Though there is a pause and restriction on in-person activities and operations for non-essential businesses and services, not-for-profit organizations need the ability to take action effectively and remotely. New York’s Not-for-Profit Corporation Law permits organizations to utilize (1) actions without meetings and (2) remote meetings through conference telephone or electronic video, provided, however, that in each instance, the organization’s certificate of incorporation or bylaws cannot prohibit or restrict such actions.
1. Actions Without a Meeting
Unless otherwise restricted by the certificate of incorporation or the bylaws, the board or any committee of the board can take action without a meeting if all directors, or committee members, consent to the adoption of a resolution authorizing the action.
The consent can either be written or sent electronically through e-mail.
If consent is provided through a written means, then the director will need to execute the consent by printing and signing, or by inserting a facsimile signature.
When sending consent electronically through e-mail, a director should provide sufficient information in the e-mail so that it can reasonably show that the message is from that individual director. To accomplish this, directors should include their full name when sending the consent electronically.
The resolution and the consent of every director (or committee member) must be filed with the minutes of the board or applicable board committee.
Since taking action without a meeting upon consent of the directors is only effective if the consent is unanimous, this may be a departure (i.e., higher voting threshold) from your organization’s in-person voting requirements to take action.
2. Participating in Meetings with the help of Technology
So long as all participants can hear each other simultaneously, directors (or members of committees of the board) can participate in meetings through telephone, video screen communication, or other similar equipment. Participation through these technological methods constitutes participation in person, so the board (or committee thereof) must follow their normal procedures for calling a meeting of the board (or committee) and obtain the requisite vote to take certain actions in the same manner in which in-person meetings are conducted.
All not-for-profit organizations should review their certificate of incorporation and bylaws to make sure there are no restrictions on taking action without meetings or participating in meetings through telephone or other electronic means.
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This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2020 Law Offices of Pullano & Farrow PLLC
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