Frequently Asked Questions
New York N-PCL Article 9.
Organizational change procedure where two or more corporations (called “constituent” corporations) become a single corporation. For more information see N-PCL § 901.
Organizational change where constituent corporations become a single corporation, and the resulting corporation (referred to as the “surviving corporation”) is one of the merging corporations.
Organizational change where constituent corporations become a single corporation, and the resulting corporation is a new corporation, called a consolidated corporation.
Name to describe each not-for-profit corporation involved in the transaction. One constituent corporation will merge or consolidate with other constituent corporations.
Plan drafted and approved by each constituent corporation.
The plan of merger should include:
- The name of each constituent corporation and if the name of any of them has been changed, the name under which it was formed, and the name of the surviving corporation, or the name or the method of determining it, of the consolidated corporation.
- As to each constituent corporation, a description of the membership and holders of any certificates evidencing capital contributions or subventions, including their number, classification, and voting rights, if any.
- The terms and conditions of the proposed merger or consolidation, including the manner and basis of converting membership or other interest in each constituent corporation into membership or other interest in the surviving or consolidated corporation, or the cash or other consideration to be paid or delivered in exchange for membership or other interest in each constituent corporation, or a combination thereof.
- In case of merger, a statement of any amendments or changes in the certificate of incorporation of the surviving corporation to be effected by such merger; in case of consolidation, all statements required to be included in a certificate of incorporation for a corporation formed under this chapter, except statements as to facts not available at the time the plan of consolidation is adopted by the board.
The board of directors of each constituent corporation, by a vote of two-thirds of the directors present, so long as a quorum is present, must vote to approve the plan of merger. The amount of favorable votes may be affected by the certificate of incorporation or by-laws so be sure to consult with counsel and the certificate of incorporation before putting the plan to a vote. See N-PCL § 902 for more information.
After being voted on by the board, if the constituent corporation is a member corporation, the members must also vote to approve the plan. Notice of the meeting must be given to all members, whether they can vote or not. A copy of the plan of merger should be circulated ahead of time. Two-thirds of the members representing a quorum must vote in favor. See N-PCL §§ 613 & 903.
If the constituent corporation is not a member organization or the members are not entitled to a vote, the plan is approved when the board of directors votes to approve the plan. See N-PCL § 903(a)(3).
Yes. No certificate of merger or consolidation can be filed until the plan has been authorized and approved by either the Attorney General or by a judge of the New York Supreme Court. For more information see N-PCL § 907(a) for Supreme Court approval and N-PCL § 907(b) for Attorney General approval.
The following documents will have to be submitted to the Charities Bureau of the Attorney General’s office (if applicable):
- Proposed plan of merger;
- Proposed certificate of merger;
- Draft verified petition;
- Proposed court order approving merger;
- Certificates of incorporation, bylaws, and other governing documents for each constituent corporation and the surviving corporation;
- Minutes of board of directors, committee and membership meetings, with secretary’s certificates, relating to the merger;
- A list of names and addresses of directors of each constituent corporation, any anticipated changes in membership or directors, any pre-merger changes to governance;
- Any letter of intent or other agreement in connection with the merger;
- IRS Form 990 and audited financial statements for the past three years for each;
- IRS Form 1023 and tax exemption determination letters for all constituent corporations and the surviving corporation;
- Names, certificates of incorporation, and other governing instruments of any subsidiaries, affiliates, and supporting organizations, including a statement of whether they are holding restricted funds;
- A list of endowments or other restricted funds of each constituent corporation;
- A list of all government agencies whose consent is required and copies of consent; and
- All Hart-Scott-Rodino filings made with federal antitrust authorities.
The certificate must include the following:
- Name of each corporation and, if changed, the name at formation. Also included should be the name of the surviving corporation, or name or method for determining the name of the consolidated corporation;
- Description of the membership and certificate holders of capital contributions or subventions;
- In a merger, a statement of any amendments to the certificate of incorporation of the surviving corporation or for a consolidation, all necessary statements for a new certificate of incorporation;
- Effective date of the consolidation or merger if different from filing date;
- In the case of a consolidation, any other statements required in a certificate of incorporation for a corporation formed under the Not-for-Profit Corporation Law but not covered above;
- Date when each corporation’s certificate of incorporation was filed by the Department of State or, if a special law creation, the chapter number and year of passage of such law; and
- Manner for authorizing a consolidation or merger within each constituent corporation.
With the Department of State. The Certificate should be sent with a certified copy of the Supreme Court order or Attorney General approval of the merger.
A certified copy of the certificate of merger, certified by the Department of State, must then be filed by the surviving or consolidated corporation with the office of the county clerk where the office of each constituent corporation, other than the surviving corporation, is located. If a constituent corporation owns real estate, a certified certificate must be filed in the recording office in each county where such property is situated.
A 501(c)(3) charitable organization will partner with a charitable organization that has not yet been recognized as a charitable organization by the Internal Revenue Service. The 501(c)(3) serves as the fiscal sponsor and accepts tax deductible donations on behalf of the sponsored charity. The fiscal sponsor controls the funds and pays them out to the sponsored organization.