a lease the term may not exceed ninety-nine years and
provided, further, that in cities having a population of one million or
more, no such sale or lease shall be made without the approval of a
majority of the members of the borough improvement board of the borough
in which such real property is located.
(3) Before any sale or lease to a local development corporation
incorporated or reincorporated under this article shall be authorized, a
public hearing shall be held by the local legislative body, or by the
board of estimate, as the case may be, to consider the proposed sale or
lease.
(4) Notice of such hearing shall be published at least ten days before
the date set for the hearing in such publication and in such manner as
may be designated by the local legislative body, or the board of
estimate as the case may be.
* (5) A local development corporation, incorporated or reincorporated
under this section, which purchases or leases real property from a
county, city, town or village, shall not, without the written approval
of the county, city, town or village, use such real property for any
purpose except the purposes set forth in the certificate of
incorporation or reincorporation of said local development corporation.
In the event such real property is used in violation of the restrictions
of this paragraph, the attorney-general may bring an action or special
proceeding to enjoin the unauthorized use. With respect to the Orange
County Funding Corporation, the independent monitor appointed pursuant
to paragraph (a) of subdivision three of section nine hundred twelve-b
of the general municipal law may also bring an action or special
proceeding to enjoin the unauthorized use of any real property purchased
or leased by such corporation in violation of the restrictions of this
paragraph.
* NB Effective until May 3, 2030
* (5) A local development corporation, incorporated or reincorporated
under this section, which purchases or leases real property from a
county, city, town or village, shall not, without the written approval
of the county, city, town or village, use such real property for any
purpose except the purposes set forth in the certificate of
incorporation or reincorporation of said local development corporation.
In the event such real property is used in violation of the restrictions
of this paragraph, the attorney-general may bring an action or special
proceeding to enjoin the unauthorized use.
* NB Effective May 3, 2030
(e) Certificate of incorporation.
In addition to the requirements of section 402 (Certificate of
incorporation; contents) the certificate of incorporation or
reincorporation of a local development corporation incorporated or
reincorporated under this article shall state (1) that all income and
earnings of such corporation shall be used exclusively for its corporate
purposes or accrue and be paid to the New York job development
authority, (2) that no part of the income or earnings of such
corporation shall inure to the benefit or profit of, nor shall any
distribution of its property or assets be made to any member or private
person, corporate or individual, or any other private interest, except
that the certificate of incorporation or reincorporation may authorize
the repayment of loans and may also authorize the repayment of
contributions (other than dues) to the local development corporation but
only if and to the extent that any such contribution may not be
allowable as a deduction in computing taxable income under the internal
revenue code of nineteen hundred fifty-four, (3) that if such
corporation accepts a mortgage loan or loans from the New York job
development authority, such corporation shall be dissolved in accordance
with the provisions of paragraph (g) upon the repayment or other
discharge in full by such corporation of all such loans.
(f) Exemption of income from taxation.
The income and operations of corporations incorporated or
reincorporated under this section shall be exempt from taxation.
(g) Dissolution.
Upon the dissolution of any local development corporation incorporated
or reincorporated under this section no member or private person,
corporate or individual, or other private interest, shall be entitled to
any distribution or division of its remaining funds and other property
and rights and interests in property, and the balance thereof, after the
payment of all debts and liabilities of the corporation of whatsoever
kind and nature, (including the payment of loans and contributions the
repayment of which has been authorized in its certificate of
incorporation or reincorporation) shall be distributed to one or more
counties, cities, towns or villages within the territory designated in
its certificate of incorporation or reincorporation as the territory in
which its operations are principally to be conducted, for furtherance of
the purposes set forth in paragraph (a), or to the New York job
development authority, as shall be provided by said corporation or by
order of the supreme court of the state of New York pursuant to section
1008 (Jurisdiction of supreme court to supervise dissolution and
liquidation).
(h) Corporations heretofore incorporated.
Any corporation heretofore incorporated under the membership
corporations law or this chapter, or under the stock or business
corporation law for any of the purposes set forth in paragraph (a) of
this section may amend its certificate of incorporation and be
reincorporated as a local development corporation organized under this
section by making and filing in the office of the secretary of state a
certificate, stating the name of such corporation, and, if it has been
changed, the name under which it was originally incorporated, the date
of its incorporation, the names and post-office addresses of its members
or of the holders of record of all of the outstanding shares of such
corporation entitled to vote with relation to the proceedings provided
for in the certificate and that such corporation has elected to become
and be a local development corporation organized and operated under and
by virtue of this section. Such certificate shall be either (1)
subscribed in person or by proxy by all of the members or the holders of
record of all of the outstanding shares of such corporation entitled to
vote with relation to such proceedings and shall have annexed an
affidavit of the secretary or an assistant secretary that the persons
who have executed the certificate, in person or by proxy, constitute all
of the members or the holders of record of all of the outstanding shares
of the corporation entitled to vote with relation to the proceedings
provided for in the certificate, or (2) subscribed by the president or a
vice president and the secretary or an assistant secretary and shall
have annexed an affidavit of such officers stating that they have been
authorized to execute and file such certificate by the votes, cast in
person or by proxy, of all of the members or of the holders of record of
all of the outstanding shares of such corporation entitled to vote with
relation to such proceedings at the meeting at which such votes were
cast, and that such votes were cast at a meeting of members or
stockholders held on a date specified, upon notice pursuant to section
605 (Notice of meeting of members) or to section 605 of the Business
Corporation Law. Every certificate filed under this paragraph shall have
endorsed thereon or annexed thereto the approval of a justice of the
supreme court of the judicial district in which the office of the
corporation is to be located. A reincorporation pursuant to this
paragraph shall not effect a dissolution of the corporation, but shall
be deemed 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 only to such other duties
and liabilities, as a corporation created for the same purposes under
this article.
(i) Effect of section.
Corporations incorporated or reincorporated under this section shall
be organized and operated exclusively for the purposes set forth in
paragraph (a), shall have, in addition to the powers otherwise conferred
by law, the powers conferred by paragraph (c) and shall be subject to
all the restrictions and limitations imposed by paragraph (e) and
paragraph (g). In so far as the provisions of this section are
inconsistent with the provisions of any other law, general or special,
the provisions of this section shall be controlling as to corporations
incorporated or reincorporated hereunder.
§ 1412. University faculty practice corporations.
(a) Organization. Notwithstanding any other provision of law, one or
more individuals who are duly authorized by law to render the same
professional service, which shall be the practice of medicine, the
practice of dentistry, the practice of chiropractics, the practice of
physical therapy or the practice of optometry, and who are members of
the faculty of the same accredited medical school, dental school,
chiropractic college, college or university with an accredited doctor of
physical therapy program or optometry college, as applicable, in the
state of New York may organize, or cause to be organized, a university
faculty practice corporation under this article (1) for the purpose of
supporting the educational mission of such school by providing clinical
instruction and supervision of students of such school, interns and
residents and, incident thereto, rendering professional services and (2)
which shall be operated in compliance with (A) section 501(c)(3) of the
United States internal revenue code and (B) the faculty practice plan
with which members of the faculty of such school are required to comply,
as amended from time to time.
(b) Definition. "University faculty practice corporation" means a
corporation organized or reincorporated under this section.
(c) Certificate of incorporation. The certificate of incorporation of
a university faculty practice corporation shall meet the requirements of
this chapter and shall have attached thereto a certificate or
certificates issued by the licensing authority certifying that each of
the proposed members, if any, directors and officers is authorized by
law to practice the profession which the corporation is being organized
to practice. The certificate shall also state (1) the name of the
medical school, dental school, chiropractic college, college or
university with an accredited doctor of physical therapy program or
optometry college, as applicable, in the state of New York of which the
proposed members, if any, directors and officers are faculty and (2)
that such corporation shall operate in compliance with (A) section
501(c)(3) of the United States internal revenue code and (B) the faculty
practice plan with which members of the faculty of such school are
required to comply, as amended from time to time.
(d) Type. A university faculty practice corporation is a charitable
corporation under this chapter.
(e) Applicability of laws; members, directors and officers. This
chapter shall be applicable to a university faculty practice corporation
except to the extent that the provisions thereof conflict with this
section. A university faculty practice corporation may consolidate or
merge only with another university faculty practice corporation. The
following provisions of article fifteen of the business corporation law
shall be applicable to a university faculty practice corporation except
that each reference in such provisions to a "shareholder" shall be
deemed to be a reference to a "member" and each reference in such
provisions to "shareholders" shall be deemed a reference to "members":
paragraphs (a), (b), (c) and (e) of section fifteen hundred one;
paragraphs (b), (c) and (d) of section fifteen hundred three; paragraphs
(a), (c) and (g) of section fifteen hundred four; section fifteen
hundred five; section fifteen hundred nine except to the extent such
section refers to section fifteen hundred ten; paragraph (a) of section
fifteen hundred twelve; section fifteen hundred fourteen; and section
fifteen hundred fifteen. No individual may be a member, director or
officer of a university faculty practice corporation unless such
individual is authorized by law to practice in this state the profession
which such corporation is authorized to practice and is a member of the
faculty of the medical school, dental school, chiropractic college,
college or university with an accredited doctor of physical therapy
program or optometry college which such corporation is organized to
support.
(f) Corporations heretofore incorporated. Any corporation heretofore
incorporated under article fifteen of the business corporation law and
operated in compliance with the requirements of section 501(c)(3) of the
United States internal revenue code may amend its certificate of
incorporation and be reincorporated as a university faculty practice
corporation organized under this section by making and filing in the
office of the secretary of state a certificate entitled "Certificate of
Reincorporation of...(name of incorporation) under section 1412 of the
Not-for-Profit Corporation Law." (1) Such reincorporation certificate
shall contain the provisions required, and any other provisions
permitted, by section 402 of this chapter and shall also set forth (A) a
statement that such corporation is filing such reincorporation
certificate under this section, (B) if the name of such corporation has
been changed, the name under which such corporation was originally
incorporated, (C) the date of incorporation of such corporation, (D) the
names and post-office addresses of the holders of record of all of the
outstanding shares of such corporation entitled to vote, (E) a statement
that such corporation has elected to become and be a university faculty
practice corporation organized and operated under by virtue of this
section and (F) the statements required by paragraph (c) of this
section. (2) Such reincorporation certificate shall be either (A)
subscribed in person or by proxy by all of the holders of record of all
of the outstanding shares of such corporation entitled to vote and shall
have annexed an affidavit of the secretary or an assistant secretary
that the persons who have executed the certificate, in person or by
proxy, constitute all of the holders of record of all of the outstanding
shares of the corporation entitled to vote or (B) subscribed by the
president or a vice president and the secretary or an assistant
secretary and shall have annexed an affidavit of such officers stating
that they have been authorized to execute and file such reincorporation
certificate by the votes, cast in person or by proxy, of all of the
holders of record of all of the outstanding shares of such corporation
entitled to vote at the meeting at which such votes were cast, and that
such votes were cast at a meeting of shareholders held on a date
specified, upon notice pursuant to section six hundred five of the
business corporation law. (3) A reincorporation pursuant to this
paragraph shall not effect a dissolution of such corporation, but shall
be deemed a continuation of its corporate existence, without affecting
its then-existing property rights or liabilities, or the liabilities of
its shareholders, directors or officers as such, but thereafter it shall
have only such rights, powers and privileges, and it and such
shareholders, directors and officers shall be subject only to such other
duties and liabilities, as a university faculty practice corporation and
members, directors and officers thereof. (4) Upon the filing of a
reincorporation certificate in the office of the secretary of state, (A)
any issued and outstanding shares of such corporation shall be purchased
by such corporation at a purchase price equal to the price for which
such shares were originally issued, or such other price as such
corporation shall agree to, such price to be paid out of the surplus of
the corporation, whereupon such shares shall be deemed cancelled as of
the date of such filing and (B) such reincorporation certificate shall
be deemed to replace the certificate of incorporation of such
corporation. The department of state shall not file such certificate of
reincorporation unless the consent of the commissioner of taxation and
finance is attached thereto. Such certificate of consent shall only be
given if the commissioner of taxation and finance ascertains that all
taxes imposed under article nine-A of the tax law, as well as penalties
and interest charges related thereto, accrued against the corporation
have been paid.
(g) Effect of section. University faculty practice corporations
incorporated or reincorporated under this section shall be organized and
operated exclusively for the purposes set forth in paragraph (a) of this
section and shall be subject to the restrictions and limitations imposed
by or pursuant to paragraphs (a) and (e) of this section.
Notwithstanding anything to the contrary in article twenty-eight of the
public health law or the regulations adopted pursuant thereto, no
corporation organized under this section shall be deemed to be
establishing or operating a hospital, diagnostic center and/or treatment
center requiring establishment or construction approval solely by reason
of being organized as a not-for-profit corporation. Insofar as the
provisions of this section are inconsistent with the provisions of any
other law, general or special, the provisions of this section shall be
controlling as to the corporations incorporated or reincorporated
hereunder.
§ 1501. Declaration of policy.
The people of this state have a vital interest in the establishment,
maintenance and preservation of public burial grounds and the proper
operation of the corporations which own and manage the same. This
article is determined an exercise of the police powers of this state to
protect the well-being of our citizens, to promote the public welfare
and to prevent cemeteries from falling into disrepair and dilapidation
and becoming a burden upon the community, and in furtherance of the
public policy of this state that cemeteries shall be conducted on a
non-profit basis for the mutual benefit of plot owners therein.
§ 1502. Definitions. As used in this article:
(a) The term "cemetery corporation" means any corporation formed under
a general or special law for the disposal or burial of deceased human
beings, by cremation, natural organic reduction or in a grave,
mausoleum, vault, columbarium or other receptacle but does not include a
family cemetery corporation or a private cemetery corporation.
(b) The term "lot owner" or "owner of a lot" means any person having a
lawful title to the use of a niche, crypt, lot, plot or part thereof, in
a cemetery, mausoleum or columbarium.
(c) The term "cemetery board" means the cemetery board in the division
of cemeteries in the department of state.
(d) A public mausoleum, crematory, natural organic reduction facility
or columbarium shall be included within the term "cemetery".
(e) The sale of a lot, plot or part thereof, grave, niche or crypt
shall mean the sale of the right of use thereof for burial purposes.
(f) The term "monuments" means a memorial erected in a cemetery on a
lot, plot or part thereof, except private mausoleums.
(g) The term "interment" means the permanent disposition of human
remains by inurnment, entombment or ground burial.
(h) The term "cremation" means the technical process, using heat and
flame, that reduces human remains to ashes and other residue.
"Cremation" shall include the processing, and may include the
pulverization, of such ashes and other residue.
(i) The term "cremains" means ashes and other residue recovered after
the completion of cremation, which may include residue of foreign matter
that may have been cremated with the human remains.
(j) The term "alternative container" or "external wrappings" means a
nonmetal receptacle or enclosure, without ornamentation or a fixed
interior lining, which is designed for the encasement of human remains
and which is made of cardboard, pressed wood, composite materials (with
or without an outside covering), or pouches of canvas or other material.
(k) The term "casket" means a rigid container that is designed for the
encasement of human remains and customarily ornamented and lined with
fabric.
(l) The term "crematory" means a facility or portion of a building in
which the remains of deceased human beings are processed by cremation.
(m) The term "holding facility" or "temporary storage facility" means
an area that (i) is designated for the retention of human remains prior
to cremation or natural organic reduction; (ii) complies with all
applicable public health laws, (iii) preserves the health and safety of
the crematory or natural organic reduction facility personnel; and (iv)
is secure from access by anyone other than authorized persons. The
interior of such facility shall not be visible from any area accessible
to the general public.
(n) The terms "cremation permit" and "natural organic reduction
permit" mean the burial and removal permit required pursuant to section
forty-one hundred forty-five of the public health law that is annotated
for disposition of the remains of a deceased human being by cremation or
natural organic reduction.
(o) The terms "cremation authorization" and "natural organic reduction
authorization" mean the crematory or natural organic reduction form
authorizing a cremation or natural organic reduction which is signed by
the next of kin or authorizing agent. This crematory or natural organic
reduction form must be a separate document and cannot be a part of
another form or document.
(p) The term "authorizing agent" shall mean the person with the right
to control the disposition of the decedent pursuant to section forty-two
hundred one of the public health law.
(q) The term "pet cremated remains" means ashes and/or other residue
recovered after the completion of cremation of any domestic animal that
has been adapted or tamed to live in intimate association with people
where such cremation has occurred at a pet crematorium as defined in
section seven hundred fifty-a of the general business law.
(r) The term "nonsectarian burial society" means a corporation or
unincorporated association or society having among its activities or its
former activities the provision of burial benefits for its members and
not supervised or controlled by a religious corporation.
(s) The term "religious burial society" means a corporation or
unincorporated association or society having among its activities or its
former activities the provision of burial benefits for its members and
supervised or controlled by a religious corporation.
(t) The term "natural organic reduction" means the contained,
accelerated conversion of human remains to soil.
(u) The term "natural organic reduction facility" means a structure,
room, or other space in a building or real property where natural
organic reduction of a human body occurs.
§ 1503. Application.
(a) Except as otherwise provided in paragraph (b) of this section,
section fifteen hundred five-b, paragraph (c) of section fifteen hundred
seven, paragraph (m) of section fifteen hundred ten, and section fifteen
hundred eighteen of this article does not apply to (1) a religious
corporation, (2) a municipal corporation, (3) a cemetery corporation
owning a cemetery operated, supervised or controlled by or in connection
with a religious corporation or (4) a cemetery belonging to a religious
or a municipal corporation, or operated, supervised or controlled by or
in connection with a religious corporation unless any officer, member or
employee of any such corporation shall receive or may be lawfully
entitled to receive any pecuniary profit from the operations thereof,
other than reasonable compensation for services in effecting one or more
of the purposes of such corporation or as proper beneficiaries of its
strictly charitable purposes or unless the organization of any such
corporation for any of its avowed purposes be a guise or pretense for
directly or indirectly making any other pecuniary profit for such
corporation, or for any of its officers, members or employees, and
unless any such corporation is not, in good faith, organized or
conducted exclusively for one or more of its stated purposes.
(b) All crematories or natural organic reduction facilities shall be
subject to inspection by the division of cemeteries. Upon inspection,
the crematory or natural organic reduction facility may be asked to
produce any and all records for the operation and maintenance of the
crematory or natural organic reduction facility. These records may
include but not be limited to cremation or natural organic reduction
authorizations, rules and regulations of the crematory or natural
organic reduction facility, procedures as set forth in section fifteen
hundred seventeen of this article, or section fifteen hundred eighteen
of this article, as applicable, and the written procedure of the
identification of remains.
(c) Except as otherwise provided in paragraph (c) of section fifteen
hundred seven and paragraph (m) of section fifteen hundred ten of this
article, this article does not apply to a burial site as defined in
paragraph (a) of subdivision one of section one hundred seventy-one of
the executive law.
§ 1504. Cemetery board and general administration.
(a) A cemetery board is hereby created within the division of
cemeteries in the department of state, subject to the following
requirements: (1) The members of such board shall be the secretary of
state, the attorney general and the commissioner of health, who shall
serve without additional compensation. (2) The secretary of state,
attorney general and commissioner of health may each, by official order
filed in the office of his respective department and in the office of
the board, designate a deputy or other representative in his department
to perform any or all of the duties under this section of the department
head making such designation, as may be provided in such order. Such
designation shall be deemed temporary only and shall not affect the
civil service or retirement rights of any person so designated. Such
designees shall serve without additional compensation. (3) The
secretary of state shall be chairman of such board, provided that in his
absence at any meeting of the board the attorney general or the
commissioner of health, in such order, if either or both be present,
shall act as chairman. When designees of such officers, in the absence
of all such officers, are present at any meeting of the board, the
designee of the secretary of state, if present, and in his absence one
of the other designees present, in the same order of preference as
provided for the officer appointing him, shall act as chairman. (4)
Technical, legal or other services shall be performed in so far as
practicable by personnel of the departments of state, law and health
without additional compensation but the board may employ and compensate
within appropriations available therefor such assistants and employees
as may be necessary to carry out the provisions of this section and may
prescribe their powers and duties. (5) Two members of the board shall
constitute a quorum to transact the business of the board at both
regular and special meetings. (6) The board shall meet at least once a
month, shall keep a record of all its proceedings and shall determine
the rules of its own proceedings. (7) Special meetings may be called
by the chairman upon his initiative, and must be called by him upon
receipt of a written request therefor signed by another member of the
board. Written notice of the time and place of such special meeting
shall be delivered to the office of each member of the board. (8) The
board shall have the duty of administering the provisions of this
chapter which deal with cemetery corporations other than the cemeteries
and cemetery corporations enumerated in section fifteen hundred three
and shall have all the powers herein provided and such other powers and
duties as may be otherwise prescribed by law.
(b) Director of the division of cemeteries. The cemetery board shall
appoint a director of the division of cemeteries who shall hold his
office for a term of six years. He shall receive an annual salary to be
fixed by the board within the appropriations available to the board.
Subject to the supervision, direction and control of the board, the
director of the division of cemeteries shall be responsible for the
administration of this article and he shall exercise and perform such
duties and functions of the board as it may assign or delegate to him
from time to time.
(c) Powers and duties of the cemetery board. With respect to any
cemetery or cemetery corporation, the cemetery board shall have the
following duties and powers: (1) To adopt such reasonable rules and
regulations as the cemetery board shall deem necessary for the proper
administration of this article. (2) To order any cemetery corporation
to do such acts as may be necessary to comply with the provisions of
this article or any rule or regulation adopted by the cemetery board or
to refrain from doing any act in violation thereof. (2-a) To adopt
reasonable rules and regulations to exempt those cemetery corporations
from the provisions of paragraph (h) of section fifteen hundred ten of
this chapter which because of a limited number of paid employees or
appropriate resources are unable to carry out such provisions. (2-b) To
adopt reasonable rules and regulations to extend the time period
mandated by the provisions of paragraph (h) of section fifteen hundred
ten of this chapter when necessary because compliance by a cemetery
corporation within such time period is impossible. (3) To enforce its
orders by mandamus or injunction in a summary proceeding or otherwise.
In connection with such action or proceeding, the attorney general is
authorized to take proof, issue subpoenas and administer oaths in the
manner provided in the civil practice law and rules. (4) To impose a
civil penalty upon a cemetery corporation not exceeding one thousand
dollars, after conducting an adjudicatory hearing pursuant to the
provisions of the state administrative procedure act, for a violation of
or a failure to comply with any provisions contained in this article or
any regulation, directive or order of the board, and without the need to
maintain a civil action pursuant to subdivision five of this paragraph.
(5) To maintain a civil action in the name of the people of the state to
recover a judgment for a money penalty imposed under the provisions of
this article.
(d) Judicial review. Any order or determination of the cemetery
board made pursuant to this article shall be subject to review by the
supreme court in the manner provided by article seventy-eight of the
civil practice law and rules; provided, however, that an application for
review of such order or determination must be made within one hundred
twenty days from the date of the filing of such order or determination,
and provided further that no stay shall be granted pending the
determination of the matter except on notice to the cemetery board and
for a period not exceeding thirty days. Proceedings to review such order
shall be entitled to a preference.
§ 1505. Special requirements of incorporation.
(a) Certificate of incorporation; additional contents. In addition to
the requirements of section four hundred two (Certificate of
incorporation; contents), the certificate of incorporation of a cemetery
corporation shall be filed in the office of the clerk of each county in
which any part of the cemetery is proposed to be, or is, situated, and
shall state: (1) each city, village or town, and county, in which any
part of the cemetery is or is proposed to be situated; and (2) the time
of the annual meeting.
(b) Cemetery board endorsement. Every certificate of incorporation of
a cemetery corporation, except those within the exclusionary provisions
of section fifteen hundred three, shall have endorsed thereon or annexed
thereto the approval of the cemetery board as required in subdivision
(e) of section four hundred four of this chapter.
(c) Type of corporation. A cemetery corporation is a charitable
corporation under this chapter.
(d) Lot owners in unincorporated cemeteries may incorporate. (1) Not
less than three owners of lots in an unincorporated cemetery may cause a
notice to be posted in at least six conspicuous places in the city, town
or village in which such cemetery is located, and to be published once
in each week for three successive weeks in a newspaper, if any,
published in such municipality, stating that at a time and place
specified, a meeting of the lot owners will be held to determine whether
such cemetery shall be incorporated, pursuant to this chapter. (2) The
meeting shall be held at a convenient place in the city, town or village
in which the cemetery is located, not less that twenty-five nor more
than thirty days after the first posting and publication of the notice
of the meeting. At such meeting every lot owner shall be entitled to one
vote in person or by proxy for each lot owned by him. The persons
entitled to vote at such meeting shall select a chairman and secretary,
and determine by ballot whether or not the lot owners shall incorporate
pursuant to this chapter. (3) If a majority of the ballots are in favor
of incorporation, the persons entitled to vote at such meeting shall
select three lot owners to incorporate and the provisions of this
chapter shall be applicable, except that three persons may incorporate,
and the corporation shall not be required to have more than three
directors. Upon such incorporation, the lot owners shall be members of
the corporation, and it shall be vested with the title to such cemetery
and the personal property appertaining thereto. If the title to the
cemetery has prior to such incorporation vested in the town, pursuant to
section two hundred and ninety-one of the town law of section one of
title seven of chapter eleven of part one of the revised statute, the
supervisor of such town shall on request of the directors of such
corporation, execute to it a deed of such cemetery lands releasing all
interest of the town therein, and thereafter the title shall be vested
in the corporation.
