N.Y.
Not-for-Profit Corporation Law Section 102
Definitions
(a)
As used in this chapter, unless the context otherwise requires, the term:(1)
“Bonds” includes secured and unsecured bonds, debentures, and notes.(2)
“By-laws” means the code or codes of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated.(3)
“Certificate of incorporation” includes (A) the original certificate of incorporation or any other instrument filed or issued under any statute to form a domestic or foreign corporation, as amended, supplemented or restated by certificates of amendment, merger or consolidation or other certificates or instruments filed or issued under any statute; or (B) a special act or charter creating a domestic or foreign corporation, as amended, supplemented or restated. (3-a) “Charitable corporation” means any corporation formed, or for the purposes of this chapter, deemed to be formed, for charitable purposes. (3-b) “Charitable purposes” of a corporation means one or more of the following purposes: charitable, educational, religious, scientific, literary, cultural or for the prevention of cruelty to children or animals.(4)
“Conducting of activities” of a corporation means the operations for the conduct of which such corporation is formed and may constitute “doing of business” or “transaction of business” as those terms are used in the statutes of this state.(5)
“Corporation” or “domestic corporation” means a corporation (1) formed under this chapter, or existing on its effective date and theretofore formed under any other general statute or by any special act of this state, exclusively for a purpose or purposes, not for pecuniary profit or financial gain, for which a corporation may be formed under this chapter, and(2)
no part of the assets, income or profit of which is distributable to, or enures to the benefit of, its members, directors or officers except to the extent permitted under this statute.(6)
“Director” means any member of the governing board of a corporation, whether designated as director, trustee, manager, governor, or by any other title. The term “board” means “board of directors” or any other body constituting a “governing board” as defined in this section. (6-a) “Entire board” means the total number of directors entitled to vote which the corporation would have if there were no vacancies. If the by-laws of the corporation provide that the board shall consist of a fixed number of directors, then the “entire board” shall consist of that number of directors. If the by-laws of any corporation provide that the board may consist of a range between a minimum and maximum number of directors, and the number within that range has not been fixed in accordance with paragraph (a) of § 702 (Number of directors)section seven hundred two of this chapter, then the “entire board” shall consist of the number of directors within such range that were elected or appointed as of the most recently held election of directors, as well as any directors whose terms have not yet expired.(7)
“Foreign corporation” means a corporation formed under laws other than the statutes of this state, which, if formed under the statutes of this state, would be within the term “corporation or domestic corporation” as herein defined. “Authorized”, when used with respect to a foreign corporation, means having authority under Article 13 (Foreign Corporations) to conduct activities of the corporation in this state. (7-a) “Infant” or “minor” means any person who has not attained the age of eighteen years.(8)
“Insolvent” means being unable to pay debts as they become due in the usual course of the debtor’s business.(9)
“Member” means one having membership rights in a corporation in accordance with the provisions of its certificate of incorporation or by-laws. (9-a) “Non-charitable corporation” means any corporation formed under this chapter, other than a charitable corporation, including but not limited to one formed for any one or more of the following non-pecuniary purposes: civic, patriotic, political, social, fraternal, athletic, agricultural, horticultural, or animal husbandry, or for the purpose of operating a professional, commercial, industrial, trade or service association.(10)
“Not-for-profit corporation” means a corporation as defined in subparagraph (5).(11)
“Office of a corporation” means the office the location of which is stated in the certificate of incorporation of a domestic corporation, or in the application for authority of a foreign corporation or an amendment thereof. Such office need not be a place where activities are conducted by such corporation.(12)
“Process” means judicial process and all orders, demands, notices or other papers required or permitted by law to be personally served on a domestic or foreign corporation, for the purpose of acquiring jurisdiction of such corporation in any action or proceeding, civil or criminal, whether judicial, administrative, arbitrative or otherwise, in this state or in the federal courts sitting in or for this state.(15)
“Governing board” means the body responsible for the management of a corporation or of an institutional fund.(16)
“Historic dollar value” means the aggregate fair value in dollars of (i) an endowment fund at the time it became an endowment fund, (ii) each subsequent donation to the fund at the time it is made, and(iii)
each accumulation made pursuant to a direction in the applicable gift instrument at the time the accumulation is added to the fund. The determination of historic dollar value made in good faith by the corporation is conclusive.(18)
