§ 23-17-228 — Nonprofit operation

(a) Each cooperative shall be operated on a nonprofit basis for the mutual benefit of its members and patrons. (b) (1) The bylaws of a cooperative or its contracts with members and patrons shall contain provisions consistent with § 23-17-229 relative to the disposition of revenues and receipts as may be necessary and appropriate to establish and maintain its nonprofit cooperative character. (2) In the case of a cooperative authorized to issue shares of stock, the bylaws and contracts shall provide that no moneys shall be paid, except after the declaration or payment of dividends on the outstanding shares of stock in accordance with the certificate of incorporation of the cooperative, and the bylaws or contracts shall otherwise be consistent with cooperatives' obligations in respect to the shares of stock. (c) Subject to the provisions of this subchapter, the articles of incorporation of the cooperative, and the bylaws of the cooperative, the cooperative's board of directors shall have the authority to determine the qualifications for a person to be considered a "patron" of the cooperative.

Legislative History

Acts 1951, No. 51, § 27; A.S.A. 1947, § 77-1627; Acts 1989, No. 437, § 17; 1999, No. 946, § 10.