§ 1505-a. Additional requirements for incorporation of crematories.
(a) Approval. A cemetery corporation seeking the approval to operate a
crematory must submit for approval by the cemetery board the following:
(1) a list of the directors, employees, and certificate holders of the
cemetery corporation; (2) a certified survey of the site and location
within the county it will be situated; (3) a business plan for the
operation of the crematory to include, but not be limited to, number of
expected cremations per year, number of cremation units, manufacture,
capital costs, financing, anticipated number of employees, types of
services provided, pricing thereof; (4) a description of the impact of
the proposed crematory on other crematories within the county or whether
the crematory will have an adverse impact on the surrounding community;
(5) plans, designs, and costs of any structures to be erected or
retrofitted for the crematory use; (6) a description of any approvals or
permits required by state or local law. No crematory shall be approved
until such other approvals or permits have been obtained. Any board
approval of a crematory shall be so conditioned.
(b) Further information. Within thirty-five days following receipt of
the information required by paragraph (a) of this section, the cemetery
board or the division of cemeteries may request from the cemetery
corporation any additional information or documentation and technical
assistance deemed necessary to review such information. Such information
shall not be deemed complete until the requested additional information
has been received. If no such request is made, the submission shall be
deemed complete on the thirty-fifth day after its receipt by the
division.
(c) Determination. The cemetery board shall approve or deny the
proposed crematory within ninety days of the completed submission.
(d) Notification. The cemetery board shall provide written notice of
its determination to the cemetery corporation. If a negative
determination is made, such notice shall state the reasons therefor.
Notice shall be made by registered or certified mail addressed to the
corporation at its principal office.
§ 1505-b. Additional requirements for incorporation of natural organic
reduction facilities.
(a) Approval. A cemetery corporation seeking the approval to operate a
natural organic reduction facility shall submit for approval by the
cemetery board the following:
(1) a list of the directors, employees, and certificate holders of the
cemetery corporation;
(2) a certified survey of the site and location within the county it
will be situated;
(3) a business plan for the operation of the natural organic reduction
facility to include, but not be limited to, number of expected natural
organic reductions per year, number of natural organic reduction units,
manufacture, capital costs, financing, anticipated number of employees,
types of services provided, pricing thereof;
(4) a description of the impact of the proposed natural organic
reduction facility on other natural organic reduction facilities, if
any, within the county or impact on the surrounding community;
(5) plans, designs, and costs of any structures to be erected or
retrofitted for the natural organic reduction facility use; and
(6) a description of any approvals or permits required by state or
local law. No natural organic reduction facility shall be approved until
such other approvals or permits have been obtained.
(b) Further information. Within thirty-five days following receipt of
the information required by paragraph (a) of this section, the cemetery
board or the division of cemeteries may request from the cemetery
corporation any additional information or documentation and technical
assistance deemed necessary to review such information. Such information
shall not be deemed complete until the requested additional information
has been received. If no such request is made, the submission shall be
deemed complete on the thirty-fifth day after its receipt by the
division of cemeteries.
(c) Determination. The cemetery board shall approve or deny the
proposed natural organic reduction facility within ninety days of the
completed submission.
(d) Notification. The cemetery board shall provide written notice of
its determination to the cemetery corporation. If a negative
determination is made, such notice shall state the reasons therefor.
Notice shall be made by registered or certified mail addressed to the
cemetery corporation at its principal office.
§ 1506. Cemetery lands.
(a) Purchase of land; notice to cemetery board. (1) No cemetery
corporation, in purchasing real property hereafter, shall pay or agree
to pay more than the fair and reasonable market value thereof. The terms
of the purchase, including the price to be paid and the method of
payment, shall be subject to notice and approval of the cemetery board.
In determining the fair and reasonable market value, the cemetery board
may take into consideration the method by which the purchase price is to
be paid.
(2) Notwithstanding the restrictions set forth in subparagraph three
of paragraph (h) of this section, a cemetery corporation may purchase
real property for cemetery purposes that is not adjacent to existing
cemetery property or that would result in the cemetery corporation
owning more than two hundred acres of land in the aggregate upon proving
to the satisfaction of the cemetery board:
i. that the proposed purchase will benefit the cemetery corporation
and the owners of plots and graves in the cemetery;
ii. that the cemetery has sufficient funds and sufficient ability to
take on any debt required by the proposed terms of purchase;
iii. that the cemetery corporation fully investigated available land
in reasonable proximity to its existing cemetery and that the proposed
purchase is prudent, taking into consideration the proximity of the land
to the existing cemetery, the quantity of land, the proposed purchase
price, and if applicable, the number of lot sales and income the land is
reasonably expected to generate, and the future needs of the cemetery;
and
iv. that the municipalities that would be required to assume the care
and control of any part of the cemetery if the cemetery corporation were
to be abandoned have been notified of the proposed purchase.
(b) Consent of local authorities. (1) No cemetery shall hereafter be
located in any city or village without the consent of the local
legislative body of such city, or the board of trustees of such village.
(2) No cemetery shall hereafter be located in any town, outside of an
incorporated village in Suffolk county, without the consent of the town
board of such town.
(c) Cemeteries in Kings, Queens, Rockland, Westchester, Nassau,
Suffolk, Putnam and Erie counties. A cemetery corporation shall not take
by deed, devise, merger or otherwise any land in the counties of Kings,
Queens, Rockland, Westchester, Nassau, Suffolk, Putnam or Erie for
cemetery purposes, or set apart any ground therefor in any of such
counties, unless the consent of the board of supervisors or legislative
body thereof, or of the city council of the city of New York, in respect
to Kings or Queens county, be first obtained. Such consent may be
granted upon such conditions and under such regulations and restrictions
as the public health and welfare may require. Notice of application for
such consent shall be published, once a week for six weeks, in the
newspapers designated to publish the session laws and in such other
newspapers published in the county as such board or body may direct,
stating the time when the application will be made, a brief description
of the lands proposed to be acquired, their location and the area
thereof. Any person interested therein may be heard on such
presentation. If such consent is granted the corporation may take and
hold the lands designated therein. The consent shall not authorize any
one corporation to take or hold more than two hundred fifty acres of
land unless the acquisition is by an abandonment pursuant to section
fifteen hundred six-c of this article or a merger or consolidation of
cemetery corporations pursuant to article nine of this chapter that
complies with the additional requirement of section fifteen hundred
six-d of this article, except that such limitation shall not apply to
paragraph (n) of this section and the provisions of subparagraph two of
paragraph (a) of this section. Nothing contained in this subdivision
shall prevent any religious corporation in existence on April fifteenth,
eighteen hundred fifty-four, in any of said counties from using as
heretofore any burial ground then belonging to it within such county.
Such board or body, from time to time, may make such regulation as to
burials in any cemetery in the county as the public health may require.
(d) Limitation on the acquisition of land by rural cemetery
corporations. It shall not be lawful for any rural cemetery corporation
hereafter to acquire or take by deed, devise or otherwise, any land in
any county within the state of New York, having a population of between
one hundred seventy-five thousand and two hundred thousand, according to
the federal census of nineteen hundred, or set apart any ground for
cemetery purposes therein, where there has already been set apart in any
such county, five hundred acres of land for rural cemetery purposes, and
the consent of the board of supervisors of any such county shall not be
granted where there has already been granted five hundred acres of land,
or upwards, within such county, to rural cemetery corporations unless
the acquisition is by an abandonment pursuant to section fifteen hundred
six-c of this article or a merger or consolidation of cemetery
corporations pursuant to article nine of this chapter that complies with
the additional requirements of section fifteen hundred six-d of this
article. Nothing herein contained shall affect any lawful consent or
grant hitherto made by the board of supervisors of any such county.
(e) Limitations on the acquisition of land for cemetery purposes in
certain counties. (1) It shall not be lawful for any corporation,
association or person hereafter to set aside or use for cemetery
purposes any lands in any county within the state erected on and after
January first, eighteen hundred ninety, adjoining a city of the first
class and having a population of between eighty thousand and eighty-five
thousand according to the federal census of nineteen hundred ten; but
nothing herein contained shall prevent cemetery corporations formed
prior to January first, nineteen hundred seventeen, which own in such
county a cemetery in which burials have been made prior to such date,
from setting apart and using for burial purposes lands lying contiguous
or adjacent to such cemetery which lands have been heretofore acquired
by a recorded deed of conveyance made to such a cemetery corporation
either for burial purposes, or for the purposes of the convenient
transaction of its general business, which lands shall have been
acquired with the consent of the board of supervisors; nor to prohibit
the dedication or use of land within such county for a family cemetery
as provided in paragraph (c) of section fourteen hundred one of this
chapter. Nothing herein contained shall prohibit a cemetery corporation
from assuming management and maintenance of an abandoned cemetery
pursuant to section fifteen hundred six-c of this article or a merger or
consolidation of cemetery corporations pursuant to article nine of this
chapter that complies with the additional requirements of section
fifteen hundred six-d of this article.
(2) The provisions of this paragraph shall not operate to prevent any
such cemetery corporation located in Nassau county from using for burial
purposes contiguous or adjacent land acquired by it provided that such
use shall be consented to by the Nassau county legislature.
(f) Conveyance by religious corporations or by trustees. A cemetery
corporation may accept a conveyance of real property held by a religious
corporation for burial purposes, or by trustees for such purposes if all
such trustees living and residing in this state unite in the conveyance,
subject to all trusts, restrictions and conditions upon the title or
use. Lots previously sold and grants for burial purposes shall not be
affected by any such conveyance; nor shall any grave, monument or other
erection, or any remains, be disturbed or removed without the consent of
the lot owner, or if there be no such owner, without the consent of the
heirs of the persons whose remains are buried in such grave.
(g) Certain conveyances to cemetery corporations authorized. Upon
approval of the cemetery board first having been obtained, a cemetery
corporation which maintains and operates a cemetery may accept a
conveyance of title to the fee of or to burial rights in lands within
the confines of said cemetery and it shall be lawful for any cemetery or
business corporation to make such conveyances. Lots previously sold and
grants previously made for burial purposes shall not be affected by such
conveyance. The cemetery corporation, in consideration of the
conveyance to it of burial rights in lands within the confines of said
cemetery, may, with the approval of the cemetery board, issue
participating certificates of the kind and nature provided for in
paragraph three of subdivision (e) of section fifteen hundred eleven of
this article. In making its determination the cemetery board shall
consider and may condition its approval on the purposes of this section.
(h) Acquisition of property by condemnation or otherwise. (1) If the
certificate of incorporation or by-laws of a cemetery corporation do not
exclude any person, on equal terms with other persons, from the
privilege of purchasing a lot or of burial in its cemetery, such
corporation may, from time to time, acquire by condemnation, exclusively
for the purposes of a cemetery, not more than two hundred acres of land
in the aggregate, forming one continuous tract, wholly or partly within
the county in which its certificate of incorporation is filed or
recorded, except as in this section otherwise provided as to the
counties of Erie, Nassau, Suffolk, Putnam, Kings, Queens, Rockland and
Westchester.
(2) A cemetery corporation may acquire by condemnation, exclusively
for the purposes of a cemetery, any real property or any interest
therein necessary to supply water for the uses of such cemetery, and the
right to lay, relay, repair and maintain conduits and water pipes with
connections and fixtures, in, through or over the lands of others and
the right to intercept and divert the flow of waters from the lands of
riparian owners, and from persons owning or interested in any waters.
But no such cemetery corporation shall have power to take or use water
from any of the canals of this state, or any canal reservoirs as
feeders, or any streams which have been taken by the state for the
purpose of supplying the canals with water.
(3) A cemetery corporation may acquire, otherwise than by
condemnation, real property exclusively for the purposes of a cemetery
as aforesaid in subparagraph 1 of this paragraph and additional real
property for the purposes of the convenient transactions of its
business, no portion of which shall be used for the purposes of a
cemetery. Notwithstanding the foregoing or any other provision of law to
the contrary, a cemetery corporation that holds real property for
cemetery purposes that exceeds two hundred acres in the aggregate or
that does not form one continuous tract as a result of acquisitions of
real property that occurred prior to the effective date of the chapter
of the laws of two thousand twenty which amended this paragraph and for
which all approvals and consents required at the time to acquire such
real property were obtained, may continue to use such real property for
cemetery purposes.
(i) Sale or disposition of cemetery lands. (1) No cemetery corporation
may sell or dispose of the fee of all or any part of its lands dedicated
to cemetery use, unless it shall prove to the satisfaction of the
supreme court in the district where any portion of the cemetery lands is
located or the cemetery board, that either: (A) all bodies have been
removed from each and every part of the cemetery, that all the lots in
the entire cemetery have been reconveyed to the corporation and are not
used for burial purposes, and that it has no debts and liabilities, or
(B) the land to be sold or disposed of is not used or is not physically
adaptable for burial purposes and that the sale or disposition will
benefit the cemetery corporation and the owners of plots and graves in
the cemetery, and (C) the sale or disposition is not to a funeral entity
as defined in paragraph (c) of section fifteen hundred six-a of this
article. (2) If the sale or disposition is made pursuant to subparagraph
(A) of subdivision one of this paragraph, the cemetery shall satisfy the
court or the cemetery board that it is in the public interest to dispose
of such cemetery land in the manner proposed; that the subject land is
not suitable for cemetery purposes or is no longer needed by the
community for such cemetery uses or purposes; and that the subject land
is being sold for its current market value. (3) If the sale or
disposition of the land is made pursuant to subparagraph (B) of
subdivision one of this paragraph, the court or cemetery board shall
order that the consideration received by the cemetery corporation, less
the necessary expenses incurred, shall be deposited into the permanent
maintenance fund established by the cemetery corporation pursuant to
paragraph (a) of section fifteen hundred seven of this article. (4)
Notice of any application hereunder shall be given in addition to the
cemetery board, to the holders of certificates of indebtedness and land
shares of the cemetery corporation, to any person having informed the
cemetery board by petition or notice of interest in the proceeding and
to any person interested in the proceeding pursuant to section five
hundred eleven of this chapter (Petition for leave of court).
(j) Conveyance by cemetery corporation to city or village. A
cemetery corporation may convey and transfer its real property held for
burial purposes, together with its other assets, to a city having a
population of less than one million inhabitants in which such real
property is located, or to a village, provided such real property is
located within such village or wholly within three miles of the
boundaries thereof, or to a town, in which such real property is
located, if all the directors and trustees of such cemetery corporation
living and residing in the state of New York unite in the conveyance and
transfer. Such conveyance and transfer shall be subject to all
agreements as to lots sold and all trusts, restrictions and conditions
upon the title or use of such real property and assets. Lots previously
sold and grants previously made for burial purposes shall not be
affected by such conveyance, nor shall any grave, monument or other
erection be disturbed or removed except in accordance with law. No such
conveyance shall be effective unless and until the legislative body of
such city, town or village shall by ordinance or resolution accept the
same subject to the conditions and restrictions hereinabove imposed,
which ordinance or resolution said legislative body is hereby authorized
and empowered to adopt by a majority vote of such body. Upon such
conveyance and transfer such property shall be and become a municipal
cemetery of such city, town or village and such property and assets so
conveyed and transferred shall be administered as any other municipal
cemetery of such city, town or village and the said cemetery corporation
shall be dissolved by the recording of such conveyance and transfer.
(k) Streets or highways not to be laid out through certain cemetery
lands. So long as the lands of a rural cemetery corporation organized
under the act entitled "An act authorizing the incorporation of rural
cemetery associations," constituting chapter one hundred thirty-three of
the laws of eighteen hundred forty-seven, and the acts amendatory
thereof, shall remain dedicated to the purpose of a cemetery, no street,
road, avenue or public thoroughfare shall be laid out through such
cemetery, or any part of the lands held by such association for the
purposes aforesaid, without the consent of the trustees of such
association and the cemetery board.
(l) Exclusive right of cemetery corporation to provide annual care
services. Notwithstanding any provision of this article to the contrary,
it shall be the right of each cemetery corporation, at its option, to
exclusively provide all annual care services to be performed for
consideration on all or any part of its lands at rates to be reviewed by
the cemetery board. In the event that the cemetery board determines that
an excessive, unauthorized or improper charge has been made for such
services or that the services have not been properly performed, he or
she may direct the cemetery corporation to pay to the person from whom
such charge was collected a sum equivalent to three times the excess as
determined by the cemetery board, or in the case of work not properly
performed, it may direct the cemetery corporation to perform the work
properly. Every cemetery corporation that chooses to provide, on an
exclusive basis, such annual care services shall include in any contract
for the sale of any part of its lands the following notice, in at least
ten point bold type:
Notice
The (name of cemetery corporation), pursuant to
state law, provides annual care services on an exclusive basis.
Therefore, the purchaser of the plot or lot being transferred by this
agreement may not contract with any outside party for such annual care
services. For purposes of this paragraph, the term "annual care" shall
mean the maintenance of a lot, plot or part thereof, and may include
care of lawns, trees, shrubs, monuments and markers within the plot. The
provisions of this paragraph shall not be construed to prohibit a lot
owner from placing, or arranging to place, floral or similar
arrangements on such cemetery lots or plots.
(m) Prohibition of stand-alone mausoleum and columbarium. No
application for the construction of a mausoleum or columbarium to be
located in any city, town or village shall be approved by the cemetery
board when such mausoleum or columbarium shall be the only form of
interment offered by a cemetery corporation, unless a management
contract has been entered into with an existing cemetery corporation
regulated under this article, that will provide operational management
of the mausoleum or columbarium, and the owner of the mausoleum or
columbarium has reserved interment space and secured interment services
in a cemetery regulated under this article, in order to assure continued
perpetual care of the remains contained in the mausoleum or columbarium
should such mausoleum or columbarium become abandoned or choose to cease
operations.
(n) The provisions of this section shall not operate to prevent any
two cemeteries located in Suffolk county with contiguous or adjacent
land dedicated for cemetery purposes and previously operating as public
cemetery corporations, from effectuating a merger of such cemeteries
where their total acreage does not exceed three hundred twenty-five
acres.
§ 1506-a. Cemetery corporations; restrictions.
(a) No cemetery corporation shall, directly or indirectly:
(1) sell, or have, enter into or perform a lease of any of its real
property to a funeral entity, or use any of its property for location of
a funeral entity;
(2) commingle its funds with a funeral entity;
(3) direct or carry on its business or affairs with a funeral entity;
(4) authorize control of its business or affairs by a funeral entity;
(5) engage in any sale or cross-marketing of goods or services with a
funeral entity;
(6) have or enter into or perform a management or service contract for
cemetery operations with a funeral entity; or
(7) have, enter into or perform a management contract with any entity
other than a not-for-profit cemetery corporation; provided, however,
that a not-for-profit cemetery corporation may enter into or perform a
management contract with a private cemetery corporation for the
operational management of a mausoleum or columbarium by such private
cemetery corporation provided such contract shall have first been
authorized by the board of the not-for-profit cemetery corporation.
(b) Only the provisions of subdivisions one and two of paragraph (a)
of this section shall apply to cemetery corporations with thirty acres
or less of real property dedicated to cemetery purposes, and only to the
extent the sale or lease is of real property dedicated to cemetery
purposes, and such cemeteries shall not engage in the sale of funeral
home goods or services, except if such goods and services are otherwise
permitted to be sold by cemeteries, nor shall a majority of the members
of the board of directors or trustees of such cemeteries be made up of
the representatives of a funeral entity.
(c) For the purposes of this section, "funeral entity" means a person,
partnership, corporation, limited liability company or other form of
business organization providing funeral home services, or owning,
controlling, conducting or affiliated with a funeral home, any
subsidiary thereof or an officer, director or stockholder having a ten
per centum or greater proprietary, beneficial, equitable or credit
interest in a funeral home.
§ 1506-b. Transfer of lands of Valley View Rural Cemetery.
Notwithstanding any other provision of law to the contrary, the board
of trustees of the Valley View Rural Cemetery Association in the town of
Dover Plains, New York, may by resolution of such board, sell, lease or
transfer any portion of the lands of Valley View Rural Cemetery to the
parish of St. Charles Borromeo in the town of Dover Plains, New York,
for cemetery purposes for the adjoining and contiguous cemetery of the
parish of St. Charles Borromeo.
§ 1506-c. Abandoned cemetery maintenance by cemetery corporations.
(a) Upon application and approval by the cemetery board, a cemetery
corporation may assume management and maintenance of an abandoned
cemetery. For the purposes of this section, abandoned cemetery means a
cemetery which was organized pursuant to this chapter or existing by
virtue of the membership corporation law, for which there no longer
exists any corporate board or body to maintain it, and for which there
is no sufficient trust fund or endowment to provide ordinary and
necessary care and maintenance. Provided, however, that in no event
shall the cemetery board approve the assumption of the management and
maintenance of an abandoned cemetery under this section if the abandoned
cemetery was affiliated with any religious denomination or tradition or
if the majority of the persons whose bodies were interred in such
cemetery were affiliated with any religious denomination or tradition
unless the cemetery assuming the management and maintenance of such
abandoned cemetery follows the customs and practices of the same
religious denomination or tradition.
(b) A cemetery corporation assuming management and maintenance of an
abandoned cemetery may make application for funds pursuant to paragraph
(h) of section fifteen hundred seven of this article and section
ninety-seven-r of the state finance law for maintenance of abandoned
cemeteries. Within sixty days of submission of a completed application,
the cemetery board shall approve or deny such application.
(c) Monies disbursed under such assumption shall be used exclusively
for the purpose of the management and maintenance of an abandoned
cemetery as provided in subparagraph three of paragraph (h) of section
fifteen hundred seven of this article.
(d) Any residual funds disbursed to a cemetery corporation after the
maintenance of an abandoned cemetery has been performed must be returned
to the cemetery board for redeposit into the state cemetery vandalism
restoration, monument repair or removal and administration fund
established by section ninety-seven-r of the state finance law.
(e) Within ninety days of its receipt of disbursements, the cemetery
corporation shall make a report to the cemetery board setting forth
details of the maintenance and clean-up undertaken and the amount of
funds, if any, to be redeposited into the fund. If the maintenance and
clean-up have not been completed, or necessary equipment has not been
purchased, the reasons therefor shall be set forth, and the anticipated
date for a subsequent, final report shall be disclosed.
§ 1506-d. Additional requirements for merger or consolidation of
cemetery corporations in certain circumstances. (a) A merger or
consolidation of cemetery corporations may be approved notwithstanding
that the surviving corporation or consolidated corporation will own land
that does not form one continuous tract or that exceeds two hundred
acres in the aggregate, but only with the recommendation of the cemetery
board. The cemeteries proposing such a merger or consolidation shall
first prove to the satisfaction of the cemetery board that:
(1) the plan of merger or consolidation is economically feasible and
financially responsible;
(2) the merger or consolidation does not harm the interests of each
cemetery corporation, their lot owners, the communities in which the
constituent cemeteries are located, or the state;
(3) the surviving or consolidated corporation will have the resources,
ability and commitment of directors and officers to ensure that all the
constituent cemeteries are properly operated and maintained, that they
will not fall into disrepair and dilapidation and become a burden upon
the community, that they will be operated for the mutual benefit of lot
owners, and that they will continue to serve the local communities in
which they are located;
(4) the municipalities which would be required to assume the care and
control of any part of the cemetery if the surviving or consolidated
cemetery corporation were to be abandoned have been notified of the
proposed merger or consolidation; and
(5) the plan of merger or consolidation submitted to the cemetery
board shall include the following:
(i) a description of the financial assets of each constituent cemetery
corporation demonstrating that the surviving or consolidated cemetery
will have sufficient financial resources to operate all locations
subsequent to merger or consolidation;
(ii) a proposal for management of financial assets of the surviving or
consolidated cemetery, including management of trust funds of the
constituent cemeteries;
(iii) a proposal for maintenance, storage and availability of all
corporate and cemetery records of the surviving or consolidated cemetery
including procedures for physical or remote access to such records by
persons entitled to access;
(iv) a proposal for maintenance, storage and availability of all
corporate and cemetery records relating to the constituent cemeteries,
including procedures for physical or remote access to such records by
persons entitled to access;
(v) a plan for maintenance and operation of all locations in an
equitable manner;
(vi) an agreement that contact information for the surviving or
consolidated cemetery will be posted at the entrance to each location of
the surviving or consolidated cemetery and on any website maintained by
it;
(vii) a proposal for the conduct of annual and special lot owner
meetings that permits lot owners who were lot owners of a constituent
cemetery to attend, actively participate in, and vote at such meetings
remotely; and
(viii) a proposal for providing notice to lot owners who were lot
owners of a constituent cemetery of the place, date and hour of the
annual and any special lot owner meetings in compliance with section six
hundred five of this chapter, and that also provides for: notice to be
published in a newspaper located in each county in which any constituent
cemetery was located, and notice to be prominently posted on the
homepage of any website maintained by the surviving or consolidated
cemetery.
(b) In addition to the requirements of section nine hundred three of
this chapter, lot owner approval of the plan of merger or consolidation
must meet these requirements:
(1) Notice of the meeting to lot owners by a constituent cemetery
corporation that will not be a surviving cemetery corporation may not be
served by publication, unless the constituent cemetery demonstrates that
notice by means other than publication would cause undue hardship;
(2) Additional notice of the meeting shall be conspicuously posted at
the cemetery at least sixty days prior to the meeting and shall provide
the name, telephone number and address of a person from whom a copy of
the plan of merger or consolidation may be obtained; and
(3) Additional notice of the meeting, along with the plan of merger or
consolidation or an outline of the material features of the plan, shall
be conspicuously posted, by each constituent corporation, on any website
it maintains or through which it conducts business.
