N.Y. General Associations Law 7-A – Incorporation of joint-stock association
§ 7-a. Incorporation of joint-stock association. 1. Any joint-stock association transacting business within this state under this chapter and created by or under the laws of this state on or before January first, nineteen hundred sixty-four may be incorporated under the business corporation law for a purpose or purposes for which a corporation may be formed under such law, in accordance with the following provisions of this section.
Terms Used In N.Y. General Associations Law 7-A
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Statute: A law passed by a legislature.
2. (a) The certificate of incorporation of a joint-stock association to be incorporated pursuant to this section shall be entitled "Certificate of incorporation of ……………….. (name of corporation) under § 402 of the business corporation law and § 7-a of the general associations law," shall be signed by the president of the joint-stock association as the incorporator, with his name and address stated beneath or opposite his signature, acknowledged by him and delivered to the department of state, and shall set forth the matters required or permitted to be set forth in a certificate of incorporation under § 402 of the business corporation law and shall also set forth:
(1) The name and date of organization of the joint-stock association to be incorporated.
(2) The number of outstanding shares of each class and series of the joint-stock association, specifying the classes and series entitled to vote and further specifying each class and series, if any, entitled to vote as a class, and a statement of the basis upon which and the manner in which such shares shall be converted into, or exchangeable for, the shares or other securities of the corporation, or the cash or other consideration which is to be paid or delivered in exchange for shares of the joint-stock association, or a combination thereof.
(3) A statement that the signer of the certificate of incorporation is the president of the joint-stock association and that he has been authorized by the stockholders of the joint-stock association, in accordance with the provisions of subdivision three of this section, to sign, acknowledge and deliver the certificate to the department of state for the purpose of incorporating the joint-stock association.
(b) (1) Notwithstanding the provisions of § 301 of the business corporation law, the corporation may have the same name as the joint-stock association to be incorporated, and shall not be required to add to, modify or otherwise change such name, if the joint-stock association has transacted business in this state under such name continuously since January first, nineteen hundred twelve.
(2) Subject to the requirements of the business corporation law, the certificate of incorporation approved in accordance with the provisions of subdivision three of this section may make any change in the purpose or purposes of the joint-stock association, in the shares which it shall have authority to issue and in its duration and may contain any provision, not inconsistent with law, which is permitted to be set forth in a certificate of incorporation under § 402 of the business corporation law.
3. The incorporation of a joint-stock association as provided in this section shall be authorized in the following manner:
(a) The board of directors of the joint-stock association shall call a meeting of its stockholders for the following purposes:
(1) To authorize the incorporation of the joint-stock association pursuant to this section, to approve the certificate of incorporation proposed to be made and delivered for such purpose and to authorize the president of the joint-stock association to sign, acknowledge and deliver to the department of state such certificate of incorporation for filing pursuant to this section; and
(2) To adopt by-laws of the corporation to take effect upon the filing of the certificate of incorporation by the department of state, which by-laws may contain any provisions permitted to be contained in the by-laws of a corporation formed under the business corporation law.
(b) Notice of such meeting of stockholders shall be given to each stockholder of record of the joint-stock association, whether or not entitled to vote, in the manner provided in its articles of association for special meetings of stockholders or, in the absence of any such provision, in conformity with the provisions of § 605 of the business corporation law as to special meetings of shareholders of a corporation subject to such law. A copy of the proposed certificate of incorporation, except for any information not available at the time of the notice, and a copy of the proposed by-laws of the corporation shall accompany such notice. Except as otherwise required by this section or as otherwise provided in the articles of association or by-laws of the joint-stock association, the provisions of sections six hundred four to six hundred twelve, inclusive, of the business corporation law shall govern the conduct of such meeting.
(c) At such meeting of stockholders the matters specified in paragraph (a) of subdivision three of this section shall be authorized, adopted and approved by vote of the holders of that proportion of the outstanding shares of the joint-stock association entitled to vote which is required by its articles of association to amend such articles, the holders of shares of a class or series voting as a class if the articles so provide, or, in the absence of any provision in the articles as to the amendment thereof, by vote of the holders of two-thirds of all the outstanding shares of the joint-stock association entitled to vote in the election of any of its directors.
