On November 8, 2021, New York Governor Kathy Hochul signed legislation to permanently amend provisions of the NY Business Corporation Law to allow companies to use electronic means to document action by written consent by boards and to hold virtual shareholder meetings, unless such action is prohibited by the entity’s articles of organization or by-laws. As discussed in our prior post, Governor Cuomo issued two Executive Orders: the first, March 7 Executive Order No. 202, declared a disaster emergency and ceased operations of all non-essential businesses in New York state; and the second, March 20th Executive Order No. 202.8, temporarily suspended several regulations governing meetings at New York corporations. Absent this relief, New York state still required an in-person shareholder meeting be held, although following an October 2019 rule change, it also permitted a virtual component (subject to certain conditions).
To provide the business community with continued relief after the end of the COVID-19 disaster declaration, NY Bill No. A1025 was signed into law on April 6, 2021. This temporary measure amended Sections 708(b) and 603(a) of the NY Corporation Law to allow, unless prohibited in the certificate of incorporation or bylaws, the board of directors to: (a) adopt the resolution of members by consent in writing delivered via secured electronic communication as defined; and (b) allow corporations to hold meetings of shareholders electronically. The temporary law expires on December 31st 2021.
On June 8, the NY Legislature passed, and on November 8, 2021 Governor Hochul signed, NY Bill No. A1237, which, effective immediately, permanently removes the expiration date of NY Bill No. A1025 and provides NY corporations with the ability to hold shareholder meetings and conduct board actions electronically.