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Subchapter 002: THE COOPERATIVE MARKETING ACT; COOPERATIVE ASSOCIATIONS
§ 991. Definitions
As used in this subchapter, unless the context or subject matter otherwise requires:
(1) “Agricultural products” includes horticultural, viticultural, forestry, dairy, livestock,
poultry, bee, and any farm products.
(2) “Association” means any nonprofit cooperative association organized under this chapter.
(3) “Associations” organized hereunder means nonprofit cooperative associations.
(4) “Consumers’ cooperative” means an association organized under this chapter for the
acquisition and distribution for the benefit of ultimate consumers of property, goods,
commodities, or services.
(5) “Handcraft product” means any product fashioned primarily by hand with the final form
and its characteristics shaped by hand and produced in the home or a small craft center
by the artisan or craftsman in a skilled or artistic process rather than in an assembly
line technique.
(6) “Marketing cooperative” means an association organized under this chapter for the
marketing of agricultural or handcraft products.
(7) “Member” includes actual members of associations without capital stock and holders
of common stock in associations organized with capital stock.
(8) “Person” includes individuals, firms, partnerships, corporations, and associations.
(9) “Railroad cooperative” means any association organized under this chapter for the
organization, acquisition, and operation of a general transportation business by railroad,
including truck, bus, air, and water transportation subsidiaries of the railroad. (Amended 1973, No. 90, § 1; 2025, No. 10, § 3, eff. July 1, 2025.)
§ 992. Use of “cooperative”
The use of the word “cooperative” as a part of the name of any person is hereby limited
to such persons as are legally organized and chartered under the provisions of this
chapter or chapter 8 or 14 of this title. (Amended 1985, No. 46, § 4; 1987, No. 254 (Adj. Sess.), § 4, eff. June 16, 1988; 2011, No. 84 (Adj. Sess.), § 2, eff. April 20, 2012.)
§ 993. Subscribers
Five or more persons, a majority of whom are residents of this State, may form a nonprofit,
cooperative association, with or without capital stock, under the provisions of this
subchapter.
§ 994. Powers
Each association incorporated under this subchapter shall have the following powers:
(1) In the case of a marketing cooperative, the power to engage in any activity in connection
with the purchasing, marketing, selling, preserving, harvesting, drying, processing,
manufacturing, canning, packing, grading, storing, handling, or utilization of any
agricultural or handcraft products or the manufacturing or marketing of the byproducts
thereof, any activity in connection with the purchase, hiring, or use by its members
of supplies, machinery or equipment, and in financing any of the aforementioned activities.
However, a marketing association shall not handle agricultural or handcraft products
of nonmembers to an extent greater in value than the products of its own members that
it handles. In the case of a consumers’ cooperative, the power to engage in any one
or more lawful mode or modes of acquiring, producing, building, operating, manufacturing,
furnishing, exchanging, or distributing any type of property, commodities, goods,
or services for the primary and mutual benefit of the patrons of the association,
or their patrons, if any, as ultimate consumers. In the case of a railroad cooperative,
to engage in any activity in connection with the organization, acquisition, and operation
of a subsidiary transportation business, whether by means of railroad, truck, water
carrier, air, or other.
(2) To have perpetual succession in its corporate name unless incorporated or formed for
a limited term, or dissolved as provided by law.
(3) To borrow money without limitations as to amount of corporate indebtedness or liability.
(4) To make advance payments, and advances to members.
(5) To act as the agent or representative of any member or members in any of the above
mentioned activities.
(6) To acquire, to exercise all rights of ownership or control in, and to sell, transfer,
or pledge, or guarantee the payment of dividends or interest on, or the retirement
or redemption of, shares of the capital stock or bonds of any corporation or association
engaged in any related activity or in the warehousing, handling, marketing, sale,
or distribution of any of the products, property, commodities, or goods handled by
the association.
(7) To establish reserves and invest the funds thereof in bonds or in such other property
as may be provided in the bylaws.
