Not-for-Profit Corporation Law
Article 10, Non Judicial Dissolution
Section 1001. Plan of dissolution and distribution of assets.
1002. Authorization of plan.
1003. Certificate of dissolution; contents; approval.
1004. Certificate of dissolution; filing; effect.
1005. Procedure after dissolution.
1006. Corporate action and survival of remedies after
dissolution.
1007. Notice to creditors; filing or barring claims.
1008. Jurisdiction of supreme court to supervise dissolution and
liquidation.
1009. Applicability to dissolution under other provisions.
1010. Revocation of voluntary dissolution proceedings.
1012. Certificate of annulment of dissolution and reinstatement
of corporate existence.
1013. Dissolution of certain firemen`s benevolent associations.
S 1001. Plan of dissolution and distribution of assets.
(a) The board shall adopt a plan for the dissolution of the
corporation and the distribution of its assets. Such plan shall
implement any provision in the certificate of incorporation prescribing
the distributive rights of members.
(b) If the corporation is a Type B or Type C corporation and has no
assets to distribute at the time of dissolution, the plan of dissolution
shall include a statement to that effect, and a certified copy of such
plan shall be filed with the attorney general within ten days after its
adoption by the board.
S 1002. Authorization of plan.
(a) Upon adopting a plan of dissolution and distribution of assets,
the board shall submit it to a vote of the members. Such plan shall be
approved at a meeting of members by two-thirds vote as provided in
paragraph (c) of section 613 (Vote of members).
(b) If there are no members entitled to vote on the dissolution of
the corporation, the plan of dissolution and distribution of assets
shall be deemed authorized upon its adoption by the board.
(c) Whenever a statute creating, or authorizing the formation of, a
corporation required approval by a governmental body or officer for the
formation of such corporation, dissolution shall not be authorized
without the approval of such body or officer.
(d) The plan of dissolution and distribution of assets shall have
annexed thereto the approval of a justice of the supreme court in the
judicial district in which the office of the corporation is located in
the case of a Type B or Type C corporation, and in the case of any other
corporation which holds assets at the time of dissolution legally
required to be used for a particular purpose, except that no such
approval shall be required with respect to the plan of dissolution of a
corporation, referred to in paragraph (b) of section 1001 (Plan of
dissolution and distribution of assets), which has no assets to
distribute at the time of dissolution and which has complied with the
requirements of such paragraph. Application to the supreme court for an
order for such approval shall be by verified petition, with certified
copies of the consents prescribed by this section annexed thereto, and
upon ten days written notice to the attorney general accompanied by
copies of such petition and consents.
S 1003. Certificate of dissolution; contents; approval.
(a) After the plan of dissolution and distribution of assets has been
authorized, a certificate of dissolution, entitled "Certificate of
dissolution of ........ (name of corporation) under section 1003 of the
Not-for-Profit Corporation Law" shall be signed and delivered to the
department of state. It shall set forth:
(1) The name of the corporation and, if its name has been changed,
the name under which it was formed.
(2) The date its certificate of incorporation was filed by the
department of state.
(3) The name and address of each of its officers and directors.
(4) The type of corporation it is at the time of dissolution.
(5) A statement as to whether or not the corporation holds assets at
the time of dissolution which are legally required to be used for a
particular purpose.
(6) That the corporation elects to dissolve.
(7) The manner in which the dissolution was authorized.
(8) A statement that prior to delivery of such certificate of
dissolution to the department of state for filing, the plan of
dissolution and distribution of assets will be approved by a justice of
the supreme court, if such approval is required. In the case of a
corporation, referred to in paragraph (b) of section 1001 (Plan of
dissolution and distribution of assets), having no assets to distribute
at the time of dissolution, a statement that a certified copy of the
plan of dissolution which contains the statement prescribed by such
paragraph has been duly filed with the attorney general.
(b) Such certificate of dissolution shall have indorsed thereon or
annexed thereto the approval of the dissolution:
(1) By a governmental body or officer, if such approval is required.
