The Soapbox and Toolbox for New York State's Nonprofits

December 22, 2015

Summary of New Revisions to Nonprofit Law

FROM THE LAWYERS ALLIANCE FOR NONPROFITS (LANY)
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On December 11, 2015, Governor Cuomo signed the third of three bills that, collectively, effectuated a number of small but substantive revisions to the New York State Not-for-Profit Corporation Law. Unlike the wholesale overhaul of that law brought about by the adoption in 2013 of the Nonprofit Revitalization Act, these recently enacted revisions were primarily intended to either refine or clarify certain statutory definitions or to codify certain best governance practices that, although commonly employed by many nonprofits for the better part of the last decade, did not work their way into that Act. Revisions that are wholly technical in their nature are not addressed in this Legal Alert. Except as otherwise noted, the several revisions discussed below became effective upon their enactment.

Most of the changes will make governance easier if organizations decide to take advantage of them. All nonprofits incorporated in New York will need to review their bylaws to determine if amendments are necessary or advisable. This Legal Alert outlines some of the appropriate steps nonprofit managers and directors should take to update their respective organizations’ bylaws and other governance documents. LANY suggests that all nonprofits incorporated in New York review their bylaws to:

  • add to the definition of “independent director” that a director who has certain specified relationships with the corporation’s auditing firm is not independent;
  • add to the term “domestic partner” to the definition of “relative”;
  • consider whether any of the clarifications and optional procedures described below apply to their organization.

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This alert is meant to provide general information only, not legal advice. If you have any questions, please contact Laura Abel at Lawyers Alliance for New York at (212) 219-1800 x283.

Lawyers Alliance for New York is the leading provider of business and transactional legal services for nonprofit organizations that are improving the quality of life in New York City neighborhoods. Our network of pro bono lawyers from law firms and corporations and staff of experienced attorneys collaborate to deliver expert corporate, tax, real estate, employment, intellectual property, and other legal services to community organizations. By connecting lawyers, nonprofits, and communities, we help nonprofits to develop affordable housing, stimulate economic development, promote community arts, strengthen urban health, and operate and advocate for vital programs for children and young people, the elderly, and other low-income New Yorkers.

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