CORPORATE TRANSACTIONS & COMPLIANCE BLOG

Obtaining Consent From the New York Commissioner of Education

By: Don Beaulac, COGENCY GLOBAL INC. on Tue, Apr 09, 2013

Part 1 – Domestic and Foreign Business Entities

NY Education Department Consent resized 600The following or very similar language can be found in the New York Business Corporation Law (BCL), Not-For-Profit Corporation Law (NPCL), Limited Liability Company Law (LLCL) and Revised Limited Partnership Law (RLPA): 

“Except as provided in this chapter, the name of a domestic or foreign [entity type] shall not, unless the consent of the Commissioner of Education is endorsed on or annexed to the certificate, contain the words school, education, elementary, secondary, kindergarten, prekindergarten, preschool, nursery school, museum, history, historical, historical society, arboretum, library, college, university, conservatory, academy or institute or any abbreviation or derivative of such terms.”

It is important to note that consent is required from the New York Education Department even if the context in which one of the words listed above is used makes it clear that the entity is not in any way holding itself out to be a provider of education. So, for example, the names “Educational Products, LLC”, “School Street Realty Corporation” and “University Heights Bookstore, Ltd.” all require Education Department consent before they can be used.

To avoid delays in obtaining consent from the Commissioner of Education, keep the following in mind when preparing a document for presentation:

Domestic Business Corporations:
Certificates of incorporation are usually drawn up using a standard all-purpose clause, however, Education will insist that any all-purpose language be removed and replaced with a clause containing specific purposes.

Domestic Limited Liability Companies and Limited Partnerships:
Formation documents usually contain no purposes whatever. Education will insist that a clause containing specific purposes be added within the body of the document. The clause should appear before the witness clause and/or signature and not as a postscript or addendum.

Foreign Corporations, Limited Liability Companies and Limited Partnerships:
Qualification documents must observe the same requirements as their domestic counterparts in that specific purposes are needed within the document and any all-purpose language must be removed. In addition, each qualification document presented for consent must be accompanied by a Certificate of Good Standing and a copy of the incorporation/formation document and any previously filed amendments from the domestic jurisdiction.

Amendments Changing Name:
Any entity, foreign or domestic, desiring to change its name to a name containing one or more restricted words previously noted must obtain Commissioner of Education consent before filing with the New York Department of State. Domestic entities must submit, along with the proposed amendment, a copy of the formation document and any previously filed amendments. If these documents do not contain a clause with specific purposes, the proposed amendment must be further amended to add specific purposes. Foreign entities must comply with the same requirements as domestic entities and, in addition, provide a copy of all documents filed in the domestic jurisdiction.

Bear in mind that the purposes provided in any document presented for consent of the Commissioner of Education will be evaluated to determine whether or not the entity should, in fact, be filed with the Board of Regents or filed with the Department of State with consent and whether or not the name of the entity is deceptive or misleading.

To learn about obtaining consent of the Commissioner of Education for not-for-profit corporations, look for Part 2 of this posting in the near future.

 

This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Nonprofit Registration and Compliance, Charitable Solicitation Registration