Office of the Revisor of Statutes
Minnesota Session Laws - 1989, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1989
CHAPTER 144-H.F.No. 1411
An act relating to cooperatives; recodifying and
clarifying certain provisions on cooperative
businesses; amending certain provisions of cooperative
business law; requiring a registered officer or agent
for cooperatives; authorizing cooperatives to provide
greater approval proportions than provided in statute
for certain cooperative actions; providing corporate
existence of cooperative begins with filing of
articles; authorizing loans to and fiduciary powers
with members; specifying how vacancies in unexpired
directors' terms may be filled; authorizing the board
to rescind membership for member violations;
eliminating certain filings with county recorders;
eliminating attorney general approval of articles of
merger or consolidation; prescribing a fee for filing
articles of consolidation; prescribing a procedure for
dissolution of cooperatives; deeming certain organized
cooperatives to be organized under and subject to this
act; amending Minnesota Statutes 1988, sections 47.20,
subdivision 2; 117.232, subdivision 1; 216B.027,
subdivision 5; 237.075, subdivision 9; 273.124,
subdivisions 3 and 6; 273.132, subdivision 5; 363.01,
subdivision 32; and 500.20, subdivision 2a; proposing
coding for new law as Minnesota Statutes, chapter
308A; repealing Minnesota Statutes 1988, sections
308.01 to 308.92.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
CHAPTER 308A
COOPERATIVE LAW
Section 1. [308A.001] [CITATION.]
This chapter may be cited as the "Minnesota cooperative
law."
Sec. 2. [308A.005] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] The definitions in this
section apply to this chapter.
Subd. 2. [ARTICLES.] "Articles" means the articles of
incorporation of a cooperative as originally filed and amended.
Subd. 3. [ASSOCIATION.] "Association" means an
organization conducting business on a cooperative plan that is
incorporated under other laws of this state or another state.
Subd. 4. [BOARD.] "Board" means the board of directors of
a cooperative.
Subd. 5. [COOPERATIVE.] "Cooperative" means an association
conducting business on a cooperative plan that is organized
under this chapter or is subject to this chapter.
Subd. 6. [CORPORATION.] "Corporation" means a company,
association, or body vested with a corporate power or function.
Subd. 7. [DOMESTIC CORPORATION.] "Domestic corporation"
means a corporation organized under the laws of this state.
[300.02 s. 5]
Subd. 8. [FOREIGN CORPORATION.] "Foreign corporation"
means a corporation that is not a domestic corporation. [300.02
s. 6]
Subd. 9. [MEMBER.] "Member" means a member or a
stockholder of a cooperative who is entitled to vote.
Subd. 10. [MEMBERS' MEETING.] "Members' meeting means a
regular or special members' meeting.
Subd. 11. [STOCKHOLDER.] "Stockholder" means the holder of
a share of common stock of a cooperative. [308.06 s. 2]
GENERAL PROVISIONS
Sec. 3. [308A.011] [USE OF TERM COOPERATIVE RESTRICTED.]
Subdivision 1. [ONLY BUSINESS SUBJECT TO THIS CHAPTER MAY
USE TERM COOPERATIVE.] A corporation or association organized in
this state may not use the term "cooperative" as part of its
corporate or business name or title, or to represent itself as a
cooperative, unless the corporation or association has complied
with and is subject to this chapter or has incorporated under
other laws of this state authorizing incorporation of business
on a cooperative plan. [308.05 s. 3]
Subd. 2. [PENALTY FOR MISUSE OF TERM COOPERATIVE.] A
corporation or association is guilty of a misdemeanor that
violates subdivision 1. [308.05 s. 3]
Sec. 4. [308A.021] [FILING FEE.]
Unless otherwise provided, the filing fee for documents
filed with the secretary of state is $25. [308.06 s. 4]
Sec. 5. [308A.031] [PROMOTION EXPENSE NOT TO BE INCURRED.]
(a) Except as provided in paragraph (b), a cooperative may
not spend money, issue or pledge capital stock of the
cooperative, or incur indebtedness for payment of promotion of
the cooperative or for the payment of commissions, salaries, or
expenses of any kind in connection with the promotion of the
cooperative.