(8) To buy, hold, and exercise all privileges of ownership over such real or personal
property as may be necessary or convenient for the conduct and operation of any of
the business of the association, or business incidental thereto.
(9) To establish, secure, own, and develop patents, trademarks, trade names, and copyrights.
(10) To do everything necessary, suitable, or proper for the accomplishment of any of the
purposes or the attainment of any of the objects herein enumerated, or conducive to
or expedient for the interest or benefit of the association, and to contract accordingly;
to exercise and possess all powers, rights, and privileges necessary or incidental
to the purposes for which the association is organized or to the activities in which
it is engaged, and, in addition, any other rights, powers, and privileges granted
by the laws of this State to corporations organized under the general laws of this
State, except such as are inconsistent with the express provisions of this subchapter;
and to do any such thing anywhere. (Amended 1973, No. 90, § 2; 2025, No. 10, § 3, eff. July 1, 2025.)
§ 995. Articles
Each association formed under this subchapter shall prepare and file articles of incorporation
setting forth:
(1) The name of the association.
(2) The purpose for which it is formed.
(3) The address of its principal office in this State, and the name, email, and address
information of an agent for service of process pursuant to section 1655 of this title.
(4) The names and business addresses of the directors thereof who are to serve until the
election and qualification of their successors.
(5) The name and business address of the clerk, and of any other principal the association
provides.
(6) When organized without capital stock, whether the property rights and interest of
the members are equal, and, if unequal, the general rules applicable to all members
by which the property rights and interest, respectively, of each member shall be determined
and fixed, and provision for the admission of new members who shall be entitled to
share in the property of the association in accordance with such general rules. This
provision or paragraph of the articles of incorporation shall not be altered, amended,
or replaced except by the written consent or vote representing three-fourths of the
members.
(7) When organized with capital stock, the amount of such stock, the number of shares
into which it is divided, and the par value thereof.
(8) The capital stock may be divided into preferred and one or more classes of common
stock. When so divided, the articles of incorporation shall contain a statement of
the number of shares of stock to which preference is granted, the number of shares
of stock to which no preference is granted, and the nature and definite extent of
the preference and privileges granted to each.
(9) The articles of incorporation of any association organized under this subchapter may
provide that the members or stockholders thereof shall have the right to vote in person
or through another method of communication, including through a telecommunications
or electronic medium, but a member or stockholder may not vote by proxy. This provision
or paragraph of the articles of incorporation shall not be altered and shall not be
subject to amendment.
(10) In addition to the foregoing, the articles of incorporation of any association incorporated
hereunder may contain any provision consistent with law with respect to management,
regulation, government, financing, indebtedness, membership, the establishment of
voting districts and the election of delegates for representative purposes, the issuance,
retirement, and transfer of its stock, if formed with capital stock, or any provisions
relative to the way or manner in which it shall operate or with respect to its members,
officers, or directors and any other provisions relating to its affairs.
(11) The articles of incorporation shall be subscribed by the incorporators and shall be
sworn to by one or more of them; and shall be filed with the Secretary of State. A
certified copy shall also be filed with the Secretary of Agriculture, Food and Markets.
(12) When so filed, the articles of incorporation or a certified copy thereof shall be
received in the courts of this State as prima facie evidence of the facts contained
therein and of the due incorporation of such association. (Amended 2003, No. 42, § 2, eff. May 27, 2003; 2015, No. 157 (Adj. Sess.), § B.1, eff. June 2, 2016; 2023, No. 85 (Adj. Sess.), § 13, eff. July 1, 2024; 2025, No. 10, § 3, eff. July 1, 2025.)
§ 996. Amendment of articles; statement of change
(a) The articles of incorporation may be altered or amended except as otherwise provided
in this subchapter at any regular meeting or any special meeting called for that purpose.
An amendment must first be approved by two-thirds of the directors and adopted by
a vote of two-thirds of the members or delegates present and voting at such meeting.
Amendments to the articles of incorporation, when so adopted, shall be filed in accordance
with the provisions of section 995 of this title.
