1. Required. A cooperative shall have bylaws governing the cooperative’s business
affairs, structure, the qualifications, classification, rights and obligations of members, and
the classifications, allocations, and distributions of membership interests, which are not
otherwise provided in the articles or by this chapter.
2. Contents.
a. If not stated in the articles, a cooperative’s bylaws must state all of the following:
(1)The purpose of the cooperative.
(2)The capital structure of the cooperative to the extent not stated in the articles,
including a statement of the classes and relative rights, preferences, and restrictions
granted to or imposed upon each class of member interests, the rights to share in profits or
distributions of the cooperative, and the authority to issue membershi
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1. Required. A cooperative shall have bylaws governing the cooperative’s business
affairs, structure, the qualifications, classification, rights and obligations of members, and
the classifications, allocations, and distributions of membership interests, which are not
otherwise provided in the articles or by this chapter.
2. Contents.
a. If not stated in the articles, a cooperative’s bylaws must state all of the following:
(1) The purpose of the cooperative.
(2) The capital structure of the cooperative to the extent not stated in the articles,
including a statement of the classes and relative rights, preferences, and restrictions
granted to or imposed upon each class of member interests, the rights to share in profits or
distributions of the cooperative, and the authority to issue membership interests, which may
be designated to be determined by the board.
(3) A provision designating the voting and governance rights, to the extent not stated in
the articles, including which membership interests have voting power and any limitations
or restrictions on the voting power, which shall be in accordance with the provisions of this
chapter.
(4) A statement that patron membership interests with voting power shall be restricted
to one vote for each member regardless of the amount of patron membership interests held
in the affairs of the cooperative or a statement describing the allocation of voting power
allocated as prescribed in this chapter.
15 COOPERATIVE ASSOCIATIONS ACT, §501A.506
(5) A statement that membership interests held by a member are transferable only with
the approval of the board or as provided in the bylaws.
(6) If nonpatron membership interests are authorized, all of the following:
(a) A statement as to how profits and losses will be allocated and cash will be distributed
between patron membership interests collectively and nonpatron membership interests
collectively to the extent not stated in the articles.
(b) A statement that net income allocated to a patron membership interest as determined
by the board in excess of dividends and additions to reserves shall be distributed on the basis
of patronage.
(c) A statement that the records of the cooperative shall include patron membership
interests and, if authorized, nonpatron membership interests, which may be further
described in the bylaws of any classes and in the reserves.
b. The bylaws may contain any provision relating to the management or regulation of the
affairs of the cooperative that are not inconsistent with law or the articles, and shall include
all of the following:
(1) The number of directors and the qualifications, manner of election, powers, duties,
and compensation, if any, of directors.
(2) The qualifications of members and any limitations on their number.
(3) The manner of admission, withdrawal, suspension, and expulsion of members.
(4) Generally, the governance rights, financial rights, assignability of governance
and financial rights, and other rights, privileges, and obligations of members and their
membership interests, which may be further described in member control agreements.
(5) Any provisions required by the articles to be in the bylaws.
3. Adoption.
a. Bylaws shall be adopted before any distributions to members, but if the articles or
bylawsprovidethatrightsofcontributorstoaclassofmembershipinterestwillbedetermined
in the bylaws, the bylaws must be adopted before the acceptance of any contributions to that
class.
b. Subject to subsections 4, 5, and 6, the bylaws of a cooperative may be adopted or
amended by the directors, or the members may adopt or amend bylaws at a regular or special
members’ meeting if all of the following apply:
(1) The notice of the regular or special meeting contains a statement that the bylaws or
restated bylaws will be voted upon and copies are included with the notice, or copies are
availableuponrequestfromthecooperativeandasummarystatementoftheproposedbylaws
or amendment is included with the notice.
(2) A quorum is registered as being present or represented by mail or alternative voting
method if the mail or alternative voting method is authorized by the board.
(3) Thebylawsoramendmentisapprovedbyamajorityvotecast,orforacooperativewith
articles or bylaws requiring more than majority approval or other conditions for approval, the
bylaws or amendment is approved by a proportion of the vote cast or a number of the total
members as required by the articles or bylaws and the conditions for approval in the articles
or bylaws have been satisfied.
c. Until the next annual or special members’ meeting, the majority of directors may
adopt and amend bylaws for the cooperative that are consistent with subsections 4, 5, and
6, which may be further amended or repealed by the members at an annual or special
members’ meeting.
4. Amendment of bylaws by board or members.
a. The board may amend the bylaws at any time to add, change, or delete a provision,
unless any of the following applies:
(1) This chapter, the articles, or the bylaws reserve the power exclusively to the members
in whole or in part.
(2) A particular bylaw expressly prohibits the board from doing so.
b. Anyamendmentofthebylawsadoptedbytheboardmustbedistributedtothemembers
no later than ten days after adoption and the notice of the annual meeting of the members
must contain a notice and summary or the actual amendments to the bylaws adopted by the
board.
§501A.506, COOPERATIVE ASSOCIATIONS ACT 16
c. The members may amend the bylaws even though the bylaws may also be amended by
the board.
5. Bylaw changing quorum or voting requirement for members.
a. (1) The members may amend the bylaws to fix a greater quorum or voting requirement
for members, or voting groups of members, than is required under this chapter.
(2) An amendment to the bylaws to add, change, or delete a greater quorum or voting
requirement for members shall meet the same quorum requirement and be adopted by
the same vote and voting groups required to take action under the quorum and voting
requirements then in effect or proposed to be adopted, whichever is greater.
b. A bylaw that fixes a greater quorum or voting requirement for members under
paragraph “a” shall not be adopted and shall not be amended by the board.
6. Bylaw changing quorum or voting requirement for directors.
a. A bylaw that fixes a greater quorum or voting requirement for the board may be
amended by any of the following methods:
(1) If adopted by the members, only by the members.
(2) If adopted by the board, either by the members or by the board.
b. A bylaw adopted or amended by the members that fixes a greater quorum or voting
requirement for the board may provide that the bylaw may be amended only by a specified
vote of either the members or the board, but if the bylaw is to be amended by a specified vote
of the members, the bylaw must be adopted by the same specified vote of the members.
c. Action by the board under paragraph “a”, subparagraph (2), to adopt or amend a bylaw
that changes the quorum or voting requirement for the board shall meet the same quorum
requirement and be adopted by the same vote required to take action under the quorum and
voting requirement then in effect or proposed to be adopted, whichever is greater.
7. Emergency bylaws.
a. Unless otherwise provided in the articles or bylaws, the board may adopt bylaws to be
effective only in an emergency as defined in paragraph “d”. The emergency bylaws, which
are subject to amendment or repeal by the members, may include all provisions necessary
for managing the cooperative during the emergency, including any of the following:
(1) Procedures for calling a meeting of the board.
(2) Quorum requirements for the meeting.
(3) Designation of additional or substitute directors.
b. All provisions of the regular bylaws consistent with the emergency bylaws shall
remain in effect during the emergency. The emergency bylaws shall not be effective after
the emergency ends.
c. All of the following shall apply to action taken in good faith in accordance with the
emergency bylaws:
(1) The action binds the cooperative.
(2) The action shall not be the basis for imposition of liability on any director, officer,
employee, or agent of the cooperative on the grounds that the action was not authorized
cooperative action.
d. Anemergencyexistsforthepurposesofthissection,ifaquorumofthedirectorscannot
readily be obtained because of some catastrophic event.