(b) An amount not more than ten percent of the par value of
the capital stock sold may be used by officers or committees
elected by the stockholders or for hiring responsible solicitors
to sell or solicit the sale of stock. [308.13]
ORGANIZATION
Sec. 6. [308A.101] [ORGANIZATIONAL PURPOSE.]
Subdivision 1. [GENERAL PURPOSE.] A cooperative may be
formed and incorporated on a cooperative plan for the purpose of
conducting an agricultural, dairy, marketing, transportation,
warehousing, commission, contracting, building, mining,
telephone, manufacturing, mechanical, mercantile, electrical,
heat, light, or power business, or for any combination of these
purposes or for any other lawful purpose. [308.05 s. 1]
Subd. 2. [ELECTRIC COOPERATIVE PURPOSE.] An electric
cooperative may only be formed by cooperatives engaged in the
generation, transmission, and distribution of electric energy
for the purpose of financing, or refinancing, the construction,
improvement, expansion, acquisition, and operation of electric
generating plants and electric transmission and distribution
lines, systems, facilities and equipment and related facilities
of its members. [308.05 s. 5]
Sec. 7. [308A.105] [INCORPORATORS.]
A cooperative may be organized by one or more
incorporators, who may act for themselves as individuals or as
the agents of other cooperatives or associations. [308.06 s. 1]
Sec. 8. [308A.121] [COOPERATIVE NAME.]
Subdivision 1. [NAME.] The name of a cooperative must
distinguish the cooperative from other entities doing business
in the state as domestic or foreign corporations or limited
partnerships, or under assumed names, trade or service marks, or
reserved corporate or limited partnership names, as provided in
section 302A.115. [308.06 s. 1]
Subd. 2. [NAME RESERVED.] The cooperative name shall be
reserved for the cooperative during its corporate existence.
[308.06 s. 1]
Sec. 9. [308A.125] [STOCK AND NONSTOCK ORGANIZATION.]
Subdivision 1. [STOCK AND NONSTOCK COOPERATIVES HAVE SAME
AUTHORITY.] Cooperatives organized on a capital stock basis may
be organized and have the same powers and authority as
cooperatives organized without capital stock on a membership
basis. [308.06 s. 2]
Subd. 2. [CAPITAL STOCK ORGANIZATION.] A cooperative is
organized on a capital stock basis if holding shares of common
stock entitles the holder of the stock to vote. [308.06 s. 2]
Subd. 3. [NONSTOCK ORGANIZATION.] (a) The articles of a
nonstock cooperative must contain the provisions required in the
articles of a cooperative organized on a capital stock basis if
the provisions are applicable to a cooperative organized upon a
membership basis.
(b) Except for cooperatives constituted partially or
entirely of other cooperatives, a member of a cooperative
organized on a membership basis may not have more than one vote,
and a membership is transferable only with the consent and
approval of the board. [308.06 s. 2]
Sec. 10. [308A.131] [ARTICLES OF INCORPORATION.]
Subdivision 1. [CONTENTS.] (a) The incorporators shall
prepare the articles, which must include:
(1) the name of the cooperative;
(2) the purpose of the cooperative;
(3) the principal place of business for the cooperative;
(4) the period of duration for the cooperative, if the
duration is not to be perpetual;
(5) the total authorized number of shares and the par value
of each share if the cooperative is organized on a capital stock
basis;
(6) a description of the classes of shares, if the shares
are to be classified;
(7) a statement of the number of shares in each class and
relative rights, preferences, and restrictions granted to or
imposed upon the shares of each class, and a provision that only
common stockholders have voting power;
(8) a statement that individuals owning common stock shall
be restricted to one vote in the affairs of the cooperative;
(9) a statement that shares of stock are transferable only
with the approval of the board;
(10) a statement that dividends on the capital stock of the
cooperative may not exceed eight percent annually;
(11) the names, post office addresses, and terms of office
of the directors of the first board; and
(12) a statement that net income in excess of dividends and
additions to reserves shall be distributed on the basis of
patronage, and that the records of the cooperative may show the
interest of patrons, stockholders of any classes, and members in
the reserves.