(b) Notwithstanding subsection (a) of this section, an association shall amend the name,
email, or address information of its agent for service of process by submitting to
the Secretary of State for filing a statement of change pursuant to section 1655 of this title. (Amended 2025, No. 10, § 3, eff. July 1, 2025.)
§ 997. Fee
For filing articles of incorporation, an association shall pay $20.00 to the Secretary
of State, and for filing an amendment thereto, $10.00. (Amended 1963, No. 37, § 4; 1967, No. 278 (Adj. Sess.), § 7; 2025, No. 10, § 3, eff. July 1, 2025.)
§ 998. Members
Under the terms and conditions prescribed in its bylaws, a marketing cooperative may
admit as members, or issue common stock to, only cooperative marketing associations
legally formed under the laws of this State, or persons engaged in the production
of the agricultural or handcraft products to be handled by or through the association,
including the lessees and tenants of land used therefor, and any lessors and landlords
who receive any part of the agricultural or handcraft products produced on the leased
premises or of the sale price of such product as rent. Under the terms and conditions
prescribed in its bylaws, a consumers’ cooperative may admit as members any natural
persons, associations, incorporated or unincorporated groups organized on a cooperative
basis, or any nonprofit groups. Under the terms and conditions prescribed in its bylaws,
a railroad cooperative may admit as members, or issue stock to, any nonprofit organizations,
any persons, corporations, or associations who are patrons of its services. (Amended 1973, No. 90, § 3.)
§ 999. Proxies
If a member of a nonstock association be other than a natural person, such member
may be represented by any individual, associate, officers, manager, or member thereof
duly authorized in writing.
§ 1000. Adoption of bylaws
(a) Within 30 days after its organization, each association shall adopt for its government
and management a code of bylaws, not inconsistent with the powers granted hereby.
Except as provided in subsection (b) of this section, a majority vote of the members
shall be necessary to adopt, alter, amend, or repeal such bylaws.
(b) In the case of any association having district election of delegates and delegate
system of voting as permitted by subdivision 995(10) of this title, in which, under its articles of incorporation or bylaws, such delegates have complete
voting power on behalf of the membership for every purpose except that of their own
election and the election of district directors, following reasonable notice to the
members or stockholders in accordance with the bylaws, a majority of the delegates
attending and voting at any meeting of the delegates of the association may adopt,
alter, amend, or repeal such bylaws. (Amended 1971, No. 87, § 1, eff. April 16, 1971; 2023, No. 85 (Adj. Sess.), § 14, eff. July 1, 2024.)
§ 1001. Contents of bylaws
Each association may provide in its bylaws for any or all of the following matters:
(1) The time, place, and manner of calling and conducting its meetings.
(2) The number of stockholders or members constituting a quorum.
(3) The number of directors constituting a quorum.
(4) The qualifications, compensation, duties, and term of office of directors and officers;
the time of their election; and the mode and manner of giving notice thereof.
(5) Reasonable penalties for violations of the bylaws.
(6) The amount of entrance, organization, and membership fees, if any; the manner of collecting
the same; and the purposes for which they may be used.
(7) The amount which each member or stockholder shall be required to pay annually or from
time to time, if at all, to carry on the business of the association; the charges,
if any, to be paid by each member or stockholder for services rendered by the association
to him or her and the time of payment and manner of collection; and the marketing
contract between the association and its members or stockholders, which every member
or stockholder may be required to sign.
(8) The number and qualification of members or stockholders of the association and the
conditions precedent to membership or ownership of common stock; the method, time,
and manner of permitting members to withdraw or the holders of common stock to transfer
their stock; the manner of assignment and transfer of the interest of members and
of the shares of common stock; the conditions upon which and time when a membership
shall cease; the automatic suspension of the rights of a member when he or she ceases
to be eligible to membership; the manner and effect of the expulsion of a member;
the manner of determining the value of a member’s interest and provision for its purchase
by the association upon the death or withdrawal of a member or stockholder, or upon
the expulsion of a member or forfeiture of his or her membership, or, at the option
of the association, the purchase at a price fixed by conclusive appraisal by a board
of appraisers. But in no case shall it be provided that the value or price of the
stock shall be determined by any board on which the association shall have any greater
voice than the member or his or her representative.
