§ 5 — Applicability of business corporation law to cooperative corporations

§ 5. Applicability of business corporation law to cooperative\ncorporations. 1. The business corporation law applies to every\ncorporation heretofore or hereafter formed under this chapter, or under\nany other statute or special act of this state, or under laws other than\nthe statutes of this state, which has as its purpose or among its\npurposes the cooperative rendering of mutual help and service to its\nmembers and which, if formed under laws other than the statutes of this\nstate, would, if it were to be formed currently under the laws of this\nstate, be formed under this chapter except a membership cooperative as\ndefined in section three of this chapter, to which the not-for-profit\ncorporation law shall apply. Any corporation to which the business\ncorporation law is made applicable by this section shall be treated as a\n"corporation," "domestic corporation," or "foreign corporation," as such\nterms are used in the business corporation law; provided, however, that\nneither the purposes for which any such corporation may be formed under\nthis chapter nor its classification as a non-profit corporation shall\nthereby be extended or affected. Any corporation to which the\nnot-for-profit corporation law is made applicable by this section shall\nbe a type D not-for-profit corporation.\n (a) If any provision of the business corporation law conflicts with\nany provision of this chapter, the provision of this chapter shall\nprevail, and the conflicting provision of the business corporation law\nshall not apply in such case. If any provision of this chapter relates\nto a matter embraced in the business corporation law but is not in\nconflict therewith, both provisions shall apply.\n (b) The following provisions of the business corporation law shall not\napply to cooperative corporations: section two hundred one (a), section\nfour hundred three, the final clause of section five hundred one (a)\nwhich reads "and no limitation or definition of dividend or liquidation\nrights shall be effective unless at the time one or more classes of\noutstanding shares, singly or in the aggregate, are entitled to\nunlimited dividend and liquidation rights", section five hundred five,\nsection five hundred eighteen (c), section six hundred eight (a) and\n(b), section six hundred nine, section six hundred fourteen (a), section\nsix hundred eighteen, section six hundred twenty-one, section six\nhundred twenty-two, section six hundred thirty (a) (except as provided\nin section forty-seven of this chapter), section seven hundred three\n(a), section seven hundred four, and section eight hundred three (a).\n (c) In applying the business corporation law to non-stock cooperative\ncorporations, unless the context requires otherwise, the terms\n"shareholder" and "holder of shares" shall mean "member," and the terms\n"shareholders" and "holders of shares" shall mean "members".\n (d) In applying the business corporation law to corporations subject\nto this chapter, unless the context requires otherwise, references to\nthe holders of a stated percentage or fraction of "all outstanding\nshares," "all outstanding shares entitled to vote thereon," "the shares\nentitled to vote," and "the outstanding shares, whether or not entitled\nto vote," shall mean the stated percentage or fraction of the members or\ndelegates present and voting; provided, however, that this paragraph\nshall not apply to shares of stock not evidencing membership.\n 2. For the purpose of this section and elsewhere in this chapter, the\neffective date of the business corporation law shall be September first,\nnineteen hundred sixty-seven.\n 3. Sections five hundred eight and five hundred fifteen of the\nnot-for-profit corporation law notwithstanding, a membership cooperative\nshall be permitted to distribute any portion or all of its net retained\nproceeds to its members pro rata on the basis of their patronage.\n