(c) The cemetery board may adopt rules and regulations as are
necessary to carry out the purposes and provisions of this section.
§ 1506-e. Lease of cemetery lands.
(a) Cemetery board approval. Except as set forth in paragraph (i) of
this section, no cemetery corporation shall lease any portion of its
land without notice to and approval of the cemetery board.
(b) Requirements for approval of a lease of cemetery land. The
application to the cemetery board for approval to lease cemetery land
shall meet the following requirements:
(1) The cemetery's lot owners or board of directors have approved the
lease.
(2) If the cemetery has any existing leases of land, it must disclose
them so the board can consider the impact of existing leases on cemetery
operations.
(3) In addition to its submission to the cemetery board, the cemetery
corporation shall, no earlier than ten days prior to such submission,
post notices in the immediate proximity of the land proposed to be
leased, the cemetery office and, in a manner so as not to violate local
zoning ordinances or to create a traffic hazard, all entrances. Each
such notice shall provide information written in plain English
concerning the proposed lease and, if the proposed lease includes
construction of new structures or buildings, include a drawing, which
shall be an accurate rendition of the proposed construction. In
addition, such notices shall state the telephone number and address
where comments may be received and the last date on which such comments
will be accepted, which shall be no earlier than sixty days following
the date the notices are posted.
(4) The proposed lease has been negotiated at arm's length for a fair
market rent and contains all of the agreements between the parties.
Where the proposed lease would be a related party transaction under this
chapter, the cemetery shall disclose this fact and demonstrate
compliance with restrictions related to such transactions, as set forth
in section seven hundred fifteen of this chapter, and the cemetery board
may require that the lease contain a clause by which the cemetery board
may set reasonable reporting requirements that would disclose any
financial relationship between the lessor and lessee related to the
leased property.
(5) The initial lease term is not greater than forty-nine years, and
the cemetery demonstrates that such a term will not interfere with land
needed for burial purposes. Notwithstanding the provisions of this
subparagraph, the cemetery board may approve a lease with extensions of
the initial term not to exceed ninety-nine years from the date of the
initial lease, provided that the security shall be updated at year
forty-nine and every twenty years afterward during the term of the lease
and all extensions thereof, if applicable, and approved pursuant to
paragraph (h) of this section.
(6) If the proposed lease involves land adjacent to cemetery
operations, the proposed lease requires the tenant to construct and
maintain a physical or visual buffer approved by the cemetery board,
which may be vegetative, and that protects visitors to the cemetery, and
that otherwise complies with the requirements of this section.
(7) The proposed lease requires the tenant to be responsible for any
and all taxes, assessments, and charges related to its occupancy and use
of the land, whether imposed against the tenant or the cemetery
corporation.
(8) If the proposed lease includes permission to construct any
infrastructure, buildings or other structures, the application to the
cemetery board shall provide for the removal of such infrastructure,
buildings or other structures after the cemetery retakes possession of
the land, unless the infrastructure, buildings or other structures are
to be retained by the cemetery pursuant to paragraph (f) of this
section.
(9) The proposed lease shall include an agreement to pay for the
removal of any proposed infrastructure, buildings and structures, except
any that are approved to be retained as set forth in paragraph (f) of
this section, and return the land to a condition suitable for cemetery
use upon the expiration or termination of the lease and such agreement
shall be secured by a fund, bond, letter of credit or other security
sufficient to pay for such future removal. The application shall include
a written description of the proposed funding mechanism for the
establishment of a fund, written evidence of a bond, or other security
to the cemetery board for payment of the cost of restoring the leased
premises to a condition suitable for use for cemetery purposes at the
end or earlier termination of the term of the lease, including but not
limited to the cost of removing any and all buildings and structures
that may then be located on the leased premises and will not be
retained. Any such bond shall be issued by an entity authorized to do
business in the state of New York, and any irrevocable letter of credit
or a certificate of deposit shall be from a New York state or federally
chartered bank, trust company, savings bank or savings and loan
association that is qualified to do business in the state of New York
and insured by the federal deposit insurance corporation.
(10) The land proposed to be leased will not be used for any activity
that would be disruptive to cemetery operations or that would have a
significant impact on cemetery traffic.
(11) If the proposed use or activity arising therefrom could disturb
normal and usual cemetery activities, the proposed lease limits the
hours of activity.
(12) The proposed lease will not include the manufacture or disposal
of hazardous material or the use or storage of hazardous material in
violation of any law or otherwise create a significant risk of
environmental harm to the cemetery property.
(13) The proposed lease may permit assignment or sub-leases, including
sub-leasing and assignment of space on cell towers to communications
providers, provided the original lease remains in effect and the use
remains the same.
(c) The following uses are deemed to comply with subparagraph ten of
paragraph (b) of this section:
(1) Communications service facilities, also known as cell towers;
(2) Solar panels; and
(3) Energy storage equipment, as defined in section four hundred
ninety-nine-aaaa of the real property tax law.
(d) For any lease involving related party transactions pursuant to
section seven hundred fifteen of this chapter, the cemetery board may
set reasonable reporting requirements that would disclose any financial
relationship between the lessor and lessee related to the leased
property.
(e) Any material modification, alteration or expansion of the lease or
additions of any infrastructure, structures or buildings outside the
scope of the prior approval requires cemetery board approval.
(f) If the cemetery corporation intends that any infrastructure,
structures or buildings proposed under the lease be retained and used
for cemetery purposes after the lease terminates or expires, the
application to approve the lease shall also include an application for
approval of such infrastructure, structures or buildings as intended to
be used by the cemetery. The board shall render decision on the
application for a major alteration in conjunction with the decision on
the application to lease cemetery land. If that application is approved,
such infrastructure, buildings or structures shall be excluded from the
requirements of subparagraph nine of paragraph (b) of this section.
(g) The application shall include at least two written estimates of
the cost of removing the infrastructure, buildings and structures
excluding retained infrastructure and associated structures and
returning the land to a condition suitable for burial purposes at the
conclusion of the lease.
(h) (1) The cemetery board shall approve the type and amount of the
security which shall be maintained in full force and effect, in an
amount not less than that which was approved by the cemetery board,
until: (i) the leased premises shall have been restored to a condition
suitable for use for cemetery purposes at the end or earlier termination
of the term of the lease, (ii) any and all buildings and structures then
located on the leased premises shall have been removed, (iii) proof in
form acceptable to the cemetery board demonstrating that all costs of
such restoration and removal work have been paid in full and that no
person or entity performing labor or furnishing materials for such work
has filed a notice of mechanic's lien that shall have been delivered to
the cemetery board, provided however that a cemetery may contest such
lien as long as such contest prevents the foreclosure of a lien, and
(iv) if applicable, each governmental unit or agency that issued any
permit for such restoration and removal work shall have issued a
certificate of compliance or other similar instrument indicating that
such work has been completed in a due and proper manner. The parties
directed to perform the restoration and removal work contemplated by
this paragraph and as approved by the cemetery board shall not be
limited by the amount of the bond, letter of credit, or certificate of
deposit or by any inability to recover all or any part of such bond,
letter of credit, or certificate of deposit from the issuing surety,
bank, trust company, savings bank, or savings and loan association.
Neither the cemetery board nor the department of state shall be liable
to the tenant, the cemetery, or any other person or entity by reason or
any determination or approval made under this paragraph.
(2) Prior to the commencement of construction, the cemetery shall
submit proof to the cemetery board that such security in such amount is
in place.
(i) Leases for the following uses do not require cemetery board
approval:
(1) A lease or license to grow and harvest crops with a term less than
five years;
(2) A lease of a dwelling to the caretaker or other officer or
employee of the cemetery that is actually used and occupied as that
person's residence; and
(3) A renewal or assignment of an existing lease of existing
structures on land owned by the cemetery, not dedicated to cemetery
purposes and that was subject to a lease, provided that such purchase or
acquisition was approved by a court or the cemetery board, if such
renewal does not change the scope of the existing lease.
(j) All lease payments and other consideration received by the
cemetery corporation, less the necessary expenses incurred, shall be
deposited into the permanent maintenance fund established by the
cemetery corporation pursuant to paragraph (a) of section fifteen
hundred seven of this article, except that upon a showing of a need to
fund specific projects, maintain and preserve, or expand current
cemetery operations, the cemetery board may permit any portion of the
lease payments or other consideration to be used for such purposes, with
the remainder to be deposited to the permanent maintenance fund.
§ 1507. Trust funds.
(a) Maintenance and preservation; permanent maintenance fund; current
maintenance fund. Subject to rules and regulations of the cemetery
board: (1) Every cemetery corporation shall maintain and preserve the
cemetery, including all lots, plots and parts thereof. For the sole
purpose of such maintenance and preservation, every cemetery corporation
shall establish and maintain (A) a permanent maintenance fund, and (B) a
current maintenance fund. At the time of making the sale of a lot, plot
or part thereof, the cemetery corporation shall deposit not less than
ten per centum of the gross proceeds of the sale into the permanent
maintenance fund. An additional fifteen per centum of the gross proceeds
of the sale shall be deposited in the current maintenance fund. In
addition to the foregoing, at the time the cemetery corporation receives
payment for the performance of an interment or inurnment, the cemetery
corporation shall collect and deposit into the permanent maintenance
fund the sum of thirty-five dollars. (2) The permanent maintenance fund
is hereby declared to be and shall be held by the corporation as a trust
fund, for the purpose of maintaining and preserving the cemetery,
including all lots, crypts, niches, plots, and parts thereof. The
principal of such fund shall be invested in such securities as are
permitted for the investment of trust funds by section 11-2.3 of the
estates, powers and trusts law. The income in the form of interest and
ordinary dividends therefrom shall be used solely for the maintenance
and preservation of the cemetery grounds. In addition, in any year, the
governing board of a qualified corporation, as defined below, may
appropriate for expenditure solely for the maintenance and preservation
of the cemetery grounds, and treat as income for all purposes, an amount
of trust principal equal to the excess, if any, of a percentage of the
fair market value of the principal of the trust, as of the last day of
the cemetery's immediately preceding fiscal year, as is prudent under
the standard established by article five-A of this chapter, the prudent
management of institutional funds act over interest and ordinary
dividends received in such year; provided, however, that an
appropriation of an amount (the safe harbor amount) of trust principal
equal to the excess of up to four percent of the fair market value of
the principal of the trust, as of the last day of the cemetery's
immediately preceding fiscal year over interest and ordinary dividends
received in such year shall be deemed to be prudent in all events. A
"qualified corporation" means a cemetery corporation which adopts a
written investment policy setting forth guidelines on investments and
delegation of management and investment functions in accord with the
standards of article five-A of this chapter. If a cemetery corporation
seeks to appropriate any percentage of the principal of the permanent
maintenance fund in accordance with this subparagraph, the cemetery
corporation shall provide notice of such proposed appropriation and
provide a copy of its written investment policy by certified mail to the
cemetery board not less than sixty days in advance of such proposed
appropriation and shall disclose such appropriation as part of and in
addition to their annual reporting requirements as defined in section
fifteen hundred eight of this article, setting forth the amount of
principal to be appropriated for such expenditure and its effect on the
permanent maintenance fund. Such proposed appropriation shall become
effective sixty days after receipt of such notice, unless the proposed
appropriation exceeds the safe harbor amount or the written investment
policy is not provided or is not prepared in accordance with the
standards of article five-A of this chapter, and the cemetery board
within such sixty-day period notifies the cemetery corporation that the
board objects to the proposed appropriation. Except to the extent that
principal is utilized as the result of the foregoing, all principal of
the permanent maintenance fund shall remain inviolate, with the further
exception that, upon application to the supreme court in a district
where a portion of the cemetery grounds is located, the court may make
an order permitting the principal or a part thereof to be used for the
purpose of current maintenance and preservation of the cemetery or
otherwise. Such application may be made by the cemetery board on notice
to the corporation or by the corporation on notice to the cemetery
board. Unless the cemetery can clearly demonstrate that it lacks
sufficient future revenue to make repayment, any such allowance from the
permanent maintenance fund shall be in the form of a loan, and the court
shall determine the method for repayment of such a loan by the cemetery
to the fund. If the cemetery clearly demonstrates it lacks sufficient
future revenue to make repayment such allowance from the permanent
maintenance fund shall be in the form of a grant that the cemetery is
not required to repay into its permanent maintenance fund. A cemetery,
including a surviving cemetery following a merger or consolidated
cemetery following a consolidation, may seek a modification of the
method of repayment, or conversion of a loan to a grant, if the cemetery
can clearly demonstrate that the cemetery merged or consolidated into
the surviving cemetery will not produce sufficient future revenue to
make repayment under the existing loan. (3) The current maintenance
fund shall be used and applied for the sole purpose of ordinary and
necessary expenses of the care and maintenance of the cemetery. When all
burial rights in the cemetery have been conveyed, the fund remaining on
deposit or to the credit of the current maintenance fund shall be
transferred into the permanent maintenance fund. (4) The percentage of
the proceeds of sales required to be deposited in the permanent
maintenance fund or current maintenance fund by a particular cemetery
corporation may be increased or diminished by order of the supreme court
in a district where any portion of the cemetery is located. Such
application may be made by the cemetery board on notice to the
corporation or by the corporation on notice to the cemetery board.
(b) Perpetual care of lots. (1) Upon the application of a prospective
purchaser of any lot, plot or part thereof and upon payment of the
purchase price and the amount fixed as a reasonable charge for the
perpetual care of any lot, plot or part thereof, every cemetery
corporation shall include with the deed of conveyance an agreement
perpetually to care for such lot, plot, or part thereof, to the extent
that the income derived by the corporation from such amount will permit.
(2) Such corporation also, upon the application of an owner or of the
executor or administrator of a deceased owner of any lot and upon the
payment of the amount fixed as a reasonable charge for the perpetual
care of such lot, shall, and upon the application of any other person
and the payment of such amount, may enter into a like agreement with
him. Such agreement shall be executed and may be recorded in the same
manner as a deed. (3) Any corporation organized under or subject to the
provisions of this section may enter into an agreement in writing with
any executor or executors, trustee or trustees, under a last will and
testament to whom there has heretofore been, or may hereafter be,
bequeathed a sum for the perpetual care of any lot, plot or part thereof
in any such cemetery or with any administrator or administrators with
the will annexed under any such will perpetually to care for such lot,
plot or part thereof under the provisions of the terms of such last will
and testament, and subject in all cases to the approval of the
surrogate's court having jurisdiction over such trust estate. Such
approval may be evidenced by the written endorsement of the surrogate on
a duplicate original of such agreement filed in the surrogate's court.
In case the surrogate shall approve such agreement any such executor,
trustee or administrator with the will annexed thereupon shall pay over
to the treasurer of such perpetual care fund of such cemetery
corporation any moneys remaining or being in his hands belonging to such
trust, and upon making such payment and accounting therefore to the
surrogate's court may be discharged from said trust as such executor,
trustee or administrator with the will annexed.
(c) Perpetual care fund. (1) Every cemetery corporation and every
religious corporation having charge and control of a cemetery which
heretofore has been or which hereafter may be used for burials, shall
keep separate and apart from its other funds, all moneys and property
received by it, whether by contract, in trust or otherwise, for the
perpetual care and maintenance of any lot, plot or part thereof in its
cemetery, and all such moneys or property so received by any such
corporation are hereby declared to be, and shall be held by the
corporation as trust funds. Any moneys and property so received, unless
otherwise provided in the instrument under which such moneys or property
were received, shall be kept in a separate fund to be known as the
perpetual care fund. (2) The principal of such funds, whether kept in
the perpetual care fund or otherwise, and unless already so invested
when received, shall be invested within a reasonable time after receipt
thereof, and kept invested, in such securities as are permitted for the
investment of trust funds by sections 11-2.2 and 11-2.3 of the estates,
powers and trusts law. The income arising therefrom shall be used solely
for the perpetual care and maintenance of the lot or plots or parts
thereof for which such income has been provided. In addition, in any
year, the governing board of a qualified corporation, as defined below,
may appropriate for expenditure solely for the maintenance and
preservation of the cemetery grounds, and treat as income for all
purposes, an amount of trust principal equal to the excess, if any, of a
percentage of the fair market value of the principal of the trust, as of
the last day of the cemetery's immediately preceding fiscal year, as is
prudent under the standard established by article five-A of this
chapter, the prudent management of institutional funds act over interest
and ordinary dividends received in such year; provided, however, that an
appropriation of an amount (the safe harbor amount) of trust principal
equal to the excess of up to four percent of the fair market value of
the principal of the trust, as of the last day of the cemetery's
immediately preceding fiscal year over interest and ordinary dividends
received in such year shall be deemed to be prudent in all events. A
"qualified corporation" means a cemetery corporation which adopts a
written investment policy setting forth guidelines on investments and
delegation of management and investment functions in accord with the
standards of article five-A of this chapter. If a cemetery corporation
seeks to appropriate any percentage of the principal of the perpetual
care fund in accordance with this subparagraph, the cemetery corporation
shall provide notice of such proposed appropriation and provide a copy
of its written investment policy by certified mail to the cemetery board
not less than sixty days in advance of such proposed appropriation and
shall disclose such appropriation as part of and in addition to their
annual reporting requirements as defined in section fifteen hundred
eight of this article, setting forth the amount of principal to be
appropriated for such expenditure and its effect on the perpetual care
fund. Such proposed appropriation shall become effective sixty days
after receipt of such notice, unless the proposed appropriation exceeds
the safe harbor amount or the written investment policy is not provided
or is not prepared in accordance with the standards of article five-A of
this chapter, and the cemetery board within such sixty-day period
notifies the cemetery corporation that the board objects to the proposed
appropriation. (3) The corporation may, for the purpose of investing and
reinvesting such funds, add the same to any similar trust fund or funds
and apportion shares or interest to each trust fund, showing upon its
records at all times every share or interest. (4) The corporation may
accept in trust for the perpetual care of a lot, plot or part thereof in
its cemetery, property not made eligible for the investment of trust
funds under the foregoing provisions of this subdivision and may retain
such property in the form in which received, separate and apart from the
perpetual care fund, if directed so to do by the instrument under which
such property is received, so long as such property remains in the form
in which it was received; but whenever such property is sold or
otherwise disposed of, the proceeds of such sale or other disposition
shall be invested in the manner heretofore provided in this subdivision
for the investment of trust funds. The exchange of stock or evidences of
indebtedness issued by a corporation for stock or evidences of
indebtedness of the same corporation, or for stock, evidences of
indebtedness, warrants or script received as a result of merger,
consolidation or reorganization of such corporation, or the receipt of
additional stock or evidences of indebtedness of such corporation, as a
distribution by such corporation, shall not be deemed to be a
disposition of the property originally received in trust, and such
exchanged or additional property may be retained in place and stead of
the property originally received, and under the same conditions. The
corporation shall keep accurate accounts of all funds for the perpetual
care and maintenance of cemetery lots, plots or parts thereof, separate
and apart from its other funds. A copy of the record pertaining to each
such perpetual care fund shall be at all times available at the office
of the corporation during usual business hours, for inspection and copy
by any owner of an endowed lot or his representative.
(d) Perpetual care fund; allocation of income and cost of care and
maintenance. On or before the fifteenth day of March in each calendar
year the officers of every cemetery corporation shall fix and determine
that portion of the income on the investment of the principal of the
perpetual care fund during the calendar or fiscal year immediately
preceding, to be apportioned to each separate lot or part thereof for
which a perpetual care agreement has been made. The cost during such
previous calendar or fiscal year of the care of each lot or part thereof
shall be allocated and charged against the income so apportioned to it.
Any excess of the income so apportioned over and above the allocated
cost of the care and maintenance of such lot or part thereof shall be
credited to such lot or part thereof, to be used in any future years to
make up the deficiency if the income apportioned to such lot or part
thereof should, in any year since September first, nineteen hundred
forty-nine, or in any future year, fall, or have fallen, below the cost
of care thereof.
(e) Designation of fiduciary corporation by directors or trustees of
cemetery corporation to act as custodians of funds. Notwithstanding the
provisions of any other law, the directors or trustees of cemetery
corporations are hereby authorized to designate a bank or trust company
to act as custodian and trustee of any or all of the respective funds of
such cemetery corporation received by it for the perpetual care of lots
in the cemetery thereof pursuant to paragraph (b), of this section, the
permanent maintenance of such cemetery pursuant to paragraph (a) of this
section, and for special purposes pursuant to paragraph (f) of this
section. Such corporate trustee shall be designated by a resolution duly
adopted by the board of directors or trustees and approved by a justice
of the supreme court of the judicial district in which the cemetery of
said corporation is located or the cemetery board; and the directors or
trustees of such cemetery corporation may, with the approval of the
justice of the supreme court, revoke such trust, and either take over
such trust fund or name another trustee to handle the same, but if not
so revoked, such trust shall be perpetual. Any bank or trust company
accepting any such cemetery fund shall keep the same separate from all
other funds, except that it may, irrespective of any provision contained
in this article invest the same in a legal common trust fund or in
shares of a mutual trust investment company organized under the banking
law, and shall pay over the net income to the directors or trustees of
the cemetery corporation by whom it shall be expended and applied to the
purpose for which such trust fund was paid to the cemetery corporations
and accounted for in accordance with such paragraphs (a), (b) and (f) of
this section.
(e-1) Monument maintenance fund. (1) A cemetery corporation may,
subject to the approval of the cemetery board, establish and maintain a
monument maintenance fund. Such a fund is hereby declared to be and
shall be held by the cemetery corporation as a trust fund, for the
purpose of providing notice if such monuments are damaged or defaced by
an act of vandalism and for the restoration of such monuments. Two or
more cemetery corporations may establish a joint monument maintenance
fund.
(2) The principal of the fund shall be invested in securities
permitted for the investment of trust funds by sections 11-2.2 and
11-2.3 of the estates, powers and trusts law. The principal of such fund
shall remain inviolate, except that upon application to the cemetery
board, which may make an order permitting the principal or a part
thereof to be used for the purpose of restoring monuments damaged or
defaced by an act of vandalism. The income arising from such investment
shall be used solely for the costs and expenses resulting from an act of
vandalism against monuments in such cemetery.
(3) The fund shall be financed by a charge levied at the time of each
interment at a rate established by each cemetery creating such a fund,
subject to cemetery board approval pursuant to section fifteen hundred
nine of this article. Such a charge shall be levied in addition to the
approved rates for interment. The fund may also accept gifts, donations
and bequests.
(4) Each cemetery creating such a fund shall promulgate rules and
regulations to administer the fund, subject to cemetery board approval
pursuant to section fifteen hundred nine of this article. Such rules
shall include the conditions under which the income from such fund may
be properly expended.
(5) The cemetery corporation shall keep accurate accounts of all
moneys for the fund, separate and apart from its other funds.
(f) Acquisition of property for special purposes and in trust. (1) A
cemetery corporation may acquire, otherwise than by condemnation, real
or personal property, absolutely or in trust, in perpetuity or
otherwise, and shall use the same or the income therefrom in pursuance
of the terms of the instrument by which it was acquired, for the
following purposes only: (i) The improvement or embellishment, but not
the enlargement, of its cemetery; (ii) The construction, preservation or
replacement of any building, structure, fence, wall, or walk therein;
(iii) The erection, renewal or preservation of any tomb, monument,
stone, fence, wall, railing or other erection or structure on or around
its cemetery or any lot or plot therein; (iv) The planting or
cultivation of trees, grass, shrubs, flowers or plants in or about its
cemetery or any lot or plot therein; (v) The construction, operation,
maintenance, repair and replacement of a crematory or columbarium or
both in its cemetery; (vi) The care, keeping in order and embellishment
of any lot, plot or part thereof or the structures thereon, in its
cemetery, as prescribed in the instrument transferring such property to
the cemetery corporation, or by the person or persons from time to time
having possession, care and control of such lot, plot or part thereof,
as the case may be. (2) All moneys and property received by a cemetery
corporation in trust under this subdivision, unless otherwise provided
in the instrument under which such moneys or property were received and
unless already so invested when received, shall be invested within a
reasonable time after the receipt thereof, and kept invested in such
securities as are permitted for the investment of trust funds by
sections 11-2.2 and 11-2.3 of the estates, powers and trusts law. The
corporation may, for the purpose of investing and reinvesting such
funds, add the same to any similar trust fund or funds and apportion
shares or interests to each trust fund, showing upon its records at all
times every share or interest. The cemetery corporation shall maintain a
record for each such trust fund. Such record shall be at all times
available at the office of the corporation during usual business hours,
for inspection and copy by any owner of an endowed lot or his
representative.
(g) Trust for the care of burial ground. A cemetery corporation,
incorporated under or by a general or special law, may receive tangible
property, securities or funds in trust, and hold and invest the same and
apply the principal or income thereof, in accordance with the terms of
the trust, for the purpose of repairing, maintaining, improving or
embellishing a burial ground, not constituting a part of the cemetery of
such cemetery corporation, and located outside of a city of more than
one million inhabitants and within ten miles of the cemetery of the
corporation accepting such trust. The directors of such corporation, or
a majority of them and the treasurer, shall annually within sixty days
after the close of each calendar or fiscal year, make, sign and shall
file at the office of the corporation a detailed accounting and report
of such trust funds held under this subdivision and the use made of such
funds or of the income thereof for the preceding calendar or fiscal
year, which shall include among other things, properly itemized, the
securities in which the same is then invested, and any purchases, sales
or other changes made therein during the period covered by such report.
