2023 New York Laws › NPC - Not-For-Profit Corporation › Article 4 - Formation of Corporations › 406 - Private Foundation, as Defined in the United States Internal Revenue Code of 1954: Provisions Included in the Certificate of Incorporation.

§ 406. Private  foundation,  as  defined  in  the United States internal
revenue code of 1954: provisions included in the certificate of
incorporation.
(a) The following provisions are hereby included in the certificate of
incorporation of every domestic  corporation,  heretofore  or  hereafter
formed,  to which this chapter applies in whole or in part, and which is
a "private foundation" as defined in section 509 of  the  United  States
internal revenue code of 1954 ("code"):
(1)  The  corporation  shall  distribute such amounts for each taxable
year at such time and in such manner as not to subject  the  corporation
to tax on undistributed income under section 4942 of the code.
(2)  The corporation shall not engage in any act or self-dealing which
is subject to tax under section 4941 of the code.
(3) The corporation shall not  retain  any  excess  business  holdings
which are subject to tax under section 4943 of the code.
(4)  The  corporation shall not make any investments in such manner as
to subject the corporation to tax under section 4944 of the code.
(5) The corporation shall not make any taxable expenditures which  are
subject to tax under section 4945 of the code.
Except   as   provided   in   paragraph   (b),  this  paragraph  applies
notwithstanding any other provision of the certificate of  incorporation
or any direction in a gift instrument.
(b) Paragraph (a) shall not apply to the extent that it conflicts with
any  mandatory  direction  in  a  gift  instrument executed prior to the
effective date of this section  unless  such  conflicting  direction  is
removed  as impracticable under article eight of the estates, powers and
trusts law or in any other manner provided by  law.  The  absence  of  a
specific  provision  in  the  gift instrument for the current use of the
principal of the fund, or the  presence  in  such  an  instrument  of  a
provision,  as  to  the  principal of a fund, limited to the principal's
being held, invested and reinvested, is not such a conflicting mandatory
direction.
(b-1) A  domestic,  not-for-profit  corporation  that  is  a  "private
foundation"  as  defined in section 509 of the code and that is required
by section 6104(d) of the code to make available for  public  inspection
its  annual  return  shall  publish  notice  of the availability of such
return for inspection. Such notice shall be published,  not  later  than
the day prescribed for filing such annual return (determined with regard
to  any  extension of time for filing), in a newspaper designated by the
clerk of the county  in  which  the  principal  office  of  the  private
foundation  is  located, having general circulation in that county. When
such county is located within a city with a population of one million or
more, such designation shall be as though such notice were a  notice  of
judicial  proceedings.  The notice shall state that the annual return of
the  private  foundation  is  available  at  its  principal  office  for
inspection  during regular business hours by any citizen who requests it
within one hundred eighty days after the date of such  publication,  and
shall  state  the  address  and  the  telephone  number  of  the private
foundation's principal office and the name of its principal  manager.  A
copy  or  notice  published  in  a newspaper other than the newspaper or
newspapers designated by the county clerk shall not be deemed to be  one
of the publications required by this paragraph.
(c) All references in this section to sections of the code shall be to
such  sections  as  amended  from  time  to  time,  or  to corresponding
provisions of subsequent internal revenue laws.
(d) Nothing in this section shall impair the rights and powers of  the
courts or the attorney-general of this state.
(e)  For purposes of this section, the term gift instrument shall have
the meaning set forth in section 551 (Definitions).