N.Y. Business Corporation Law § 501: Authorized shares

§ 501. Authorized shares.

(a) Every corporation shall have power to create and issue the number

of shares stated in its certificate of incorporation. Such shares may be

all of one class or may be divided into two or more classes. Each class

shall consist of either shares with par value or shares without par

value, having such designation and such relative voting, dividend,

liquidation and other rights, preferences and limitations, consistent

with this chapter, as shall be stated in the certificate of

incorporation. The certificate of incorporation may deny, limit or

otherwise define the voting rights and may limit or otherwise define the

dividend or liquidation rights of shares of any class, but no such

denial, limitation or definition of voting rights shall be effective

unless at the time one or more classes of outstanding shares or bonds,

singly or in the aggregate, are entitled to full voting rights, and no

such limitation or definition of dividend or liquidation rights shall be

effective unless at the time one or more classes of outstanding shares,

singly or in the aggregate, are entitled to unlimited dividend and

liquidation rights.

(b) If the shares are divided into two or more classes, the shares of

each class shall be designated to distinguish them from the shares of

all other classes. Shares which are entitled to preference in the

distribution of dividends or assets shall not be designated as common

shares. Shares which are not entitled to preference in the distribution

of dividends or assets shall be common shares, even if identified by a

class or other designation, and shall not be designated as preferred

shares.

(c) Subject to the designations, relative rights, preferences and

limitations applicable to separate series and except as otherwise

permitted by subparagraph two of paragraph (a) of section five hundred

five of this article, each share shall be equal to every other share of

the same class. With respect to corporations owning or leasing

residential premises and operating the same on a cooperative basis,

however, provided that (1) liquidation or other distribution rights are

substantially equal per share, (2) changes in maintenance charges and

general assessments pursuant to a proprietary lease have been and are

hereafter fixed and determined on an equal per-share basis or on an

equal per-room basis or as an equal percentage of the maintenance

charges, and (3) voting rights are substantially equal per share or the

certificate of incorporation provides that the shareholders holding the

shares allocated to each apartment or dwelling unit owned by the

corporation shall be entitled to one vote in the aggregate regardless of

the number of shares allocated to the apartment or dwelling unit or the

number of shareholders holding such shares, shares of the same class

shall not be considered unequal because of variations in fees or charges

payable to the corporation upon sale or transfer of shares and

appurtenant proprietary leases that are provided for in proprietary

leases, occupancy agreements or offering plans or properly approved

amendments to the foregoing instruments.