Such accounting and report shall be at all times available at the office
of the corporation, during usual business hours, for inspection and copy
by any lot owner or any contributor to such trust fund.
(h) Vandalism, abandonment and monument repair or removal. (1)
Cemeteries incorporated under this article shall contribute to a fund
created pursuant to section ninety-seven-r of the state finance law for
the maintenance of abandoned cemeteries, for the restoration of property
damaged by acts of vandalism, and for the repair or removal of monuments
or other markers not owned by the cemetery corporation that have fallen
into disrepair or dilapidation so as to create a dangerous condition.
Such fund shall be administered by a board of trustees comprised of the
secretary of state, the attorney general and the commissioner of health,
or their designees, who shall serve without additional compensation.
(2) The fund shall be financed by contributions by the cemetery
corporations of not more than five dollars ($5.00) per interment or
cremation in a manner to be determined by the New York state cemetery
board. No contributions shall be collected upon the interment of the
cremains of a deceased person where a contribution was collected upon
cremations.
(3) The moneys of the fund shall be expended equally for the
maintenance of abandoned cemeteries previously owned by a corporation
incorporated pursuant to this chapter or the membership corporations law
and the repair of cemetery vandalism damage and the repair or removal of
monuments or other markers not owned by the cemetery corporation,
provided, however, that the cemetery board may determine that
circumstances necessitate an unequal distribution due to specific needs
and may provide for such distribution. For purposes of this section, the
maintenance of abandoned cemeteries may include the ordinary and
necessary care of a cemetery, such as the construction of cemetery
fences, placement of cemetery lights, removal of grass and weeds,
demolition or restoration of any buildings or structures in disrepair,
the refilling of graves, the repair or removal of monuments or other
markers not owned by the cemetery corporation that have fallen into
disrepair or dilapidation so as to create a dangerous condition,
replacement of cemetery doors and locks, and the care of crypts, niches,
grave sites, monuments, and memorials paid for by means of the general
fund or special fund or the income applied from the permanent
maintenance fund, perpetual care fund or monument maintenance fund of
the abandoned cemetery. For the purposes of this paragraph, the term
"abandoned cemetery" may include cemeteries in imminent danger of
abandonment as determined by the New York state cemetery board.
(4) Authorization for payments by the fund for maintenance of an
abandoned cemetery shall be made by the secretary of state only upon
approval by the cemetery board of an application by a municipality or
other solvent not-for-profit cemetery corporation, or a solvent
not-for-profit cemetery corporation that merges with an abandoned
cemetery in a city pursuant to section fifteen hundred six-d of this
article, for fair and reasonable expenses required to be made by the
municipality, other solvent not-for-profit cemetery corporation for
maintenance of an abandoned cemetery, or a solvent not-for-profit
cemetery corporation that merges with an abandoned cemetery in a city
pursuant to section fifteen hundred six-d of this article; provided,
however, that the cemetery board shall not approve any such application
unless the municipality, other solvent not-for-profit cemetery
corporation, or solvent not-for-profit cemetery corporation that merges
with an abandoned cemetery in a city pursuant to section fifteen hundred
six-d of this article acknowledges that the responsibility for
restoration and future care, preservation, and maintenance of such
cemetery has been assumed by the municipality or other solvent
not-for-profit cemetery corporation, or the solvent not-for-profit
cemetery corporation that merges with an abandoned cemetery in a city
pursuant to section fifteen hundred six-d of this article. For the
purposes of this paragraph, such cemetery shall always be deemed an
abandoned cemetery.
(5) Authorization for payments by the fund for the repair of vandalism
damage shall be made by the secretary of state only on approval by the
New York state cemetery board which shall determine:
(i) that an act of vandalism to the extent described by the cemetery
corporation did take place;
(ii) that either a written report of the vandalism was filed with the
local police or sheriff's department, or, that the cemetery, upon
consent of the division, made a determination not to file the report
because the publicity generated by filing the report would have adverse
consequences for the cemetery;
(iii) that the cost of repairs is fair and reasonable; and
(iv) that the cemetery corporation has been unable to obtain funds
from the lot owner, his spouse, devisees or descendants within a
reasonable period of time nor are there adequate funds in the cemetery
corporations monument maintenance fund, if such a fund has been
established by the cemetery.
(6) Authorization for payments by the fund for the repair or removal
of monuments or other markers not owned by the cemetery corporation
shall be made by the secretary of state only on approval by the New York
state cemetery board on application by the cemetery corporation showing:
(i) that the monuments or markers are so badly out of repair or
dilapidated as to create a dangerous condition;
(ii) that the cost of remedying the condition is fair and reasonable;
(iii) that the cemetery corporation has given not less than sixty days
notice to the last known owner to repair or remove the monument or other
marker and the said owner has failed to do so within the time prescribed
in said notice.
(7) The New York state cemetery board shall promulgate rules defining
standards of maintenance, as well as what type of vandalism or out of
repair or dilapidated monuments or other markers shall qualify for
payment of repair or removal by the fund and the method and amount of
payment of contributions described in subparagraph two of this paragraph
upon the recommendation of the state cemetery board citizens advisory
council created by section fifteen hundred seven-a of this article
(State cemetery board citizens advisory council). The New York state
cemetery board shall approve or deny any application made pursuant to
this section no later than sixty days after receipt of a completed
application.
(8) Nothing contained in this paragraph is to be construed as giving a
cemetery corporation an "insurable interest" in monuments or other
embellishments on a plot, lot or part thereof, nor is it meant to imply
that the cemetery corporation has any responsibility for repairing
vandalism damage not covered by this fund, nor for repairing or removing
out of repair or dilapidated monuments or other markers not owned by the
cemetery corporation, nor shall it constitute the doing of an insurance
business.
§ 1507-a. State cemetery board citizens advisory council.
(a) There is hereby created a state cemetery board citizens advisory
council, to study, investigate, monitor and make recommendations with
respect to the maintenance and operation of the state cemetery vandalism
restoration, monument repair or removal and administration fund. Such
advisory council shall study and investigate incidents of cemetery
abandonment, vandalism and desecration, monitor the administration of
such fund and recommend changes to improve the management of and
expenditures from the state cemetery vandalism restoration, monument
repair or removal and administration fund.
(b) The advisory council shall be composed of a member designated by
the secretary of state, a member designated by the attorney general, a
member designated by the commissioner of health, a member designated by
the comptroller and a member designated by the commissioner of taxation
and finance. The appointees to the advisory council shall not be
employees of the department of state, department of law, department of
health, department of audit and control or department of taxation and
finance. Each of the members shall serve for a term of two years,
provided, however, that the first appointments by the comptroller and
commissioner of taxation and finance shall serve for a term of one
year. Vacancies occurring other than by expiration of term shall be
filled in the same manner as the original appointments for the balance
of the unexpired term. Persons designated or appointed to the advisory
council shall have demonstrated a long-standing interest, knowledge and
experience in the care and preservation of gravesites. One member shall
be elected chairman of the advisory council by a majority vote of the
members of such council.
(c) The members of the advisory council shall receive no compensation
for their services but shall be reimbursed for travel expenses incurred
in the performance of their duties.
(d) The advisory council shall meet at least quarterly at the call of
the chairman.
(e) The advisory council may request and shall receive from any
department, division, board, bureau, commission, agency, public
authority of the state or any political subdivision thereof such
assistance and data as will enable it properly to carry out its
activities hereunder and effectuate the purposes set forth herein.
§ 1508. Reports by cemeteries.
(a) Annual report. Each cemetery corporation shall, on or before the
fifteenth day of March after the end of its calendar year, or if on a
fiscal year the seventy-fifth day after the close of such year, file
with the cemetery board (1) a statement as to the condition of the
permanent maintenance trust fund and a schedule of the assets of such
fund. (2) a statement as to the condition of the perpetual care fund and
a schedule of the assets of such fund. (3) a statement as to the
condition of the moneys and properties received by the cemetery
corporation in trust under the provisions of subdivisions (f) and (g) of
section fifteen hundred seven of this article. (4) a statement of the
gross proceeds of the sale of plots, lots and parts thereof, graves,
niches and crypts showing the disposition of such proceeds and (5) a
statement of changes in the number and amount of certificates of
indebtedness in accordance with the provisions of paragraph three of
subdivision (a) of section fifteen hundred eleven of this article. (6) a
statement as to the condition of the monument maintenance fund, if any,
and a schedule of the assets of such fund.
(b) Additional reports. The cemetery board may address to any cemetery
corporations or its officers or any person any inquiry in relation to
the transactions or conditions of the cemetery corporation or any matter
connected therewith, and may require that a reply be verified. Failure
to submit such reply within the time designated by the cemetery board
shall subject the corporation, officer or person so addressed to the
penalties provided in subdivision (d) hereof.
(c) Cemetery payment for administration. To defray the expenses of
examination and administration, each cemetery corporation shall not
later than March fifteenth in each calendar year, pay to the cemetery
board the sum of three dollars per interment and cremation or natural
organic reduction in excess of fifteen interments, cremations, or
natural organic reductions for the preceding calendar year. No
contribution shall be collected upon the interment of the remains of a
deceased person where a contribution was collected upon cremation or
natural organic reduction.
(d) Failure to file report. Any cemetery corporation or individual
failing to file any report or any schedule of rules, regulations and
charges required by this article shall forfeit to the people of the
state the sum of one hundred dollars for each day that each such report
shall be delayed or withheld, except that the cemetery board may extend
the time for filing any such report and may waive payment of any penalty
or part thereof provided herein.
§ 1509. Cemetery rules and regulations; charges and lot tax assessments.
(a) Rules and regulations. The directors of a cemetery corporation
shall make reasonable rules and regulations for the use, care,
management and protection of the property of the corporation and of all
lots, plots and parts thereof; for regulating the dividing marks between
the lots, plots and parts thereof; for prohibiting or regulating the
erection of structures upon such lots, plots or parts thereof; for
preventing unsightly monuments, effigies and structures within the
cemetery grounds, and for the removal thereof; for regulating the
introduction and care of plants, trees and shrubs within such grounds;
for the prevention of the burial in a lot, plot or part thereof, of a
body not entitled to burial therein; for regulating or preventing
disinterments; for regulating the conduct of persons while within the
cemetery grounds; for excluding improper persons and preventing improper
assemblages therein. The directors may prescribe penalties for the
violation of any such rule or regulation, not exceeding twenty-five
dollars for each violation, which shall be recoverable by the
corporation in a civil action.
(b) Charges for services. The directors of a cemetery corporation
shall fix and make reasonable charges for any acts and services ordered
by the owner and rendered by the corporation in connection with the use,
care, including perpetual, annual and special care, management and
protection of lots, plots and parts thereof. In determining said charges
the directors shall consider the propriety and the fair and reasonable
cost and expense of rendering the services or performing the work for
which such charges are made.
(c) Cemetery board approval. (1) A cemetery corporation's rules,
regulations and original charges shall not become effective unless and
until approved by the cemetery board as hereinafter provided. (2) The
directors of any cemetery corporation, organized on or before August
thirty-first, nineteen hundred forty-nine, shall file in the office of
the cemetery board the name and address of the corporation together with
its rules, regulations and charges, and a statement showing the basis
upon which they were made, within ninety days after the time this
section as hereby amended takes effect. The directors of any cemetery
corporation organized on or after September first, nineteen hundred
forty-nine, shall file in the office of the cemetery board the name and
address of the corporation together with its rules, regulations and
charges, and a statement showing the basis on which they were made,
within ninety days after the date of the filing of the certificate of
incorporation in the department of state. (3) Within six months after
the date of such filing, the cemetery board shall make and file in its
office an order approving, disapproving or amending such rules,
regulations and original charges in whole or part. Such rules,
regulations and charges, if approved with or without amendment, shall
become effective as approved upon the filing of such order by the
cemetery board in its office. The cemetery board shall notify the
directors of the action taken by it and its reasons therefor by
registered mail addressed to the corporation at its principal office. In
making its determination as to the schedule of charges the cemetery
board shall consider the propriety and the fair and reasonable cost and
expense of rendering the services or performing the work for which such
charges are made. In passing upon the rules and regulations, the
cemetery board shall consider the interests of the members of the
corporation and the public interest in the proper maintenance and
operation of burial grounds. (4) The rules, regulations and charges of
any cemetery corporation existing on or before August thirty-first,
nineteen hundred forty-nine, shall remain in effect until the cemetery
board files in its office an order pursuant to the provisions of
subdivision three hereof. A cemetery corporation organized on or after
September first, nineteen hundred forty-nine, may enforce the rules,
regulations and charges filed by it in the office of the cemetery board
until the cemetery board files in its office an order pursuant to the
provisions of subdivision three hereof.
(d) Services not in list of charges. In the event that a cemetery
corporation provides any services not included in the list of charges,
and for which a charge cannot reasonably be fixed in advance, the
charges made therefor shall be reviewable by the cemetery board. In the
event that the cemetery board determines that an excessive, unauthorized
or improper charge has been made for such services or that the services
have not been properly performed, it may direct the cemetery corporation
to pay to the person from whom such charge was collected a sum
equivalent to three times the amount of the excess as determined by the
cemetery board, or in the case of work not properly performed, it may
direct the cemetery corporation to perform the work properly.
(e) Amendment and modification. (1) The rules and regulations of a
cemetery corporation may be amended or added to by the corporation by
filing such proposed amendments or additions in the office of the
cemetery board but no such amendment or addition shall be effective
unless and until an order approving such amendments or additions is made
by the cemetery board and filed in its office in the same manner as that
applicable to the original filing of the rules, regulations and charges
of the cemetery corporation. (2) The charges of a cemetery corporation
may be amended or added to by the corporation by filing an application
containing such proposed amendment or addition in the office of the
division of cemeteries and shall be processed in accordance with
subparagraph three of this paragraph. The cemetery board shall consider
the propriety and the fair and reasonable costs and expense of rendering
the services or performing the work for which such charges are made. The
effective rules, regulations or charges of a cemetery corporation may be
amended, modified or vacated by the cemetery board at any time. The
cemetery board shall notify the directors of the action taken by it and
its reasons therefor by registered or certified mail addressed to the
corporation at its principal office. In amending, modifying or vacating
any rule, regulation or charge, the cemetery board shall be guided by
the standards set forth in subparagraph three of paragraph (c) of this
section. (3) Any application setting forth the proposed amendment of, or
addition to, the charges of a cemetery corporation as provided for by
subparagraph two of this paragraph shall be processed in accordance
either with clauses A, B and C of this subparagraph or in accordance
with clause D of this subdivision.
A. Within thirty-five days following receipt of the application, the
board or the division may request from the cemetery corporation any
additional information or documentation deemed necessary to complete
such application, and such application shall not be complete for the
purposes of compliance with this subparagraph until the requested
information has been received. If no such request is made, the
application shall be deemed to be complete on the thirty-fifth day after
its receipt by the division.
B. An application setting forth the proposed amendment of, or addition
to, the charges of a cemetery corporation shall be deemed to be approved
for any cemetery corporation holding, including unrestricted funds, cash
and investments totalling less than four hundred thousand dollars, if
the board does not object to the proposed charges within sixty days
following: (i) the date on which the application shall have been deemed
to be complete or (ii) the date on which the requested information
necessary to complete the application shall have been received,
whichever is later. If the board objects to the proposed charges, it
shall notify the directors in writing with the reasons therefor, such
notice to be mailed by registered or certified mail to the corporation
at its principal office, not less than three business days before the
end of such sixty day period. If the board approves such amendment of or
addition to the charges, it shall do so by order.
C. An application setting forth the proposed amendment of, or addition
to, the charges of a cemetery corporation shall be deemed to be approved
for any cemetery corporation holding, including unrestricted funds, cash
and investments totalling more than four hundred thousand dollars, if
the board does not object to the proposed charges within ninety days
following: (i) the date on which the application shall have been deemed
to be complete or (ii) the date on which the requested information
necessary to complete the application shall have been received,
whichever is later. If the board objects to the proposed charges, it
shall notify the directors in writing with the reasons therefor, such
notice to be mailed by registered or certified mail to the corporation
at its principal office, not less than three business days before the
end of such ninety day period. If the board approves such amendment of
or addition to the charges, it shall do so by order.
D. A cemetery may apply to the cemetery board for an increase in any
or all of its approved charges by submitting a schedule to the cemetery
board showing its currently approved charges and the proposed charges
after applying the employment cost index to said charges as it appears
in the United States Department of Labor, Bureau of Labor Statistics,
Series ECU10001A, not seasonally adjusted, total compensation, civilian,
twelve month percent change for all workers schedule or any subsequent
schedule that may be adopted by the United States Department of Labor,
Bureau of Labor Statistics, as a replacement for the aforementioned
schedule. Any application by a cemetery under this subparagraph will
prohibit application under subparagraph two of this paragraph for one
year from the effective date of the approved increase under this
subparagraph. An application setting forth the proposed changes in
charges shall be deemed to be approved if the board does not object to
the proposed charges within sixty-days following the date on which the
application is submitted by a cemetery. If the board objects to the
proposed charges, it shall notify the directors in writing with the
reasons therefore, such notice to be mailed to the corporation at its
principal office, not less than three business days before the end of
such sixty day period. If the board approves such amendment of or
addition to the charges, it shall do so by order. The cemetery board
shall not approve application by a cemetery under this subparagraph if
(i) the proposed percentage increases exceed the employment cost index
percentages as provided in this subparagraph; (ii) there have been
invasions of the permanent maintenance fund by the cemetery that have
not been repaid or are not currently being repaid; (iii) the cemetery is
currently not in compliance with any court order or any cemetery board
order that is not under judicial review under paragraph (d) of section
1504; (iv) the cemetery has not filed in a timely manner its annual
reports with the division of cemeteries as required under section 1508
(Reports by cemeteries); (v) all assessments as required under paragraph
(c) of section 1508 (Reports by cemeteries) and vandalism fund payments
as required under subparagraph two of paragraph (h) of section 1507
(Trust funds) have not been paid.
(f) Lot tax assessment. (1) If the funds of a cemetery corporation
applicable to the improvement and care of its cemetery, or applicable to
the construction of a receiving vault therein for the common use of lot
owners, be insufficient for such purposes, the directors of the
corporation, not oftener than once in any year and for such purposes
only, may, upon the prior approval of the cemetery board, which shall
determine the necessity and propriety thereof, levy a tax on some basis
to be determined by the directors of such corporation, but no such tax
shall exceed two dollars on any one lot, except that with the written
consent of two-thirds of the lot owners or by the vote of a majority of
the lot owners present at an annual meeting, or at a special meeting
duly called for such purpose, such tax may be for an amount which shall
not exceed a total of five dollars per annum per lot, and the tax on any
one lot shall not exceed five dollars per annum but the taxes may be
levied upon each lot in the first instance for a sum sufficient for the
improvement and care of the lot, but no greater sum than five dollars
shall be collected in any one year. The whole tax levied may be
collected in sums of five dollars in successive years in the manner
herein provided. (2) Notice of such tax shall be served on the lot
owners or where two or more persons are owners of the same lot, on one
of them, either personally, or by leaving it at his residence, with a
person of mature age and discretion, or by mail, if he resides in a
city, town or village where the office of the corporation is not
located, or in case the residence or whereabouts of the owner cannot be
ascertained, by publication once a week for four successive weeks in a
newspaper published in the town where such cemetery is located, or if no
newspaper is published in such town then in some newspaper published in
the county where such cemetery is located. (3) If such tax remain unpaid
for more than thirty days after the service of such notice, the
president and secretary of the corporation may issue a warrant to the
treasurer of the corporation, requiring him to collect such tax in the
same manner as school collectors are required to collect school taxes;
and such treasurer shall have the same power and be subject to the same
liabilities in executing such warrant as a collector of school taxes has
or is subject to by law in executing a warrant for the collection of
school taxes. (4) If the taxes so levied remain unpaid for five years
after the levying of such tax the amount thereof with interest shall be
a lien on the unused portion of the lot which is subject to such tax,
and no portion of the lot so taxed shall be used by the owner thereof
for burial purposes, while any such tax remains unpaid. (5) If at the
expiration of five years from the date of the service of the first
notice of assessment as herein provided, any such assessment or the
interest thereon shall remain unpaid, the corporation may sell the
unused portion of such lot at public auction upon the cemetery grounds,
in the following manner: If the person owning such lot resides within
the state, a written notice, under the seal of such cemetery
corporation, if it have a seal, and the hand of the president or
secretary thereof, stating the amount of such tax or taxes unpaid and
that such unused portion of such lot will be sold at a time therein to
be specified, not less than twenty days from the date of the service of
such notice, shall be personally served upon such owner; if such owner
is not a resident of the state, or if the place of his residence cannot
with due diligence be ascertained, or if, for any other reason
satisfactory to the court, personal service cannot with due diligence be
made upon such owner, such cemetery corporation, or any of its officers,
may present a duly verified petition stating the facts to the county
court of the county in which such cemetery lands are situated, or to the
supreme court, and such court may upon satisfactory proof, by its order,
direct the service of such notice in the manner provided by the civil
practice law and rules for the substituted service of a summons. The
president or secretary of such corporation, or any suitable and proper
person appointed by it or by the court, upon filing proof of publication
and service of such notice as provided by section three hundred fourteen
of the surrogate's court procedure act may make such sale, and such sale
may be adjourned from time to time for the accommodation of the parties
or for other proper reasons. Previous notice of such sale shall be
posted at the main entrance of the cemetery. Prior to such sale such
corporation shall cause such lot to be resurveyed and replotted showing
the part thereof not used for burial purposes and only such unused
portion shall be sold. The cemetery corporation may at any such sale
purchase any such lots or parts of lots. The surplus remaining after
paying all assessments, interest, cost and charges shall be set aside by
the corporation, as a fund for the care and improvement of the portion
of such lot that has been used for burial purposes. In case the proceeds
of such sale shall amount to more than thirty dollars the person making
it shall make his report, under oath, to the court, of the proceedings
and shall state the amount for which such lot was sold and that it was
sold to the highest responsible bidder, together with the names of the
purchasers, and the court may and in a proper case shall, by order,
confirm the sale; in all other cases the person making such sale shall
file in the office of the county clerk of the county in which the
cemetery lands are situated a like report duly verified; on the filing
of such order of confirmation or such report, as the case may be, the
ownership of the unoccupied portion of such lot shall vest in the
purchaser thereof. (6) The directors of any such corporation may make a
contract with a lot owner which shall provide for the payment by him of
an agreed gross sum in lieu of further taxes and assessments and that
upon the payment of such gross sum the lot of such owner shall be
thereafter exempt from taxes and assessments.
(g) Purchases through office of general services. Notwithstanding the
provisions of any general, special or local law, any officer or agent of
a cemetery corporation subject to the provisions of this article
authorized to make purchases of commodities and services may make such
purchases through the office of general services subject to such rules
as may be established from time to time pursuant to section one hundred
sixty-three of the state finance law; provided that any such purchase
shall exceed five hundred dollars and that the cemetery corporation for
which such officer or agent acts shall accept sole responsibility for
any payment due the vendor. All purchases shall be subject to audit and
inspection by the cemetery corporation for which made. Two or more
cemetery corporations may join in making purchases pursuant to this
section and, for the purposes of this section, such groups shall be
deemed a cemetery corporation.
§ 1510. Cemetery duties.
(a) Posting and distribution of rules, regulations, charges and
prices. The rules, regulations, charges, and prices of goods, lots,
plots or parts thereof shall be suitably printed and shall be
conspicuously posted by the corporation in each of its offices, if any,
and conspicuously displayed on any website the corporation maintains or
through which it conducts business. A printed copy of charges and prices
of goods, lots, plots or parts thereof shall be made available upon
request by any person for up to the actual price of the printing of the
copy. For each day in which the corporation fails to post or display the
rules, regulations, charges and prices the corporation shall be subject
to a penalty of twenty-five dollars which may be recovered in a civil
action by the cemetery board. For each instance in which the corporation
fails to make available a copy of the prices of goods, lots, plots, or
parts thereof, to a person who requests such copy, the corporation shall
be subject to a penalty of twenty-five dollars which may be recovered in
a civil action by the cemetery board. The cemetery board may waive the
payment of the penalty or any part thereof.
(b) Surveys and maps of cemetery. (1) Every cemetery corporation, from
time to time, as land in its cemetery may be required for burial
purposes, shall survey and subdivide such lands and make and file in the
office of the corporation a map thereof, open to public inspection,
delineating the lots or plots, avenues, paths, alleys and walks and
their respective designations; a true copy thereof shall upon its
written request, be filed with the cemetery board. Any unsold lots,
plots or parts thereof, in which there are no remains, by order of the
directors, may be resurveyed and altered in shape or size, and properly
designated on such map. (2) Every cemetery corporation shall provide
reasonable access to every lot, plot and grave. This provision shall not
be applicable where on September first, nineteen hundred forty-nine such
access cannot be provided without the disinterment of a body or bodies.
A cemetery corporation shall not permit or allow a body to be interred
hereafter in a path, alley, avenue or walk shown on the cemetery maps or
actually in existence. Nothing herein contained, however, shall prevent
a cemetery corporation in special cases from enlarging a lot by selling
to the owner thereof the access space next to such lot, and permitting
interments therein, provided reasonable access to such lot and to
adjoining lots is not thereby eliminated, and provided the approval of
the cemetery board shall have first been obtained.