(b) The articles must always contain the provisions in
paragraph (a), except that the names, post office addresses, and
terms of offices of the directors of the first board may be
omitted after their successors have been elected by the members
or the articles are amended in their entirety.
(c) The articles may contain other lawful provisions.
(d) The articles must be signed by the incorporators.
[308.06 s. 2]
Subd. 2. [FILING ARTICLES.] (a) The original articles must
be filed with the secretary of state and a copy filed in the
office of the county recorder of the county where the principal
place of business of the cooperative is located.
(b) The fee for filing the articles with the secretary of
state is $60. [308.06 s. 4]
Sec. 11. [308A.135] [AMENDMENT OF ARTICLES.]
(a) The articles of a cooperative must be amended as
provided in this subdivision.
(b) The board by majority vote must pass a resolution
stating the text of the proposed amendment. The text of the
proposed amendment and an attached mail ballot, if the board has
provided for a mail ballot in the resolution, must be mailed
with a regular or special meeting notice to each member. The
notice must designate the time and place of the meeting for the
proposed amendment to be considered and voted on. A cooperative
with more than 200 members may publish the notice, proposed
amendment, and ballot in the manner provided for a regular
meeting notice.
(c) If a quorum of the members is registered as being
present or represented by mail vote at the meeting, the proposed
amendment is adopted if approved by a majority of the votes cast.
(d) After an amendment has been adopted by the members, a
certificate stating the amendment and the manner of adoption
shall be signed by the president, vice president, secretary, or
assistant secretary, and filed in the office of the secretary of
state and the office of the county recorder of the county where
the cooperative's principal place of business is located.
[308.15 s. 1]
Sec. 12. [308A.141] [AMENDMENT OF ARTICLES TO BE GOVERNED
BY THIS CHAPTER.]
Subdivision 1. [AUTHORITY.] A corporation or association
organized and doing business under other statutes of this state
or under the laws of other states that has conducted business on
a cooperative plan may become subject to this chapter by
amending its articles of incorporation to conform to the
requirements of this chapter. [308.14 s. 1]
Subd. 2. [PROCEDURE FOR AMENDMENT.] (a) A corporation or
association organized under statutes of this state may amend its
articles of incorporation in the manner provided under the
statute that it is governed by for the adoption of amendments.
(b) A corporation or association organized under laws of
other states shall amend its articles of incorporation in the
manner required by the laws of the state where it was
incorporated. After the articles of incorporation are amended,
the corporation or association shall file a certified copy of
the articles of incorporation and amendments with the secretary
of state with the fees and requirements prescribed for filing
articles. After filing, the corporation or association is a
cooperative in this state and subject to the provisions of this
chapter. [308.14 s. 1]
Sec. 13. [308A.145] [AMENDMENT OF ARTICLES TO INCORPORATE
DEFECTIVELY ORGANIZED COOPERATIVE.]
Subdivision 1. [AMENDMENT OF ARTICLES.] An association or
corporation organized defectively under other law of this state
that has conducted its business upon the cooperative plan and
has in good faith carried on and transacted business, may amend
its articles of incorporation in their entirety to be governed
by this chapter. The articles of amendment shall be filed with
the secretary of state and a copy of the articles recorded in
the office of the county recorder of the county where the
principal place of business of the corporation or association is
located. [308.36 s. 1]
Subd. 2. [DE FACTO CORPORATION BECOMES CORPORATION DE
JURE.] Upon the filing and recording of the articles of
amendment of a de facto corporation, the corporation is a legal
and valid corporation de jure. Courts shall hold all
transactions, past and future, as if the organization was not
defective. [308.36 s. 2]
Subd. 3. [PENDING LITIGATION NOT AFFECTED.] This section
does not affect pending litigation. [308.36 s. 3]
Subd. 4. [NOT APPLICABLE IF CHARTER IS FORFEITED.] This
section does not apply to a corporation whose charter has been
declared forfeited by a court of competent jurisdiction in this
state. [308.36 s. 3]
Sec. 14. [308A.151] [AMENDMENT OF ARTICLES TO RENEW
EXPIRED CORPORATE EXISTENCE.]