(2) By a justice of the supreme court in the judicial district in
which the office of the corporation is located in the case of a Type B
or Type C corporation, and in the case of any other corporation which
holds assets at the time of dissolution legally required to be used for
a particular purpose. Such approval of the dissolution shall include a
statement that the plan of dissolution and distribution of assets has
been approved, except that in the case of a corporation, referred to in
paragraph (b) of section 1001, having no assets to distribute at the
time of dissolution, such approval of the dissolution shall include a
statement that it appears that the corporation has no assets to
distribute, that the corporation has filed with the attorney general a
certified copy of its plan of dissolution, and that approval of such
plan is not required. The application to the supreme court for an order
for such approval shall be by verified petition upon ten days written
notice to the attorney general, accompanied by a copy of the certificate
of dissolution.
S 1004. Certificate of dissolution; filing; effect.
The department of state shall not file a certificate of dissolution
unless the consent of the state tax commission to the dissolution is
attached thereto. Upon filing the certificate, the corporation is
dissolved.
S 1005. Procedure after dissolution.
(a) After dissolution:
(1) The corporation shall carry on no activities except for the
purpose of winding up its affairs.
(2) The corporation shall proceed to wind up its affairs, with power
to fulfill or discharge its contracts, collect its assets, sell its
assets for cash at public or private sale, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its
business.
(3) After paying or adequately providing for the payment of its
liabilities, the remaining assets of the corporation shall be
distributed in the following manner:
(A) Assets received and held by the corporation for a purpose
specified as Type B in paragraph (b) of section 201 (Purposes) or which
are legally required to be used for a particular purpose shall be
distributed to one or more domestic or foreign corporations or other
organizations engaged in activities substantially similar to those of
the dissolved corporation pursuant to a plan of distribution adopted as
provided in section 1001 (Plan of dissolution and distribution of
assets) or as ordered by the court to which such plan is submitted for
approval under section 1002 (Authorization of plan). Any disposition
contained in any will or other instrument, in trust or otherwise, made
before or after the dissolution, to or for the benefit of any
corporation so dissolved shall inure to or for the benefit of the
corporation or organization acquiring the assets of the dissolved
corporation as provided herein, and so far as is necessary for that
purpose the corporation or organization acquiring such disposition shall
be deemed a successor to the dissolved corporation: provided, however,
that such disposition shall be devoted by the acquiring corporation or
organization to the purposes intended by the testator, donor or grantor.
(B) Other assets, if any, shall be distributed in accordance with the
specifications of the plan of distribution adopted as provided in
section 1001 (Plan of dissolution and distribution of assets) or, to the
extent that the certificate of incorporation prescribes the distributive
rights of members, or of any class or classes of members, as provided in
such certificate.
(4) Any assets distributable to a creditor or member who is unknown
or cannot be found, or who is under a disability, shall be paid to the
state comptroller as abandoned property within six months from the date
fixed for the payment of the final liquidating distribution, and be
subject to the provisions of the abandoned property law.
(b) Assets shall be distributed under a plan of distribution in
accordance with the following order of priorities:
(1) Holders of certificates of subvention.
(2) Holders of capital certificates.
(3) Members.
S 1006. Corporate action and survival of remedies after dissolution.
(a) A dissolved corporation, its directors, officers and members may
continue to function for the purpose of winding up the affairs of the
corporation in the same manner as if the dissolution had not taken
place, except as otherwise provided in this chapter or by court order.
In particular and without limiting the generality of the foregoing:
(1) The directors of a dissolved corporation shall not be deemed to
be trustees of its assets; title to such assets shall not vest in them,
but shall remain in the corporation until transferred by it in its
corporate name.
(2) Dissolution shall not change quorum or voting requirements for
the board or members, or provisions regarding election, appointment,
resignation or removal of, or filling vacancies among, directors or
officers, or provisions regarding amendment or repeal of by-laws or
adoption of new by-laws.