(9) The basis of voting by the members or stockholders, especially whether votes of all
members shall be equal, or in proportion to the land area leased or used by each member
for production of the products handled by the association, or in proportion to the
quantity of such products delivered by or handled for each member or stockholder,
or such other basis as may be determined. Unless otherwise provided, no member or
stockholder shall be entitled to more than one vote regardless of the number of shares
of common stock owned by him or her.
(10) In the case of a consumers’ or railroad cooperative, the method of distributing among
members or stockholders and patrons, both members and nonmembers, the net savings
derived from the excess of total income over operating expenses. Provision may be
made for the accumulation of reserve funds out of net savings. (Amended 2025, No. 10, § 3, eff. July 1, 2025.)
§ 1002. Meetings
Each association shall by its bylaws provide for one or more regular meetings annually.
§ 1003. Special meetings
The board of directors shall have the right to call a special meeting of the members
or stockholders of the association at any time. They shall call one upon the petition
of not less than ten percent of the members or stockholders, stating the specific
business to be brought before the association.
§ 1004. Notice of meetings
Notice of each meeting, together with a statement of the purposes thereof, shall be
mailed or telegraphed to each member at least ten days prior to the meeting.
§ 1005. Place of meetings
Meetings of the members or stockholders of the association, regular or special, shall
be held at such place within or outside this State as may be determined from time
to time by the board of directors. (Added 1971, No. 87, § 2, eff. April 16, 1971.)
§ 1006. Directors
The business of the association shall be managed by a board of not less than five
directors, elected by the members or stockholders from their own number.
§ 1007. Classification of directors
The bylaws may provide that the territory in which the association has members shall
be divided into districts and that the directors shall be elected according to such
districts by the members in that district. In such case, the bylaws shall specify
the number of directors to be elected by each district, and the manner and method
of reapportioning the directors and of redistricting the territory covered by the
association.
§ 1008. Primary elections for directors
The bylaws may provide that primary elections shall be held in each district, to elect
the directors apportioned to such districts, and that the result of all such primary
elections may be ratified by the next regular meeting of the association or may be
deemed the act of the association.
§ 1009. Appointment of directors by public officials
The bylaws may provide that one or more directors may be appointed by any public official
or commission or by the other directors selected by the members or their delegates.
Such directors shall represent primarily the interest of the general public in such
associations and need not be members or stockholders of the association, but shall
have the same powers and rights as other directors. Such directors shall not number
more than one-fifth of the entire board.
§ 1010. Vacancies on board of directors
When a vacancy on the board of directors occurs other than by expiration of term,
the remaining members of the board shall fill the vacancy by a majority vote, unless
the bylaws provide for an election of directors by districts. In such a case, the
board of directors shall immediately call a special meeting of the members, or stockholders,
to fill the vacancy in the district where it exists.
§ 1011. Contracts with directors
During the term of his or her office, a director shall not be a party to a contract
for profit with the association differing in any way from the business relations accorded
each member or holder of common stock of the association or others, or upon terms
differing from those generally current in that district.
§ 1012. Executive committee
The bylaws may provide for an executive committee and may allot to such committee
all the functions and powers of the board of directors, subject to the general direction
and control of that board.
§ 1013. Officers
The directors shall elect from their number a president and one or more vice presidents.
They shall also elect a secretary, who shall be the clerk of the association, and
a treasurer, who need not be directors or members of the association. The directors
may combine the two latter offices and designate the combined office as that of secretary-treasurer,
or unite both functions and titles in one person. The treasurer may be a bank or any
depository, and as such, shall not be considered as an officer, but as a function
of the board of directors, and in such case, the secretary shall perform the usual
accounting duties of the treasurer, except that the funds shall be deposited only
as and where authorized by the board of directors. (Amended 2025, No. 10, § 3, eff. July 1, 2025.)
