Article 2, Corporate Purposes and Powers
Section
201. Purposes.
202. General and special powers.
203. Defense of ultra vires.
204. Limitation on activities.
205. Conveyance of real property to members for dwelling houses.
S 201. Purposes.
(a) A corporation, as defined in subparagraph (5), paragraph (a) of S
102 (Definitions), may be formed under this chapter as provided in
paragraph (b) unless it may be formed under any other corporate law of
this state in which event it may not be formed under this chapter unless
such other corporate law expressly so provides.
(b) A corporation, of a type and for a purpose or purposes as follows,
may be formed under this chapter, provided consents required under any
other statute of this state have been obtained:
Type A - A not-for-profit corporation of this type may be formed for
any lawful non-business purpose or purposes including, but not limited
to, any one or more of the following non-pecuniary purposes: civic,
patriotic, political, social, fraternal, athletic, agricultural,
horticultural, animal husbandry, and for a professional, commercial,
industrial, trade or service association.
Type B - A not-for-profit corporation of this type may be formed for
any one or more of the following non-business purposes: charitable,
educational, religious, scientific, literary, cultural or for the
prevention of cruelty to children or animals.
Type C - A not-for-profit corporation of this type may be formed for
any lawful business purpose to achieve a lawful public or quasi-public
objective.
Type D - A not-for-profit corporation of this type may be formed under
this chapter when such formation is authorized by any other corporate
law of this state for any business or non-business, or pecuniary or
non-pecuniary, purpose or purposes specified by such other law, whether
such purpose or purposes are also within types A, B, C above or
otherwise.
(c) If a corporation is formed for purposes which are within both type
A and type B above, it is a type B corporation. If a corporation has
among its purposes any purpose which is within type C, such corporation
is a type C corporation. A type D corporation is subject to all
provisions of this chapter which are applicable to a type B corporation
under this chapter unless provided to the contrary in, and subject to
the contrary provisions of, the other corporate law authorizing
formation under this chapter of the type D corporation.
S 202. General and special powers.
(a) Each corporation, subject to any limitations provided in this
chapter or any other statute of this state or its certificate of
incorporation, shall have power in furtherance of its corporate
purposes:
(1) To have perpetual duration.
(2) To sue and be sued in all courts and to participate in actions and
proceedings, whether judicial, administrative, arbitrative or otherwise,
in like cases as natural persons.
(3) To have a corporate seal, and to alter such seal at pleasure, and
to use it by causing it or a facsimile to be affixed or impressed or
reproduced in any other manner.
(4) To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use
and otherwise deal in and with, real or personal property, or any
interest therein, wherever situated.
(5) To sell, convey, lease, exchange, transfer or otherwise dispose
of, or mortgage or pledge, or create a security interest in, all or any
of its property, or any interest therein, wherever situated.
(6) To purchase, take, receive, subscribe for, or otherwise acquire,
own, hold, vote, employ, sell, lend, lease, exchange, transfer, or
otherwise dispose of, mortgage, pledge, use and otherwise deal in and
with, bonds and other obligations, shares, or other securities or
interests issued by others, whether engaged in similar or different
business, governmental, or other activities.
(7) To make capital contributions or subventions to other
not-for-profit corporations.
(8) To accept subventions from other persons or any unit of
government.
(9) To make contracts, give guarantees and incur liabilities, borrow
money at such rates of interest as the corporation may determine, issue
its notes, bonds and other obligations, and secure any of its
obligations by mortgage or pledge of all or any of its property or any
interest therein, wherever situated.
(10) To lend money, invest and reinvest its funds, and take and hold
real and personal property as security for the payment of funds so
loaned or invested.
(11) To conduct the activities of the corporation and have offices and
exercise the powers granted by this chapter in any jurisdiction within
or without the United States.
(12) To elect or appoint officers, employees and other agents of the
corporation, define their duties, fix their reasonable compensation and
the reasonable compensation of directors, and to indemnify corporate
personnel. Such compensation shall be commensurate with services
performed.
(13) To adopt, amend or repeal by-laws, including emergency by-laws
made pursuant to subdivision seventeen of section twelve of the state
defense emergency act, relating to the activities of the corporation,
the conduct of its affairs, its rights or powers or the rights or powers
of its members, directors or officers.
(14) To make donations, irrespective of corporate benefit, for the
public welfare or for community fund, hospital, charitable, educational,
scientific, civic or similar purposes, and in time of war or other
national emergency in aid thereof.
(15) To be a member, associate or manager of other non-profit
activities or to the extent permitted in any other jurisdiction to be an
incorporator of other corporations, and to be a partner in a
redevelopment company formed under the private housing finance law.
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Article 2 Continued . . .
(16) To have and exercise all powers necessary to effect any or all of
the purposes for which the corporation is formed.