(3) Capital certificates may be transferred and determination of
members for any purpose may be made without closing the record of
members until such time, if any, as such record may be closed, and
either the board or the members may close it.
(4) The corporation may sue or be sued in all courts and participate
in actions and proceedings, whether judicial, administrative,
arbitrative or otherwise, in its corporate name, and process may be
served by or upon it.
(b) The dissolution of a corporation shall not affect any remedy
available to or against such corporation, its directors, officers or
members, for any right or claim existing or any liability incurred
before such dissolution, except as provided in sections 1007 (Notice to
creditors; filing or barring claims) or 1008 (Jurisdiction of supreme
court to supervise dissolution and liquidation.)
S 1007. Notice to creditors; filing or barring claims.
(a) At any time after dissolution, the corporation may give a notice
requiring all creditors and claimants, including any with unliquidated
or contingent claims and any with whom the corporation has unfulfilled
contracts, to present their claims in writing and in detail at a
specified place and by a specified day, which shall not be less than six
months after the first publication of such notice. Such notice shall be
published at least once a week for two successive weeks in a newspaper
of general circulation in the county in which the office of the
corporation was located at the date of dissolution. On or before the
date of the first publication of such notice, the corporation shall mail
a copy thereof, postage prepaid and addressed to his last known address,
to each person believed to be a creditor of or claimant against the
corporation whose name and address are known to or can with due
diligence be ascertained by the corporation. The giving of such notice
shall not constitute a recognition that any person is a proper creditor
or claimant, and shall not revive or make valid, or operate as a
recognition of the validity of, or a waiver of any defense or
counterclaim in respect of any claim against the corporation, its
assets, directors, officers or members, which has been barred by any
statute of limitations or become invalid by any cause, or in respect of
which the corporation, its directors, officers or members, has any
defense or counterclaim.
Article 10 Continued . . .
(b) Any claims which shall have been filed as provided in such notice
and which shall be disputed by the corporation may be submitted for
determination to the supreme court under section 1008 (Jurisdiction of
supreme court to supervise dissolution and liquidation). A claim filed
by the trustee or paying agent for the holders of bonds or coupons shall
have the same effect as if filed by the holder of any such bonds or
coupons. Any person whose claim is, at the date of the first
publication of such notice, barred by any statute of limitations is not
a creditor or claimant entitled to any notice under this section or
section 1008. The claim of any such person and all other claims which
are not timely filed as provided in such notice except claims which are
the subject of litigation on the date of the first publication of such
notice and all claims which are so filed but are disallowed by the court
under section 1008, shall be forever barred as against the corporation,
its assets, directors, officers and members, except to such extent, if
any, as the court may allow them against any remaining assets of the
corporation in the case of a creditor who shows satisfactory reason for
his failure to file his claim as so provided. If the court requires a
further notice under section 1008, any reference to a notice in this
section shall, to the extent that the court so orders, mean such further
notice, except that a claim which has been filed in accordance with a
notice under this section need not be refiled under such further notice.
(c) Notwithstanding this section and section 1008, tax claims and
other claims of this state and of the United States shall not be
required to be filed under those sections, and such claims shall not be
barred because not so filed, and distribution of the assets of the
corporation, or any part thereof, may be deferred until determination of
any such claims.
(d) Laborer`s wages shall be preferred claims and entitled to payment
before any other creditors out of the assets of the corporation in
excess of valid prior liens or encumbrances.
S 1008. Jurisdiction of supreme court to supervise dissolution and
liquidation.
(a) At any time after the filing of a certificate of dissolution
under this article, the supreme court in the judicial district where the
office of the corporation was located at the date of its dissolution, in
a special proceeding instituted under this section, upon the petition of
the corporation or, in a situation approved by the court, upon the
petition of a creditor, claimant, director, officer, member, subscriber
for capital certificates, incorporator or the attorney-general, may
suspend or annul the dissolution or continue the liquidation of the
corporation under the supervision of the court and may make all such
orders as it may deem proper in all matters in connection with the
dissolution or the winding up of the affairs of the corporation, and in
particular, and without limiting the generality of the foregoing, in
respect of the following:
(1) The determination of the validity of the authorization of the
dissolution of the corporation and of the execution and delivery of the
certificate of dissolution under this article.
