Bill > S05160

This bill updates the Not-For-Profit Corporation Law to clarify and expand protections for directors, officers, and key persons in non-profit organizations. It establishes comprehensive guidelines for indemnification, which means protecting these individuals from financial losses resulting from legal actions taken in the course of their official duties. The bill allows non-profit corporations to indemnify (financially protect) directors, officers, and key persons for expenses incurred in legal proceedings, including judgments, fines, settlements, and legal fees, provided they acted in good faith and met certain standards of conduct. The legislation ensures that indemnification rights survive even if a corporation merges or consolidates, and that these rights continue to benefit the individual and their heirs even after they leave their position. The bill specifies that indemnification can apply to various types of legal actions, including civil, criminal, administrative, and investigative proceedings, and allows corporations to purchase insurance to protect these individuals. Importantly, the bill provides nuanced provisions for determining when indemnification is appropriate, including allowing for court review and establishing that termination of a legal action or a conviction does not automatically disqualify someone from indemnification. The legislation aims to provide clearer, more robust protections for individuals serving in leadership roles in non-profit organizations.

Government Affairs

https://www.nysenate.gov/legislation/bills/2025/S5160