Last year, we posted about amendments to the New York Not-for-Profit Corporation Law (the “NPCL”) and the New York Estates, Powers and Trusts Law (the “EPTL”) here and here. As we noted, the amendments were signed into law last year and take effect on May 27, 2017 (with the exception of the amendment to NPCL Section 713(f) regarding employees serving as board chairs, which took effect January 1, 2017).
This post is a reminder that the effective date of these amendments is just around the corner!
As noted in our earlier posts, the amendments revise the statutory definitions of “independent director,” “related party,” “related party transaction,” and “key employee” (now, “key person”). The amendments also revise statutory provisions relating to creation and authority of committees, approval of related party transactions, and content and oversight of conflict of interest and whistleblower policies, among other things.
As also noted in our earlier posts, some of these changes should be helpful for nonprofits. For example, the exclusion of de minimis and certain “ordinary course” transactions from the related party transaction rules should reduce the compliance burden for nonprofits. However, the implications of certain other changes – for example, replacing “key employee” with “key person” – likely require reviewing various policies, such as the organization’s conflict of interest policy, to be sure the necessary parties are covered. We are available to assist if you have questions about how these changes might impact your organization.