Subdivision 1. [AMENDMENT TO RENEW CORPORATE
EXISTENCE.] If the period of corporate existence of a
corporation organized under any law of this state that has
conducted its business on a cooperative plan expires and the
corporation continues in good faith to carry on and transact
business, the corporation may renew its corporate existence by
amending its articles of incorporation to comply with this
chapter. The amended articles must include a provision
extending the corporate duration for a limited period or making
the corporate existence perpetual. [308.062 s. 1]
Subd. 2. [DOES NOT AFFECT PENDING LITIGATION.] This
section does not affect pending litigation. [308.062 s. 1]
Subd. 3. [DOES NOT APPLY TO FORFEITED CHARTER.] This
section does not apply to a corporation whose charter has been
declared forfeited by a court of competent jurisdiction.
[308.062 s. 1]
Subd. 4. [CORPORATE ACTS AND CONTRACTS VALIDATED.] If a
corporation complies with subdivisions 1, 2, and 3, corporate
acts and contracts that were performed, made, and entered into
after the expiration of the corporate existence are legal and
valid against the objection that the period of duration of the
corporation had expired. [308.062 s. 2]
Sec. 15. [308A.155] [CORPORATE EXISTENCE.]
Subdivision 1. [COMMENCEMENT OF BUSINESS.] A cooperative
may commence business when ten percent of the authorized capital
stock has been subscribed and paid in. [308.07 s. 2]
Subd. 2. [PERPETUAL EXISTENCE UNLESS
LIMITED.] Cooperatives have perpetual duration unless the
cooperative provides for a limited period of duration of
corporate existence in the articles. [308.061, 308.15 s. 1]
Sec. 16. [308A.165] [BYLAWS.]
The bylaws of a cooperative may be amended at a regular or
special members' meeting if:
(1) the notice of the meeting contains a summary statement
of the proposed amendment;
(2) a quorum is registered as being present or represented
by mail vote; and
(3) the amendment is approved by a majority of the votes
cast. [308.15 s. 2]
POWERS
Sec. 17. [308A.201] [POWERS.]
Subdivision 1. [GENERAL POWERS.] In addition to other
powers, a cooperative as an agent or otherwise:
(1) may perform every act and thing necessary or proper to
the conduct of the cooperative's business or the accomplishment
of the purposes of the cooperative;
(2) has other rights, powers, or privileges granted by the
laws of this state to other corporations, except those that are
inconsistent with the express provisions of this chapter; and
(3) has the powers given in this section. [308.05 s. 1]
Subd. 2. [DEALING IN ITS OWN PRODUCTS.] (a) A cooperative
may buy, sell, or deal in its own products, the products of the
cooperative's individual members or patrons, the products of
another cooperative or association or of its members or patrons.
(b) A cooperative may negotiate the price at which the
products the cooperative is selling may be sold. [308.05 s. 1]
Subd. 3. [CONTRACTS AND AGREEMENTS.] A cooperative may
enter into or become a party to a contract or agreement for the
cooperative or for the cooperative's individual members or
patrons, or between the cooperative and its members. [308.05 s.
1]
Subd. 4. [TRANSACTIONS OF REAL ESTATE AND PERSONAL
PROPERTY.] A cooperative may purchase and hold, lease, mortgage,
encumber, sell, exchange, and convey as a corporation real
estate, buildings, and personal property as the business of the
cooperative may require. [308.05 s. 1]
Subd. 5. [CONSTRUCTION OF BUILDINGS AND FACILITIES.] A
cooperative may erect buildings or other structures or
facilities or the cooperative's owned or leased property, or on
a right-of-way legally acquired by the cooperative. [308.05 s.
1]
Subd. 6. [ISSUANCE OF BONDS AND INDEBTEDNESS.] A
cooperative may issue bonds or other evidence of indebtedness
and to borrow money to finance the business of the cooperative.
[308.05 s. 1]
Subd. 7. [ADVANCES TO MEMBERS OR PATRONS.] A cooperative
may make advances to the cooperative's members or patrons on
produce delivered by the members or patrons to the cooperative.
