Corporate Sale of Substantially All Assets Approval Requirements in New York

At a glance

Requirements one by one

New York uses two qualitative phrases and no percentage safe harbor

N.Y. Bus. Corp. Law § 909(a) applies when the corporation disposes of all or substantially all assets outside the usual or regular course of the business it actually conducts. The section does not supply an asset, income, or revenue percentage, a significant-continuing-business test, a subsidiary valuation method, or an investment-holding safe harbor.

Section 909(b) gives presumptive-evidence effect to a corporate deed, lease, or other conveyance instrument reciting that the property is not all or substantially all assets, that the disposition is usual or regular course, or that shareholders duly authorized it. A recital is not an instruction to invent or assume the underlying fact.

The board authorizes and directs a shareholder vote

Section 909(a)(1) requires the board to authorize the proposed disposition and direct its submission to shareholders. It states no general recommendation, conflict-based nonrecommendation explanation, or conditional-submission rule.

Shareholders may fix the terms, conditions, and consideration or authorize the board to do so. The consideration can be cash or real or personal property, including another domestic or foreign corporation's shares, bonds, or other securities.

Record holders get notice, but timing differs by recipient

Section 909(a)(2) sends meeting notice to every record shareholder whether or not entitled to vote. N.Y. Bus. Corp. Law § 605(a) gives voting holders notice 10 to 60 days before the meeting, or 24 to 60 days if third-class mail is used. For an action carrying § 623 payment rights, the notice states that purpose and effect and includes § 623 or an outline of its material terms.

Section 909 itself does not require the meeting notice to attach an asset-sale plan, full terms, or a description of consideration. Governing records and other applicable disclosure law remain separate.

The outstanding-share vote has a legacy split

Section 909(a)(3) uses a majority of the votes of all outstanding shares entitled to vote for corporations incorporated after the clause's effective date and corporations existing on that date whose certificate expressly provides for the majority rule. Other corporations existing on that date use two-thirds of the votes of all outstanding shares entitled to vote.

The text does not state a separate class or series vote for an asset disposition. This page preserves the statute's formation-and-certificate split rather than guessing which branch a corporation occupies from its present age alone.

Written consent defaults to unanimity

N.Y. Bus. Corp. Law § 615(a)-(d) defaults no-meeting action to written consent of all outstanding shares entitled to vote. If the certificate permits, holders with the meeting-minimum votes may act instead. Sufficient consents must be delivered within 60 days after the earliest delivered consent, and prompt notice goes to nonconsenting holders after less-than-unanimous action.

Consent has the same effect as the corresponding valid vote. The general consent route does not erase § 605's appraisal notice or the separate § 623 preservation procedure when payment rights apply.

Mortgages and security interests have an express no-vote default

N.Y. Bus. Corp. Law § 911 lets the board authorize a mortgage, pledge, or security interest in all or any corporate property. Unless the certificate says otherwise, no shareholder vote or consent is required for that board action.

Sections 909 and 911 state no general wholly owned subsidiary, pro rata distribution, consolidated-asset, or investment-holding exception. Section 909(d)-(e) instead creates a narrow same-name successor route: transferring the assets and name to a newly formed same-name corporation can automatically dissolve the existing corporation 30 days after the new certificate filing with the stated tax consent unless the existing corporation changes its name.

Conveyance challenges and abandonment have separate rules

Under § 909(c), an action to set aside a corporate conveyance instrument affecting real property, or real and personal property, for failure to comply with § 909(a) requires both commencement and a notice of pendency within the stated one-year period after recording. That limitations rule does not decide another claim or remedy.

Section 909(f) lets the board abandon despite shareholder approval and without further holder action, subject to third-party rights under a related contract. It does not decide termination rights, fees, damages, or whether a disposition already closed.

Nonassenting voting holders have a conditional payment route

N.Y. Bus. Corp. Law § 910(a)(1)(B) gives an entitled voting shareholder who does not assent the § 623 fair-value payment route when § 909 requires approval. The asset-sale right excludes a transaction wholly for cash when approval is conditioned on dissolution and distribution of substantially all net assets by the holders' respective interests within one year after the transaction.

This page identifies the eligibility boundary and notice. It does not administer the § 623 demand, valuation, payment, or court procedure for a particular holder.

What trips people up

• The vote may be majority or two-thirds. The denominator is all outstanding shares entitled to vote in both branches; the formation-date/certificate branch selects the fraction.
• A conveyance recital is presumptive evidence, not conclusive validation. The statute assigns an evidentiary effect and a limitations period without saying that a false or disputed recital resolves every claim.
• Using the seller's name has a special dissolution consequence. The narrow § 909(d)-(e) route is not a general rule that every asset sale dissolves the seller.

Common questions

Does mortgaging all corporate property require a shareholder vote?

Not under § 911's default. The certificate of incorporation may provide otherwise, and a differently structured transfer may require separate analysis.

May the board abandon after shareholders approve?

Yes. Section 909(f) allows abandonment without another shareholder action, subject to third-party rights under a related contract.

Does an ordinary asset sale require a Department of State filing?

Section 909 states no general filing for the ordinary asset disposition. Its same-name successor-corporation branch requires the new corporation's formation certificate and stated contents, while title, dissolution, tax, lien, license, and regulatory records remain separate.

Statutes and sources

• N.Y. Bus. Corp. Law § 909. The quoted current text supplies the trigger, board/holder procedure, vote split, recitals, challenge period, same-name dissolution, and abandonment. Official current text (accessed September 5, 2026).
• N.Y. Bus. Corp. Law §§ 605 and 615. The quoted current text supplies meeting/appraisal notice and written-consent mechanics. Official § 605 and official § 615 (accessed September 5, 2026).
• N.Y. Bus. Corp. Law §§ 910 and 911. The quoted current text supplies the asset-sale payment-right boundary and mortgage/security-interest exception. Official § 910 and official § 911 (accessed September 5, 2026).