§ 1014. Salaries
An association may provide a fair compensation for the time actually spent by its
officers and directors in its service and for the service of the members of its executive
committee. The bylaws may provide that a director or officer shall not occupy any
position in the association on regular salary or substantially full time pay.
§ 1015. Issue of stock
An association shall not issue stock to a member until it has been fully paid for.
The promissory notes of the members may be accepted by the association as full or
partial payment. The association shall hold the stock as security for the payment
of the note, but such retention as security shall not affect the member’s right to
vote. Until such notes are paid in full, the corresponding stock, to the extent of
unpaid balances, shall be carried on the books of the association and upon all financial
statements made by the association as “capital stock issued for notes,” and the notes
shall be carried on such books and statements as “notes given for capital stock.”
§ 1016. Liability of members for debts
A member shall not be liable for the debts of the association.
§ 1017. Preferred stock
An association organized with stock may issue preferred stock but such stock shall
have no voting privileges. Such stock may be issued on such terms and with such preferences
as the board of directors may determine and may be sold to any person, member or nonmember,
and may be redeemable or retirable by the association on such terms and conditions
as may be provided in the certificate of organization and printed on the face of the
stock certificate.
§ 1018. Marketing contracts—Terms
An association and its members may make and execute marketing contracts, requiring
the members to sell, for any period of time, all or any specified part of their agricultural
products or specified commodities exclusively to or through the association or any
facilities to be created by the association. If they contract a sale to the association,
it shall be conclusively held that title to the products passes to the association
upon delivery except for legally recorded chattel mortgages given for value and prior
to July 1 in any year on such products or commodities whether such mortgages are given
before or after the making of such contract of sale. The contract may provide, among
other things, that the association may sell or resell the products delivered by its
members, with or without taking title thereto, and pay over to its members the resale
price, after deducting all necessary selling, overhead and other costs and expenses,
including interest or dividends on stock, not exceeding eight percent per annum, and
reserves for retiring the stock, if any, and other proper reserves, and for any other
reductions.
§ 1019. Damages
The bylaws or the marketing contract may fix, as liquidated damages, a specific sum
to be paid by a member or stockholder to the association upon the breach by him or
her of any provision of the marketing contract regarding the sale or delivery or withholding
of products; and may further provide that the member shall pay all costs, premiums
for bonds, expenses, and fees, in case any action is brought upon the contract by
the association. Any such provisions shall be valid and enforceable in the courts
of this State. Such clauses providing for liquidated damages shall be enforceable
as such and shall not be regarded as penalties.
§ 1020. Enjoining breach
In case of any such breach or threatened breach of such marketing contract by a member,
a Superior Court may restrain by injunction further breach of the contract and may
decree specific performance thereof. Pending the termination of such an action and
upon filing a verified complaint showing the breach or threatened breach, and upon
filing a sufficient bond, such court may grant a temporary restraining order against
the member. (1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)
§ 1021. Liability of landowner, landlord or lessor
In any action upon such marketing agreement, it shall be conclusively presumed that
a landowner, landlord, or lessor is able to control the delivery of products produced
on his or her land by tenants or others, whose tenancy, possession, or work on such
land, or the terms of whose tenancy, possession, or labor thereon, were created or
changed after execution by the landowner, landlord, or lessor of such a marketing
agreement. In such action, the foregoing remedies for nondelivery or breach shall
lie and be enforceable against such landowner, landlord, or lessor.
§ 1022. Payment in stock
When an association with preferred capital stock shall purchase the stock or any property
or interest, it may discharge the obligation so incurred, wholly or in part, by exchanging
for the acquired interest shares of its preferred capital stock to an amount which
at par value would equal the fair market value of the stock, property, or interest
so purchased, as determined by the board of directors. In that case the transfer to
the association of the stock or interest purchased shall be equivalent to payment
in cash for the shares of stock issued.
