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NEW YORK BUSINESS CORPORATION
BSC

Last update: 2011-11-09


  • Article 1. Short Title; Definitions; Applications; Certificates, Miscellaneous 101 - 112
  • Article 2. Corporate Purposes and Powers 201 - 203
  • Article 3. Corporate Name and Service of Process 301 - 308
  • Article 4. Formation of Corporations 401 - 409
  • Article 5. Corporate Finance 501 - 520
  • Article 6. Shareholders 601 - 630
  • Article 7. Directors and Officers 701 - 726
  • Article 8. Amendments and Changes 801 - 808
  • Article 9. Merger or Consolidation; Guarantee; Disposition of Assets; Share Exchanges 901 - 913
  • Article 10. Non-judicial Dissolution 1001 - 1009
  • Article 11. Judicial Dissolution 1101 - 1118
  • Article 12. Receivership 1201 - 1218
  • Article 13. Foreign Corporations 1301 - 1320
  • Article 15. Professional Service Corporations 1501 - 1516
  • Article 15-A. Foreign Professional Service Corporations 1525 - 1533
  • Article 16. Security Takeover Disclosure Act 1600 - 1613
  • Article 20. Effective Date 2001

Article 1
Short Title; Definitions; Applications; Certificates, Miscellaneous

Section 101. Short title.

This chapter shall be known as the "Business Corporation Law".

Section 102. Definitions.

(a) As used in this chapter, unless the context otherwise requires, the term:

(1) "Authorized person" means a person, whether or not a shareholder, officer or director, who is authorized to act on behalf of a corporation or foreign corporation.

(2) "Bonds" includes secured and unsecured bonds, debentures, and notes.

(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.

(4) "Corporation" or "domestic corporation" means a corporation for profit 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 for a purpose or purposes for which a corporation may be formed under this chapter, other than a corporation which may be formed under the cooperative corporations law.

(5) "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".

(7) "Foreign corporation" means a corporation for profit formed under laws other than the statutes of this state, which has as its purpose or among its purposes a purpose for which a corporation may be formed under this chapter, other than a corporation which, if it were to be formed currently under the laws of this state, could not be formed under this chapter. "Authorized", when used with respect to a foreign corporation, means having authority under article 13 (Foreign corporations) to do business in this state.

(7-a) "Infant" means a 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) "Net assets" means the amount by which the total assets exceed the total liabilities. Stated capital and surplus are not liabilities.

(10) "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 business activities are conducted by such corporation.

(11) "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.

(12) "Stated capital" means the sum of (A) the par value of all shares with par value that have been issued, (B) the amount of the consideration received for all shares without par value that have been issued, except such part of the consideration therefor as may have been allocated to surplus in a manner permitted by law, and (C) such amounts not included in clauses (A) and (B) as have been transferred to stated capital, whether upon the distribution of shares or otherwise, minus all reductions from such sums as have been effected in a manner permitted by law.

(13) "Surplus" means the excess of net assets over stated capital.

(14) "Treasury shares" means shares which have been issued, have been subsequently acquired, and are retained uncancelled by the corporation. Treasury shares are issued shares, but not outstanding shares, and are not assets.

Section 103. Application.

(a) This chapter applies to every domestic corporation and to every foreign corporation which is authorized or does business in this state. This chapter also applies to any other domestic corporation or foreign corporation of any type or kind to the extent, if any, provided under this chapter or any law governing such corporation and, if no such provision for application is made, to the extent, if any, that the stock corporation law applied to such corporation immediately prior to the effective date of this chapter.

This chapter also applies to a corporation of any type or kind, formed for profit under any other chapter of the laws of this state except a chapter of the consolidated laws, to the extent that provisions of this chapter do not conflict with the provisions of such unconsolidated law. If an applicable provision of such unconsolidated law relates to a matter embraced in this chapter but is not in conflict therewith, both provisions shall apply. Any corporation to which this chapter is made applicable by this paragraph shall be treated as a "corporation" or "domestic corporation" as such terms are used in this chapter, except that the purposes of any such corporation formed or formable under such unconsolidated law shall not thereby be extended. For the purpose of this paragraph, the effective date of this chapter as to corporations to which this chapter is made applicable by this paragraph shall be June one, nineteen hundred seventy-three.

