We’ve been providing our readers with an outline of The New York Nonprofit Revitalization Act, and detailing how it affects the way nonprofits are viewed, and operated. If you haven’t already looked over the first six provisions, make sure you visit our earlier blog posts for other matters of significance. Here are the last four provisions of The New York Nonprofit Revitalization Act we will address. Be sure to read the full text of the law and consult with your professional advisers to ensure compliance with this Act.
- The outdated “types” for nonprofits in New York (Type A, B, C, and D) are being eliminated and replaced by two categories: “charitable corporation” and “non-charitable corporation.”
Current Type B and C corporations will be deemed “charitable” while current Type A corporations will be deemed “non-charitable.” The classification of Type D corporations will depend on the purposes for which they were formed.
- Certain transactions such as: mergers, sales of assets under certain circumstances, changes of corporate purpose, and dissolutions with assets, can now proceed with attorney general approval.
A court order may be granted in the absence of the attorney general approval.
- The New York attorney general has been granted certain enhanced enforcement authority.
This includes the ability to seek injunctive relief, damages, and restitution where there are improper related party transactions. This also includes possible double damages for willful misconduct.
- Some obstacles to incorporate in New York, such as the need for a waiver under certain circumstances from the New York State Department of Education have been eliminated.
Some of the waivers from other state agencies will STILL be required under certain circumstances, and prior notice to the NYSED might also be required.
If you’re working for a nonprofit in the state of New York, you need to be aware of the provisions in this Act, and understand the implications of them. Being “in the know” about the latest legislation affecting your business can make a huge difference in your day-to-day operations, and the way you plan for the future. Please feel free to contact us if you have any questions regarding the act, or if you need assistance in its implementation.
No information contained in this communication can be relied upon as legal or tax advice. It is not intended and cannot be used, relied or acted upon without professional guidance and advice.