NY State Senate Bill 2019-S8706

Senate Bill S8706

2019-2020 Legislative Session

Relates to providing for the remote conduct of certain practices and procedures relating to board meetings

download bill text pdf

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 09, 2020	referred to rules

2019-S8706 (ACTIVE) - Details

See Assembly Version of this Bill:: A10768
Current Committee:: Senate Rules
Law Section:: Business Corporation Law
Laws Affected:: Amd §§708 & 602, BC L; amd §§603 & 605, N-PC L; amd §28, Rel Corp L; amd §6, Chap 122 of 2020
Versions Introduced in 2021-2022 Legislative Session:: S1182, A1237

2019-S8706 (ACTIVE) - Summary

Provides for the remote conduct of certain practices and procedures relating to board meetings utilizing electronic and/or audio-visual technologies; makes permanent provisions relating to providing for the remote conduct of certain practices and procedures relating to board meetings.

2019-S8706 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8706

SPONSOR: BENJAMIN
 
TITLE OF BILL:

An act to amend the business corporation law, the not-for-profit corpo-
ration law, and the religious corporations law, in relation to providing
for the remote conduct of certain practices and procedures relating to
board meetings; and to amend chapter 122 of the laws of 2020, amending
the business corporation law, the not-for-profit corporation law, and
the religious corporations law relating to providing for the remote
conduct of certain practices and procedures relating to board meetings,
in relation to the effectiveness thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would allow business corporations, not-for-profit corpo-
rations, religious institutions, and cooperatives to hold meetings of
shareholders, members, trustees, etc., via electronic communication.

 
SUMMARY OF PROVISIONS:

Section 1. Paragraph (b) of section 708 of the business corporation law
is amended to allow a director to give their written consent for the
board to take actions without a formal meeting via electronic means.

Section 2. Paragraph (a) of section 602 of the business corporation law
is amended to allow the board of directors to determine a shareholders
meeting shall take place solely via electronic communications, the
platform/service of which shall be the place of the meeting for purposes
of Article VI of the business corporations law.

Section 3. Paragraph (a) of section 603 of the not-for-profit corpo-
ration law is amended to allow members to participate in in-person meet-
ings via electronic communications, or for meetings of members to take
place solely via electronic communications, at the discretion of the
board of directors, and to provide minimum procedure guidelines for
members taking part in members meetings via electronic communications.

Section 4. Paragraph (a) of Section 605 of the not-for-profit corpo-
ration law is amended by requiring the notice of meeting for a members
meeting include the means of electronic communications, if any, by which
members may participate in the meeting. Additionally, paragraph (b) of
section 605 would be amended by requiring that, for a notice of meeting
of an adjourned meeting to another time and place to not be necessary,
the means of electronic communication, if any, by which members may
participate in said adjourned meeting must be announced at the meeting
where the adjournment is taking place.

Section 5. The religious corporations law is amended by adding a new
section to explicitly authorize the board of trustees of a religious
corporation to determine that board or corporate meetings may be held
solely by means of electronic communications.

Section 6. This act shall take effect immediately.

 
JUSTIFICATION:


The New York State Business Corporation Law and Not-For-Profit Corpo-
ration Law do not expressly authorize shareholder and member meetings,
respectively, to take place solely via electronic communications. The
New York State Religious Corporations Law, as it pertains to board of
trustee meetings and corporate meetings, in a general sense is similarly
deficient in that regard. Recent executive orders by the Governor in
regard to encouraging social distancing in response to the COVID-19
pandemic have expressly allowed such meetings to take place solely by
electronic communications, and that ability was codified by Ch.122 of
2020 for the duration of COVID-19 state of emergency. Under this author-
ity, meetings have successfully been conducted via electronic communi-
cations and corporations should continue to have this flexibility after
the COVID-19 pandemic ends.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S8706 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8706
 
                             I N  S E N A T E
 
                               July 9, 2020
                                ___________
 
 Introduced  by Sen. BENJAMIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the business corporation law, the not-for-profit  corpo-
   ration law, and the religious corporations law, in relation to provid-
   ing  for the remote conduct of certain practices and procedures relat-
   ing to board meetings; and to amend chapter 122 of the laws  of  2020,
   amending  the business corporation law, the not-for-profit corporation
   law, and the religious corporations law relating to providing for  the
   remote  conduct  of certain practices and procedures relating to board
   meetings, in relation to the effectiveness thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  (b) of section 708 of the business corporation
 law, as amended by chapter 122 of the laws of 2020, is amended  to  read
 as follows:
   (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 in writing to the adoption of a
 resolution authorizing  the  action.  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. [For the
 duration of the state disaster emergency declared by executive order two
 hundred two that began on March seventh, two thousand  twenty,  notwith-
 standing]  NOTWITHSTANDING  any  provision  of  law to the contrary, the
 written consent of a member  may  be  made  electronically,  where  such
 consent  is  submitted via electronic mail, TEXT, OR OTHER SECURED PLAT-
 FORM FOR ELECTRONIC COMMUNICATIONS, along with information from which it
 can be reasonably determined that the  transmission  was  authorized  by
 such member.
   §  2. Paragraph (a) of section 602 of the business corporation law, as
 amended by chapter 122 of the laws  of  2020,  is  amended  to  read  as
 follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD16887-01-0

 S. 8706                             2
 
   (a)  Meetings  of  shareholders  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, if] IF, pursuant to
 this paragraph or the by-laws of the corporation, the board of directors
 is authorized to determine the place of a meeting of  shareholders,  the
 board of directors may, in its sole discretion, determine that the meet-
 ing   be   held   solely  by  means  of  electronic  communication,  the
 platform/service of which shall be the place of the meeting for  purpose
 of this article.
   §  3.  Paragraph  (a) of section 603 of the not-for-profit corporation
 law, as amended by chapter 122 of the laws of 2020, is amended  to  read
 as follows:
   (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, the] 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 electron-
 ically 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.
   § 4. Section 605 of the not-for-profit corporation law, as amended  by
 chapter 122 of the laws of 2020, is amended to read as follows:
 § 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,] 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, indi-
 cate 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 enti-
 tled  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

 S. 8706                             3
 
 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 forego-
 ing, 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 affida-
 vit  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,] 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.
   § 5. Section 28 of the religious corporations law, as added by chapter
 122 of the laws of 2020, is amended read as follows:
   §  28.  [Meetings  for  the  duration  of the state disaster emergency
 declared by executive order two hundred two that began on March seventh,
 two thousand twenty; electronic communication. For the duration  of  the
 state  disaster  emergency  declared  by executive order two hundred two
 that began on March seventh, two thousand twenty, notwithstanding] ELEC-
 TRONIC MEETINGS.  NOTWITHSTANDING any provision of law,  certificate  of
 incorporation  or by-laws to the contrary, if the board of trustees of a

 S. 8706                             4
 
 religious corporation is authorized to determine the  place  of  trustee
 meetings  [or],  corporate  meetings, CONGREGANT OR MEMBERSHIP MEETINGS,
 the board of trustees may, in its sole discretion,  determine  that  the
 meeting  shall  be held solely by means of electronic communication, the
 electronic service and/or platform through which  the  meeting  is  held
 shall be the place of the meeting for purposes of this chapter.
   §  6. Section 6 of chapter 122 of the laws of 2020, amending the busi-
 ness corporation law, the not-for-profit corporation law, and the  reli-
 gious  corporations  law relating to providing for the remote conduct of
 certain practices and procedures relating to board meetings, is  amended
 to read as follows:
   §  6.  This act shall take effect immediately [and shall expire and be
 deemed repealed December 31, 2021].
   § 7. This act shall take effect immediately.

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