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Overview
New York State Nonprofit Revitalization
Act (NPRA) went into effect July 1, 2014.
first meaningful revision of the New York Not-for-Profit
Corporation Law (NPCL) in over 40 years.
Formation, Merger,
Dissolution
NPCL 201.
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Incorporation
Certificate of Incorporations purposes clause
need only state whether nonprofit is formed for
charitable or non-charitable purposes, but can
include more detailed purposes and/or activities.
NPCL 402(a)(2)
Prior consent of the Department of Education is
no longer necessary for many organizations.
But must send notice within 30 days of filing
with the Department of State.
NPCL 404(d).
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Governance Procedures
Notice of Meetings
Notice of a meeting of directors or
members may now be sent by fax or email.
If notice of a meeting of members is provided
by publication, the corporation must also post
notice of the meeting on its website.
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Videoconference
Board members may participate in a
meeting via video conference, unless
otherwise restricted in the certificate of
incorporation or bylaws.
Remote participants count towards
quorum requirement.
NPCL 708
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Audit Committee
Corporations required to file an independent CPAs
audit report with the NY Attorney General (i.e.
registered to solicit & revenue $500k+):
the board, or a designated audit committee comprised
solely of independent directors, must:
oversee the corporations accounting and financial reporting
processes and audit,
retain or renew the relationship with the auditor, &
review the results and any related management letter with the
auditor.
NPCL 712-a(a).
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Independent Director
An independent director is an individual who within the
last three years has not:
(i)
(ii)
NPCL 102(a)(21)
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Extends to Relatives
Independent director is an individual whose relative within
the last three years has not:
(i) been a key employee of the corporation or an affiliate;
(ii) received more than $10,000 in compensation from the
corporation or an affiliate; and
(iii) been a current officer of, or does not have a substantial
financial interest in, an entity that has made payments to
or received payments from the corporation or an
affiliate, which exceeds the lesser of $25,000 or 2% of
such entitys consolidated gross revenues. Charitable
donations do not count as payments.
Importance of Independent
Directors
Oversee audit and relationship with
auditors
Oversee adoption and implementation of,
and compliance with:
Conflicts of Interest Policy
Whistleblower Policy
NPCL 712-a
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NPCL 102(a)(23)
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Limitations on RPT
A corporation may not enter into any
related party transaction unless the board
has determined that the transaction is
fair,
reasonable &
in the corporations best interests.
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Conduct of Meeting
A related party may not participate in
deliberations or voting regarding a related
party transaction.
The board or a committee may request
that a related party be present to provide
information before the deliberations or
voting begin.
NPCL 715(g).
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Board Chair
No employee of the corporation may serve
as board chair. (NPCL 713(f))
This provision does not take effect until
1/1/2016 (Ch. 81 of the laws of 2014).
A.7641 would extend this to 1/1/2017
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Whistleblower Policy
Every corporation with 20+ employees and annual revenue in
the prior fiscal year over $1 million must adopt a whistleblower
policy.
The policy must provide that no director, officer, employee or
volunteer who in good faith reports any action or suspected
action by or within the corporation that is illegal, fraudulent or
in violation of adopted corporate policy shall suffer
intimidation, harassment, discrimination other retaliation or
adverse employment consequences.
A corporation is deemed to comply if
it has already adopted a whistleblower policy required by federal,
state or local laws
that is substantially consistent with the whistleblower policy
required by the NPCL.
NPCL 715-b.
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Fiscal Policies
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Unaudited
Financial
Report
Independent
CPA
Review
Independent
CPA
Audit
Through
6/30/13
<$100,000
$100,000
$250,000
7/1/14
<$250,000
$250,000
$500,000
7/1/17
<$250,000
$250,000
$750,000
7/1/21
<$250,000
$250,000
$1 million
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