This chapter shall not apply to a domestic corporation of any type or kind heretofore or hereafter formed under the banking law, insurance law, railroad law, transportation corporations law or cooperative corporations law, or under any other statute or special act for a purpose or purposes for which a corporation may be formed under any of such laws except to the extent, if any, provided under such law. It shall not apply, except to the extent, if any, provided under the banking law, insurance law, railroad law, transportation corporations law or cooperative corporations law, to a foreign corporation of any type or kind heretofore or hereafter formed which (1) has as its purpose or among its purposes a purpose for which a corporation may be formed only under the insurance law, banking law, railroad law, transportation corporations law or cooperative corporations law, and (2) is either an authorized insurer as defined in the insurance law or does in this state only the kind of business which can be done lawfully by a corporation formed under the banking law, railroad law, transportation corporations law or cooperative corporations law, as the case may be. After the effective date of this chapter the stock corporation law shall not apply to any corporation of any type or kind. The general corporation law shall not apply to a corporation of any type or kind to which this chapter applies. A reference in any statute of this state, which makes a provision of the stock corporation law applicable to a corporation of any type or kind, shall be deemed and construed to refer to and make applicable the corresponding provision, if any, of this chapter.

(b) This chapter applies to commerce with foreign nations and among the several states, and to corporations formed by or under any act of congress, only to the extent permitted under the constitution and laws of the United States.

(c) The enactment of this chapter shall not affect the duration of a corporation which is existing on the effective date of this chapter. Any such existing corporation, its shareholders, directors and officers shall have the same rights and be subject to the same limitations, restrictions, liabilities and penalties as a corporation formed under this chapter, its shareholders, directors and officers.

(d) This chapter shall not affect any cause of action, liability, penalty or action or special proceeding, which on the effective date of this chapter, is accrued, existing, incurred or pending but the same may be asserted, enforced, prosecuted or defended as if this chapter had not been enacted.

(e) After the effective date of this chapter no corporation shall be formed under the stock corporation law.

Section 104. Certificates; requirements, signing, filing, effectiveness.

(a) Every certificate or other instrument relating to a domestic or foreign corporation which is delivered to the department of state for filing under this chapter, other than a certificate of existence under section 1304 (Application for authority; contents), shall be in the English language, except that the corporate name may be in another language if written in English letters or characters.

(c) Whenever such instrument is required to set forth the date when a certificate of incorporation was filed by the department of state, the original certificate of incorporation is meant. This requirement shall be satisfied, in the case of a corporation created by special act, by setting forth the chapter number and year of passage of such act.

(d) Every such certificate required under this chapter to be signed and delivered to the department of state shall, except as otherwise specified in the section providing for such certificate, be signed either by an officer, director, attorney-in-fact or duly authorized person and include the name and the capacity in which such person signs such certificate.

(e) If an instrument which is delivered to the department of state for filing complies as to form with the requirements of law and there has been attached to it the consent or approval of the state official, department, board, agency or other body, if any, whose consent to or approval of such instrument or the filing thereof is required by any statute of this state and the filing fee and tax, if any, required by any statute of this state in connection therewith have been paid, the instrument shall be filed and indexed by the department of state. No certificate of authentication or conformity or other proof shall be required with respect to any verification, oath or acknowledgment of any instrument delivered to the department of state under this chapter, if such verification, oath or acknowledgment purports to have been made before a notary public, or person performing the equivalent function, of one of the states, or any subdivision thereof, of the United States or the District of Columbia. Without limiting the effect of section four hundred three of this chapter, filing and indexing by the department of state shall not be deemed a finding that a certificate conforms to law, nor shall it be deemed to constitute an approval by the department of state of the name of the corporation or the contents of the certificate, nor shall it be deemed to prevent any person with appropriate standing from contesting the legality thereof in an appropriate forum.

(f) Except as otherwise provided in this chapter, such instrument shall become effective upon the filing thereof by the department of state.

