New York Not-for-Profits Can Permanently Embrace Virtual Meetings

Morgan Lewis
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Morgan Lewis

Virtual member meetings for New York State not-for-profit and religious corporations, which were originally allowed as an exceptional circumstance, are now permitted permanently.

SUMMARY

New York had temporarily modified its rules to allow for virtual meetings of members of not-for-profit and religious corporations as a response to the COVID-19 pandemic. Prior to these modifications, these organizations were not permitted to hold membership meetings virtually, or to hold hybrid meetings in which some members participated virtually while others participated in person. Effective November 8, 2021, these options for virtual meetings have been permanently codified into New York’s Not-for-Profit Corporation Law (N-PCL).

BACKGROUND

Section 603 of the N-PCL requires not-for-profit corporations to hold member meetings. Section 28 of the Religious Corporations Law (RCL) requires the same for religious corporations. Prior to the COVID-19 pandemic, neither N-PCL Section 603 nor RCL Section 28 explicitly provided for remote participation at member meetings. Executive Order 202, however, suspended all in-person meetings in early 2020. The state also adopted several temporary provisions to allow not-for-profit and religious organizations to hold remote member meetings. The original executive order was originally set to expire in May 2020; the temporary provisions were eventually extended by the New York State Legislature to continue until the state disaster emergency declared by Executive Order 202 ended or until December 31, 2021, whichever occurred later.

NEW RULES

The temporary provisions allowing for virtual meetings of members of New York not-for-profit and religious organizations have been adopted as permanent changes to the N-PCL and the RCL. For corporations organized under the N-PCL, unless otherwise restricted by the certificate of incorporation or the bylaws, meetings of members can be held partially or entirely virtually. If held virtually, the electronic service and/or platform by which the meeting is held is deemed to be the place of the meeting.

For corporations organized under the RCL, meetings of members can be held either in person or virtually if the board is authorized to determine the place of member meetings. Unlike corporations formed under the N-PCL, member meetings cannot be held partially virtually—in other words, they must be held either entirely in person or entirely virtually.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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