(c) Record of burials, natural organic reductions or cremations. A
record shall be kept of every burial in the cemetery of a cemetery
corporation, showing the date of burial, the name, age, and place of
birth of the person buried, when these particulars can be conveniently
obtained, and the lot, plot, or part thereof, in which such burial was
made. A copy of such record, duly certified by the secretary of such
corporation, shall be furnished on demand and payment of such fees
therefor as are allowed the county clerk for certified copies of
records. Notwithstanding any other provision of this section, all
cemetery corporations which conduct cremations or natural organic
reductions shall maintain permanent records of the name of the deceased
human being, the funeral home from which the remains were received, the
receipt of delivery of the deceased human remains, the authorizing agent
for the cremation or natural organic reduction, and the manner of
disposition of the remains. Such records may be reviewed by the division
of cemeteries at any time.
(d) When burial not to be refused. No cemetery corporation shall
refuse or deny the right of burial and the privileges incidental thereto
in any lot, plot or part thereof to those otherwise lawfully entitled to
be buried therein, for any reason except for the non-payment of
interment charges and the purchase price of the lot, plot or part
thereof, in accordance with the terms of the contract of purchase or
except as provided in subdivision (f) of section fifteen hundred nine of
this article.
(e) Removals. A body interred in a lot in a cemetery owned or operated
by a corporation incorporated by or under a general or special law may
be removed therefrom, with the consent of the corporation, and the
written consent of the owners of the lot, and of the surviving wife,
husband, children, if of full age, and parents of the deceased. If the
consent of any such person or of the corporation can not be obtained,
permission by the county court of the county, or by the supreme court in
the district, where the cemetery is situated, shall be sufficient.
Notice of application for such permission must be given, at least eight
days prior thereto, personally, or, at least sixteen days prior thereto,
by mail, to the corporation or to the persons not consenting, and to
every other person or corporation on whom service of notice may be
required by the court.
(f) Expenses of improving vacant lot. Whenever a person having a lot
in a cemetery shall vacate the same by a removal of all the bodies
therefrom, and leave such lot in an unsightly condition for one month,
the corporation may grade, cut, fill or otherwise change the surface
thereof, without reducing the area of the lot. The expense, not
exceeding ten dollars, shall be chargeable to the lot. If the owners of
such lot, within six months after such expense has been incurred, shall
not repay such expense, the corporation may sell the lot at public
auction upon the cemetery grounds, previous notice of such sale having
been posted at the main entrance of the cemetery, and mailed to the
owners of such lot at their last-known post office address, at least ten
days prior to the day of sale, and shall pay the surplus, if any, on
demand to the owners of such lot.
(g) Removal or correction of dangerous conditions in cemetery lots.
Any plant life, fencing or embellishment or structure other than a
mausoleum, monument or mound, in a lot, plot or part thereof which
becomes so worn, neglected, broken or deteriorated that its continued
existence is a danger to persons or property within the cemetery grounds
may be removed, repaired or corrected by the cemetery corporation at its
own cost and expense, provided it first gives not less than fifteen days
notice by registered or certified mail to the last known owner at his
last known address to repair or remove such object and the said owner
shall fail to repair or remove the object within the time provided in
said notice. In the event of such removal, correction or repair by the
cemetery corporation it shall, within twenty days thereafter, notify the
lot owner, by registered or certified mail addressed to him at his last
known address, of the action taken by the cemetery corporation. Nothing
herein contained shall be construed to affect, supersede or impair any
contract, rule or regulation duly approved by the cemetery board, or
right or obligation of the cemetery corporation, nor shall it be
construed as placing any legal duty or obligation to exercise any right
authorized by this subdivision.
(h) Repair or notice as to non-dangerous damage or defacement. Except
as otherwise provided by rule or regulation of the cemetery board
pursuant to subparagraph two-a of paragraph (c) of section fifteen
hundred four of this article, in the event a lot, plot or part thereof
is substantially damaged or defaced which does not present a dangerous
condition to persons or property, or in the event a mausoleum, monument
or mound in a lot, plot or part thereof is substantially damaged or
defaced, and the correction of such condition is not subject to the
provisions of paragraph (g) of this section or section fifteen hundred
ten-a of this article, the cemetery corporation within thirty days of
the discovery of this condition may at its own cost and expense repair
the damage or defacement, or if it determines not to do so, the
corporation shall within such thirty day period notify the owner, his or
her distributee or the person filing an affidavit with such corporation
pursuant to the provisions of paragraph (e) of section fifteen hundred
twelve of this article of such condition at the last address of such
owner, distributee or person appearing on the books and records of the
corporation. The notice shall be sent by first class mail and a
certificate of mailing shall be obtained. Nothing herein contained shall
be construed as establishing any right of damages not otherwise provided
by law, rule or contract in any person against the cemetery corporation
for failure to repair any condition described or give notice thereof as
provided for in this paragraph.
(i) Record of inscriptions to be filed. Whenever, under any general or
special law, any cemetery is abandoned or is taken for a public use, the
town board of the town or the governing body of the city in which such
cemetery is located, shall cause to be made, at the time of the removal
of the bodies interred therein, an exact copy of all inscriptions on
each headstone, monument, slab or marker erected on each lot or plot in
such cemetery and shall cause the same to be duly certified and shall
file one copy thereof in the office of the town or city clerk of the
town or city in which such cemetery was located and one copy in the
office of the state historian and chief of the division of history in
the department of education at Albany. In addition to such inscriptions,
such certificate shall state the name and location of the cemetery so
abandoned or taken for a public use, the cemetery in which each such
body was so interred and the disposition of each such headstone,
monument, slab or marker.
(j) Grave markers. No cemetery corporation, which provides for the
burial of persons of the Jewish faith, shall promulgate any rule or
regulation prohibiting the use of cement beds as a means of demarcating
a specific grave area. Such cemetery corporations shall provide this
service to all persons of the Jewish faith requesting this method of
marking a grave when such grave area is provided through the agency of a
membership or religious corporation or unincorporated association or
society which provides burial benefits for the members. Subject to the
rules and regulations promulgated by the cemetery board, such cemetery
corporations shall establish the schedule of charges to be assessed for
installation and maintenance of cement beds. The schedule of charges
shall be filed with and approved by the cemetery board. Such regulation
may require the payment of the cost of perpetual care as a condition to
such installation and maintenance. The charges assessed shall be paid by
the person requesting the service. The provisions of this paragraph
shall only be applicable within the counties contained within the first,
second, tenth and eleventh judicial districts as such districts are
arranged pursuant to section one hundred forty of the judiciary law.
(k) Notice and restoration as to damage and defacement due to
vandalism. In the event a monument is damaged or defaced by an act of
vandalism, the cemetery corporation shall, within thirty days of the
discovery of such damage, notify the owner, his distributee or the
person filing an affidavit with such corporation pursuant to the
provisions of paragraph one of subdivision (e) of section fifteen
hundred twelve of this article of such damage in the manner provided in
subdivision (h) of this section. The cost and expense of such notice may
be provided from the fund where such fund exists. If a fund has been
established, the cemetery corporation shall restore the monument with
moneys from such fund. If such a fund has not been established or where
such fund is inadequate to restore the monument, the cemetery
corporation may restore such monument at its own cost and expense.
Nothing herein contained shall be construed as establishing any right of
damages not otherwise provided by law, rule or contract in any person
against the cemetery corporation for failure to restore any monument if
no monument maintenance fund exists or if such fund is inadequate to
restore such monument.
(l) Removal of monument. No person or organization shall remove a
monument without authorization in the form of a court order from a court
of competent jurisdiction, or without the written authorization of the
owner of a burial plot, or the lineal descendants of the deceased, if
such owner or lineal descendants are known, and without obtaining
written approval from a duly incorporated cemetery association, which
association shall keep a record of all such written approvals. The
provisions of this section shall not prohibit the removal, in accordance
with rules and regulations promulgated by the secretary of state, of a
monument for the purpose of repair, nonpayment or adding inscriptions as
authorized by a cemetery association or as permitted in this article. A
violation of any provision of this paragraph shall be punishable by a
fine not to exceed five hundred dollars.
(m) Use of construction and demolition debris for burial. No cemetery
corporation or religious corporation having charge and control of a
cemetery which heretofore has been or which hereafter may be used for
burials, shall use construction and demolition debris, as that term is
defined in 6 NYCRR 360-1.2, for the purpose of burying human remains.
(n) Interment of pet cremated remains. The interment of pet cremated
remains in a cemetery corporation shall be available to a lot owner only
in those circumstances where the interment is incidental to the burial
of human remains and where authorization has been provided in a written
statement from the cemetery corporation. The cemetery corporation shall
provide a list of approved charges for the interment of such remains.
All payments received for interment of such remains shall be deposited
in the cemetery corporation's permanent maintenance fund. Pet cremated
remains must be disposed of by placing them in a grave, crypt, or niche.
Nothing in this section shall obligate a cemetery corporation to allow
interment of such cremated pet remains where prior approval at the time
of sale or in advance of need has not been received. The provisions of
this section shall not apply to an incorporated or unincorporated
cemetery operated, supervised or controlled by a religious corporation
or a lot, plot or part thereof whose record owner is an incorporated or
unincorporated religious association or society.
(o) Posting and distribution of the New York state cemetery disclosure
form. (1) New York state cemetery disclosure forms shall be created by
the state cemetery board and shall be posted on the website of the
division of cemeteries in the department of state. Copies of such forms
shall be suitably printed by the cemetery corporation and conspicuously
displayed in each of its offices, if any, so that all persons visiting
such place may readily see the form and inspect its contents. Physical
copies of the forms shall be made available to any person inquiring
about cemetery lots, goods, or services. A corporation may offer a
customer the option of receiving the forms through the use of a quick
response (QR) code in lieu of receiving a paper copy.
(2) The New York state cemetery disclosure forms shall be in the form
and manner as prescribed by the state cemetery board, shall include the
contact information of the New York department of state division of
cemeteries, and shall contain an explanation of the rights of lot owners
and family members including, but not be limited to, the following:
(A) a website address, and a hyperlink in the case of electronic
copies, for information about the regulation of cemeteries in New York,
the New York department of state division of cemeteries and the state
cemetery board, and a description of those types of cemeteries that are
not regulated by the state cemetery board;
(B) the process of purchasing and re-selling a burial lot, plot or
part thereof;
(C) the right to interment and disposition options;
(D) inheritance rights of a burial lot, plot or part thereof;
(E) a listing of reasons that interment may be denied;
(F) the requirements in regards to the use of outer enclosures;
(G) the rights of lot owners as members of the cemetery corporation;
(H) cemeteries' duties regarding charges, prices, rules, and
regulations;
(I) the right to make burial arrangements and provide for
memorialization; and
(J) any other information deemed appropriate.
(3) The state cemetery board may, from time to time, update and amend
the New York state cemetery disclosure form as it deems necessary.
§ 1510-a. Repair or removal of monuments.
(a) Cemetery corporations may repair or remove any monuments or other
markers not owned by the cemetery corporation that have fallen into
disrepair or dilapidation so as to create a dangerous condition,
provided that the cemetery corporation has given not less than sixty
days notice by registered or certified mail to the last known owner at
that person's last known address to repair or remove the monument or
other marker and the said owner has failed to do so within the time
provided in said notice.
(b) In the event that the last known owner cannot be found, the notice
may be given by publishing the same once each week for three consecutive
weeks in a newspaper published or circulated in the county in which the
cemetery is located. Such notice shall be addressed to the last known
owner and to all persons having or claiming any interest in or to the
burial lot on which the monument or other marker is located. The notice
shall date from the date of mailing such notice by registered or
certified mail, or the date of the third publication in the newspaper.
(c) Any monument or other marker that is removed as provided for in
this section shall be replaced with a flush bronze or granite marker
suitably inscribed if replacement is appropriate for identification
purposes.
(d) Nothing contained herein shall be construed as establishing any
right of damages not otherwise provided by law, rule or contract in any
person against the cemetery corporation for failure to repair or remedy
any condition described or give notice thereof as provided for in this
section.
§ 1510-b. Availability for interment on six-day basis.
Every cemetery corporation shall be available for interments at least
six days per week, excluding legal holidays, as set forth in the
cemetery's regulations or in accordance with its practices. Any cemetery
which maintains and designates a burial section for persons of a
particular religious belief must remain available for grave openings and
interments Sunday through Friday or other six-day period in accordance
with the religious and/or ethnic traditions of the persons interred in
said religious section. Nothing in this section shall require a cemetery
to provide grave openings and/or interments if they are otherwise unable
to do so as to direct consequence of severe weather conditions or other
similar conditions.
§ 1510-c. Form of authorizations.
Any form, authorization, permit or designation required by this
article may be signed by written instrument or the use of an electronic
signature, as that term is defined in subdivision three of section three
hundred two of the state technology law, with the intent to execute the
instrument, writing or electronic record.
§ 1511. Cemetery indebtedness.
(a) Certificates of indebtedness. (1) If a cemetery corporation be
indebted for lands purchased for cemetery purposes, or for services
rendered or materials furnished in connection with the necessary and
proper preservation or improvement of its cemetery or for moneys
borrowed exclusively for payment of such services or materials, the
directors, by the concurring vote of a majority of their whole number,
with the consent of the creditor to whom such indebtedness is owing, may
issue certificates under the corporate seal, signed by the president and
secretary, for such amount, payable at the times and at the rate of
interest agreed upon but not to exceed six per centum per annum;
provided, however, that there be first obtained from the cemetery board
an order approving the issuance of such certificates. In the case of
certificates of indebtedness issued for moneys borrowed exclusively for
payment for services rendered or materials furnished in connection with
the necessary and proper preservation or improvement of its cemetery the
consent of the creditor to whom such indebtedness is owing shall not be
required. (2) Such approval shall be given by the cemetery board only
if it determines that the amount of the certificates proposed to be
issued does not exceed the fair and reasonable value of the services
rendered or materials furnished or the purchase price of real property
as fixed in accordance with subdivision (b) of this section. No
certificate issued shall be valid or enforceable unless there has first
been issued by the cemetery board an order of approval as herein
provided. No certificate shall be for less than one hundred dollars.
The certificate shall be transferable by delivery, unless therein
otherwise provided. (3) The directors shall keep an account of the
number and amount of such certificates, the persons to whom issued, the
date of maturity, the rate of interest and the purpose for which the
same were issued. Each cemetery corporation shall file with the
cemetery board a verified statement setting forth all changes in such
account during the previous calendar or fiscal year. (4) The directors
shall set aside from the proceeds of sales of lots, plots and parts
thereof such sums to pay such certificates at maturity as they deem
necessary. Until the certificates are paid the holders thereof shall be
entitled at all meetings of the corporation, to one vote for each one
hundred dollars of indebtedness remaining unpaid, except that those
certificates of indebtedness issued for moneys borrowed exclusively for
payment of services or materials shall have no voting power. The
certificates shall not be a lien upon any lot, plot or part thereof
belonging to a lot owner.
(b) Application of proceeds of sales of lots. (1) At least one-half
of the proceeds of sales of lots or the use thereof remaining after the
deductions for the portion thereof required to be deposited in the
permanent maintenance fund and current maintenance fund together with
the expenses of sale shall be applied by a cemetery corporation to the
payment of the purchase price of the real property acquired by it. The
remainder of such proceeds shall be applied by the corporation to
preserving, improving and embellishing the cemetery grounds and the
avenues and roads leading thereto, and to defraying its expenses and
discharging its liabilities. After the payment of such purchase price,
and the expense of surveying and laying out the cemetery, all the
proceeds of such sales shall be applied to the improvement, preservation
and embellishment of the cemetery and to such expenses and liabilities.
(2) Where a corporation has agreed with a person from whom any such
lands were purchased to pay therefor a specified share not exceeding
one-half of the proceeds of sales of lots therein or the use thereof,
such corporation may continue to make payments as so agreed, provided
however that there be first deducted from said proceeds of sales the
amount required to be deposited in the permanent maintenance fund and
current maintenance fund as aforesaid together with the expenses of
sale. The balance of such proceeds shall continue to be applied by the
corporation to the preservation, improvement and embellishment of the
cemetery, and the expenses and liabilities of the corporation. Where
the corporation has heretofore agreed to pay a specified share of the
proceeds as aforesaid in payment of the purchase price of land, the
prices of lots or the use thereof in force when such purchase was made,
shall not be changed, while the purchase price remains unpaid, without
the written consent of a majority in interest of the persons from whom
the lands were purchased or their legal representatives. (3) A
corporation which has hertofore issued certificates of land shares which
entitle the owner to a specified share in the proceeds of the sale of
lots, may purchase such certificates with its surplus or reserve funds
and hold such certificates for the benefit of its surplus or reserve
funds, but such certificates may not thereafter be sold or reissued.
(c) Certificates of stock formerly issued. If a cemetery
corporation, incorporated under a law repealed by the membership
corporations law, prior to September first, eighteen hundred
ninety-five, converted its outstanding indebtedness or certificates of
indebtedness into certificates of stock, in pursuance of law, no
interest shall accrue to the holders of such stock, but they shall
receive annually or semi-annually a dividend thereon for their
proportional part of the entire surplus or net receipts of the
corporation over and above current expenses; or if the proportion of the
net receipts or surplus which stockholders shall be entitled to receive
shall have been fixed by agreement at the time of issuing such stock,
such stockholders shall be entitled to receive dividends in accordance
with such agreement. Such certificates of stock shall be transferable
only on the books of the corporation on the surrender of the
certificate, unless otherwise provided on the face thereof, and on every
such surrender a new certificate of stock shall be issued to the person
to whom the same has been transferred; and the holders of such stock
shall be entitled, in person or by proxy, to one vote for every share
thereof, at each meeting of the corporation. A register of the stock
issued by the corporation shall be kept by its directors showing the
date of issue, the number of shares, the par value thereof, the name of
each person to whom issued, the number of the certificates therefor; and
all transfers of such stock shall be noted and entered in such register,
and the certificates surrendered shall be deemed canceled by the issue
of a new certificate, and the surrendered certificate shall be
destroyed. Any director may become the holder or transferee of such
stock for his own individual use or benefit. No such stock shall be a
lien on the lot of any individual lot owner within the cemetery limits;
and no other or greater liability of the corporation issuing such stock
shall be created or deemed to exist than may be necessary to enforce the
faithful application of the surplus or net receipts of the corporation
to and among the holders of the stock in the manner hereinbefore
specified. A cemetery which has heretofore issued such certificates of
stock is a membership corporation and not a stock corporation.
(d) Retirement of certificates of stock of certain cemetery
corporations. If a cemetery association, incorporated under a law
repealed by chapter five hundred fifty-nine of the laws of eighteen
hundred ninety-five has changed certificates of indebtedness into
certificates of stock, pursuant to chapter one hundred seven of the laws
of eighteen hundred seventy-nine, and such stock remains unimpaired,
such association may retire such stock and issue in exchange therefor
certificates of indebtedness representing the par value of such stock,
such certificates of indebtedness to bear interest at a rate not
exceeding six per centum per annum from the date of the last preceding
dividend payment; provided, however, the exchange of such stock for
certificates of indebtedness shall be authorized at a duly called
meeting of such association by the affirmative vote of at least
two-thirds of the stock issued and outstanding and of at least
two-thirds of all votes cast at such meeting in favor of such exchange.
Any holder of such stock not voting in favor of the exchange of such
stock for certificates of indebtedness may at any time prior to the vote
upon such exchange, or if notice of the meeting to vote upon such
exchange was not mailed to him at least twenty days prior to the taking
of such vote, then within twenty days after the mailing of such notice,
object to such exchange and demand payment for his stock and thereupon
such stockholder or the corporation shall have the right, subject to the
same conditions and provisions contained in section six hundred
twenty-three of the business corporation law, to have such stock
appraised and paid for as provided in such section. Such objection and
demand must be in writing and filed with the corporation. The
provisions of this section relating to certificates of indebtedness and
the rights of the holders thereof shall apply to certificates of
indebtedness issued as provided in this subdivision. The stocks so
retired shall not be reissued by such association and it shall have no
right thereafter to issue any certificates of stock.
(e) Purchase, retirement and exchange of stock. (1) A cemetery
corporation which has issued certificates of stock, pursuant to chapter
one hundred seven of the laws of eighteen hundred seventy-nine, or
chapter two hundred sixty-seven of the laws of eighteen hundred
ninety-four, may purchase such certificates of stock with its surplus or
reserve funds, and hold such certificates for the benefit of its surplus
or reserve funds, but such certificates of stock so purchased may not
thereafter be sold or reissued. (2) A cemetery corporation which has
issued certificates of stock may also effect the retirement of such
stock as follows: The board of directors of such corporation shall
adopt by vote of a majority of the entire number of such directors a
plan for such retirement which shall include the fixing of a price which
the corporation will pay for all shares of stock then outstanding, which
price shall, in the opinion of such directors, represent the fair value
of such stock. The said plan shall be submitted to a duly called
meeting of the members of such corporation and, if approved by the
affirmative vote of at least two-thirds of all votes cast at such
meeting, including the affirmative vote of the holders of record of at
least two-thirds of all shares of stock issued and then outstanding
exclusive of any shares of stock held by the corporation, shall become
binding upon all stockholders, and they shall proceed to transfer and
surrender to the corporation their certificates of stock and to receive
payment therefor in accordance with the terms of such plan. Any holder
of shares of such stock not voting in favor of such plan may at any time
prior to the vote approving such plan, or if notice of the meeting to
vote upon such plan was not mailed to him at least twenty days prior to
the taking of such vote, then within twenty days after the mailing of
such notice, but in any event within ten days after the taking of such
vote, by written notice filed with such corporation, object to such plan
and demand appraisal of his shares. Thereupon, such stockholder or the
corporation shall have the right, subject to the same conditions and
provisions contained in section six hundred twenty-three of the business
corporation law, to have such stock appraised and paid for as provided
in such section. (3) A cemetery corporation which has issued
certificates of stock may also effect the exchange of such stock as
follows: The board of directors of such corporation shall adopt by a
vote of a majority of the entire number of such directors a plan for the
exchange of all shares of stock then outstanding for a like number of
participating certificates. Such participating certificates shall
entitle the owners to a specified share not exceeding, collectively,
one-half of the proceeds of sales of lots therein or the use thereof
after first deducting from such proceeds of sale the amount required to
be deposited in the permanent maintenance fund and current maintenance
fund as provided in and pursuant to subdivision (a) of section fifteen
hundred seven of this article, together with the expenses of sale. Such
plan shall then be submitted to the cemetery board for its approval. In
making its determination the cemetery board shall consider and may
condition its approval on the purposes of this section. Thereafter, if
the cemetery board approves such plan, or in the event the cemetery
board conditioned its approval and the conditions imposed have been
accepted by a vote of a majority of the entire board of directors of the
corporation, such plan shall be submitted to a duly called meeting of
the members of such corporation, and, if approved by the affirmative
vote of at least two-thirds of all votes cast at such meeting, including
the affirmative vote of the holders of record of at least ninety per
centum of all shares of stock issued and then outstanding exclusive of
any shares of stock held by the corporation, shall become binding upon
all stockholders. The stockholders shall then proceed to transfer and
surrender to the corporation their shares of stock and to receive in
exchange therefor participating certificates in accordance with the
terms of such plan. Any holder of shares of such stock not voting in
favor of such plan may at any time prior to the vote approving such
plan, or if notice of the meeting to vote upon such plan was not mailed
to him at least twenty days prior to the taking of such vote, then
within twenty days after the mailing of such notice, but in any event
within ten days after the taking of such vote, by written notice filed
with such corporation, object to such plan and demand appraisal of his
shares. Thereupon, such stockholder or the corporation shall have the
right, subject to the same conditions and provisions contained in
section six hundred twenty-three of the business corporation law, to
have such stock appraised and paid for as provided in such section.
Each such participating certificate issued in exchange for a share of
stock shall entitle the holder thereof to one vote for each certificate
at all meetings of the corporation. The prices of lots or the use
thereof at the time when such exchange is made shall not be changed,
while such participating certificates remain outstanding, without the
written consent of a majority in interest of the holders thereof except
as now or hereafter authorized by law. The shares of stock so exchanged
shall not be reissued by such corporation and it shall have no right
thereafter to issue any shares of stock.
(f) Exchange of certificates for shares. The directors of a cemetery
corporation, which has issued certificates for shares, from time to time
by resolution, may fix the value of each of such shares and authorize
the acceptance by the corporation of such certificates at the value so
fixed in payment for land. All certificates so accepted shall be
immediately cancelled and shall not be again issued.
§ 1512. Rights of lot owners.
(a) Lots; indivisible and inalienable. All lots, plots or parts
thereof, the use of which has been conveyed as a separate lot, shall be
indivisible, except with the consent of the lot owner or lot owners and
the corporation, or as in this section provided. After a burial therein,
the same shall be inalienable, except as otherwise provided.
(b) Interest of deceased lot owner. Upon the death of an owner or
co-owner of any lot, plot or part thereof, unless the same shall be held
in joint tenancy, or tenancy by the entirety, the interest of the
deceased lot owner shall pass to the devises of such lot owner, but, if
such interest be not effectually devised, then to his or her descendants
then surviving, and if there be none, then to the surviving spouse, and
if there be none, then to those entitled to take the real and personal
property of the deceased lot owner pursuant to article four of the
estates, powers and trust law provided, however, that no interest in any
lot, plot or part thereof shall pass by any residuary or other general
clause in a will and such interest shall pass by will only if the lot,
plot or part thereof sought to be devised is specifically referred to in
such will. The surviving spouse of a deceased lot owner during his or
her life and the owners from time to time of the deceased lot owner's
lot, plot or part thereof, shall have in common the possession, care and
control of such lot, plot or part thereof.