[308.05 s. 1]
Subd. 8. [ACCEPTANCE OF DEPOSITS.] A cooperative may
accept deposits of money from other cooperatives or associations
from which it is constituted. [308.05 s. 2]
Subd. 9. [LENDING AND BORROWING MONEY.] A cooperative may
loan or borrow money to or from cooperatives or associations
from which it is constituted with security that it considers
sufficient in dealing with the member cooperatives or
associations. [308.05 s. 2]
Subd. 10. [ACQUISITION AND DISPOSAL OF STOCK.] (a) A
cooperative may purchase, acquire, hold, or dispose of the stock
of another association or corporation, whether incorporated
under the laws of this state or another state, and assume all
rights, interests, privileges, responsibilities, and obligations
arising out of the ownership of the stock after approval by the
board to allow the cooperative to join with other cooperatives
and associations in this state and other states, to form
district, state, or national organizations or market agencies.
[308.05 s. 1]
(b) A cooperative may acquire and hold stock in another
corporation organized under the law of this state or another
state of the United States, including a corporation organized:
(1) as a federation of associations;
(2) for the purpose of forming a district, state, or
national marketing, sales, or service agency; or
(3) for the purpose of acquiring marketing facilities at
terminal or other markets in this state or other states.
[308.07 s. 3]
(c) A cooperative may purchase, own, and hold shares of
capital stock, memberships, interests in nonstock capital,
evidences of indebtedness of any domestic or foreign corporation
when reasonably necessary or incidental to accomplish the
purposes stated in the articles. [308.37]
Subd. 11. [FIDUCIARY POWERS.] A cooperative may exercise
any and all fiduciary powers in relations with cooperatives or
associations from which it is constituted. [308.05 s. 2]
Subd. 12. [ELECTRIC COOPERATIVE POWERS.] (a) An electric
cooperative has the power and authority to:
(1) make loans to its members;
(2) prerefund debt;
(3) obtain funds through negotiated financing or public
sale;
(4) borrow money and issue its bonds, debentures, notes, or
other evidence of indebtedness;
(5) mortgage, pledge, or otherwise hypothecate its assets
as may be necessary;
(6) invest its resources;
(7) deposit money in state and national banks and trust
companies authorized to receive deposits; and
(8) exercise all other powers and authorities granted to
cooperatives. [308.05 s. 5]
(b) A cooperative organized to provide rural electric power
may enter agreements and contracts with other electric power
cooperatives or with a cooperative constituted of electric power
cooperatives to share losses and risk of losses to their
transmission and distribution lines, transformers, substations,
and related appurtenances from storm, sleet, hail, tornado,
cyclone, hurricane, or wind storm. An agreement or contract or
a cooperative formed to share losses under this paragraph is not
subject to the laws of this state relating to insurance and
insurance companies. [308.43]
Subd. 13. [UTILITY COOPERATIVE CONDEMNATION POWER.] A
cooperative that is engaged in the electrical, heat, light,
power, or telephone business may exercise the power of eminent
domain in the manner provided by state law for the exercise of
the power by other corporations engaged in the same business.
[308.05 s. 1]
Subd. 14. [CREAMERY COOPERATIVE SEWAGE CONDEMNATION
POWER.] (a) A creamery cooperative organized in this state has
the right, power, and authority to condemn lands by eminent
domain for easements for sewers and sites for filtration plants
to take care of all sewage and refuse made in the operation of
its business. The power and authority shall be exercised as
provided in chapter 117. [308.39]
(b) The establishment, maintenance, and operation of sewers
or filtration plants shall be under the supervision of the chair
of the board of health as defined in section 145A.02,
subdivision 2, of the town or city where the cooperative has its
operating plant. [308.40]
Sec. 18. [308A.205] [AGRICULTURAL MARKETING CONTRACTS.]
