New York Permanently Allows Virtual Membership Meetings for Nonprofits

3 min

On November 8, 2021, New York Governor Kathy Hochul signed legislation that permanently gives New York not-for-profit and religious corporations the ability to hold virtual-only membership meetings, and not-for-profit corporations the ability to hold hybrid membership meetings that combine the virtual presence of some members with an in-person membership meeting. This change provides membership organizations, associations, professional societies, country clubs, churches, synagogues, mosques, charities, social welfare organizations, and other nonprofit and religious corporations incorporated in New York with modernized governance flexibility continuing beyond the unique public health and safety challenges associated with COVID-19.

Unlike many other state nonprofit corporate laws, New York's Not-for-Profit Corporation Law and Religious Corporations Law historically did not allow not-for-profit corporations or religious organizations to hold virtual or hybrid membership meetings. In response to the outbreak of COVID-19 in 2020, New York State implemented a series of temporary provisions that allowed not-for-profit corporations to hold membership meetings entirely or partially through virtual or remote means with approval by the organization's board of directors and with specific safeguards in place to protect member access and voting rights. These temporary provisions similarly allowed religious corporations to hold congregant or membership meetings entirely, but not partially, through virtual means with the approval of the religious organization's board of trustees.

The new law makes the option of virtual membership meetings permanent, although it still treats not-for-profit and religious corporations differently. Under the temporary laws, the board of a not-for-profit corporation could authorize virtual or hybrid meetings, and the board of a religious corporation could authorize virtual membership meetings, regardless of any restriction in the certificate of incorporation or bylaws. Now, a not-for-profit corporation's board of directors may choose to hold virtual or hybrid membership meetings only if such meetings are not prohibited by the organization's certificate of incorporation or bylaws, and subject to implementing certain mandated safeguards. In contrast, religious corporations can continue to hold virtual meetings only if the board of trustees is authorized to determine the place of meetings, and they are not allowed to hold hybrid meetings. Therefore, even organizations that previously held virtual or hybrid membership meetings under the prior temporary law should review their organizing documents to confirm that their organization is not now prohibited from doing so. Amendments may be required to remove restrictions or to affirmatively allow for virtual meetings.

Although virtual and hybrid meetings have become an attractive and efficient alternative to in-person meetings, it is important for nonprofits to follow proper governance procedures even in a virtual setting. For example, the decision to hold a virtual or hybrid membership meeting should be memorialized in a board resolution or meeting minutes. Likewise, when planning for virtual, hybrid, or in-person membership meetings, nonprofits should be mindful of evolving best practices and practical considerations surrounding the technology platforms used for virtual and remote participation in such meetings and should take care to observe the various procedural requirements that normally apply, such as notice, proxy representation, quorum, the rules of order, and recording minutes. In short, an organization should consider a number of factors when deciding the best format for its meetings, including its not-for-profit or religious corporation status, available resources, expected and historical attendance, the items to be addressed during the meeting, stakeholder experience, governance preferences, and participants' comfort with technology.