§ 1023. Ownership or control of other business organizations
An association may organize, form, operate, own, control, have an interest in, own
stock of, or be a member of, any other business organization engaged in preserving,
drying, processing, canning, packing, storing, handling, shipping, utilizing, manufacturing,
marketing, or selling the agricultural products handled by the association or byproducts
thereof. (Amended 2025, No. 10, § 3, eff. July 1, 2025.)
§ 1024. Warehouse receipts
An association engaged in warehousing may issue negotiable or nonnegotiable warehouse
receipts of the association against the commodities delivered, and such warehouse
receipts shall be considered as adequate collateral to the extent of the usual and
current value of the commodity represented thereby. In case such warehouse is licensed,
or licensed and bonded, under the laws of this or any other state of the United States,
its warehouse receipt delivered to the association on commodities of the association
or its members, or delivered by the association or by its members, shall not be challenged
or discriminated against because of ownership or control, wholly or in part, by the
association. (Amended 2025, No. 10, § 3, eff. July 1, 2025.)
§ 1025. Joint agreements
Upon resolution adopted by its board of directors, an association may enter into all
necessary and proper contracts or arrangements with any other cooperative corporation,
association, or associations, formed in this or in any other state, for the cooperative
and more economical carrying on of its business or any part thereof. Any two or more
associations may, by an agreement, unite in employing and using or may separately
employ and use the same personnel, methods, means, and agencies for carrying on and
conducting their respective businesses.
§ 1026. Annual report
An association formed under this subchapter shall prepare and submit at its annual
meeting an annual report containing the name of the association, its principal place
of business, a general statement of its business operations during the fiscal year,
showing the amount of capital stock paid for and the number of stockholders, if a
stock association, or the number of members and amount of membership fees received,
if a nonstock association, the total expenses of operation, and the amount of its
assets and indebtedness or liabilities.
§ 1027. Foreign corporations
A corporation or association organized under generally similar laws of another state
shall be allowed to carry on any proper activities, operations, and functions in this
State upon compliance with the general regulations applicable to foreign corporations
desiring to do business in this State. All contracts which could be made by an association
incorporated hereunder, made by or with such association, shall be legal and valid
and enforceable in this State with all of the remedies set forth in this subchapter.
§ 1028. Application to existing corporations
By a majority vote of its directors, and the vote in meeting assembled of the holders
of two-thirds of the outstanding stock, or, if the stock is divided into classes,
by the vote of the holders of two-thirds of each class of outstanding stock, a corporation
or association, organized under previously existing statutes, may be brought under
the provisions of this subchapter by limiting its membership and adopting the other
restrictions as provided herein. It shall make out in duplicate a statement signed
and sworn to by a majority of its directors to the effect that the corporation or
association, by a majority vote of the directors, and the vote in meeting assembled
of the holders of two-thirds of the outstanding stock, or, if the stock is divided
into classes, by the vote of the holders of two-thirds of each class of outstanding
stock, has decided to accept the benefits and be bound by the provisions of this subchapter
and has authorized all changes accordingly. Articles of incorporation shall be filed
as required in section 995 of this title, except that they shall be signed by the members of the then board of directors.
The filing fee shall be the same as for filing an amendment to the certificate of
organization.
§ 1029. Soliciting breach of contract
A person or corporation whose officers or employees knowingly induce or attempt to
induce a member or stockholder of an association organized hereunder, or organized
under similar statutes of other states, with similar restrictions and rights and operating
in this State by legal authority, to breach his marketing contract with the association,
or who maliciously and knowingly spreads false reports about the finances or management
or activity thereof, shall be fined not less than $100.00 nor more than $1,000.00,
and shall be liable to the association aggrieved in a civil suit in the penal sum
of $500.00 for each offense.