Subdivision 1. [AUTHORITY.] A cooperative and its members
or patrons may make and execute marketing contracts, requiring
the members or patrons to sell a specified portion of their
agricultural products or specified commodities exclusively to or
through the cooperative or facilities established by the
cooperative. [308.68]
Subd. 2. [TITLE TO PRODUCTS.] If a sale is contracted to
the cooperative, the sale transfers title to the products
absolutely, except for recorded liens and security interest, to
the cooperative on delivery of the products or at another
specified time if expressly provided in the contract. The
contract may allow the cooperative to sell or resell the
products of its members or patrons, with or without taking title
to the product, and pay the resale price, after deducting all
necessary selling, overhead, and other costs and expenses,
including other proper reserves, and interest not exceeding
eight percent per annum on common stock. [308.68]
Subd. 3. [TERM OF CONTRACT.] The term of a marketing
contract may not exceed five years, but may be made
self-renewing for periods not exceeding five years each, subject
to the right of either party to terminate at the end of the
original term and each renewal term by giving written notice of
the termination during a period specified in the contact. The
period for notifying to terminate a contract may not be more
than 180 days or less than 30 days before the end of the term.
[308.68]
Subd. 4. [DAMAGES FOR BREACH OF CONTRACT.] The bylaws or
the marketing contract may set specific sums, as liquidated
damages to be paid by the member or patron to the cooperative
for breach of any provisions of the marketing contract regarding
the sale or delivery or withholding of products including that
the member or patron will pay the costs, premiums for bonds,
expenses, and fees if an action is brought on the contract by
the cooperative. The remedies for breach of contract are valid
and enforceable in the courts of this state. The provisions
shall be enforced as liquidated damages and are not to be
considered or regarded as a penalty. [308.05 s. 4, 308.69]
Subd. 5. [INJUNCTION AGAINST BREACH OF CONTRACT.] If there
is a breach or threatened breach of a marketing contract by a
member or patron, the cooperative is entitled to an injunction
to prevent the further breach of the contract, and to a decree
of specific performance of the contract. Pending the
adjudication of the action after filing a certified complaint
showing the breach or threatened breach and filing a sufficient
bond, the cooperative is entitled to a temporary restraining
order and preliminary injunction against the member or patron.
[308.05 s. 4, 308.69]
Subd. 6. [PRESUMPTION ON ACTION ON CONTRACT.] In an action
on a marketing contract, it is presumed that landowners,
landlords, and lessors are able to control the delivery of
products produced on their land by tenants or others and are
liable for and subject to remedies for the breach of delivery,
if the tenancy, possession, or work on the land or the terms of
the tenancy, possession, or labor on the land was created or
changed after execution by the landowners, landlords, or lessors
of the marketing contract. [308.05 s. 4, 308.69]
Subd. 7. [PENALTIES FOR CONTRACT INTERFERENCE AND FALSE
REPORTS.] (a) A person or a corporation is guilty of a
misdemeanor and subject to a $500 civil penalty to be paid to
the aggrieved cooperative or association if the person or the
corporation's officers or employees:
(1) knowingly induce or attempt to induce a member or
stockholder of a cooperative or an association operating in this
state that is organized under similar statutes of other states
with similar restrictions and rights to break a marketing
contract with the cooperative or association; or
(2) maliciously and knowingly spread false reports about
the finances or management or activity of a cooperative or
association.
(b) Each violation is a separate offense and is subject to
the penalties in paragraph (a). [308.05 s. 4, 308.78]
Subd. 8. [CONTRACTS AND COOPERATIVES NOT IN RESTRAINT OF
TRADE.] A cooperative exercising authority under this section is
not a combination in restraint of trade or an illegal monopoly,
or an attempt to lessen competition or fix prices arbitrarily.
The marketing contracts and agreements under this section are
not illegal, or an unlawful restraint of trade, or a part of a
conspiracy or combination to accomplish an improper or illegal
purpose. [308.80]
BOARD OF DIRECTORS
Sec. 19. [308A.301] [BOARD GOVERNS COOPERATIVE.]
A cooperative is governed by its board. [308.11]
Sec. 20. [308A.305] [NUMBER OF DIRECTORS.]
The board must have at least five directors, except a
cooperative housing corporation as defined in United States
Code, title 26, section 216, subsection (b)(1), must have at
least three directors who are members of the association.
