NY Educ L § 216-A (2021)
2021 New York Laws EDN - Education Title 1 - General Provisions Article 5 - University of the State of New York Part 1 - General Organization 216-A - Applicability of Not-for-Profit Corporation Law.

§ 216-a. Applicability  of not-for-profit corporation law. 1. The term "education corporation" as used in this section means a corporation  (a) chartered  or incorporated by the regents or otherwise formed under this chapter, or (b) formed by a special act of this state with its principal purpose an education purpose and which is a member of the university  of the  state of New York, or (c) formed under laws other than the statutes of this state which, if it were to be formed currently under the laws of this state, might be chartered  by  the  regents,  and  which  has  been authorized  to conduct its activities in this state by the regents or as an authorized foreign education corporation  with  the  consent  of  the commissioner.  A  corporation as defined in the business corporation law is not an education corporation under this section.   2. An education corporation formed prior to September first,  nineteen hundred  seventy-three which has authority to issue stock, is subject to the business corporation law in all matters involving shares  of  stock. To  that  extent,  the  not-for-profit corporation law does not apply to such education corporation.   3. A corporation within clause (c) of subdivision one of this  section (a)  may be granted authority to conduct activities in this state by the regents pursuant to this section and subject  to  such  provisions,  not inconsistent  with  this  section,  as the regents may prescribe, or (b) with the consent  of  the  commissioner,  may  receive  authority  under article  13 (Foreign Corporations) of the not-for-profit corporation law to  conduct  activities  in  this  state  as   an   authorized   foreign not-for-profit  corporation. If required by the commissioner and subject to such provisions, not  inconsistent  with  this  section,  as  he  may prescribe,  an  authorized  foreign  not-for-profit corporation shall be designated as an  "authorized  foreign  education  corporation"  in  its certificate  of  authority filed with the department of state. A foreign corporation granted authority by the regents hereunder or an "authorized foreign education corporation" is an "education corporation" under  this section.   4.  Except  as  provided  in subdivisions 2 and 3 of this section, the not-for-profit  corporation  law  applies  to   a   domestic   education corporation  and  an  authorized foreign education corporation, provided that:   a. If a provision of the not-for-profit corporation law conflicts with a provision of this chapter or of a special act by  which  an  education corporation  is formed, the provision of this chapter or of such special act shall prevail and the not-for-profit corporation law shall not apply in such case. If an applicable provision of  this  chapter  or  of  such special   act  relates  to  a  matter  embraced  in  the  not-for-profit corporation law but is not in conflict therewith, both provisions  shall apply.   b.  An  education  corporation to which the not-for-profit corporation law is made applicable by this section shall  be  treated  as  a  "corp- oration",  "domestic corporation", "foreign corporation", or "authorized foreign corporation" as  such  terms  are  used  in  the  not-for-profit corporation law as modified by this section, except that the purposes of an education corporation shall not thereby be extended.   c.  The  following  provisions  of  the not-for-profit corporation law shall not apply to education corporations:  section  one  hundred  five, section  one hundred fourteen, paragraph (a) of section two hundred one, paragraphs (b) and (c) of section two hundred two, section  two  hundred five,  section  three  hundred  one,  section three hundred two, section three hundred three, article four except paragraphs (b) through  (p)  of section  four  hundred  four and section four hundred five, section five  hundred nine, article eight except section eight hundred  four,  section nine hundred seven, section one thousand twelve and article fourteen.   d.  The  following adjusting provisions shall apply in the application of the not-for-profit corporation law under this section:  (1) The opening clause of paragraph (a) of section one hundred  twelve shall  read:  "At  the  request  of the regents of the university of the state of New York,  the  attorney-general  may  maintain  an  action  or special proceeding:"  (2) The first sentence of section five hundred one shall read: "Except when   the  charter  or  certificate  of  incorporation  so  permits,  a corporation shall not have stock or shares or certificates for stock  or for  shares,  but  may  issue nontransferable membership certificates or cards  to  evidence  membership,  whether  or  not  connected  with  any financial  contribution  to  the corporation, as provided in section six hundred one (Members). The fact that the  corporation  is  an  education 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."  (3) The first sentence of paragraph (b) of section five hundred eleven shall  read  as  follows:  "Upon presentation of the petition, the Court shall direct that notice of the application be  given  promptly  to  the attorney  general and the commissioner, 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."  (4) Paragraph (a) of  section  five  hundred  fifteen  shall  read  as follows:    "Except  when  the  charter  or certificate of incorporation authorizes the issuance of stock, a corporation shall not pay  dividends or distribute any part of its income or profit to its members, directors or officers."  (5)  Section  five hundred twenty shall include after the words, "suit of the attorney general" the following words, "at  the  request  of  the regents of the university of the state of New York,"  (6)  Paragraph  (b)  of section seven hundred three, and section seven hundred four shall not  reduce  the  term  of  office  of  directors  as provided   in   the   charter  or  certificate  of  incorporation  of  a corporation, or of the  number  of  classes  into  which  its  board  is divided, if, as of September first, nineteen hundred seventy-three, such term  of office of a director is greater than five years or the board is divided into more than five classes. Such term of office  or  number  of classes  shall  not be increased after September first, nineteen hundred seventy-three.  (7) The requirement of the affirmative  vote  of  a  majority  of  the entire  board  under  paragraph (f) of section seven hundred fifteen for fixing the salaries of officers, if not  done  in  or  pursuant  to  the by-laws,  shall  not  apply where the number of the entire board is over twenty. In such case the affirmative vote of a number  of  directors  at least  equal  to the applicable quorum requirement of such board for the transaction of business shall be sufficient.  (8) Section seven hundred sixteen shall not apply  to  a  loan  by  an education  corporation if its board, in the discharge of its duty to the corporation, finds that such loan (1) is in the best  interests  of  the education  corporation  and (2) is (a) to an officer or director thereof pursuant to a plan of employee or faculty assistance, or (b) to a  busi- ness  corporation the shares of which are wholly owned by such education corporation, or (c) to a not-for-profit corporation which is  controlled by  such  education corporation, or by a group of education corporations including such education corporation, or (d) to any corporation  on  the  board  of  which  a director or officer of such education corporation is serving as a director at the  request  of  the  board  of  such  lending education  corporation; provided, however, that any loan by an education corporation  to  any  corporation or other entity in which a director or officer of such education corporation has,  directly  or  indirectly,  a substantial  financial  interest,  is prohibited. The provisions of this subparagraph shall not apply to a private foundation under  section  two hundred sixteen-b of this chapter.  (9)  The  opening  clause  of  paragraph  (b) of section seven hundred twenty shall read as follows: "An action may be brought for  the  relief provided  in  this section and in paragraph (a) of section seven hundred nineteen (Liabilities of director in  certain  cases)  by  the  attorney general  at the request of the regents of the university of the state of New York, by the corporation, or, in the right of  the  corporation,  by any of the following:"  (10) Under section nine hundred six, if any constituent corporation or the  consolidated  corporation  is or would be an education corporation, the consent of the commissioner shall be endorsed on or annexed  to  the certificate  of  merger  or  consolidation  prior  to  the filing by the department of state.  (11) In addition to the requirements  of  section  nine  hundred  nine (Consent  to filing), the consent of the regents shall be endorsed on or annexed to a certificate of merger or consolidation if  any  constituent or consolidated corporation was chartered, or formed by special act with a purpose for which a corporation might be created by the regents.  (12) The opening clause of paragraph (a) of section eleven hundred one shall  read:  "At  the  request  of the regents of the university of the state of New York, the attorney general may  bring  an  action  for  the dissolution of a corporation upon one or more of the following grounds:"  (13) The opening clause of paragraph (a) of section eleven hundred two shall  read:  "With  the consent of the regents of the university of the state of New  York,  a  petition  for  the  judicial  dissolution  of  a corporation may be presented:"  (14) The opening clause of paragraph (a) of section twelve hundred two shall read: "Upon notice to the attorney general and the commissioner, a receiver  of  the property of a corporation can be appointed only by the court, and in one of the following cases:"   e. Any reference in the not-for-profit corporation law to the delivery of any certificate or other instrument to the department  of  state  for filing  shall  refer  to  and  provide  for  corresponding action of the regents or the commissioner relating thereto, as the case may be, except that in cases where  the  commissioner  consents  to  the  filing  under article  thirteen of the not-for-profit corporation law of a certificate of authority in which the authorized foreign corporation  is  designated as  an  "authorized foreign education corporation", filing under article thirteen shall mean filing with the department of state.   5. Every corporation to which the not-for-profit  corporation  law  is made  applicable by this section, is a charitable corporation as defined in paragraph (a)  of  section  one  hundred  two  (Definitions)  of  the not-for-profit  corporation  law under all applicable provisions of that law.   6. From and after the effective  date  of  this  section  the  general corporation law shall not apply to an education corporation.   7.  For the purpose of this section and elsewhere in this chapter, the effective date of the not-for-profit corporation law as to  corporations to  which  the not-for-profit corporation law is made applicable by this section, shall be September one, nineteen hundred seventy-three.    8. Nothing in  this  section  shall  impair  the  rights  and  powers, otherwise  granted by law, of the courts or the attorney general of this state.