Chapter 15 - EXHIBIT 15D • SAMPLE COOPERATIVE BYLAWS
| Jurisdiction | Colorado |
Section 1. (a) Qualifications for Membership. Any person, including an individual, firm, partnership, corporation, association, a landlord or a tenant, who is
[For agricultural coops: a producer of agricultural products, who sells products or buys supplies handled by or through the cooperative,]
[For other coops: Describe]
who agrees to purchase
[one (1) share of common stock at the par value of $__________],
[a membership certificate for $__________],
who meets such other uniform conditions as may be prescribed by the board of directors, and who agrees to abide by the rules and regulations as may be established from time to time by the members or the board of directors may apply for admission as a member of the cooperative. Two (2) or more individuals may apply for single membership in co-tenancy if each co-tenant is individually eligible for membership.
[ For agricultural coops: A person shall be considered a producer of agricultural products if he is personally engaged in raising crops or livestock or has an equity financial investment in such a venture and varying earnings depending upon the risks involved in such venture.]
(b) Admission to Membership. The cooperative shall admit to membership every applicant who (1) applies for admission for the purpose of participating in the activities of the cooperative and (2) meets all the requirements for application and membership under these bylaws, the statutes of the State of Colorado and policies established by the board of directors; EXCEPT that a person shall not be eligible for membership if the board of directors finds, based on reasonable grounds, that the applicant's admission would prejudice the interests, hinder or otherwise obstruct, or conflict with, any purpose or operation of the cooperative. An applicant shall be considered a member upon acceptance of his application and payment for the [stock] [membership certificate] in cash.
[A new member's allocation of the cooperative's net margins for the year in which he became a member shall be based on the relationship of the member's patronage of the cooperative after he became a member to the total patronage of all members for that year.]
(c) Certificates of Interests in the Cooperative. The cooperative shall not be required to issue any certificates representing memberships, capital stock or other investments in the cooperative. If certificates are issued, the restrictions on transfer of stock or membership must be printed upon every certificate of stock or certificate of membership subject to the restrictions. Certificates shall also include the terms and conditions of redemption, if any.
Section 2. Transfer of [Common Stock] [Membership Certificate].
[ Alternative A]. [Common stock of] [A membership certificate in] the cooperative shall not be transferred to anyone
[not engaged in the production of agricultural products],
[not engaged in __________],
[who does not sell products or buy supplies handled by the cooperative,] or not otherwise qualified for membership, and any such purported transfer shall be void and of no effect, and no transfer of [common stock] [a membership certificate] will be effective without the consent of the cooperative's board of directors, nor until entered on the cooperative's records. If in the judgment of the board of directors, [common stock] [membership] is being held by any person ineligible to hold the same, the board of directors may transfer such [common stock] [membership] to [a participating certificate] [preferred stock] [interest bearing certificates of indebtedness] upon proper notification to the holder thereof and the person shall not be entitled to vote at the membership meetings of the cooperative.
[Alternative B]. No [common stock of] [membership certificate in] the cooperative shall be transferred to any person by the original holder thereof except to a spouse for holding in co-tenancy, to a business entity controlled by such holder, to the cooperative upon the redemption or acquisition thereof by the cooperative, or to a person entitled thereto by operation of law.
Section 3. (a) Withdrawal and Termination. A member may not withdraw from membership in this cooperative, nor may the voting or membership rights of a member be suspended or terminated, except as provided in this Section 3. No action taken by either the cooperative or a member pursuant to this Section 3 shall impair the obligations or liabilities of either party under any contract between the cooperative and a member which provides that it shall be terminated only as provided therein.
(b) Withdrawal. A member may withdraw from the cooperative by providing written notice of his intent to withdraw to the secretary of the cooperative. [A withdrawing member shall be considered an active member entitled to all benefits of a member of the cooperative until the withdrawal becomes effective. Unless a member has withdrawn solely because the member has moved out of the territory in which the cooperative is operating, a member who withdraws shall not be eligible to reapply for membership in the cooperative for a period of three (3) years following the date on which the withdrawal becomes effective.] or [Such notice may be revoked by the member at any time prior to, and such notice shall not become effective until, the lapse of five (5) years after the notice is received by the secretary of the cooperative.]
(c) Termination. If, following a hearing prior to which written notice of intention to terminate was given to a member by the cooperative, the board of directors shall find that the member has
[(1) ceased using the cooperative's facilities or services for a period of three (3) years, (2) has moved from the territory served by the cooperative, (3) ceased to be an agricultural producer,]
or (4) otherwise ceased to be eligible for membership in the cooperative, the board of directors [shall, may] suspend the member's voting rights for a period not in excess of five (5) years or the board may terminate the member's membership in the cooperative. If a member's voting rights are suspended, the member's voting rights may be restored at any time whenever the condition which caused suspension is removed; provided, however, that if at any time during the suspension of a member's voting rights hereunder the conditions which caused the suspension have not been removed, the board of directors [shall, may] terminate the membership of the member in the cooperative.
(d) Rights and Interest on Withdrawal or Termination. On the date at which a member's written notice of intent to withdraw becomes effective or upon the termination of his membership in the cooperative by the board of directors, all rights and interests of the member in the cooperative shall cease and the member shall be entitled only to payment for the value of the member's property rights and interest in the cooperative, as defined in this Section 3, which shall be equitably and conclusively appraised by the board of directors. The property rights and interest of member are defined to mean
[the lesser of] the amount paid by the member for [capital stock] [membership certificates] acquired as a condition for membership in the cooperative [or the book value thereof on the effective date of the member's withdrawal or termination].
Within one (1) year after the effective date of the member's withdrawal or termination, the cooperative shall pay to the member
[the lesser of] the price paid by the member for the member's [common stock] [membership certificates] [or the book value thereof].
(e) Payment of Equity Capital. Subsequent to the effective date of a member's withdrawal or termination of membership in the cooperative, the member shall also be entitled to the repayment of, in addition to his property rights and interest in the cooperative defined above, the member's equity capital in accordance with the terms and conditions of Article IX, Section 5, as and when such equity capital becomes payable to other members in the member's class under that Section. Any interest bearing certificates of indebtedness issued by the cooperative to a member pursuant to the provisions of Article IX, Section 5, shall effect a complete and total release of the obligations of the cooperative to the member with respect to equity.
Section 4. Representations of Certain Members. If a member of the cooperative is other than a natural person, the member may be represented by any individual, associate, officer, manager, or member thereof duly authorized by the member in writing delivered to the secretary of the cooperative.
Section 5. Consent to Tax Treatment. Each patron who hereafter applies for and is accepted as a member in this cooperative on (Date) , which shall be the effective date of this bylaw, who continues as a member after such date shall by such act alone consent that the amounts of any distributions with respect to his patronage occurring on or after (Date) , which are made in qualified written notices of allocation (as defined in 26 U.S.C. 1388) and per unit retain allocations which are received by him from the cooperative, will be taken into account by the member at their stated dollar amounts in the manner provided in 26 U.S.C. 1385(a) in the taxable year in which the qualified written notices of allocation are received by the member.
Section 6. Record of Members. A record of the members and their full names, addresses, and Social Security or tax identification numbers shall be kept by the cooperative. Each member shall notify the secretary immediately of any change in his address, social security or tax identification number.
Section 1. Qualifications to Become a Participating Patron. Any person, including an individual, firm, partnership, corporation, or association who is not [an...
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