“Authorized person” means a person, whether or not a member, officer, or director, who is authorized to act on behalf of a corporation or foreign corporation.(19)
An “affiliate” of a corporation means any entity controlled by, or in control of, such corporation.(20)
“Independent auditor” means any certified public accountant performing the audit of the financial statements of a corporation required by subdivision one of Executive Law § 172-B (Reports by registered charitable organizations)section one hundred seventy-two-b of the executive law.(21)
“Independent director” means a director who:(i)
is not, and has not been within the last three years, an employee or a key person of the corporation or an affiliate of the corporation, and does not have a relative who is, or has been within the last three years, a key person of the corporation or an affiliate of the corporation;(ii)
has not received, and does not have a relative who has received, in any of the last three fiscal years, more than ten thousand dollars in direct compensation from the corporation or an affiliate of the corporation;(iii)
is not a current employee of or does not have a substantial financial interest in, and does not have a relative who is a current officer of or has a substantial financial interest in, any entity that has provided payments, property or services to, or received payments, property or services from, the corporation or an affiliate of the corporation if the amount paid by the corporation to the entity or received by the corporation from the entity for such property or services, in any of the last three fiscal years, exceeded the lesser of ten thousand dollars or two percent of such entity’s consolidated gross revenues if the entity’s consolidated gross revenue was less than five hundred thousand dollars; twenty-five thousand dollars if the entity’s consolidated gross revenue was five hundred thousand dollars or more but less than ten million dollars; one hundred thousand dollars if the entity’s consolidated gross revenue was ten million dollars or more; or(iv)
is not and does not have a relative who is a current owner, whether wholly or partially, director, officer or employee of the corporation’s outside auditor or who has worked on the corporation’s audit at any time during the past three years. For purposes of this subparagraph, the terms: “compensation” does not include reimbursement for expenses reasonably incurred as a director or reasonable compensation for service as a director as permitted by paragraph (a) of section 202 (General and special powers) of this chapter; and “payment” does not include charitable contributions, dues or fees paid to the corporation for services which the corporation performs as part of its nonprofit purposes, or payments made by the corporation at fixed or non-negotiable rates or amounts for services received, provided that such services by and to the corporation are available to individual members of the public on the same terms, and such services received by the corporation are not available from another source.(22)
“Relative” of an individual means (i) his or her spouse or domestic partner as defined in Public Health Law § 2994-A (Definitions)section twenty-nine hundred ninety-four-a of the public health law;(ii)
his or her ancestors, brothers and sisters (whether whole or half blood), children (whether natural or adopted), grandchildren, great-grandchildren; or(iii)
the spouse or domestic partner of his or her brothers, sisters, children, grandchildren, and great-grandchildren.(23)
“Related party” means (i) any director, officer or key person of the corporation or any affiliate of the corporation;(ii)
any relative of any individual described in clause (i) of this subparagraph; or(iii)
any entity in which any individual described in clauses (i) and (ii) of this subparagraph has a thirty-five percent or greater ownership or beneficial interest or, in the case of a partnership or professional corporation, a direct or indirect ownership interest in excess of five percent.(24)
“Related party transaction” means any transaction, agreement or any other arrangement in which a related party has a financial interest and in which the corporation or any affiliate of the corporation is a participant, except that a transaction shall not be a related party transaction if:(i)
the transaction or the related party’s financial interest in the transaction is de minimis, (ii) the transaction would not customarily be reviewed by the board or boards of similar organizations in the ordinary course of business and is available to others on the same or similar terms, or(iii)
the transaction constitutes a benefit provided to a related party solely as a member of a class of the beneficiaries that the corporation intends to benefit as part of the accomplishment of its mission which benefit is available to all similarly situated members of the same class on the same terms.(25)
“Key person” means any person, other than a director or officer, whether or not an employee of the corporation, who (i) has responsibilities, or exercises powers or influence over the corporation as a whole similar to the responsibilities, powers, or influence of directors and officers;(ii)
manages the corporation, or a segment of the corporation that represents a substantial portion of the activities, assets, income or expenses of the corporation; or(iii)
alone or with others controls or determines a substantial portion of the corporation’s capital expenditures or operating budget.
Source:
Section 102 — Definitions, https://www.nysenate.gov/legislation/laws/NPC/102 (updated Jun. 2, 2017; accessed Dec. 21, 2024).