(g) The department shall make, certify and transmit a copy of each such instrument to the clerk of the county in which the office of the domestic or foreign corporation is or is to be located. The county clerk shall file and index such copy.

Section 104-A. Fees.

Except as otherwise provided, the department of state shall collect the following fees pursuant to this chapter:

(a) For the reservation of a corporate name pursuant to section three hundred three of this chapter, twenty dollars.

(b) For the resignation of a registered agent for service of process pursuant to section three hundred five of this chapter, and for the resignation for receipt for process pursuant to section three hundred six-A of this chapter, sixty dollars.

(c) For service of process on the secretary of state pursuant to section three hundred six, paragraph (e) of section three hundred six-A, or three hundred seven of this chapter, forty dollars. No fee shall be collected for process served on behalf of a county, city, town or village or other political subdivision of the state.

(d) For filing a certificate of incorporation pursuant to section four hundred two of this chapter, one hundred twenty-five dollars plus the tax on shares prescribed by section one hundred eighty of the tax law.

(e) For filing a certificate of amendment pursuant to section eight hundred five of this chapter, sixty dollars plus the tax on shares prescribed by section one hundred eighty of the tax law if such certificate shows a change of shares.

(f) For filing a certificate of change pursuant to paragraph (a) of section eight hundred five-A of this chapter, thirty dollars, and for filing a certificate of change pursuant to paragraph (b) of section eight hundred five-A of this chapter, five dollars.

(g) For filing a restated certificate of incorporation pursuant to section eight hundred seven of this chapter, sixty dollars plus the tax on shares prescribed by section one hundred eighty of the tax law if such certificate shows a change of shares.

(h) For filing a certificate of merger or consolidation pursuant to section nine hundred four of this chapter, or a certificate of exchange pursuant to section nine hundred thirteen (other than paragraph (g) of section nine hundred thirteen) of this chapter, sixty dollars plus the tax on shares prescribed by section one hundred eighty of the tax law if such certificate shows a change of shares.

(i) For filing a certificate of merger of a subsidiary corporation pursuant to section nine hundred five of this chapter, or a certificate of exchange pursuant to paragraph (g) of section nine hundred thirteen of this chapter, sixty dollars.

(j) For filing a certificate of merger or consolidation pursuant to section nine hundred four-a of this chapter, a certificate of merger or consolidation pursuant to section nine hundred four-b of this chapter, or a certificate of merger or consolidation of domestic and foreign corporations pursuant to section nine hundred seven of this chapter, sixty dollars.

(k) For filing a certificate of dissolution pursuant to section one thousand three of this chapter, sixty dollars.

(l) For filing an application by a foreign corporation for authority to do business in New York state pursuant to section thirteen hundred four of this chapter, two hundred twenty-five dollars.

(m) For filing a certificate of amendment of an application for authority by a foreign corporation pursuant to section thirteen hundred nine of this chapter, sixty dollars.

(n) For filing a certificate of change of application for authority by a foreign corporation pursuant to paragraph (b) of section thirteen hundred nine-A of this chapter, thirty dollars, and for filing a certificate of change pursuant to paragraph (c) of section thirteen hundred nine-A of this chapter, five dollars.

(o) For filing a certificate of surrender of authority pursuant to section thirteen hundred ten of this chapter, sixty dollars.

(p) For filing a statement of the termination of existence of a foreign corporation pursuant to section thirteen hundred eleven of this chapter, sixty dollars. There shall be no fee for the filing by an authorized officer of the jurisdiction of incorporation of a foreign corporation of a certificate that the foreign corporation has been dissolved or its authority or existence has been otherwise terminated or cancelled in the jurisdiction of its incorporation.

(q) For filing a certificate of incorporation by a professional service corporation pursuant to section fifteen hundred three of this chapter, one hundred twenty-five dollars plus the tax on shares prescribed by section one hundred eighty of the tax law.

(r) For filing a statement or amendment pursuant to section four hundred eight of this chapter, nine dollars.

(s) For filing any other certificate or instrument, sixty dollars.

Section 105. Certificates; corrections.

