What's happening
This bill changes voting requirements for not-for-profit boards, requiring a two-thirds vote of directors present for mergers or dissolutions.
Why it matters
Raises the threshold for significant decisions. By requiring a two-thirds vote of directors present (instead of possibly just a simple majority), the bill makes it harder for not-for-profit boards to approve major actions like mergers or dissolutions, potentially ensuring broader consensus.
Reduces risk of rushed or unrepresentative decisions. The new voting requirement means that a small group of directors cannot easily push through structural changes without substantial support, which could protect the organization’s mission and stakeholders.
Adds clarity and consistency. The law now clearly states the exact voting requirement for these key decisions, reducing ambiguity and the possibility of legal disputes about whether a board action was valid.
May affect board dynamics and planning. Boards will need to ensure higher attendance and engagement at meetings where mergers or dissolutions are considered, as decisions will require greater participation and agreement among directors.
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Who cares
Headline styles
Change Board Voting Rules
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Recommit, enacting clause stricken
- Referred to corporations, authorities and commissions
- 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 Amy Paulin
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1897
2019-2020 Regular Sessions
IN SENATE
January 17, 2019
Introduced by Sen. GALLIVAN -- read twice and ordered printed, and when printed to be committed 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.
Sponsor's memo
Title of bill
An act to amend the not-for-profit corporation law, in relation to voting requirements of the board of certain corporations
Purpose
To require a two-thirds vote of a corporation's board members present at the time of the vote, for a proposed consolidation, merger or dissol- ution of the corporation, so long as there is a quorum at that time.
Summary of specific provisions
Section one of the bill amends the opening paragraph of paragraph a of section 902 of the not-for-profit corporation law to require that the board of a corporation proposing to participate in a merger or consol- idation shall adopt, by a vote of two-thirds of the board present, if a quorum is present at that time, of each corporation, 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.
Section two amends subparagraph 1 of paragraph a of section 1002 of the not-for-profit corporation law to require a vote by two-thirds of the directors present at the time of the vote, if a quorum is present at that time in order to dissolve the corporation.
Section three provides the effective date.
Justification
This bill will amend the Not-for-Profit Corporation Law (NPCL) in relation to corporate consolidation, merger or dissolution. Currently, the NPCL allows boards to authorize such actions by a simple majority of a quorum of the board, whereas the law requires a higher standard for other corporate action. For example, to change the number of directors, the vote of a majority of the entire board is required; to elect an officer or to purchase r sell real property on behalf of the corpo- ration, a two-thirds majority vote of the entire board is needed. Since the decision to merge, consolidate, or dissolve is arguably the most important decision that a corporation can make, this bill will amend the NPCL to require a vote in favor of such action by two-thirds of the directors present at the time of the vote, if a quorum is present at that time, or alternatively, by a vote of the number of directors required under the corporation's certificate of incorporation, its by-laws, this chapter, and any other applicable law.
Prior legislative history
2018: S.8637A/A.10304B Referred to Corporations, Authorities and Commis- sions/ Passed Assembly
Fiscal implications
None.
Effective date
On the ninetieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.