§ 1030. Conspiracies or combinations in restraint of trade
An association organized under this subchapter and complying with the terms hereof
shall not be deemed to be a conspiracy or a combination in restraint of trade or an
illegal monopoly or an attempt to lessen competition, or to fix prices arbitrarily.
The marketing contracts and agreements between the association and its members and
any agreements authorized in this subchapter shall not be deemed illegal as such or
in unlawful restraint of trade or as a part of a conspiracy or combination to accomplish
an improper or illegal purpose.
§ 1031. Penalties
An officer or director who shall subscribe or make oath to any certificate provided
for in sections 995 and 996 of this title, which shall contain a false statement, known by such person to be false or who shall
do any act relative to the issue of capital stock which is not permitted by section 1015 of this title, or who shall make or publish any financial statement which he or she knows does
not comply with the provisions of such sections, shall be fined not more than $5,000.00,
or imprisoned not more than five years, or both, and shall also be individually liable
to a stockholder of the association or other person for damage caused by reason thereof.
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Subchapter 003: CONSOLIDATION OF COOPERATIVE ASSOCIATIONS
§ 1061. Procedure
Two or more cooperative associations organized under, or which have adopted the provisions
of subchapter 2 of this chapter, or similar laws of other states, whether having or
not having capital stock, may merge or consolidate into one cooperative association
which may be a new cooperative association or one of the constituent cooperatives
by complying with the following requirements:
(1) Notice of the proposed merger or consolidation, to which shall be attached a copy
of the articles therefor in the form prescribed in subdivision (3) of this section,
shall be mailed by each consolidating cooperative to its members, its stockholders
of every class, the holders of its certificates of beneficial interest, and its former
members to whom an allocated reserve is credited on its books, and published in a
newspaper of general circulation in the area served by such consolidating cooperative
not less than 30 days before the date of the meeting at which the consolidating cooperative
acts upon such proposal.
(2) Any present or past member of any consolidating cooperative having a property interest
therein evidenced by its stock or its certificates of beneficial interest, or by an
allocated reserve, may, not later than 10 days before the holding of such meeting,
make a demand in writing upon the consolidating cooperative for payment of such property
interest. If, upon the expiration of 60 days from the time the merger or consolidation
is completed, the consolidating cooperative and all demandants have not agreed upon
the value of the demandants’ interest, such consolidating cooperative shall, within
60 days thereafter, apply by petition to the Superior Court in the county where such
consolidating cooperative is domiciled for the determination of the value in appropriate
securities or cash, as the board of directors of the newly formed cooperative shall
determine, of the interest of each demandant who has made a demand in writing for
payment of his or her property interest, as hereinbefore set forth, and who has not
agreed thereto. Such petition shall state the names and addresses of each and every
person who has made demand within the time specified and in the manner above provided.
The consolidating cooperative shall notify each such demandant by mailing a copy of
the petition and citation by registered mail, return receipt requested, to each demandant
at his or her address as the same appears upon the books of the consolidating cooperative
or to such other address as the court shall direct. Such notice shall be in lieu of
any other notice, statutory or otherwise, and shall be sufficient to bring all parties
so notified and the subject matter of the petition within the jurisdiction of the
court. However, within 30 days from the mailing of such copy of the petition above
referred to, the demandant, at his or her option, instead of proceeding as above set
forth, may have such value ascertained by three disinterested persons, one of whom
shall be named by the demandant, another by the consolidating cooperative, and the
third by the two so named. The findings of these appraisers shall be final, and if
their award is not paid by the consolidating cooperative within 30 days after it is
made and notice given to the consolidating cooperative, the award may be recovered
by the demandant of the consolidating cooperative in a civil action on this statute.
The suit shall be stayed pending the action of the appraisers and shall be terminated
by the presiding judge as to the demandant upon the filing of the findings of the
appraisers with the consolidating cooperative.
