(1) Subject to the provisions of this section and under
the terms and conditions prescribed in the articles or bylaws adopted by it, a
cooperative may limit admission as members or issue common stock only to
persons engaged in the particular business or utilizing the goods or services
provided by or through the cooperative, including any entity formed under the law
of this state or any other jurisdiction, or may admit as members or issue common
stock to any person meeting uniform terms and conditions stated in its articles or
bylaws.
(2) When any required membership fee or payment for stock as required in
the articles, the bylaws, or a resolution of the board has been paid in full or a
promissory note executed for the required membership fee or capital subscription,
a cooperative may issue a certificate of membership or common stock evidencing
the membership or ownership of the stock or may evidence the same on the books
or other records of the cooperative as determined by the articles, the bylaws, or the
board. Except for a cooperative formed with stock, promissory notes of members
may not be accepted by the cooperative as full or partial payment for stock unless
permitted by the bylaws and adequately secured. The cooperative 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.
(3) No member shall have a right to vote until the required membership fee
or payment for stock has been paid in full.
(4) A cooperative, in its articles or bylaws, may limit the amount of common
stock that a member may own.
(5) No member shall be liable directly or indirectly, including by way of
indemnification, contribution, or otherwise, under a judgment, decree, or order of a
court, or in any other manner, for a debt, obligation, or liability of or chargeable to
the cooperative while it is incorporated for an amount exceeding the sum remaining
unpaid on the member's membership fee or the member's subscription to the stock,
including any unpaid balance on any promissory note given in payment thereof;
except that this subsection (5) shall not affect the liability of a member who is also
a member of the board or an officer for such member's negligence, wrongful act, or
misconduct in that capacity.
(6) A cooperative formed with or without capital stock under this article may
issue or accept investments in nonvoting stock or equity that may have such rights
and preferences, including being subject to per unit retains or allocations of net
margins, as may be provided in the articles, the bylaws, or by the board. Such
nonvoting stock or equity may be issued and sold by the cooperative to any person,
including those persons not otherwise qualified to be members, and may be
redeemable or retireable by the cooperative on such terms and conditions as are
provided for in the articles, the bylaws, or a resolution of the board providing for the
issuance of or the investment in the nonvoting stock or equity. The terms and
conditions of redemption shall be printed on any certificate evidencing the stock or
equity.
(7) A cooperative shall impose restrictions on the transfer of voting common
stock or membership in the cooperative in its bylaws in accordance with section 7-56-208 (2), and may also impose such restrictions in its articles, and may impose
restrictions on the transfer of other equity investments in the cooperative in its
articles, bylaws, or by resolution of its board. Any such restriction shall be printed
upon any certificate or other written evidence of the membership, voting common
stock, or other equity investment if one is issued.
(8) Subject to the provisions of section 7-56-406 (2)(c), a cooperative may, at
any time as stated in its articles, bylaws, or resolution of the board adopted at the
time of issuance, acquire, recall, redeem, exchange, or reissue its common stock,
memberships, preferred stock, preferred equity, memberships, or other equity
capital. Consideration paid for stock, memberships, or other equity capital acquired,
recalled, redeemed, exchanged, or reissued by the cooperative shall be the par
value, stated value, price originally paid, or book value, whichever is less, as
conclusively determined by the board, plus any accrued and unpaid dividends, if
any, and, if the price originally paid for the stock, memberships, or other equity
capital included an additional amount based upon the right of the holder to engage
in business with the cooperative, the consideration shall include the additional
amount. If stock, memberships, or other equity capital acquired, recalled,
redeemed, or exchanged does not have a par value, then the par value shall not be
considered in determining the consideration. The cooperative may set off against
the consideration to be paid obligations to it of the holder of stock, membership, or
other equity capital and shall have a continuing perfected security interest in the
stock, membership, and other equity capital of a member, stockholder, or holder of
other equity capital to secure payment of any indebtedness to the cooperative of
the stockholder, member, or holder of other equity capital, whenever indebtedness
is incurred. Notwithstanding any other provision of law, the security interest shall
take priority over all other perfected security interests. No acquisition, recall, or
redemption shall be made if the result of it would be to bring the value of the
remaining assets of the cooperative below the aggregate of its indebtedness. The
articles or bylaws may provide other limitations on the right of a cooperative to
acquire, recall, redeem, exchange, or reissue its stock, memberships, or other
equity capital.
(9) If a member of a cooperative is other than an individual, such member
may be represented by any individual, associate, officer, manager, member,
shareholder, or other equity holder thereof duly authorized in writing by the
member's board or other governing body having the right to authorize the
representation.
(10) If so prescribed in its articles or bylaws, a cooperative may group its
members in districts, or other units, or by types of goods or services utilized, for
administration or otherwise achieving the purposes of the cooperative.
(11) A cooperative, in its articles or bylaws, may limit the amount of common
stock or other equity capital held by members or other persons.
(12) Repealed.