Any certificate or other instrument relating to a domestic or foreign corporation filed by the department of state under this chapter may be corrected with respect to any informality or error apparent on the face, incorrect statement or defect in the execution thereof including the deletion of any matter not permitted to be stated therein. A certificate, entitled "Certificate of correction of............ (correct title of certificate and name of corporation)" shall be signed and delivered to the department of state. It shall set forth the name of the corporation, the date the certificate to be corrected was filed by the department of state, a statement as to the nature of the informality, error, incorrect statement or defect, the provision in the certificate as corrected or eliminated and if the execution was defective, the proper execution. The filing of the certificate by the department of state shall not alter the effective time of the instrument being corrected, which shall remain as its original effective time, and shall not affect any right or liability accrued or incurred before such filing. A corporate name may not be changed or corrected under this section. The provisions of this section shall apply to all instruments and certificates heretofore and hereafter filed with the department of state.

Section 106. Certificates as evidence.

(a) Any certificate or other instrument filed by the department of state relating to a domestic or foreign corporation and containing statements of fact required or permitted by law to be contained therein, shall be received in all courts, public offices and official bodies as prima facie evidence of such facts and of the execution of such instrument.

(b) Whenever by the laws of any jurisdiction other than this state, any certificate by any officer in such jurisdiction or a copy of any instruments certified or exemplified by any such officer, may be received as prima facie evidence of the incorporation, existence or capacity of any foreign corporation incorporated in such jurisdiction, or claiming so to be, such certificate when exemplified, or such copy of such instrument when exemplified shall be received in all courts, public offices and official bodies of this state, as prima facie evidence with the same force as in such jurisdiction. Such certificate or certified copy of such instrument shall be so received, without being exemplified, if it is certified by the secretary of state, or official performing the equivalent function as to corporate records, of such jurisdiction.

Section 107. Corporate seal as evidence.

The presence of the corporate seal on a written instrument purporting to be executed by authority of a domestic or foreign corporation shall be prima facie evidence that the instrument was so executed.

Section 108. When notice or lapse of time unnecessary; notices dispensed with when delivery is prohibited.

(a) Whenever, under this chapter or the certificate of incorporation or by-laws of any corporation or by the terms of any agreement or instrument, a corporation or the board or any committee thereof is authorized to take any action after notice to any person or persons or after the lapse of a prescribed period of time, such action may be taken without notice and without the lapse of such period of time, if at any time before or after such action is completed the person or persons entitled to such notice or entitled to participate in the action to be taken or, in the case of a shareholder, by his attorney-in-fact, submit a signed waiver of notice of such requirements.

(b) Whenever any notice or communication is required to be given to any person by this chapter, the certificate of incorporation or by-laws, or by the terms of any agreement or instrument, or as a condition precedent to taking any corporate action and communication with such person is then unlawful under any statute of this state or of the United States or any regulation, proclamation or order issued under said statutes, then the giving of such notice or communication to such person shall not be required and there shall be no duty to apply for license or other permission to do so. Any affidavit, certificate or other instrument which is required to be made or filed as proof of the giving of any notice or communication required under this chapter shall, if such notice or communication to any person is dispensed with under this paragraph, include a statement that such notice or communication was not given to any person with whom communication is unlawful. Such affidavit, certificate or other instrument shall be as effective for all purposes as though such notice or communication had been personally given to such person.

(c) Whenever any notice or communication is required or permitted by this chapter to be given by mail, it shall, except as otherwise expressly provided in this chapter, be mailed to the person to whom it is directed at the address designated by him for that purpose or, if none is designated, at his last known address. Such notice or communication is given when deposited, with postage thereon prepaid, in a post office or official depository under the exclusive care and custody of the United States post office department. Such mailing shall be by first class mail except where otherwise required by this chapter.

Section 109. Actions or special proceedings by attorney-general.

(a) The attorney-general may maintain an action or special proceeding:

(1) To annul the corporate existence or dissolve a corporation that has acted beyond its capacity or power or to restrain it from the doing of unauthorized business;

(2) To annul the corporate existence or dissolve any corporation that has not been duly formed;

(3) To restrain any person or persons from acting as a domestic or foreign corporation within this state without being duly incorporated or from exercising in this state any corporate rights, privileges or franchises not granted to them by the law of the state;

(4) To procure a judgment removing a director of a corporation for cause under section 706 (Removal of directors);

(5) To dissolve a corporation under article 11 (Judicial dissolution);

(6) To restrain a foreign corporation or to annul its authority to do business in this state under section 1303 (Violations).

