§ 2-2-417 — Certificates of membership or stock ownership

(a) When a member of an association established without capital stock has paid his or her membership fee in full, he or she shall receive a certificate of membership. (b) (1) (A) No association shall issue stock to a member until the stock has been fully paid for. (B) The promissory notes of the members may be accepted by the association as full or partial payment. (2) 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. (c) Except for debts lawfully contracted between him or her and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his or her membership fee or his or her subscription to the capital stock, including any unpaid balances on any promissory notes given in payment thereof. (d) (1) No stockholder of a cooperative association shall own more than one-twentieth ( 1 / 20 ) of the common stock of the association. (2) An association in its bylaws may limit the amount of common stock which one (1) member may own to any amount less than one-twentieth ( 1 / 20 ) of the common stock. (e) No member or stockholder shall be entitled to more than one (1) vote. (f) (1) Any association organized with stock under this subchapter may issue preferred stock, with or without the right to vote. (2) The stock may be redeemable or retirable by the association on such terms and conditions as may be provided for by the articles of incorporation and printed on the face of each certificate. (g) The bylaws shall prohibit the transfer of the common stock of the association to persons not engaged in the production of the agricultural products handled by the association, and the restriction must be printed upon every certificate of stock subject thereto. (h) At any time except when the debts of the association exceed fifty percent (50%) of its assets, the association may buy in or purchase its common stock at book value as conclusively determined by the board of directors and pay for it in cash within one (1) year thereafter.

Legislative History

Acts 1921, No. 116, § 14; Pope's Dig., § 2299; A.S.A. 1947, § 77-914.