[308.11]
Sec. 21. [308A.311] [ELECTION OF DIRECTORS.]
Subdivision 1. [GENERALLY.] Directors shall be elected for
the term, at the time, and in the manner provided in this
section and the bylaws. [308.11]
Subd. 2. [ELECTION AT REGULAR MEETING.] Directors shall be
elected at the regular members' meeting for the terms of office
prescribed in the bylaws. Except for directors elected at
district meetings, all directors shall be elected at the regular
members' meeting. [308.09 s. 1]
Subd. 3. [DISTRICT OR LOCAL UNIT ELECTION OF
DIRECTORS.] (a) A cooperative with districts or other local
units may elect directors on a district or local unit basis if
provided in the bylaws.
(b) The directors may be nominated or elected at district
meetings if provided in the bylaws. Directors who are nominated
at district meetings shall be elected at the annual regular
members' meeting by vote of the members of the entire
membership, unless the bylaws provide that directors who are
nominated at district meetings are to be elected by vote of the
members of the district at the annual regular members' meeting.
[308.07 s. 6]
Subd. 4. [VOTE BY MAIL.] (a) A member may not vote by mail
for a director unless mail voting is authorized by the articles
or bylaws.
(b) The ballot shall be in a form prescribed by the board.
(c) The member shall mark the ballot for the candidate
chosen and mail the ballot to the cooperative in a sealed plain
envelope inside another envelope bearing the shareholder's name.
(d) If the ballot of the member is received by the
cooperative on or before the date of the regular members'
meeting, the ballot shall be accepted and counted as the vote of
the absent member. [308.071 s. 2]
Subd. 5. [VOTE BY MAIL FOR TELEPHONE COOPERATIVE.] If
voting by mail is authorized by the articles or the bylaws of a
telephone cooperative, a member may vote by mail for the
director in the manner prescribed in the articles or bylaws.
The mail voting shall be by secret ballot. [308.071 s. 3]
Subd. 6. [FARM CORPORATION STOCKHOLDER MAY BE
DIRECTOR.] If a member of a cooperative is a family farm
corporation defined in section 500.24, subdivision 2, clause
(c), or an authorized farm corporation defined in section
500.24, subdivision 2, clause (d), the member may elect or
appoint an individual stockholder of the farm corporation
residing on or actively operating the farm to be eligible for
election as a director to the board. [308.11]
Subd. 7. [CORPORATE MEMBERS MAY NOMINATE PERSONS FOR
DIRECTOR.] If a member of a cooperative is not a natural person,
family farm corporation, or an authorized farm corporation and
the bylaws do not provide otherwise, the member may appoint or
elect one or, for a cooperative constituted entirely of other
cooperatives or associations, one or more natural persons to be
eligible for election as a director to the board. [308.11]
Sec. 22. [308A.321] [REMOVAL OF DIRECTORS.]
Members may remove a director for cause and fill the
vacancy caused by the removal at a regular or special members'
meeting. [308.11]
Sec. 23. [308A.325] [LIMITATION OF DIRECTOR'S LIABILITY.]
Subdivision 1. [ARTICLES MAY LIMIT LIABILITY.] A
director's personal liability to the cooperative or members for
monetary damages for breach of fiduciary duty as a director may
be eliminated or limited in the articles as provided in
subdivision 2. [308.111]
Subd. 2. [RESTRICTIONS ON LIABILITY LIMITATION.] The
articles may not eliminate or limit the liability of a director:
(1) for a breach of the director's duty of loyalty to the
cooperative or its members;
(2) for acts or omissions that are not in good faith or
involve intentional misconduct or a knowing violation of law;
(3) for a transaction from which the director derived an
improper personal benefit; or
(4) for an act or omission occurring before the date when
the provision in the articles eliminating or limiting liability
becomes effective. [308.111]
OFFICERS
Sec. 24. [308A.401] [OFFICERS.]
Subdivision 1. [REQUIRED OFFICERS.] (a) The board shall
elect:
(1) a president;
(2) one or more vice presidents;
(3) a secretary; and
(4) a treasurer.