(b) If any general or special law heretofore passed, or any
certificate of incorporation, shall limit the amount of property a
corporation may take or hold, or the yearly income from the corporate
assets or any part thereof, such corporation may take and hold property
of the value of fifty million dollars or less, or the yearly income
derived from which shall be six million dollars or less, or may receive
yearly income from such corporate assets of six million dollars or less,
notwithstanding any such limitations. In computing the value of such
property, no increase in value arising otherwise than from improvements
made thereon shall be taken into account.
(c) When any corporation shall have sold or conveyed any part of its
real property, the supreme court, notwithstanding a restriction in any
general or special law, may authorize it to purchase and hold from time
to time other real property, upon satisfactory proof that the value of
the property so purchased does not exceed the value of the property so
sold and conveyed within the three years next preceding the application.
(d) A corporation formed under general or special law to provide
parks, playgrounds or cemeteries, or buildings and grounds for camp or
grove meetings. Sunday school assemblies, cemetery purposes, temperance,
missionary, educational, scientific, musical and other meetings, subject
to the ordinances and police regulations of the county, city, town, or
village in which such parks, playgrounds, cemeteries, buildings and
grounds are situated, may appoint from time to time one or more special
policemen, with power to remove the same at pleasure. Such special
policemen shall preserve order in and about such parks, playgrounds,
cemeteries, buildings and grounds, and the approaches thereto, and to
protect the same from injury, and shall enforce the established rules
and regulations of the corporation. Every policeman so appointed shall
within fifteen days after his appointment and before entering upon the
duties of his office, take and subscribe the oath of office prescribed
in the thirteenth article of the constitution of the state of New York,
which oath shall be filed in the office of the county clerk of the
county where such grounds are situated. A policeman appointed under this
section when on duty shall wear conspicuously a metallic shield with the
name of the corporation which appointed him inscribed thereon. The
compensation of policemen appointed under this section shall be paid by
the corporation by which they are appointed.
(e) Any wilful trespass in or upon any of the parks, playgrounds,
buildings or grounds provided for the purposes mentioned in the
preceding paragraph, or upon the approaches thereto, and any wilful
injury to any of the said parks, playgrounds, buildings or grounds, or
to any trees, shrubbery, fences, fixtures or other property thereon or
pertaining thereto, and any wilful disturbance of the peace thereon by
intentional breach of the rules and regulations of the corporation, is a
misdemeanor.
(f) No corporation shall conduct activities in New York state under
any name, other than that appearing in its certificate of incorporation,
without compliance with the filing provisions of section one hundred
thirty of the general business law governing the conduct of business
under an assumed name.
S 203. Defense of ultra vires.
(a) No act of a corporation and no transfer of real or personal
property to or by a corporation, otherwise lawful, shall, if duly
approved or authorized by a judge, court or administrative department or
agency as required, be invalid by reason of the fact that the
corporation was without capacity or power to do such act or to make or
receive such transfer, but such lack of capacity or power may be
asserted:
(1) In an action by a member against the corporation to enjoin the
doing of any act or the transfer of real or personal property by or to
the corporation. If the unauthorized act or transfer sought to be
enjoined is being, or is to be, performed or made under any contract to
which the corporation is a party, the court may, if all of the parties
to the contract are parties to the action and if it deems the same to be
equitable, set aside and enjoin the performance of such contract, and in
so doing may allow to the corporation or to the other parties to the
contract, as the case may be, such compensation as may be equitable for
the loss or damage sustained by any of them from the action of the court
in setting aside and enjoining the performance of such contract;
provided that anticipated profits to be derived from the performance of
the contract shall not be awarded by the court as a loss or damage
sustained.
(2) In an action by or in the right of the corporation to procure a
judgment in its favor against an incumbent or former officer or director
of the corporation for loss or damage due to his unauthorized act.
(3) In an action or special proceeding by the attorney-general to
annul or dissolve the corporation or to enjoin it from the carrying on
of unauthorized activities.
S 204. Limitation on activities.
Notwithstanding any other provision of this chapter or any other
general law, a corporation of any type or kind to which this chapter
applies shall conduct no activities for pecuniary profit or financial
gain, whether or not in furtherance of its corporate purposes, except to
the extent that such activity supports its other lawful activities then
being conducted.
S 205. Conveyance of real property to members for dwelling houses.
A not-for-profit corporation, if its by-laws so provide, and pursuant
to the provisions thereof, and without leave of the court, may convey to
a member of the corporation a portion of its real property for the
erection thereupon of a cottage or other dwelling-house with suitable
outbuildings. When so conveyed the title to such portion, together with
the buildings thereon, shall continue in such member and on his death
pass to his heirs or devisees, but the land shall not be alienable
except to the corporation or to a member thereof.