The New York Cooperative Corporations Law refers to recent amendments and laws that govern a cooperative corporation set under the Business Corporate Laws and Not-For-Profit Corporation sections of the New York Consolidated Laws. The primary goals of the bill are to promote fair and equal business practices, improve economic welfare, and to make sure members of cooperative corporations and condominium housing are knowledgeable and kept up to date on specific regulations regarding conflicts of interest.

New York Cooperative Corporations Law

While there is no single definition of a cooperative, this unique business entity is democratically controlled by its members who are limited to one vote regardless of how many shares of the corporation a member owns. Definitions and requirements vary by state.

New York legislated recent amendments to the Business Corporation Law and Not-For-Profit Corporation Law, which establish regulations and procedures for cooperative cooperation. These laws cover boards of directors, shareholders' rights and obligations, board meetings, elections, certificates of incorporations, filings, fiduciary responsibility and more.

New Requirements:

New requirements only effects condominium and cooperative corporations formed under the Business Corporation Law or the Not-For-Profit Corporation Law. The law does not apply to unincorporated associations created under the New York Real Property Law, known as the Condominium Act. The bill also does not cover topics such as enforcement and oversight, leaving the shareholders or members responsible for any violations.

  • Notification Requirement
    • Stockholders and members are aware of all business transactions involving an interested director.
    • Under the Business Corporation Law:
      • Each director is required to obtain Section 713 at least once a year.
    • A company organized under the Not-For-Profit Corporation Law:
      • Each director is required to obtain a copy of Section 715 of the NPCL at least once a year.
  • Annual Reports must be available to every affiliate or stockholder and signed by each director of the company.
    • List all contracts or transactions elected by the cooperative involving an interested director.
    • The details of the contract
    • Record board meetings and elections
    • The date of the election
    • The date of the contract

Key Terms

  • Continuance:
    • Rescheduling a trial or hearing for a later date
  • Contract:
    • A legally binding written agreement. The deal goes into effect when it is signed.
  • Descendent:
    • A person who is deceased.
  • Deed:
    • Legally transfers the title, or ownership, of real property, from one person to another.
  • Defendant:
    • An individual, company, or institution sued or accused in a court of law.
    • Civil:
      • The person complained against
    • Criminal:
      • The person accused of a crime
  • Escrow
    • A financial arrangement whereby a third party secures funds until certain conditions are met.
  • Evidence
    • Facts and information presented in court or in documents that are used to influence the decision of a judge or jury.
  • Foreclosure
    • A legal process in which property that is used as security for a loan is taken into possession and sold when the mortgagor does not keep up with payments, causing the investment to default.
  • Grantor
    • The person who creates a trust or grant and assigns ownership of property.
  • Injunction
    • A law or order by a court that forbids a specific action to avoid permanent damage or injury.
  • Liabilities
    • All debts, obligations, or money owed that is the responsibility of a business or person.
  • Lien
    • A claim against real or personal property to secure that debts are paid, and obligations are met.
  • Misdemeanor
    • A crime or petty offense that is not as serious as a felony and may result in up to one year in jail.
  • National Bank
    • A bank governed by the Comptroller of the Currency, a bureau of the U.S. Treasury Department.
  • Patronage
    • A term used in a worker cooperative to determine job satisfaction and productivity that is regulated and monitored by the state.
      • Maintenance, inspection, and repair of retaining walls
  • Personal Property
    • Tangible and nonmaterial property that are not real property.
  • Plaintiff
    • The person who files a civil lawsuit complaint.
  • Real Property
    • Fixtures, land, and all other parts of the estate that can not be removed.
  • Recourse
    • An arrangement in which a bank has any credit risk connected to a sold asset that exceeds a pro rata share of the bank's claim on the asset.
  • Restitution
    • Money the defendant owes to the victim of a criminal action for damages or losses. Ordered by the court.
  • Service of Process
    • The service of writs or summonses to the appropriate party.
  • Settlement
    • Both parties come to an agreement and avoid trial.
  • Trustee
    • The title holder
  • Uniform Code Act
    • Laws set by several states to ensure commercial laws are consistent with one another.
    • Includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading.
  • Written Notice of Allocation
    • A written document stating the service amount and payment terms by the worker cooperative.

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