(2) The adequacy of the notice given to creditors and claimants and,
if it is determined to have been inadequate, the requirement of such
further notice as the court may deem proper.
(3) The determination of the validity and amount of invalidity of any
claims which have been presented to the corporation.
(4) The barring of all creditors and claimants who have not timely
filed claims as provided in any such notice, or whose claims have been
disallowed by the court, as against the corporation, its assets,
directors, officers and members.
(5) The determination and enforcement of the liability of any
director, officer, member or subscriber for capital certificates, to the
corporation or for the liabilities of the corporation.
(6) The presentation and filing of intermediate and final accounts of
the directors, the hearing thereon, the allowance or disallowance
thereof, and the discharge of the directors, or any of them, from their
liabilities.
(7) The administration of any trust, or the disposition of any
property held in trust by or for the corporation.
(8) The adequacy of a plan of distribution.
(9) The payment, satisfaction or compromise of claims against the
corporation, the retention of assets for such purpose, and the
determination of the adequacy of provisions made for payment of the
liabilities of the corporation.
(10) The disposition or destruction of records, documents and papers
of the corporation.
(11) The appointment and removal of a receiver under article 12
(Receivership) who may be a director, officer or member of the
corporation.
(12) The issuance of injunctions for one or more of the purposes and
as provided in section 1113 (Injunction).
(13) The return of subscription payments to subscribers for capital
certificates, and the making of distributions, in cash or in kind or
partly in each, to the members.
(14) The payment to the state comptroller, as abandoned property, of
assets under subparagraph (a) (4) of section 1005 (Procedure after
dissolution).
(15) Where assets were received and held by the corporation for a
purpose specified as Type B in paragraph (b) of section 201 (Purposes),
or were legally required to be used for a particular purpose, the
distribution of such assets to one or more domestic or foreign
corporations or other organizations engaged in activities substantially
similar to those of the dissolved corporation, on notice to the
attorney-general and to such other persons, and in such manner, as the
court may deem proper.
(b) No order annulling a dissolution shall be made under this section
if the name of the corporation whose dissolution is to be annulled is no
longer available for use by such corporation, unless such corporation
submits with its petition for the annulment of the dissolution a
certificate of reservation of another available name.
(c) Orders under this section may be entered ex parte, except that if
such special proceeding was not instituted upon petition of the
corporation, notice shall be given to the corporation in such manner as
the court may direct. Notice shall be given to other persons
interested, and in such manner, as the court may deem proper, of any
hearings and of the entry of any orders on such matters as the court
shall deem proper. All orders made by the court under this section
shall be binding upon the attorney-general, the corporation, its
directors, officers, members, subscribers for capital certificates,
incorporators, creditors and claimants.
S 1009. Applicability to dissolution under other provisions.
The provisions of section 1005 (Procedure after dissolution), 1006
(Corporate action and survival of remedies after dissolution), 1007
(Notice to creditors; filing or barring claims) and 1008 (Jurisdiction
of supreme court to supervise dissolution and liquidation) shall apply
to a corporation dissolved by expiration of its period of duration or
under section 203-a of the tax law, or to an incorporated firemen`s
benevolent association created by act of the legislature if such act is
subsequently repealed.
S 1010. Revocation of voluntary dissolution proceedings.
(a) At any time prior to the filing of a certificate of dissolution
by the department of state, a corporation may revoke the action taken to
dissolve the corporation in the following manner:
(1) If there are members entitled to vote thereon:
(A) Unless the certificate of incorporation dispenses with
dissolution action by the board, the board shall adopt a resolution
recommending that the voluntary dissolution proceedings be revoked and
directing submission of the proposed revocation to a vote of the members
entitled to vote thereon.