(c) Purchase for burial of decedent. Whenever a lot, plot or part
thereof shall be purchased by the executor, administrator or
representative of a decedent from estate funds for the burial of the
decedent, the surviving spouse of the decedent shall have the right of
interment therein, and the deed shall run to the names of the
distributees, other than the surviving spouse, of the decedent, or to
"The distributees, other than the surviving spouse, of .........,
deceased", if there be such surviving spouse, otherwise to "The
distributees of............., deceased." If the deed shall run to "The
distributees, other than the surviving spouse of ........., deceased,"
or to "The distributees of ........., deceased," the executor,
administrator or representative shall, at the time of delivery of the
deed to such lot, plot or part thereof, file with the corporation an
affidavit setting forth the names and places of residence of all the
decedent's distributees, and the corporation shall be entitled to rely
upon the truth of the statements contained in such affidavit.
(d) Right of interment. A deceased person shall have the right of
interment in any lot, plot or part thereof of which he or she was the
owner or co-owner at the time of his or her death, or in any tomb
erected thereon. The surviving spouse shall have the right of interment
for his or her body in a lot or tomb in which the deceased spouse was an
owner or co-owner at the time of his or her death, except where all the
available burial spaces in a lot or tomb have been designated for the
interment of persons other than the surviving spouse, pursuant to
subdivision (f) of this section, and a right to have his or her body
remain permanently interred or entombed therein, except, that such body
may be removed therefrom as provided in subdivision (e) of section
fifteen hundred ten of this article. Such right may be enforced and
protected by his or her personal representatives. The remains of a
spouse, parent or child of a person who is an owner or co-owner thereof
may be interred in such lot or tomb without the consent of any person
claiming any interest therein, subject, however, to the following rules
and exceptions: (A) The place of interment in such lot shall be subject
to the reasonable determination by a majority of the co-owners or in the
absence of such determination by the cemetery corporation or its officer
or agent having immediate charge of interments. (B) Any husband or wife
living separate from the other and owning a lot in which the other, but
for this section, would have no right of burial, at least thirty days
before the death of the other, may file with the cemetery corporation a
written objection to the interment of the other, and thereupon there
shall be no right of interment under this subdivision. (C) A parent or
child owning a lot in which the other would have no right of burial but
for this section, at least thirty days before the death of the other,
may file with the cemetery corporation a written objection to the
interment of the other, and thereupon there shall be no right of
interment under this subdivision. In such case, if the parent or child
so excluded from burial in such lot shall die without having any place
of interment, then the person filing such objection shall at once
provide for the other a suitable place of burial in a convenient
cemetery. The cost of such place of interment shall be chargeable to the
decedent's estate, if any. (D) This section shall not permit a burial in
any ground or place contrary to or in violation of any precept, rule,
regulation or usage of any church or religious society, association or
corporation restricting burial therein. This subdivision shall not limit
any existing right of burial under other provisions of law, nor shall it
limit or curtail the right of alienation, under the rules of the
cemetery corporation wherein such lot is situated, by the owner of a lot
before the death of the person for whose remains the right of burial is
provided herein, and there shall be no right of burial in any lot sold
by its owner, before the death of the person for whose remains the right
of burial is provided herein.
(e) More than one person entitled to possession and control. (1) At
any time when more than one person is entitled to the possession, care
and control of such lot, any of the persons so entitled thereto may file
with the corporation an affidavit setting forth the names and places of
residence of all the persons entitled to the possession, care and
control of such lot, and the corporation shall be entitled to rely upon
the truth of the statements contained in such affidavit. The corporation
shall be entitled to collect a reasonable fee for filing and recording
such affidavit and other documents filed in its office. (2) At any time
when more than one person is entitled to the possession, care or control
of such lot, plot or part thereof, the persons so entitled thereto shall
file with the corporation a designation of a person who shall represent
the lot, plot or part thereof, and so long as they shall fail to
designate, the corporation may make such designation. A distributee may
release his or her interest in a lot, plot or part thereof, to the other
distributees, and a joint owner may release or devise to the other joint
owners, his or her right in the lot, plot or part thereof, on conditions
specified in the release or will, the original or certified copy of
which shall be filed in the office of the corporation. The surviving
spouse not excluded from the right of burial under the provisions of
subdivision (d) of this section, at any time may release his or her
right in such lot, plot or part thereof, but no conveyance or devise by
any other person shall deprive him or her of such right.
(f) Designation of persons who may be interred. At any time all the
owners of a lot, and any surviving spouse having a right of interment
therein, may execute, acknowledge and file with the corporation an
instrument, and the sole owner of a lot may, in a testamentary
instrument admitted to probate, make a provision, which may (A)
designate the person or persons or class of persons who may thereafter
be interred in said lot or in a tomb in such lot and the places of their
interment; (B) direct that upon the interment of certain named persons,
the lot or tomb in such lot shall be closed to further interments; (C)
direct that the title of the lot shall upon the death of any one or more
of the owners, descend in perpetuity to his, her or their distributees,
unaffected by any devise. In any case in which an irrevocable
designation of a person, persons or class of persons who may be interred
in any lot or tomb has been made pursuant to this subdivision and in
which the designated person or persons, or all of the known class of
designated persons, have died and have not been buried in the places
designated in said lot or tomb, or have by a written instrument duly
signed and acknowledged and filed with the corporation, renounced the
right of interment pursuant to such designation, then, and in any such
event, the then owner or owners of said lot or tomb and any surviving
spouse having the right of interment therein, may designate another
person or persons or class of persons who may thereafter be interred in
said lot or in a tomb in said lot, and the places of their interment,
unless the original designation clearly indicated not only that it was
irrevocable, but also that no further designations were to be made. Any
designation provided for by this subdivision except a designation by
testamentary instrument, shall be deemed revocable unless such
instrument provides otherwise. In the event an owner or co-owner of a
lot is under the age of eighteen years, any designation provided for by
this subdivision, except a designation by testamentary instrument, may
be executed and acknowledged by the parent or general or testamentary
guardian for and on behalf of such owner or co-owner, provided, however,
that no such designation may be made unless a place of interment shall
remain available in said lot or in a tomb in such lot for the interment
of each owner or co-owner of the lot under the age of eighteen years,
and any designation so made may be revoked by the owner or co-owner upon
reaching the age of eighteen years except with respect to burials
effected before that time. A designation made by a parent or guardian on
behalf of an infant owner or co-owner who is over the age of fourteen
years must contain the written consent of such infant owner or co-owner.
(g) Lot owner voting. Each owner of full age of a lot in the cemetery
of the corporation, as shown in the records of the cemetery at the time
of the purchase of the lot from the corporation, or if there be two or
more owners, then one of them designated in writing by a majority of
them, may cast, in person or by proxy, one vote at meetings of the
corporation in respect to each such lot so owned. At such meetings, each
owner of a certificate of stock heretofore lawfully issued shall be
entitled to one vote for each share of stock owned by him and each owner
of a certificate of indebtedness shall be entitled to one vote for each
one hundred dollars of such indebtedness remaining unpaid. No lot owner
shall be entitled to vote unless all assessments against the lot of such
owner shall have been paid. A quorum for the transaction of business,
unless the certificate of incorporation or by-laws otherwise provide,
shall be five members entitled to vote at the meeting. In the event a
lot owner has executed a proxy which has been in effect for five or more
years, the cemetery corporation shall not honor such proxy unless it is
presented with proof that the lot owner has been sent a written notice
at the address listed in the records of the corporation at least thirty
days prior to the meeting at which the proxy is to be exercised advising
the lot owner that the proxy is still effective. The notice shall
identify the date, time and place of such meeting, and the name of the
person holding the proxy and shall state that it may, unless the proxy
provides otherwise, be terminated at any time. Such notice need not be
mailed more frequently than every fifth year.
(h) Plots owned by religious corporations, unincorporated
associations, or other entities that provide burial benefits for its
members. With respect to any lot, plot or part thereof owned by a
membership or religious corporation or unincorporated association or
other entity that provides burial benefits for its members, and requires
the cemetery to obtain a burial authorization from the membership,
religious corporation, unincorporated association, or other entity, the
following rules shall apply:
(1) If a cemetery receives a request to bury an individual who was a
member of a membership, religious corporation, unincorporated
association, or other entity that owns the lot, plot or part thereof in
which the burial would be made, and despite reasonable efforts on the
part of the family of the deceased, the funeral home, and/or the
cemetery, no representative of the membership, religious corporation,
unincorporated association, or other entity that owns the lot, plot or
part thereof in which the burial would be made can be located to
authorize the burial, the cemetery may, at its discretion, proceed with
the interment provided that documentary evidence indicating a specific
grave reservation in the lot, plot or part thereof, for the deceased
individual is provided to the cemetery and further that the cemetery has
recorded such reservation on its books and in its records;
(2) If the decedent is within the first degree of consanguinity to an
individual already interred in the lot, plot or part thereof, or the
spouse of the decedent is already interred in the lot, plot or part
thereof, the cemetery may, at its discretion, proceed with the
interment, provided some form of documentary evidence is provided to the
cemetery as to the decedent's right of burial in the lot, plot or part
thereof;
(3) The right of memorialization shall, under the circumstances
described in this paragraph, pass to the person with the right of
possession of the body at the time of burial; and
(4) Neither the cemetery nor the funeral director shall be liable for
any claims, in law or equity, relating to the failure to obtain
authorization from the membership, religious corporation, unincorporated
association, or other entity for the use of the plot, lot, or portion
thereof provided that the requirements of this paragraph have been met.
§ 1513. Sale of burial rights.
(a) Conveyance of lots. (1) Except as otherwise provided in this
paragraph the right to use any lot, plot or part thereof may be sold or
conveyed only by the cemetery corporation. (2) It shall be unlawful for
any person, firm or corporation to purchase or for a cemetery
corporation to sell a lot, plot or part thereof for the purpose of
resale. This provision, however, shall not prohibit the sale to its
members of lots, plots or parts thereof, or the right to use any lot,
plot or part thereof, by a membership or religious corporation or
unincorporated association or society which provides burial benefits for
its members. (3) It shall be unlawful for a cemetery corporation to pay
or offer to pay, or for any person, firm or corporation to receive,
directly or indirectly, a commission, bonus, rebate or other things of
value for, or in connection with, the sale of any lot, plot or part
thereof, or the sale of space in a public mausoleum, or the furnishing
by or through the cemetery corporation of any service, merchandise,
wares, goods or articles. The provisions of this paragraph shall not
apply to a person regularly employed and supervised by the cemetery
corporation. (4) Notwithstanding any inconsistent provision of this
paragraph, and subject to the provisions of section fifteen hundred
sixteen of this article, a cemetery corporation may enter into a
contract with a third-party vendor to create and maintain a website for
the purposes of the sale of any lot, plot or part thereof, or the sale
of space in a public mausoleum, or the furnishing by or through the
cemetery corporation of any service, merchandise, wares, goods or
articles. The third-party vendor may charge a fee for a transaction made
through this website, provided that a fee for all such transactions is
specified in the contract and is not dependent on or related to the
value of the lot, goods or services to be sold by the cemetery
corporation. (5) A violation of this paragraph shall constitute a
misdemeanor and shall be punishable by a fine of not more than five
hundred dollars or not more than six months imprisonment or both. Each
violation shall constitute a separate offense.
(b) Prices for burial rights and instruments of conveyance. (1) The
directors must fix and determine the prices of the burial lots, plots or
parts thereof, and keep a plainly printed copy of the schedules of such
prices conspicuously posted in each of the offices of the corporation,
open at all reasonable times to inspection, and shall file a schedule of
such prices in the office of the cemetery board. (2) Unless its
certificate of incorporation or by-laws otherwise provide, and subject
to its rules and regulations, the corporation shall sell and convey to
any person the use of the lots, plots or parts thereof designated on the
map filed in the office of the corporation, on payment of the prices so
fixed and determined, but need not sell and convey more than one lot,
plot or part thereof to any one person. Conveyances of lots, plots and
parts thereof shall be signed by the president or vice-president and
treasurer or assistant treasurer of the corporation. A written contract
for the sale or use of a lot, plot or part thereof shall have attached
thereto and made a part thereof a copy of the rules and regulations of
the cemetery corporation or such parts of such rules and regulations as
relate to the size and placement of monuments, restrictions on plot
usage, warranties, obligations of the cemetery corporation and financial
obligations and duties of the lot owner. If a lot, plot or part thereof
is sold without a written contract, the corporation shall, before any
part of the purchase price is paid by the purchaser, deliver to the
purchaser a copy of the rules and regulations or such parts thereof as
would be required to be attached to a written contract. Nothing in this
subdivision shall prevent the subsequent amendment of such rules and
regulations to increase the charges for services rendered by the
corporation or in other particulars by or with the consent of the
cemetery board under section fifteen hundred nine of this article. (3) A
cemetery corporation that shall sell a lot, plot or part thereof, in
excess of the price shown on the schedule filed in the office of the
cemetery board, and any person acting for or on behalf of the cemetery
corporation in connection with such sale, shall each forfeit to the
people of the state of New York a sum equivalent to three times the
excess amount so paid. Such penalty may be recovered in a civil action
by the cemetery board. (4) The instrument of conveyance of any burial
lot, plot or part thereof shall include the actual amount paid therefor
and a description showing the dimensions of the property conveyed, and
the plot number, section and block number as they appear on the cemetery
map.
(c) Resale by lot owner. Before any burial shall have been made in any
such lot, plot or part thereof, or, if all the bodies therein have been
lawfully removed, the lot owner may sell or convey such lot, plot or
part thereof upon notice to the cemetery. Such sale shall only occur in
those instances where the owner of such lot, plot or part thereof shall
have offered it to the cemetery corporation within one year prior to the
sale, in writing by registered or certified mail, at the price paid
therefor by said lot owner, together with simple interest at the rate of
four per centum per annum, and the cemetery corporation shall have
failed to accept such offer within thirty days after the making thereof.
Subsequent to the receipt of notice of sale of such lot, plot or part
thereof, the secretary of the cemetery corporation shall file and record
in its books all instruments of transfer. An owner may convey or devise
to the corporation his right and title in and to any such lot, plot or
part thereof.
(d) Lots held in inalienable form. (1) No portion of the cemetery of a
cemetery corporation which any person other than the corporation is
entitled to use for burial purposes, or in which bodies have been buried
and not removed, shall be sold, mortgaged or leased by the corporation.
A cemetery corporation may convey any lot so that upon such conveyance,
or after an interment therein, such lot shall be forever inalienable,
and upon the death of the lot owner shall pass to such person or persons
as may be designated in the conveyance or if no such designation be
made, shall descend as provided in section fifteen hundred twelve of
this article. Any one or more of the owners of such a lot may release or
devise to any other owner of the lot his interest therein on such
conditions as shall be specified in the release or will. (2) Any person
who is the sole owner of the burial rights in a cemetery lot, plot or
any part thereof, in which a burial has been made, may give his entire
interest, or, if not prohibited by the rules and regulations of the
cemetery corporation, any portion thereof to any person within the third
degree of consanguinity to the owner, or, in the event that no such
person exists, within the fourth degree of consanguinity to such owner.
Such conveyance shall be made subject to the right of interment of the
spouse of any deceased owner, which right said spouse may release at any
time, but no conveyance or devise by any other person shall deprive the
surviving spouse of such right. Burial rights shall not be conveyed
pursuant to the provisions of this subparagraph more frequently than
once in any ten-year period. (3) A cemetery corporation may take and
hold any lot conveyed or devised to it by the lot owner so that
thereafter it will be inalienable, and the interments therein shall be
restricted to such person or class of persons as may be designated in
the conveyance or devise. (4) The title of a lot owner shall not be
affected by the dissolution of the corporation, by non-user of its
corporate rights and franchises by any act of forfeiture on its part, by
any alienation of its property or by incumbrance thereon made or
suffered by it.
§ 1513-a. Reacquisition of a lot, plot or part thereof by a cemetery
corporation.
A cemetery corporation may, upon application and approval by the
cemetery board, reacquire, resubdivide, and resell a lot, plot or part
thereof under the following circumstances:
(a)(i) If the records of the corporation demonstrate that the lot,
plot or part thereof was purchased more than seventy-five years prior to
the application of the corporation; and (ii) if no burials have been
made in the lot, plot or part thereof or all the bodies therein have
been lawfully removed; and (iii) if neither the owner or owners of the
lot, plot or part thereof nor any person having a credible claim to
ownership who has visited, made payments in respect of or engaged in any
other proprietary activities with respect to the lot, plot or part
thereof can be identified after a reasonable search conducted by the
cemetery corporation, it shall be conclusively presumed that the owner
or owners of the lot, plot or part thereof have abandoned their burial
rights. A reasonable search consists of a search of: (1) all cemetery
records to determine the name of the owner or owners of the lot, plot or
part thereof, their last known addresses and all information available
to the cemetery relating to any person buried in the lot, plot or part
thereof and the names and last known addresses of any persons making
inquiry about or visiting the lot, plot or part thereof; (2) a search
for the death certificates and the probated wills of the owner or owners
of the lot, plot or part thereof; (3) the posting of notice by the
cemetery at the entrance to the cemetery and in the cemetery office, if
any, of its intention to declare the lot, plot or part thereof
abandoned; (4) the mailing of such notice certified mail with return
receipt requested to the owner or owners of the lot, plot or part
thereof and each person identified during the reasonable search at their
last known addresses; (5) publication of such notice once in each week
for three successive weeks, in two newspapers of regular commercial
circulation by subscription and/or newsstand sale, to be designated by
the county clerk of the county where the cemetery is located which in
his or her judgement, given the ethnic, religious, geographic or other
related demographic characteristics of the owner or owners of the lot,
plot or part thereof and each person identified through the reasonable
search and the predominant readership of such newspapers are best
calculated to inform the owner or owners of the lot, plot or part
thereof and each person identified through the reasonable search of any
application pursuant to the provisions of this section; and (6) the
preparation of an affidavit describing the steps taken by the cemetery
corporation to ascertain the identity of and to contact the current
owner or owners of the lot, plot or part thereof or next-of-kin thereof
or any other persons identified in the course of the reasonable search
who might have relevant information and the results of such steps. After
the filing with the cemetery board of proof of compliance with the above
requirements in form and substance reasonably satisfactory to such board
and upon approval by the cemetery board, the lot, plot or part thereof
may be resold by the cemetery to any party in compliance with the
cemetery rules and regulations provided, however, that any monument
subsequently placed on such lot, plot or part thereof shall conform to
the general appearance of any existing monuments in said section of
lots, plots or parts thereof, if any.
(b) If (i) the circumstances described in paragraph (a) of this
section exist except that one or more burials have been made in a lot,
and the last burial was made more than seventy-five years prior to the
application, (ii) the lot, plot or part thereof can be subdivided to
create new graves, (iii) the bodies have not been lawfully removed, and
(iv) the cemetery submits an application to the cemetery board which
complies with the requirements set forth in paragraph (a) of this
section, it shall be conclusively presumed that the lot owner has
abandoned the right to make further burials in the lot, the lot may be
subdivided, and the resubdivided lot, plot or parts thereof which do not
contain the remains of the deceased persons may be resold by the
cemetery corporation as provided in this section. Nothing in this
section shall permit a cemetery corporation to declare abandoned a lot,
plot or part thereof, where such lot, plot or part thereof was purchased
for multiple depth burials and where one or more burials has occurred or
authorized a cemetery corporation to remove a monument or other
embellishment to facilitate the resale of such lot, plot or part
thereof, except as provided by section fifteen hundred ten of this
article.
(c) If the owner or owners of a lot, plot or part thereof can be
identified, the cemetery corporation, with the consent of the owner or
owners of the lot, plot or part thereof, the lot, plot or part thereof
may be resubdivided, and the resubdivided lot, plot or part thereof
which does not contain the remains of deceased persons may be resold by
the cemetery corporation, provided, however, if no burial has been made
in the lot, plot or part thereof, in the twenty-five year period
preceding such application, the owner of a lot, plot or part thereof has
notified his or her parents, spouse, issue, brothers, sisters,
grandparents, and grandchildren, if any, of the application to the
cemetery board, and provided further, however, if a burial has been made
in this lot, plot or part thereof during such twenty-five year period,
the spouse and issue of such deceased person are also notified, and
provided further, in either case the owner of the lot, plot or part
thereof satisfies the cemetery board that none of the persons notified
have agreed within forty-five days of notification to purchase the lot,
plot or part thereof at the price provided under paragraph (c) of
section fifteen hundred thirteen of this article.
(d) Upon the sale of a lot, plot or part thereof reacquired by the
corporation under the provisions of paragraph (a), (b), or (c) of this
section, thirty-five percent of the net proceeds shall be placed in the
permanent maintenance fund and sixty-five percent shall be placed in the
current maintenance fund. Provided, however, that if their property was
reacquired under paragraph (i) of this section, thirty-five percent of
the net proceeds shall be placed in the permanent maintenance fund,
fifty percent shall be placed in the current maintenance fund and
fifteen percent shall be placed in a perpetual care fund which the
cemetery shall establish in the name of the defunct society for the
exclusive purpose of maintenance of the grounds on which the graves were
reacquired.
(e) If the owner of the lot, plot or part thereof is subsequently
identified, the cemetery corporation shall: (i) return all unsold lots,
plots or parts thereof if any, to the owner if so requested; and (ii)
with respect to any lots, plots or parts thereof that have been sold
pursuant to this section, at the option of the owner of the lot, plot or
part thereof; either (1) provide the owner, at no cost to the owner,
with a lot, plot or part thereof comparable to any lot, plot or part
thereof that was sold by the cemetery corporation or (2) provide the
owner with the proceeds from the sale of the lot, plot or part thereof
reacquired under this section with interest thereon from the date of the
sale at six percent per annum.
(f) The provisions of this section shall not apply to a lot, plot or
part thereof whose record owner is a religious burial society.
(g) The provisions of this section shall not violate the burial
requirements of sectarian sections of cemetery corporations.
(h) Monuments to be erected on a lot, plot or parts thereof, following
the resale of a lot, plot or part thereof, shall conform to the rules
and regulations or other requirements of the cemetery corporation and
shall conform to the size, style and type of monuments in the section of
the cemetery where such resale occurs.
(i) A cemetery corporation may, upon application and approval by the
cemetery board, reacquire, resubdivide, and resell a lot, plot or part
thereof formerly owned by a nonsectarian burial society under the
following circumstances:
(1) If the cemetery corporation has received a request to make a
burial on the grounds of a nonsectarian burial society and the
provisions of paragraph (h) of section fifteen hundred twelve of this
article had to be invoked to make the burial then the cemetery
corporation may, at its discretion, commence the process of reacquiring
the unused graves on the grounds of the nonsectarian burial society,
except that any graves that have been reserved for individuals where
such reservations have been recorded on the books and records of the
cemetery corporation shall be exempt from reclamation; or
(2) If routine mailings or proxy mailings are sent to the officers of
record of a nonsectarian burial society and such mailings are returned
by the post office, the cemetery corporation may, at its discretion,
make a second mailing by certified mail return receipt requested to each
officer of record of the nonsectarian burial society as recorded on the
cemetery's books and records and, if each of these mailings is returned
by the post office, the cemetery corporation may, at its discretion,
commence the process of reacquiring the unused graves on the grounds of
the nonsectarian burial society, except that any graves that have been
reserved for individuals where such reservations have been recorded on
the books and records of the cemetery corporation shall be exempt from
reacquisition.
(j) If a cemetery corporation has decided to commence the process of
reacquiring graves owned by a nonsectarian burial society it shall:
(1) send by certified mail return receipt requested to each individual
who has engaged in proprietary activities in connection with graves on
the grounds of a nonsectarian burial society, seeking the names and
addresses of any current officers of the nonsectarian burial society and
informing those individuals of the cemetery corporation's intentions of
reacquiring the unused graves on the grounds of the nonsectarian burial
society;
(2) send by certified mail return receipt requested to each individual
who has a grave reserved or deeded to them a letter seeking the names
and addresses of any current officers of the nonsectarian burial society
and informing such individuals of the cemetery corporation's intentions
or reacquiring the unused graves on the grounds of the nonsectarian
burial society;
(3) post a notice as provided in clause three of subparagraph (iii) of
paragraph (a) of this section;
(4) publish a notice as provided in clause five of subparagraph (iii)
of paragraph (a) of this section;
(5) prepare and submit an affidavit as provided in clause six of
subparagraph (iii) of paragraph (a) of this section; and
(6) upon the sale of any grave or graves on the grounds of the
nonsectarian burial society which have been reacquired by the cemetery
corporation, the cemetery corporation shall distribute the net proceeds
of the sale as provided in paragraph (d) of this section.
(k) The cemetery corporation shall delay the sale of ten percent of
the graves it reacquires from the nonsectarian burial society for twenty
years as a reserve in the event an individual or individuals are
identified who have a valid claim for burial on the grounds of the
nonsectarian burial society.
(l) At the time the graves that have been reacquired by a cemetery
corporation from a nonsectarian burial society are sold, the contract of
sale shall contain a clause in bold type which specifies that the
monuments to be erected on such lot, plot or part thereof, shall conform
to the size, style and type of monuments in the section of the cemetery
where such graves are located.
§ 1514. Misdemeanor; general penalty.
Wherever under the provisions of this article a person violating any
part thereof is deemed to be guilty of a misdemeanor and no specific
penalty is provided, the penalty for each separate violation shall be
imprisonment for not more than six months or a fine of not more than
five hundred dollars, or both.
§ 1515. Actions affecting cemetery corporations.