(3) If the articles of merger or consolidation are adopted by the affirmative vote of
not less than two-thirds of the members attending and voting of each consolidating
cooperative voting thereon at the meeting called to consider the same, or by not less
than by a two-thirds vote of its delegates if qualified as provided in subdivision
(4) of this section, articles of merger or consolidation in the form adopted shall
be executed under its seal and acknowledged on behalf of each consolidating cooperative
by its president or vice-president. Such articles of merger or consolidation shall
recite that they are executed pursuant to this subchapter and shall state:
(A) the name of each consolidating cooperative and the address of its principal office;
(B) the name of the new cooperative and the address of its principal office in this State,
or if none, the name, email, and address of an agent for service of process pursuant
to section 1655 of this title;
(C) a statement that each consolidating cooperative agrees to the merger or consolidation;
(D) the names and business addresses of the directors of the new cooperative, and of any
other principal the association provides; and
(E) the terms and conditions of the merger or consolidation and the mode of carrying the
same into effect, including the manner in which the members of the consolidating cooperative
may or shall become members of the new cooperative; and may contain provisions, not
inconsistent with law or this subchapter, which are deemed necessary or advisable
for the conduct of the business of the new cooperative.
(4) The president or vice president and the clerk or secretary of each consolidating cooperative
executing such articles of merger or consolidation shall make and annex thereto an
affidavit stating that the provisions of this section in respect to such articles
were duly complied with by such cooperative.
(5) In the case of any consolidating cooperative having a district election of delegates
and a delegate system of voting as permitted by subdivision 995(10) of this title, in which, under its articles of incorporation or bylaws, such delegates have complete
voting power on behalf of the membership for every purpose, except that of their own
election and the election of district directors, the vote adopting the merger or consolidation
required by subdivision (3) of this section shall be that of not less than two- thirds
of the delegates attending and voting at such meeting. (Amended 1965, No. 89, §§ 1, 2, eff. June 10, 1965; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 2023, No. 85 (Adj. Sess.), § 15, eff. July 1, 2024; 2025, No. 10, § 3, eff. July 1, 2025.)
§ 1062. Filing of articles
The articles of merger or consolidation, or a duplicate original thereof, or a copy
duly certified by the clerk or secretary of the consolidating cooperative or the new
cooperative, shall be filed in the Office of the Secretary of State of this State
and with the Secretary of Agriculture, Food and Markets, and if the same affects title
to real estate in this State, shall be recorded in the office where by law a deed
of such real estate is required to be recorded. The making and perfecting of such
merger or consolidation shall not be effective until the same is filed in the Office
of the Secretary of State as herein provided, and in the case of the new cooperative,
if the same is to have capital stock, until it has filed an affidavit of the proposed
issue of its stock. (Amended 2003, No. 42, § 2, eff. May 27, 2003.)
§ 1063. Fee
For filing articles of merger or consolidation the new cooperative shall pay $20.00
to the Secretary of State; and for filing an amendment thereof $10.00. (Amended 1963, No. 37, § 5; 1967, No. 278 (Adj. Sess.), § 8.)
§ 1064. Powers
The new cooperative, in addition to the general powers of cooperative associations
granted by subchapter 1 of this chapter, shall possess and enjoy all the rights, privileges,
powers, franchises, immunities, exemptions, and benefits of each of the consolidating
cooperatives, and may exercise the same in this State, unless contrary to law, as
effectually as each of the consolidating cooperatives. The title to any real estate
or personal property vested in the consolidating cooperatives, under the laws of this
State shall pass to and be vested in the new cooperative upon the recording of the
articles of merger or consolidation in the office where by law a deed thereof should
be recorded, and shall not revert, or be in any way impaired, by reason of such merger
or consolidation.
§ 1065. Preservation of rights and liabilities
All rights of creditors and liens upon the property of the consolidating cooperatives
shall be preserved unimpaired; and all debts, liabilities, and duties of each consolidating
cooperative shall thenceforth become the obligation of the new cooperative and may
be enforced against the latter to the same extent as if the obligations and liabilities
had been incurred or contracted by it. (Amended 1971, No. 185 (Adj. Sess.), § 28, eff. March 29, 1972.)