(7) Upon written application, ex parte, for an order to the supreme court at a special term held within the judicial district where the office of the corporation is located, and if the court so orders, to inspect the books and records of the corporation to the extent that such inspection is available to shareholders and directors under the law of this state. Such application shall contain a statement that the inspection is necessary to protect the interests of the people of this state. This paragraph applies to every corporation, no shares of which are listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national or an affliated securities association. This paragraph does not apply to a corporation all shares of which are owned either directly or through a wholly owned subsidiary by a corporation or corporations to which this paragraph does not apply.

(8) To collect any fines payable to the department of state pursuant to section four hundred nine of this chapter.

(b) In an action or special proceeding brought by the attorney-general under any of the provisions of this chapter:

(1) If an action, it is triable by jury as a matter of right.

(2) The court may confer immunity in accordance with the provisions of section 50.20 of the criminal procedure law.

(3) A temporary restraining order to restrain the commission or continuance of the unlawful acts which form the basis of the action or special proceeding may be granted upon proof, by affidavit, that the defendant or defendants have committed or are about to commit such acts. Application for such restraining order may be made ex parte or upon such notice as the court may direct.

(4) If the action or special proceeding is against a foreign corporation, the attorney-general may apply to the court at any stage thereof for the appointment of a temporary receiver of the assets in this state of such foreign corporation, whenever it has assets or property of any kind whatsoever, tangible or intangible, within this state.

(5) When final judgment in such action or special proceeding is rendered against the defendant or defendants, the court may direct the costs to be collected by execution against any or all of the defendants or by order of attachment or other process against the person of any director or officer of a corporate defendant.

(6) In connection with any such proposed action or special proceeding, the attorney-general may take proof and issue subpoenas in accordance with the civil practice law and rules.

(c) In any such action or special proceeding against a foreign corporation which has not designated the secretary of state as its agent for service of process under section 304 (Statutory designation of secretary of state as agent for service of process), any of the following acts in this state by such foreign corporation shall constitute the appointment by it of the secretary of state as its agent upon whom process against such foreign corporation may be served:

(1) As used in this paragraph the term "resident" shall include individuals, domestic corporations and foreign corporations authorized to do business in the state.

(2) Any act done, or representation made as part of a course of the solicitation of orders, or the issuance, or the delivery, of contracts for, or the sale of, property, or the performance of services to residents which involves or promotes a plan or scheme to defraud residents in violation of the laws or the public policy of the state.

(3) Any act done as part of a course of conduct of business in the solicitation of orders from residents for property, goods or services, to be delivered or rendered within this state to, or on their behalf, where the orders or contracts are executed by such residents within this state and where such orders or contracts are accompanied or followed by an earnest money desposit or other down payment or any installment payment thereon or any other form of payment, which payment is either delivered in or transmitted from the state.

(4) Any act done as part of the conduct of a course of business with residents which defrauds such residents or otherwise involves or promotes an attempt by such foreign corporation to circumvent the laws of this state.

(d) Paragraphs (b), (c), (d) and (e) of section 307 (Service of process on unauthorized foreign corporation) shall apply to process served under paragraph (c).

Section 110. Reservation of power.

The legislature reserves the right, at pleasure, to alter, amend, suspend or repeal in whole or in part this chapter, or any certificate of incorporation or any authority to do business in this state, of any domestic or foreign corporation, whether or not existing or authorized on the effective date of this chapter.

Section 111. Effect of invalidity of part of chapter; severability.

If any provision of this chapter or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared severable.

Section 112. References.

Unless otherwise stated, all references in this chapter to articles or sections refer to the articles or sections of this chapter, and all references in any section of this chapter to a lettered or numbered paragraph or subparagraph refer to the paragraph or subparagraph so lettered or numbered in such section.

Article 2
Corporate Purposes and Powers