In any action or proceeding affecting or instituted by any cemetery
corporation the cemetery board shall be served with notice thereof in
the same manner as any necessary party and shall take such steps in the
action or proceeding as it may deem necessary to protect the public
interest.
§ 1516. Sale of monuments.
(a) No cemetery corporation shall engage in the sale of monuments, not
including flush bronze markers, nor shall such monuments be displayed
for sale on the property of a cemetery corporation.
(b) No cemetery corporation shall authorize or permit any employee or
director thereof to advertise or make known his or her relationship to
such corporation while engaged in the sale of monuments outside of his
or her employment by the cemetery corporation.
(c) With regard to the sale of flush granite markers, the cemetery
board shall adopt reasonable rules and regulations to exempt cemetery
corporations from the provisions of paragraph (a) of this section where
a practice for the sale of such flush granite markers was established
with the knowledge and approval of the cemetery board prior to the
effective date of this section.
§ 1517. Crematory operations.
Cemetery corporations that operate a crematory shall have the
following duties and obligations:
(a) Maintenance and privacy. (1) A crematory facility shall be
maintained in a clean, orderly, and sanitary manner, with adequate
ventilation and shall have a temporary storage area available to store
the remains of deceased human beings pending disposition by cremation,
the interior of which shall not be accessible to the general public.
(2) Entrances and windows of the crematory facility shall be
maintained at all times to secure privacy, including (i) doors shall be
tightly closed and rigid; (ii) windows shall be covered; and (iii)
entrances shall be locked and secured when not actively attended by
authorized crematory personnel.
(b) Cremation process. (1) The cremation process shall be conducted in
privacy. No person except authorized persons shall be admitted into the
retort area, holding facility, or the temporary storage facility while
the remains of deceased human beings are being cremated. Authorized
persons, on admittance, shall comply with all rules of the crematory
corporation and not infringe upon the privacy of the remains of deceased
human beings.
(2) The following are authorized persons: (i) licensed, registered
funeral directors, registered residents, and enrolled students of
mortuary science; (ii) officers and trustees of the cemetery
corporation; (iii) authorized employees or their authorized agents of
the cemetery corporation; (iv) public officers acting in the discharge
of their duties; (v) authorized instructors of funeral directing
schools; (vi) licensed physicians or nurses; and (vii) members of the
immediate family of the deceased and their authorized agents and
designated representatives.
(c) Identification of deceased human beings. (1) No crematory shall
cremate the remains of any deceased human being without the accompanying
cremation permit, required pursuant to section four thousand one hundred
forty-five of the public health law which permit shall constitute
presumptive evidence of the identity of the said remains. In addition,
all crematories situated outside the city of New York, must comply with
paragraph (b) of subdivision two of section four thousand one hundred
forty-five of the public health law pertaining to the receipt for the
deceased human being. From the time of such delivery to the crematory,
until the time the crematory delivers the cremains as directed, the
crematory shall be responsible for the remains of the deceased human
being. Further, a cremation authorization form must accompany the permit
required in section four thousand one hundred forty-five of the public
health law. This form, provided or approved by the crematory, must be
signed by the next of kin or authorizing agent attesting to the
permission for the cremation of the deceased, and disclosing to the
crematory that such body does not contain a battery, battery pack, power
cell, radioactive implant, or radioactive device, if any, and that these
materials were removed prior to the cremation process.
(2) Upon good cause being shown rebutting the presumption of the
identity of such remains, the cremation shall not commence until
reasonable confirmation of the identity of the deceased human being is
made. This proof may be in the form of, but not limited to, a signed
affidavit from a licensed physician, a member of the family of the
deceased human being, the authorizing agent or a court order from the
state supreme court within the county of the cemetery corporation. Such
proof shall be provided by the authorizing agent.
(3) The crematory shall have a written plan to assure that the
identification established by the cremation permit accompanies the
remains of the deceased human being through the cremation process and
until the identity of the deceased is accurately and legibly inscribed
on the container in which the cremains are placed.
(d) Opening of container holding the remains of the deceased human
being. (1) The casket, alternative container, or external wrappings
holding the remains of the deceased human being shall not be opened
after delivery to the crematory unless there exists good cause to
confirm the identity of the deceased, or to assure that no material is
enclosed which might cause injury to employees or damage to crematory
property, or upon reasonable demand by members of the immediate family
or the authorized agent.
(2) In such instances in which the casket, alternative container, or
wrappings are opened after delivery to the crematory, such action shall
only be conducted by the licensed funeral director or registered
resident delivering the remains of the deceased human being and if
necessary, with the assistance of crematory personnel and a record shall
be made, which shall include the reason for such action, the signature
of the person authorizing the opening thereof, and the names of the
person opening the container and the witness thereto, which shall be
retained in the permanent file of the crematory. The opening of the
container shall be conducted in the presence of the witness and shall
comply with all rules and regulations intended to protect the health and
safety of crematory personnel.
(e) Ceremonial casket cremation disclosure. In those instances in
which the remains of deceased human beings are to be delivered to a
crematory in a casket that is not to be cremated with the deceased,
timely disclosure thereof must be made by the person making the funeral
arrangements to the crematory that prior to cremation the remains of the
deceased human being shall be transferred to an alternative container.
Such signed acknowledgement of the authorizing person, that the timely
disclosure has been made, shall be retained by the crematory in its
permanent records.
(f) Transferring remains. (1) The remains of a deceased human being
shall not be removed from the casket, alternative container, or external
wrappings in which it is delivered to the crematory unless explicit,
signed authorization is provided by the person making funeral
arrangements or by a public officer discharging his or her statutory
duty, which signed authorization shall be retained by the crematory in
its permanent records.
(2) When the remains of a deceased human being are to be transferred
to an alternative container, the transfer shall be conducted in privacy
with dignity and respect and by the licensed funeral director or
registered resident who delivered those remains and if necessary, with
the assistance of crematory personnel. The transferring operation shall
comply with all rules and regulations intended to protect the health and
safety of crematory personnel.
(g) Commingling human remains. The cremation of remains of more than
one deceased human being in a retort at any one time is unlawful, except
upon the explicit, signed authorization provided by the persons making
funeral arrangements and the signed approval of the crematory, which
shall be retained by the crematory in its permanent records.
(h) Processing of cremains. (1) Upon the completion of the cremation
of the remains of a deceased human being, the interior of the retort
shall be thoroughly swept so as to render the retort reasonably free of
all matter. The contents thereof shall be placed into an individual
container and not commingled with other cremains. The cremation permit
shall be attached to the individual container preparatory to final
processing.
(2) A magnet and sieve, or other appropriate method of separation, may
be used to divide the cremains from unrecognizable incidental or foreign
material.
(3) The incidental and foreign material of the cremation process shall
be disposed of in a safe manner in compliance with all sanitary rules
and regulations as byproducts.
(4) The cremains shall be pulverized until no single fragment is
recognizable as skeletal tissue.
(5) The pulverized cremains shall be transferred to a sealable
container or containers whose inside dimension shall be of suitable size
to contain the entire cremains of the person who was cremated.
(6) The prescribed sealable container or containers shall be
accurately and legibly labeled with the identification of the human
being whose cremains are contained therein, in a manner acceptable to
the division of cemeteries.
(i) Disposition of cremains. The authorizing agent shall be
responsible for the final disposition of the cremains. Cremains must be
disposed of by placing them in a grave, crypt, or niche, by scattering
them in a designated scattering garden or area, or in any manner
whatever on the private property of a consenting owner or by delivery to
the authorizing agent or a person specifically designated by the
authorizing agent. Upon completion of the cremation process, if the
cemetery corporation has not been instructed to arrange for the
interment, entombment, inurnment or scattering of the cremains, the
cemetery corporation shall deliver the cremains to the individual
specified on the cremation authorization form or the funeral firm of
record. The delivery may be made in person or by registered mail. Upon
receipt of the cremains, the individual receiving them may transport
them in any manner in the state without a permit, and may dispose of
them in accordance with this section. After delivery, the cemetery
corporation shall be discharged from any legal obligation or liability
concerning the cremains. If, after a period of one hundred twenty days
from the date of the cremation, the authorizing agent has not instructed
the cemetery corporation to arrange for the final disposition of the
cremains or claimed the cremains, the cemetery corporation may dispose
of the cremains in any manner permitted by this section. The cemetery
corporation, however, shall keep a permanent record identifying the site
of final disposition. The authorizing agent shall be responsible for
reimbursing the cemetery corporation for all reasonable expenses
incurred in disposing of the cremains. Upon disposing of the cremains,
the cemetery corporation shall be discharged from any legal obligation
or liability concerning the cremains. Except with the express written
permission of the authorizing agent, no person shall:
(1) dispose of cremains in a manner or in a location so that the
cremains are commingled with those of another person. This prohibition
shall not apply to the scattering of cremains at sea, by air, or in an
area located in a cemetery and used exclusively for those purposes; and
(2) place cremains of more than one person in the same temporary
container or urn.
(j) Crematory operation certification. Any employee of a crematory
whose function is to conduct the daily operations of the cremation
process shall be certified by an organization approved by the division
of cemeteries. Proof of such certification must be posted in the
crematory and available for inspection at any time. Any new employees of
a crematory required to be certified under this section shall be
certified within one year of their employment. Any employees of a
crematory required to be certified under this section and retained prior
to the effective date of this paragraph shall be certified within one
year of such effective date. Renewal of such certification shall be
completed every five years from the date of certification.
* § 1518. Crematory operations during emergency declaration.
Notwithstanding any other provision of law, for the duration of a
state or county disaster emergency declared pursuant to an executive
order, crematories located in any county of the state may provide
emergency transportation and disposition assistance in such instances
where the crematories in affected areas are inoperable or unable to
provide sufficient capacity for the disposition of human remains during
any period of the declared emergency. Such crematories electing to
provide emergency assistance shall contract for or otherwise utilize any
mode of transportation necessary to transport human remains from areas
of a declared emergency to other crematory operations within the state
with cremation capacity. Transportation and disposition of human remains
from such affected areas shall be conducted by any agent of the
regulated crematory and shall only be permitted with a cremation permit
required pursuant by section four thousand one hundred forty-five of the
public health law attesting to the permission for the cremation of the
deceased and their identity. In all instances of emergency crematory
operations, a fully executed cremation authorization form shall
accompany the human remains and provide the information necessary to
return the cremated remains to the individual authorizing such
cremation. Nothing in this section shall require a crematory to provide
such transportation or additional crematory resources if they are unable
to do so.
* NB There are 2 § 1518's
* § 1518. Natural organic reduction facility operations.
Cemetery corporations that operate a natural organic reduction
facility shall have the following duties and obligations:
(a) Maintenance and privacy. (1) A natural organic reduction facility
shall be maintained in a clean, orderly, and sanitary manner, with
adequate ventilation and shall have a temporary storage area available
to store the remains of deceased human beings pending disposition by
natural organic reduction, the interior of which shall not be accessible
to the general public.
(2) Entrances and windows of the facility shall be maintained at all
times to secure privacy, including (i) doors shall be tightly closed and
rigid; (ii) windows shall be covered; and (iii) entrances shall be
locked and secured when not actively attended by authorized facility
personnel.
(b) Natural organic reduction process. (1) The natural organic
reduction process shall be conducted in privacy. No person except
authorized persons shall be admitted into the reduction area, holding
facility, or the temporary storage facility while the remains of
deceased human beings are being naturally organically reduced.
Authorized persons, on admittance, shall comply with all rules of the
cemetery corporation and not infringe upon the privacy of the remains of
deceased human beings.
(2) The following are authorized persons: (i) licensed, registered
funeral directors, registered residents, and enrolled students of
mortuary science; (ii) officers and trustees of the cemetery
corporation; (iii) authorized employees or their authorized agents of
the cemetery corporation; (iv) public officers acting in the discharge
of their duties; (v) authorized instructors of funeral directing
schools; (vi) licensed physicians or nurses; and (vii) members of the
immediate family of the deceased and their authorized agents and
designated representatives.
(c) Identification of deceased human beings. (1) No natural organic
reduction facility shall naturally organically reduce the remains of any
deceased human being without the accompanying natural organic reduction
permit, required pursuant to section forty-one hundred forty-five of the
public health law which permit shall constitute presumptive evidence of
the identity of the said remains. In addition, all natural organic
reduction facilities situated outside the city of New York, must comply
with paragraph (b) of subdivision two of section forty-one hundred
forty-five of the public health law pertaining to the receipt for the
deceased human being. From the time of such delivery to the natural
organic reduction facility, until the time the natural organic reduction
facility distributes the remains as directed, the facility shall be
responsible for the remains of the deceased human being. Further, a
natural organic reduction authorization form shall accompany the permit
required in section forty-one hundred forty-five of the public health
law. This form, provided or approved by the facility, shall be signed by
the next of kin or authorizing agent attesting to the permission for the
natural organic reduction of the deceased, and disclosing to the natural
organic reduction facility that such body does not contain a battery,
battery pack, power cell, radioactive implant, or radioactive device, if
any, and that these materials were removed prior to the natural organic
reduction process.
(2) Upon good cause being shown rebutting the presumption of the
identity of such remains, the natural organic reduction shall not
commence until reasonable confirmation of the identity of the deceased
human being is made. This proof may be in the form of, but not limited
to, a signed affidavit from a licensed physician, a member of the family
of the deceased human being, the authorizing agent or a court order from
the state supreme court within the county of the cemetery corporation.
Such proof shall be provided by the authorizing agent.
(3) The facility shall have a written plan to assure that the
identification established by the natural organic reduction permit
accompanies the remains of the deceased human being through the natural
organic reduction process and until the identity of the deceased is
accurately and legibly inscribed on the container in which the remains
are placed.
(d) Opening of a container holding the remains of the deceased human
being. (1) The remains of a deceased human being shall be delivered to
the natural organic reduction facility in an alternative container or in
external wrappings sufficient to contain the remains and also designed
to fully decompose in the natural reduction process. Such alternative
container or external wrappings holding the remains of the deceased
human being shall not be opened after delivery to the natural organic
reduction facility unless there exists good cause to confirm the
identity of the deceased, or to assure that no material is enclosed
which might cause injury to employees or damage to natural organic
reduction facility property, or upon reasonable demand by members of the
immediate family or the authorized agent.
(2) In such instances in which alternative container or wrappings are
opened after delivery to the natural organic reduction facility, such
action shall only be conducted by the licensed funeral director or
registered resident delivering the remains of the deceased human being
and a record shall be made, which shall include the reason for such
action, the signature of the person authorizing the opening thereof, and
the names of the person opening the container or wrappings and the
witness thereto, which shall be retained in the permanent file of the
natural organic reduction facility. The opening of the container or
wrapping shall be conducted in the presence of the witness and shall
comply with all rules and regulations intended to protect the health and
safety of natural organic reduction facility personnel.
(e) Ceremonial casket natural organic reduction disclosure. In those
instances in which the remains of deceased human beings are to be
delivered to a natural organic reduction facility in a casket or other
container that is not to be naturally organically reduced with the
deceased, timely disclosure thereof must be made by the person making
the funeral arrangements to the natural organic reduction facility that
prior to natural organic reduction the remains of the deceased human
being shall be transferred to a container or in external wrappings
sufficient to contain the remains and also designed to fully decompose
in the natural reduction process. Such signed acknowledgement of the
authorizing person, that the timely disclosure has been made, shall be
retained by the natural organic reduction facility in its permanent
records.
(f) Transferring remains. (1) The remains of a deceased human being
shall not be removed from the casket, alternative container, or external
wrappings in which it is delivered to the natural organic reduction
facility unless explicit, signed authorization is provided by the person
making funeral arrangements or by a public officer discharging their
statutory duty, which signed authorization shall be retained by the
natural organic reduction facility in its permanent records.
(2) When the remains of a deceased human being are to be transferred
to an alternative container, the transfer shall be conducted in privacy
with dignity and respect and by the licensed funeral director or
registered resident who delivered those remains. The transferring
operation shall comply with all rules and regulations intended to
protect the health and safety of facility personnel.
(g) Commingling human remains. The natural organic reduction of
remains of more than one deceased human being in a reduction container
at any one time is unlawful, except upon the explicit, signed
authorization provided by the persons making funeral arrangements and
the signed approval of the natural organic reduction facility, which
shall be retained by the natural organic reduction facility in its
permanent records.
(h) Processing of remains. (1) Upon the completion of the natural
organic reduction of the remains of a deceased human being, the interior
of the natural organic reduction container shall be thoroughly swept or
otherwise cleaned so as to render the natural organic reduction
container reasonably free of all matter. The contents thereof shall be
placed into an individual container and not commingled with other
remains. The natural organic reduction permit shall be attached to the
individual container preparatory to final processing.
(2) A magnet and sieve, or other appropriate method of separation, may
be used to divide the remains from unrecognizable incidental or foreign
material.
(3) The incidental and foreign material of the natural organic
reduction process shall be disposed of in a safe manner in compliance
with all sanitary rules and regulations as byproducts.
(4) The remains shall be pulverized until no single fragment is
recognizable as skeletal tissue.
(5) The pulverized remains shall be transferred to a container or to
multiple containers, if so requested in writing by the person making the
funeral arrangements for the natural organic reduction. Such container
or containers shall have inside dimensions of suitable size to contain
the remains of the person who was naturally organically reduced.
(6) The prescribed container or containers shall be accurately and
legibly labeled with the identification of the human being whose remains
are contained therein, in a manner acceptable to the division of
cemeteries.
(i) Disposition of remains. The authorizing agent shall be responsible
for the final disposition of the remains. Disposition of remains
resulting from the natural organic reduction process are not recoverable
once scattered or interred. Remains shall be disposed of by scattering
them in a designated scattering garden or area in a cemetery, or by
prior authorization by the cemetery corporation, by placing them in a
grave, crypt, or niche, or retrieval of the remains pursuant to prior
authorization by the authorizing agent or a person specifically
designated by the authorizing agent. Upon completion of the natural
organic reduction process, the cemetery corporation shall notify the
authorizing agent and funeral firm making such arrangements that the
natural organic reduction process has been completed and that the
remains are prepared to be disposed of in accordance with this
paragraph. Upon receipt of the remains, the individual receiving them
may transport them in any manner in the state without a permit, and may
dispose of them in accordance with this section. After disposition, the
cemetery corporation shall be discharged from any legal obligation or
liability to deliver the remains to the authorizing agent or any other
person enumerated under paragraph (a) of subdivision two of section
forty-two hundred one of the public health law concerning the remains.
If, after a period of one hundred twenty days from the date of the
natural organic reduction, the authorizing agent has not instructed the
cemetery corporation to arrange for the final disposition of the remains
or claimed the remains, the cemetery corporation may dispose of the
remains in any manner permitted by this section. The cemetery
corporation, however, shall keep a permanent record identifying the site
of final disposition. The authorizing agent shall be responsible for
reimbursing the cemetery corporation for all reasonable expenses
incurred in disposing of the remains. Upon disposing of the remains, the
cemetery corporation shall be discharged from any legal obligation or
liability to deliver the remains to the authorizing agent or any other
person enumerated under paragraph (a) of subdivision two of section
forty-two hundred one of the public health law concerning the remains.
Except with the express written permission of the authorizing agent, no
person shall place remains of more than one person in the same temporary
container or urn.
(j) Natural organic reduction facility operation certification. Any
employee of a natural organic reduction facility whose function is to
conduct the daily operations of the cremation or natural organic
reduction process shall be certified by an organization approved by the
division of cemeteries. Proof of such certification shall be posted in
the natural organic reduction facility and available for inspection at
any time. Any new employees of a natural organic reduction facility
required to be certified under this section shall be certified within
one year of their employment. Any employees of a natural organic
reduction facility required to be certified under this section and
retained prior to the effective date of this paragraph shall be
certified within one year of such effective date. Renewal of such
certification shall be completed every five years from the date of
certification.
(k) The cemetery board, in consultation with the department of health,
the department of environmental conservation, and any other state agency
deemed necessary, may promulgate rules and regulations consistent with
law to effectuate the provisions of this section.
* NB There are 2 § 1518's
§ 1600. Short title.
This article shall be known and may be cited as the "land bank act".
§ 1601. Legislative intent.
The legislature finds and declares that New York's communities are
important to the social and economic vitality of the state. Whether
urban, suburban, or rural, many communities are struggling to cope with
vacant, abandoned, and tax-delinquent properties.
There exists a crisis in many cities and their metro areas caused by
disinvestment in real property and resulting in a significant amount of
vacant and abandoned property. For example, Cornell Cooperative
Extension Association of Erie county estimates that the city of Buffalo
has thirteen thousand vacant parcels, four thousand vacant structures
and an estimated twenty-two thousand two hundred ninety vacant
residential units. This condition of vacant and abandoned property
represents lost revenue to local governments and large costs ranging
from demolition, effects of safety hazards and spreading deterioration
of neighborhoods including resulting mortgage foreclosures.
The need exists to strengthen and revitalize the economy of the state
and its local units of government by solving the problems of vacant and
abandoned property in a coordinated manner and to foster the development
of such property and promote economic growth. Such problems may include
multiple taxing jurisdictions lacking common policies, ineffective
property inspection, code enforcement and property rehabilitation
support, lengthy and/or inadequate foreclosure proceedings and lack of
coordination and resources to support economic revitalization.
There is an overriding public need to confront the problems caused by
vacant, abandoned and tax-delinquent properties through the creation of
new tools to be available to communities throughout New York enabling
them to turn vacant spaces into vibrant places.
Land banks are one of the tools that can be utilized by communities to
facilitate the return of vacant, abandoned, and tax-delinquent
properties to productive use. The primary focus of land bank operations
is the acquisition of real property that is tax delinquent, tax
foreclosed, vacant, abandoned, and the use of tools authorized in this
article to eliminate the harms and liabilities caused by such
properties.
§ 1602. Definitions.
The following words and phrases when used in this article shall have
the meanings given to them in this section unless the context clearly
indicates otherwise:
(a) "board of directors" or "board" shall mean the board of directors
of a land bank;
(b) "land bank" shall mean a land bank established as a charitable
not-for-profit corporation under this chapter and in accordance with the
provisions of this article and pursuant to this article;
(c) "foreclosing governmental unit" shall mean "tax district" as
defined in subdivision six of section eleven hundred two of the real
property tax law;
(d) "municipality" shall mean a city, village, town or county other
than a county located wholly within a city;
(e) "school district" shall mean a school district as defined under
the education law; and
(f) "real property" shall mean lands, lands under water, structures
and any and all easements, air rights, franchises and incorporeal
hereditaments and every estate and right therein, legal and equitable,
including terms for years and liens by way of judgment, mortgage or
otherwise, and any and all fixtures and improvements located thereon.
§ 1603. Creation and existence.
(a) Any foreclosing governmental unit may create a land bank by the
adoption of a local law, ordinance, or resolution as appropriate to such
foreclosing governmental unit which action specifies the following:
(1) the name of the land bank;
(2) the number of members of the board of directors, which shall
consist of an odd number of members, and shall be not less than five
members nor more than fifteen members;
(3) the initial individuals to serve as members of the board of
directors, and the length of terms for which they are to serve;
(4) the qualifications, manner of selection or appointment, and terms
of office of members of the board; and
(5) the articles of incorporation for the land bank, which shall be
filed with the secretary of state in accordance with the procedures set
forth in this chapter.
(b) Two or more foreclosing governmental units may enter into an
intergovernmental cooperation agreement which creates a single land bank
to act on behalf of such foreclosing governmental units, which agreement
shall be authorized by and be in accordance with the provisions of
paragraph (a) of this section. Such intergovernmental agreement shall
include provisions for dissolution of such land bank.
(c) Any foreclosing governmental units and any municipality may enter
into an intergovernmental cooperation agreement which creates a single
land bank to act on behalf of such foreclosing governmental unit or
units and municipality, which agreement shall be authorized by and be in
accordance with the provisions of paragraph (a) of this section. Such
intergovernmental agreement shall include provisions for dissolution of
such land bank.
(d) Except when a land bank is created pursuant to paragraph (b) or
(c) of this section, in the event a county creates a land bank, such
land bank shall have the power to acquire real property only in those
portions of such county located outside of the geographical boundaries
of any other land bank created by any other foreclosing governmental
unit located partially or entirely within such county.
(e) A school district may participate in a land bank pursuant to an
intergovernmental cooperation agreement with the foreclosing
governmental unit or units that create the land bank, which agreement
shall specify the membership, if any, of such school district on the
board of directors of the land bank, or the actions of the land bank
which are subject to approval by the school district.
(f) Each land bank created pursuant to this act shall be a charitable
corporation, and shall have permanent and perpetual duration until
terminated and dissolved in accordance with the provisions of section
sixteen hundred thirteen of this article.
(g) Nothing in this article shall be construed to authorize the
existence of more than forty-five land banks located in the state at one
time, provided further that each foreclosing governmental unit or units
proposing to create a land bank shall submit such local law, ordinance
or resolution as required by paragraph (a) of this section, to the urban
development corporation, for its review and approval. The creation of a
land bank shall be conditioned upon approval of the urban development
corporation.
(h) The office of the state comptroller shall have the authority to
audit any land bank pursuant to this article.
§ 1604. Applicability of New York law.
This article shall apply only to land banks created pursuant to this
article.
§ 1605. Board of directors.
(a) (1) The initial size of the board shall be determined in
accordance with section sixteen hundred three of this article. Unless
restricted by the actions or agreements specified in section sixteen
hundred three of this article, the provisions of this section shall
apply.
(2) The size of the board may be adjusted in accordance with by-laws
of the land bank.
