What's happening
This bill changes voting requirements for not-for-profit corporate mergers, consolidations, and dissolutions to require a two-thirds board majority if a quorum is present.
Why it matters
Makes it harder for a small group to push through major changes. By requiring a two-thirds majority of directors present (if a quorum exists) for mergers, consolidations, or dissolutions, the bill reduces the risk that a narrow majority or a “bare quorum” can approve significant organizational actions that may not have broad board support.
Adds consistency and predictability to board decision-making. The new threshold creates a clear and uniform standard for board votes on these critical matters, potentially reducing disputes or confusion about what constitutes valid board action under varying by-laws or incorporation certificates.
Could impact how not-for-profits govern controversial or high-stakes decisions. Organizations facing contentious proposals may need to build broader consensus among directors, which could slow down the process but also encourage more inclusive deliberation and reduce the chance of hasty or divisive decisions.
Protects stakeholder interests, especially in organizations with divided boards. By raising the bar for approval, the bill may help safeguard the interests of minority factions, members, donors, or other stakeholders who could be adversely affected by rapid or poorly-supported structural changes.
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Who cares
Not-for-profit boards of directors
The bill would expressly allow adoption of merger or consolidation plans by two-thirds of directors present when a quorum is present, or by the number required under governing documents and applicable law.
Not-for-profit corporations considering dissolution
The bill would add a two-thirds vote of directors present, with a quorum present, as an option for board adoption of a dissolution plan.
Directors of not-for-profits with board vacancies
The bill would retain the option for remaining directors to unanimously adopt a dissolution plan when fewer directors hold office than are needed for a quorum.
Headline styles
Change Board Voting Rules
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to corporations, authorities and commissions
- Delivered to senate
- Passed assembly
- Ordered to third reading cal.8
- Returned to assembly
- Died in senate
- Referred to corporations, authorities and commissions
- Delivered to senate
- Passed assembly
- Advanced to third reading cal.93
- Reported
- Reported referred to codes
Show 1 earlier action
- Referred to corporations, authorities and commissions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Change Board Voting Rules
In Senate Committee · Corporations, Authorities And Commissions · Sponsor Leroy Comrie
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
222
2019-2020 Regular Sessions
IN ASSEMBLY (Prefiled)
January 9, 2019
Introduced by M. of A. PAULIN, GALEF, RAIA, ABINANTI, BUCHWALD -- read once and referred to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the not-for-profit corporation law, in relation to voting requirements of the board of certain corporations
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The opening paragraph of paragraph (a) of section 902 of the not-for-profit corporation law is amended to read as follows:
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:
§ 2. Subparagraph 1 of paragraph (a) of section 1002 of the not-forprofit corporation law, as amended by chapter 549 of the laws of 2013, is amended to read as follows:
(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; [or]
(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;
§ 3. This act shall take effect on the ninetieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02091-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.