(B) Revocation of the voluntary dissolution proceedings shall be
authorized by two-thirds vote as provided in paragraph (c) of section
613 (Vote of members).
(2) If there are no members entitled to vote thereon, revocation of
the voluntary dissolution proceedings shall be authorized by the vote of
a majority of the directors then in office.
(3) If approval of the dissolution of a corporation by a governmental
body or officer is required, as provided in paragraph (c) of section
1002 (Authorization of plan), and such approval has been given,
revocation of the voluntary dissolution proceedings shall not be
authorized without approval thereof by such body or officer.
S 1012. Certificate of annulment of dissolution and reinstatement of
corporate existence.
(a) Any corporation dissolved under former section 57 of the
membership corporations law may, at any time after the effective date of
this chapter, deliver to the department of state a signed certificate
which shall be entitled, "certificate of annulment of dissolution and
reinstatement of corporate existence of .............................
(name of corporation) pursuant to section 1012 of the Not-for-Profit
Corporation Law", and shall set forth:
(1) The name of the corporation and, if it has been changed, the name
under which it was formed.
(2) The date of the filing of its certificate of incorporation by the
department of state.
(3) The law under which it was formed.
(4) That it failed to deliver to the department of state a
certificate, as required by subdivision 1 of section 57 of the
membership corporations law.
(5) That it elects to be reinstated and to continue its corporate
existence.
(6) That, under section 201 (Purposes), it is a Type .............
(Insert A, B or C) not-for-profit corporation.
(b) Notwithstanding subparagraph (a) (1) of section 1006 (Corporate
action and survival of remedies after dissolution), the directors of a
corporation whose dissolution is annulled under this section shall be
deemed trustees of its assets, unless such assets have been distributed
pursuant to section 1005 (Procedure after dissolution).
(c) The filing of such certificate by the department of state shall
have the effect of annulling all of the proceedings theretofore taken
for the dissolution of such corporation, and it shall thereafter have
such corporate powers, rights, privileges, immunities, duties and
liabilities as it had on the date of publication of the proclamation of
dissolution, as if such proclamation had not been made and published.
(d) The department of state shall not file a certificate of annulment
of dissolution and reinstatement of corporate existence if the name of
the corporation being reinstated is not available under section 301
(Corporate name; general) for use by a corporation then being formed
under this chapter, unless such certificate shall change the name to one
which is available for such use.
(e) If, after the publication of the proclamation of dissolution, it
shall appear that the name of any corporation was erroneously included
therein, the secretary of state shall make an appropriate entry on the
records of the department of state, which entry shall have the effect of
annulling all of the proceedings theretofore taken for the dissolution
of the corporation under this section, and it shall have such corporate
powers, rights, privileges, immunities, duties and liabilities as it had
on the date of such publication of the proclamation, as if such
proclamation had not been made and published.
(f) Whenever a corporation has complied with paragraph (a) or the
action specified in paragraph (e) has been taken, the secretary of state
shall publish a notice thereof in the state advertising bulletin and
shall send a copy of such bulletin to the clerk of the county in which
the office of the corporation is located. The county clerk shall file
such copy and make appropriate entry on his record without charge.
(g) Nothing in this section shall be deemed to extend the duration of
any corporation as stated in its certificate of incorporation.
(h) The fee of the secretary of state for filing a certificate under
this section shall be ten dollars.
S 1013. Dissolution of certain firemen`s benevolent associations.
(a) An incorporated firemen`s benevolent association created by act of
the legislature may dissolve in accordance with the provisions of this
article.
(b) Any such corporation authorized to have paid to it foreign fire
insurance premium taxes imposed under sections 9104 and 9105 of the
insurance law shall, in addition to any other requirements of this
article, file with the superintendent of insurance a copy of the
certificate of dissolution. Moneys then due and owing to the corporation
under said sections, and moneys thereafter otherwise payable to the
corporation pursuant to such authorization, shall be distributed as
provided in said sections.