(b) In the event that a land bank is created pursuant to an
intergovernmental agreement in accordance with section sixteen hundred
three of this article, such intergovernmental cooperation agreement
shall specify matters identified in paragraph (a) of section sixteen
hundred three of this article; provided, however, that each foreclosing
governmental unit shall have at least one appointment to the board.
(c) Any public officer shall be eligible to serve as a board member
and the acceptance of the appointment shall neither terminate nor impair
such public office. For purposes of this section, "public officer" shall
mean a person who is elected to a municipal office. Any municipal
employee or appointed officer shall be eligible to serve as a board
member.
(d) The members of the board of directors shall select annually from
among themselves a chairman, a vice-chairman, a treasurer, and such
other officers as the board may determine, and shall establish their
duties as may be regulated by rules adopted by the board.
(e) The board shall establish rules and requirements relative to the
attendance and participation of members in its meetings, regular or
special. Such rules and regulations may prescribe a procedure whereby,
should any member fail to comply with such rules and regulations, such
member may be disqualified and removed automatically from office by no
less than a majority vote of the remaining members of the board, and
that member's position shall be vacant as of the first day of the next
calendar month. Any person removed under the provisions of this
paragraph shall be ineligible for reappointment to the board, unless
such reappointment is confirmed unanimously by the board.
(f) A vacancy on the board shall be filled in the same manner as the
original appointment.
(g) Board members shall serve without compensation, shall have the
power to organize and reorganize the executive, administrative,
clerical, and other departments of the land bank and to fix the duties,
powers, and compensation of all employees, agents, and consultants of
the land bank. The board may reimburse any member for expenses actually
incurred in the performance of duties on behalf of the land bank.
(h) The board shall meet in regular session according to a schedule
adopted by the board, and also shall meet in special session as convened
by the chairman or upon written notice signed by a majority of the
members.
(i) A majority of the members of the board, not including vacancies,
shall constitute a quorum for the conduct of business. All actions of
the board shall be approved by the affirmative vote of a majority of the
members of that board present and voting; provided, however, no action
of the board shall be authorized on the following matters unless
approved by a majority of the total board membership:
(1) adoption of by-laws and other rules and regulations for conduct of
the land bank's business;
(2) hiring or firing of any employee or contractor of the land bank.
This function may, by majority vote of the total board membership, be
delegated to a specified officer or committee of the land bank, under
such terms and conditions, and to the extent, that the board may
specify;
(3) the incurring of debt;
(4) adoption or amendment of the annual budget; and
(5) sale, lease, encumbrance, or alienation of real property,
improvements, or personal property.
(j) Members of a board shall not be liable personally on the bonds or
other obligations of the land bank, and the rights of creditors shall be
solely against such land bank.
(k) Vote by proxy shall not be permitted. Any member may request a
recorded vote on any resolution or action of the land bank.
(l) Each director, officer and employee shall be a state officer or
employee for the purposes of sections seventy-three and seventy-four of
the public officers law.
§ 1606. Staff.
A land bank may employ a secretary, an executive director, its own
counsel and legal staff, and such technical experts, and such other
agents and employees, permanent or temporary, as it may require, and may
determine the qualifications and fix the compensation and benefits of
such persons. A land bank may also enter into contracts and agreements
with municipalities for staffing services to be provided to the land
bank by municipalities or agencies or departments thereof, or for a land
bank to provide such staffing services to municipalities or agencies or
departments thereof.
§ 1607. Powers.
(a) A land bank shall constitute a charitable not-for-profit
corporation under New York law, which powers shall include all powers
necessary to carry out and effectuate the purposes and provisions of
this article, including the following powers in addition to those herein
otherwise granted:
(1) adopt, amend, and repeal bylaws for the regulation of its affairs
and the conduct of its business;
(2) sue and be sued in its own name and plead and be impleaded in all
civil actions, including, but not limited to, actions to clear title to
property of the land bank;
(3) to adopt a seal and to alter the same at pleasure;
(4) to make contracts, give guarantees and incur liabilities, borrow
money at such rates of interest as the land bank may determine;
(5) to issue negotiable revenue bonds and notes according to the
provisions of this article;
(6) to procure insurance or guarantees from the state of New York or
federal government of the payments of any debts or parts thereof
incurred by the land bank, and to pay premiums in connection therewith;
(7) to enter into contracts and other instruments necessary to the
performance of its duties and the exercise of its powers, including, but
not limited to, intergovernmental agreements under section one hundred
nineteen-o of the general municipal law for the joint exercise of powers
under this article;
(8) to enter into contracts and other instruments necessary to the
performance of functions by the land bank on behalf of municipalities or
agencies or departments of municipalities, or the performance by
municipalities or agencies or departments of municipalities of functions
on behalf of the land bank;
(9) to make and execute contracts and other instruments necessary to
the exercise of the powers of the land bank; and any contract or
instrument when signed by the chairman or vice-chairman of the land
bank, or by an authorized use of their facsimile signatures, and by the
secretary or assistant secretary, or, treasurer or assistant treasurer
of the land bank, or by an authorized use of their facsimile signatures,
shall be held to have been properly executed for and on its behalf;
(10) to procure insurance against losses in connection with the real
property, assets, or activities of the land bank;
(11) to invest money of the land bank, at the discretion of the board
of directors, in instruments, obligations, securities, or property
determined proper by the board of directors, and name and use
depositories for its money;
(12) to enter into contracts for the management of, the collection of
rent from, or the sale of real property of the land bank;
(13) to design, develop, construct, demolish, reconstruct,
rehabilitate, renovate, relocate, and otherwise improve real property or
rights or interests in real property;
(14) to fix, charge, and collect rents, fees and charges for the use
of real property of the land bank and for services provided by the land
bank;
(15) to grant or acquire a license, easement, lease (as lessor and as
lessee), or option with respect to real property of the land bank;
(16) to enter into partnership, joint ventures, and other
collaborative relationships with municipalities and other public and
private entities for the ownership, management, development, and
disposition of real property;
(17) to inventory vacant, abandoned and tax foreclosed properties;
(18) to develop a redevelopment plan to be approved by the foreclosing
governmental unit or units;
(19) to be subject to municipal building codes and zoning laws;
(20) to enter in agreements with a foreclosing governmental unit for
the distribution of revenues to the foreclosing governmental unit and
school district;
(21) to organize a subsidiary for a project or projects which the land
bank has the power to pursue under this article when the primary reason
for which the subsidiary shall be organized shall be to limit the
potential liability impact of the subsidiary's project or projects on
the land bank or because state or federal law requires that the purpose
of a subsidiary be undertaken through a specific corporate or business
structure. All real property of a subsidiary organized under this
article shall be maintained on the inventory lists required in this
article of the land bank of which it is a subsidiary and the subsidiary
shall make all reports and other disclosures as are required of land
banks under this article and as local public authorities, unless the
subsidiary's operations and finances are consolidated with those of the
land bank of which it is a subsidiary. Subsidiaries organized under this
article shall be established in the form of a New York charitable
not-for-profit corporation or a New York single member limited liability
company. Subsidiaries shall not have the authority to issue bonds, notes
or other debts, provided, however, that such subsidiaries may issue
notes or other debt to the land bank of which it is a subsidiary. The
organizational documents filed to create a subsidiary under this article
shall state that the land bank is organizing the subsidiary for the
purposes set forth in this article and the name of the subsidiary shall
be reasonably related to the name of the land bank of which it is a
subsidiary. The real property of a subsidiary organized under this
article and its income and operations are exempt from all taxation by
the state of New York and by any of its political subdivisions; and
(22) to do all other things necessary to achieve the objectives and
purposes of the land bank or other laws that relate to the purposes and
responsibility of the land bank.
(b) A land bank shall neither possess nor exercise the power of
eminent domain.
§ 1608. Acquisition of property.
(a) The real property of a land bank and its income and operations are
exempt from all taxation by the state of New York and by any of its
political subdivisions. The real property of a land bank shall be exempt
from: (i) all special ad valorem levies and special assessments as
defined in section one hundred two of the real property tax law; (ii)
sewer rent imposed under article fourteen-F of the general municipal
law; and (iii) any and all user charges imposed by any municipal
corporation, special district or other political subdivisions of the
state, provided, however, that real property of a land bank for which
such land bank receives rent, fees, or other charges for the use of such
real property shall not be exempt from subparagraphs (ii) and (iii) of
this paragraph. Such exempt status shall be effective upon the date of
transfer of title to a land bank, notwithstanding the applicable taxable
status date. Notwithstanding any other general, special or local law
relating to fees of clerks, no clerk shall charge or collect a fee for
filing, recording or indexing any paper, document, map or proceeding
filed, recorded or indexed for a land bank, or an officer thereof acting
in an official capacity, nor for furnishing a transcript, certification
or copy of any paper, document, map or proceeding to be used for land
bank purposes.
(b) The land bank may acquire real property or interests in real
property by gift, devise, transfer, exchange, foreclosure, purchase, or
otherwise on terms and conditions and in a manner the land bank
considers proper.
(c) The land bank may acquire real property by purchase contracts,
lease purchase agreements, installment sales contracts, land contracts,
and may accept transfers from municipalities upon such terms and
conditions as agreed to by the land bank and the municipality.
Notwithstanding any other law to the contrary, any municipality may
transfer to the land bank real property and interests in real property
of the municipality on such terms and conditions and according to such
procedures as determined by the municipality.
(d) The land bank shall maintain all of its real property in
accordance with the laws and ordinances of the jurisdiction in which the
real property is located.
(e) The land bank shall not own or hold real property located outside
the jurisdictional boundaries of the foreclosing governmental unit or
units which created the land bank; provided, however, that a land bank
may be granted authority pursuant to an intergovernmental cooperation
agreement with another municipality to manage and maintain real property
located within the jurisdiction of such other municipality.
(f) Notwithstanding any other provision of law to the contrary, any
municipality may convey to a land bank real property and interests in
real property on such terms and conditions, form and substance of
consideration, and procedures, all as determined by the transferring
municipality in its discretion.
(g) The acquisition of real property by a land bank pursuant to the
provisions of this article, from entities other than political
subdivisions, shall be limited to real property that is tax delinquent,
tax foreclosed, vacant or abandoned; provided, however, that a land bank
shall have authority to enter into agreements to purchase other real
property consistent with an approved redevelopment plan.
(h) The land bank shall maintain and make available for public review
and inspection a complete inventory of all property received by the land
bank. Such inventory shall include: the location of the parcel; the
purchase price, if any, for each parcel received; the current value
assigned to the property for purposes of real property taxation; the
amount, if any, owed to the locality for real property taxation; the
identity of the transferor; and any conditions or restrictions
applicable to the property.
(i) All parcels received by the land bank shall be listed on the
received inventory established pursuant to paragraph (h) of this section
within one week of acquisition and shall remain in such inventory for
one week prior to disposition.
(j) Failure to comply with the requirements in paragraphs (h) and (i)
of this section with regard to any particular parcel shall cause such
acquisition by the land bank to be null and void.
§ 1609. Disposition of property.
(a) The land bank shall hold in its own name, or in the name of a
lawfully organized subsidiary, all real property acquired by the land
bank irrespective of the identity of the transferor of such property.
(a-1) This section governing the disposition of property by land banks
shall supersede section twenty-eight hundred ninety-seven of the public
authorities law in the governance of property dispositions by land banks
and, as such, notwithstanding any other general, special or local law to
the contrary, section twenty-eight hundred ninety-seven of the public
authorities law shall not apply to land banks.
(b) The land bank shall maintain and make available for public review
and inspection a complete inventory of all real property dispositions by
the land bank. Such inventory shall include a complete copy of the sales
contract including all terms and conditions including, but not limited
to, any form of compensation received by the land bank or any other
party which is not included within the sale price.
(c) The land bank shall determine and set forth in policies and
procedures of the board of directors the general terms and conditions
for consideration to be received by the land bank for the transfer of
real property and interests in real property, which consideration may
take the form of monetary payments and secured financial obligations,
covenants and conditions related to the present and future use of the
property, contractual commitments of the transferee, and such other
forms of consideration as are consistent with state and local law.
(d) The land bank may convey, exchange, sell, transfer, lease as
lessor, grant, release and demise, pledge any and all interests in, upon
or to real property of the land bank.
(e) A foreclosing governmental unit may, in its local law, resolution
or ordinance creating a land bank, or, in the case of multiple
foreclosing governmental units creating a single land bank in the
applicable intergovernmental cooperation agreement, establish a
hierarchical ranking of priorities for the use of real property conveyed
by a land bank including but not limited to:
(1) use for purely public spaces and places, including community
gardens;
(2) use for affordable housing;
(3) use for retail, commercial and industrial activities;
(4) use as wildlife conservation areas; and
(5) such other uses and in such hierarchical order as determined by
the foreclosing governmental unit or units.
(f) A foreclosing governmental unit may, in its local law, resolution
or ordinance creating a land bank, or, in the case of multiple
foreclosing governmental units creating a single land bank in the
applicable intergovernmental cooperation agreement, require that any
particular form of disposition of real property, or any disposition of
real property located within specified jurisdictions, be subject to
specified voting and approval requirements of the board of directors.
Except and unless restricted or constrained in this manner, the board of
directors may delegate to officers and employees the authority to enter
into and execute agreements, instruments of conveyance and all other
related documents pertaining to the conveyance of real property by the
land bank.
(g) All property dispositions shall be listed on the property
disposition inventory established pursuant to paragraph (b) of this
section within one week of disposition. Such records shall remain
available for public inspection in the property disposition inventory
indefinitely.
(h) Failure to comply with the requirements in paragraph (g) of this
section shall subject the land bank to a civil penalty of one hundred
dollars per violation up to a maximum of ten thousand dollars for each
parcel, recoverable in an action brought by the attorney general or
district attorney. The attorney general or district attorney may also
seek rescission of the real property transaction.
§ 1610. Financing of land bank operations.
(a) A land bank may receive funding through grants and loans from the
foreclosing governmental unit or units which created the land bank, from
other municipalities, from the state of New York, from the federal
government, and from other public and private sources.
(b) A land bank may receive and retain payments for services rendered,
for rents and leasehold payments received, for consideration for
disposition of real and personal property, for proceeds of insurance
coverage for losses incurred, for income from investments, and for any
other asset and activity lawfully permitted to a land bank under this
article.
(c) Upon the adoption of a local law, ordinance, or resolution by
municipality, school district or any taxing district, fifty percent of
the real property taxes collected on any specific parcel of real
property identified by such municipality, school district or any taxing
jurisdiction may be remitted to the land bank, in accordance with
procedures established by regulations promulgated by the department of
taxation and finance. Such allocation of real property tax revenues
shall commence with the first taxable year following the date of
conveyance and shall continue for a period of five years.
§ 1611. Borrowing and issuance of bonds.
(a) A land bank shall have power to issue bonds for any of its
corporate purposes, the principal and interest of which are payable from
its revenues generally. Any of such bonds may be secured by a pledge of
any revenues, including grants or contributions from the state of New
York, the federal government, or any agency, and instrumentality
thereof, or by a mortgage of any property of the land bank.
(b) The bonds issued by a land bank are hereby declared to have all
the qualities of negotiable instruments under New York state law.
(c) The bonds of a land bank created under the provisions of this
article and the income therefrom shall at all times be free from
taxation for the state of New York or local purposes under any provision
of New York law.
(d) Bonds issued by the land bank shall be authorized by resolution of
the board and shall be limited obligations of the land bank; the
principal and interest, costs of issuance, and other costs incidental
thereto shall be payable solely from the income and revenue derived from
the sale, lease, or other disposition of the assets of the land bank. In
the discretion of the land bank, the bonds may be additionally secured
by mortgage or other security device covering all or part of the project
from which the revenues so pledged may be derived. Any refunding bonds
issued shall be payable from any source described above or from the
investment of any of the proceeds of the refunding bonds and shall not
constitute an indebtedness or pledge of the general credit of any
foreclosing governmental unit or municipality within the meaning of any
constitutional or statutory limitation of indebtedness and shall contain
a recital to that effect. Bonds of the land bank shall be issued in such
form, shall be in such denominations, shall bear interest, shall mature
in such manner, and be executed by one or more members of the board as
provided in the resolution authorizing the issuance thereof. Such bonds
may be subject to redemption at the option of and in the manner
determined by the board in the resolution authorizing the issuance
thereof.
(e) Bonds issued by the land bank shall be issued, sold, and delivered
in accordance with the terms and provisions of a resolution adopted by
the board. The board may sell such bonds in such manner, either at
public or at private sale, and for such price as it may determine to be
in the best interests of the land bank. The resolution issuing bonds
shall be published in a newspaper of general circulation within the
jurisdiction of the land bank and posted prominently and continuously on
the homepage of any website maintained by the land bank.
(f) Neither the members of a land bank nor any person executing the
bonds shall be liable personally on any such bonds by reason of the
issuance thereof. Such bonds or other obligations of a land bank shall
not be a debt of any municipality or of the state of New York, and shall
so state on their face, nor shall any municipality or the state of New
York nor any revenues or any property of any municipality or of the
state of New York be liable therefor.
§ 1612. Public records and public meetings.
(a) The board shall cause minutes and a record to be kept of all its
proceedings. Except as otherwise provided in this section, the land bank
shall be subject to the open meetings law and the freedom of information
law.
(b) A land bank shall hold a public hearing prior to financing or
issuance of bonds. The land bank shall schedule and hold a public
hearing and solicit public comment. After the conclusion of the public
hearing and comments, the land bank shall consider the results of the
public hearing and comments with respect to the proposed actions. Such
consideration by the land bank shall include the accommodation of the
public interest with respect to such actions; if such accommodation is
deemed in the best interest of the community proposed actions shall
include such accommodation.
(c) In addition to any other report required by this chapter, the land
bank, through its chairperson, shall annually deliver, in oral and
written form, a report to the municipality. Such report shall be
presented by March fifteenth of each year to the governing body or board
of the municipality. The report shall describe in detail the projects
undertaken by the land bank during the past year, the monies expended by
the land bank during the past year, and the administrative activities of
the land bank during the past year. At the conclusion of the report, the
chairperson of the land bank shall be prepared to answer the questions
of the municipality with respect to the projects undertaken by the
authority during the past year, the monies expended by the municipality
during the past year, and the administrative activities of the
municipality during the past year.
§ 1613. Dissolution of land bank.
A land bank may be dissolved as a charitable not-for-profit
corporation sixty calendar days after an affirmative resolution approved
by two-thirds of the membership of the board of directors. Sixty
calendar days advance written notice of consideration of a resolution of
dissolution shall be given to the foreclosing governmental unit or units
that created the land bank, shall be published in a local newspaper of
general circulation, and posted prominently and continuously on the
homepage of any website maintained by the land bank, and shall be sent
certified mail to the trustee of any outstanding bonds of the land bank.
Upon dissolution of the land bank all real property, personal property
and other assets of the land bank shall become the assets of the
foreclosing governmental unit or units that created the land bank. In
the event that two or more foreclosing governmental units create a land
bank in accordance with section sixteen hundred three of this article,
the withdrawal of one or more foreclosing governmental units shall not
result in the dissolution of the land bank unless the intergovernmental
agreement so provides, and there is no foreclosing governmental unit
that desires to continue the existence of the land bank.
§ 1614. Conflicts of interest.
No member of the board or employee of a land bank shall acquire any
interest, direct or indirect, in real property of the land bank, in any
real property to be acquired by the land bank, or in any real property
to be acquired from the land bank. No member of the board or employee of
a land bank shall have any interest, direct or indirect, in any contract
or proposed contract for materials or services to be furnished or used
by a land bank. The board may adopt supplemental rules and regulations
addressing potential conflicts of interest and ethical guidelines for
members of the board and land bank employees.
§ 1615. Construction, intent and scope.
The provisions of this article shall be construed liberally to
effectuate the legislative intent and the purposes as complete and
independent authorization for the performance of each and every act and
thing authorized by this article, and all powers granted shall be
broadly interpreted to effectuate the intent and purposes and not as a
limitation of powers. Except as otherwise expressly set forth in this
article, in the exercise of its powers and duties under this article and
its powers relating to property held by the land bank, the land bank
shall have complete control as fully and completely as if it represented
a private property owner and shall not be subject to restrictions
imposed by the charter, ordinances, or resolutions of a local unit of
government.
§ 1616. Delinquent property tax enforcement.
The municipality may enter into a contract to sell some or all of the
delinquent tax liens held by it to a land bank, subject to the following
conditions:
(a) The consideration to be paid may be more or less than the face
amount of the tax liens sold.
(b) Property owners shall be given at least thirty days advance notice
of such sale in the same form and manner as is provided by subdivision
two of section eleven hundred ninety of the real property tax law.
Failure to provide such notice or the failure of the addressee to
receive the same shall not in any way affect the validity of any sale of
a tax lien or tax liens or the validity of the taxes or interest
prescribed by law with respect thereto.
(c) The municipality shall set the terms and conditions of the
contract of sale.
(d) The land bank must thirty days prior to the commencement of any
foreclosure action provide to the municipality a list of liens to be
foreclosed. The municipality may, at its sole option and discretion,
repurchase a lien or liens on the foreclosure list from the land bank.
The repurchase price shall be the amount of the lien or liens plus any
accrued interest and collection fees incurred by the land bank. The land
bank shall provide the foreclosure list to the municipality, along with
the applicable repurchase price of each lien, by certified mail, and the
municipality shall have thirty days from receipt to notify the land bank
of its option to purchase one or more of the liens. If the municipality
opts to purchase the lien, it shall provide payment within thirty days
of receipt of the repurchase price of said lien or liens. If the
municipality shall fail to opt to repurchase the lien or liens the land
bank shall have the right to commence a foreclosure action immediately.
(e) The sale of a tax lien pursuant to this article shall not operate
to shorten the otherwise applicable redemption period or change the
otherwise applicable interest rate.
(f) Upon the expiration of the redemption period prescribed by law,
the purchaser of a delinquent tax lien, or its successors or assigns,
may foreclose the lien as in an action to foreclose a mortgage as
provided in section eleven hundred ninety-four of the real property tax
law. The procedure in such action shall be the procedure prescribed by
article thirteen of the real property actions and proceedings law for
the foreclosure of mortgages. At any time following the commencement of
an action to foreclose a lien, the amount required to redeem the lien,
or the amount received upon sale of a property, shall include reasonable
and necessary collection costs, attorneys' fees, legal costs,
allowances, and disbursements.
(g) The provisions of title five of article eleven of the real
property tax law shall apply so far as is practicable to a contract for
the sale of tax liens pursuant to this article.
(h) If the court orders a public sale pursuant to section eleven
hundred thirty-six of the real property tax law, and the purchaser of
the property is the land bank, then the form, substance, and timing of
the land bank's payment of the sales price may be according to such
agreement as is mutually acceptable to the plaintiff and the land bank.
The obligation of the land bank to perform in accordance with such
agreement shall be deemed to be in full satisfaction of the tax claim
which was the basis for the judgment.
(i) Notwithstanding any other provision of law to the contrary, in the
event that no municipality elects to tender a bid at a public sale
pursuant to the provisions of section eleven hundred sixty-six of the
real property tax law or sale pursuant to the provisions of a county
charter, city charter, administrative code, or special law when
applicable under section eleven hundred four of the real property tax
law, the land bank may tender a bid at such sale in an amount equal to
the total amount of all municipal claims and liens which were the basis
for the judgment. In the event of such tender by the land bank the
property shall be deemed sold to the land bank regardless of any bids by
any other third parties. The bid of the land bank shall be paid as to
its form, substance, and timing according to such agreement as is
mutually acceptable to the plaintiff and the land bank. The obligation
of the land bank to perform in accordance with such agreement shall be
deemed to be in full satisfaction of the municipal claim which was the
basis for the judgment. The land bank, as purchaser at such public sale
or sale pursuant to the provisions of a county charter, city charter,
administrative code, or special law when applicable under section eleven
hundred four of the real property tax law, shall take and forever
thereafter have, an absolute title to the property sold, free and
discharged of all tax and municipal claims, liens, mortgages, charges
and estates of whatsoever kind. The deed to the land bank shall be
executed, acknowledged and delivered within thirty days of the sale.
Alternatively, the land bank can assign all rights resulting from the
land bank's successful tender for the property to the foreclosing
governmental unit, which would allow the property to be deeded directly
to the foreclosing governmental unit. All land bank acquisitions
pursuant to this paragraph shall comply with section sixteen hundred
eight of this article and all dispositions of property acquired pursuant
to this paragraph shall comply with section sixteen hundred nine of this
article.
§ 1617. Contracts.
(a) The land bank may, in its discretion, assign contracts for
supervision and coordination to the successful bidder for any
subdivision of work for which the land bank receives bids. Any
construction, demolition, renovation and reconstruction contract awarded
by the land bank shall contain such other terms and conditions as the
land bank may deem desirable. The land bank shall not award any
construction, demolition, renovation and reconstruction contract greater
than ten thousand dollars except to the lowest bidder who, in its
opinion, is qualified to perform the work required and who is
responsible and reliable. The land bank may, however, reject any or all
bids or waive any informality in a bid if it believes that the public
interest will be promoted thereby. The land bank may reject any bid, if,
in its judgment, the business and technical organization, plant,
resources, financial standing, or experience of the bidder justifies
such rejection in view of the work to be performed.
(b) For the purposes of article fifteen-A of the executive law only,
the land bank shall be deemed a state agency as that term is used in
such article, and all contracts for procurement, design, construction,
services and materials shall be deemed state contracts within the
meaning of that term as set forth in such article.