4. Minutes of the proceedings of such meeting shall be kept, and a copy of the certificate of incorporation authorized at such meeting and a copy of the by-laws adopted at such meeting shall be filed with the minutes. After the certificate of incorporation shall have been filed, such minutes shall be deemed minutes of proceedings of the shareholders of the corporation for all purposes of § 624 of the business corporation law.
5. The provisions of subparagraphs one, two, three, four and six of paragraph (b) of § 806 of the business corporation law shall apply to any changes in the shares of the joint-stock association or in the rights, preferences or limitations of any such shares made by the certificate of incorporation authorized by this section as if such certificate were a certificate of amendment.
6. Upon the filing by the department of state of the certificate of incorporation authorized by this section:
(a) The joint-stock association shall no longer be governed by this chapter but shall become and be a corporation within the meaning of the business corporation law possessing, consistently with its certificate of incorporation, the business corporation law, and any other applicable statute of this state, all the rights, privileges, immunities, powers and purposes of the joint-stock association and having, without being deemed a new or different legal person or entity, all the rights and powers, subject to all the limitations thereon and qualifications thereof, which pertain to a corporation formed under the business corporation law, and the shareholders, directors and officers of the corporation shall have all the rights and privileges, and be subject to all the duties and obligations, and limitations thereon, which pertain to shareholders, directors and officers of a corporation formed under the business corporation law. The certificate of incorporation of the corporation may thereafter be amended or changed in any respect as permitted, and in the manner authorized, by said law.
(b) No further action by the incorporator shall be required for the organization of the corporation. The by-laws adopted in accordance with subdivision three of this § of the corporation and, for all purposes of the business corporation law, shall be deemed by-laws adopted by the shareholders of the corporation. The directors of the joint-stock association in office at the time of incorporation shall continue to hold office as directors of the corporation for their respective terms in accordance with the by-laws and the provisions of Article 7 of the business corporation law.
(c) Subject to the provisions of subdivision five of this section, the initial capital, capital surplus and earned surplus of the corporation shall be the capital, capital surplus and earned surplus, respectively, of the joint-stock association as existing at the time of incorporation, provided that prior to the declaration by the board of directors of the first dividend after incorporation, the board may determine the amount of the corporation's earned surplus as provided in subparagraph one (A) of paragraph (a) of § 517 of the business corporation law in respect of corporations formed before the effective date of said law, and such determination if made in good faith shall be conclusive.
(d) All property, real and personal, of the joint-stock association, including real property held in the name of the president, as such president, subscriptions to shares, causes of action, licenses, permits and every other asset of the joint-stock association shall vest in the corporation without further act or deed.
(e) No liability or obligation due or to become due, claim or demand for any cause existing against the joint-stock association, or any stockholder, officer or director thereof shall be released or impaired by such incorporation. The corporation shall assume and be liable for all the liabilities, obligations and penalties of the joint-stock association without further act or instrument, and an action or proceeding may be maintained thereon against the corporation in lieu of an action or proceeding against an officer of the joint-stock association under article three of this chapter.
(f) No action or proceeding, whether civil or criminal, then pending by or against the joint-stock association, or any stockholder, officer or director thereof, shall abate or be discontinued by such incorporation, but may be enforced, prosecuted, settled or compromised as if such incorporation had not occurred, or the corporation may be substituted in any such action or proceeding brought pursuant to article three of this chapter by or against an officer of the joint-stock association, in place of such officer.
(g) The personal liability, if any, of any stockholder of the joint-stock association, as such stockholder, existing at the time of incorporation shall not thereby be extinguished but shall remain personal to such stockholder and shall not become the liability of any other shareholder of the corporation or of any subsequent transferee of any share of the corporation, and an action or proceeding may be maintained thereon against such stockholder in accordance with the provisions of article three of this chapter, provided that such an action or proceeding could have been maintained under said article three if the incorporation of the joint-stock association had not occurred, treating the corporation as an officer of the joint-stock association for such purpose.
7. After the filing of the certificate of incorporation by the department of state pursuant to this section, the corporation shall cause a copy of the certificate of incorporation, certified by the department of state, to be filed in the office of the official who is the recording officer of each county in this state in which real property of the joint-stock association is located.
8. The provisions of § 96 of the executive law prescribing the fee to be collected by the department of state for filing a certificate of incorporation under the business corporation law shall apply to the certificate of incorporation to be filed pursuant to this section.