N.Y. Business Corporation Law 1705 – Termination of benefit corporation status
§ 1705. Termination of benefit corporation status.
Terms Used In N.Y. Business Corporation Law 1705
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Benefit corporation: means a business corporation incorporated under this article and whose status as a benefit corporation has not been terminated as provided in this article. See N.Y. Business Corporation Law 1702
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Minimum status vote: means that, in addition to any other approval or vote required by this chapter, the certificate of incorporation or a bylaw adopted by the shareholders:
(1) The holders of shares of every class or series that are entitled to vote on the corporate action shall be entitled to vote as a class on the corporate action; and
(2) The corporate action must be approved by vote of the shareholders of each class or series entitled to cast at least three-quarters of the votes that all shareholders of the class or series are entitled to cast thereon. See N.Y. Business Corporation Law 1702
(a) A benefit corporation may terminate its status as such and cease to be subject to this article by amending its certificate of incorporation to delete the statement that the corporation is a benefit corporation. The amendment shall not be effective unless it is adopted by at least the minimum status vote.
(b) If a benefit corporation is a party to a merger or consolidation in which the surviving or new corporation will not be a benefit corporation, the plan of merger or consolidation shall not be effective unless it is adopted by at least the minimum status vote in addition to any other vote required by this chapter, the certificate of incorporation or the bylaws.
(c) Any benefit corporation that is party to a merger or consolidation in which shares of stock of such benefit corporation will be converted into a right to receive shares of stock of a corporation that is not a benefit corporation must approve the plan of merger or consolidation by at least the minimum status vote in addition to any other vote required by this chapter, the certificate of incorporation or the bylaws.
(d) A sale, lease, conveyance, exchange, transfer, or other disposition of all or substantially all of the assets of a benefit corporation, unless the transaction is in the usual and regular course of business of the benefit corporation, shall not be effective unless the transaction is approved by at least the minimum status vote in addition to any other vote required by this chapter, the certificate of incorporation or the bylaws.