(b) The board may elect additional officers as the articles
or bylaws authorize or require. [308.11]
Subd. 2. [SECRETARY AND TREASURER MAY BE COMBINED.] The
offices of secretary and treasurer may be combined and if
combined the person filling the office shall be termed
secretary-treasurer. [308.11]
Subd. 3. [CHAIR AND VICE CHAIR.] If the bylaws provide,
the board may elect directors as a chair and one or more vice
chairs. [308.11]
Subd. 4. [OFFICERS THAT MUST BE STOCKHOLDERS.] The
president and vice president must be directors and members
unless the articles or bylaws provide for a chair and one or
more vice chairs and the articles or bylaws do not require
otherwise. The treasurer, secretary, and additional officers
need not be directors or members. [308.11]
Subd. 5. [REMOVAL OF OFFICERS.] Members may remove an
officer at a members' meeting for cause and fill the vacancy
caused by the removal. [308.11]
STOCK
Sec. 25. [308A.501] [CAPITAL STOCK.]
Subdivision 1. [AUTHORIZED AMOUNTS.] The amount, number of
shares, and par value of the authorized capital stock may be
increased or decreased and classes of the capital stock may be
established or altered by amending the articles at a regular
members' meeting or at a special members' meeting called for the
purpose of the amendment. [308.07 s. 1]
Subd. 2. [ISSUANCE OF SHARES.] A share of stock may not be
issued until at least the par value of the share has been paid
for in cash or a cash equivalent. [308.07 s. 2]
Subd. 3. [SALE OF STOCK TO BE APPROVED BY BOARD.] Stock in
a cooperative may only be sold or transferred with the approval
of the board. [308.07 s. 9]
Subd. 4. [REPURCHASE BY COOPERATIVE.] (a) The bylaws must
provide that the cooperative has the first privilege of
purchasing stock of any class offered for sale by a stockholder.
(b) Stock acquired by the cooperative may be held as
treasury stock or may be retired and canceled. [308.07 s. 9]
Sec. 26. [308A.505] [SUBJECT TO SECURITIES LAW.]
Cooperatives are subject to the provisions of chapter 80A,
except as specifically provided in section 80A.15. [308.06 s.
3]
MEMBERS
Sec. 27. [308A.601] [GROUPING OF MEMBERS.]
Subdivision 1. [AUTHORIZATION.] A cooperative may in the
articles or bylaws group members in districts, local units, or
another basis. [308.07 s. 5]
Subd. 2. [IMPLEMENTATION.] The board may do things
necessary to implement the use of districts or local units
including setting the time and place and prescribing the rules
of conduct for holding meetings by districts or local units to
elect delegates to members' meetings. [308.07 s. 8]
Sec. 28. [308A.605] [STOCKHOLDER VIOLATIONS.]
(a) A stockholder who knowingly, intentionally, or
repeatedly violates a provision of the bylaws may be required by
the board to surrender stock of any class owned by the
stockholder. [308.07 s. 9]
(b) The cooperative shall refund to the stockholder the
lesser of the par value or the book value of the stock. Stock
required to be surrendered shall be retired and canceled by the
board. [308.07 s. 9]
Sec. 29. [308A.611] [REGULAR MEMBERS' MEETINGS.]
Subdivision 1. [ANNUAL MEETING.] Regular members' meetings
must be held annually at a time determined by the board, unless
otherwise provided for in the articles or bylaws. [308.09 s. 1]
Subd. 2. [LOCATION.] The regular members' meeting shall be
held at the principal place of business of the cooperative, or
at another place conveniently located within the area served by
the cooperative. A cooperative constituted entirely or
partially of other cooperatives or associations organized under
the laws of another state, or doing business in another state,
may hold regular members' meetings at a place within or outside
of the state, as designated in the notice of the meeting.
[308.09 s. 1]
Subd. 3. [BUSINESS AND FISCAL REPORTS.] The officers must
submit reports to the members at the regular members' meeting
covering the business of the cooperative for the previous fiscal
year that show the condition of the cooperative at the close of
the fiscal year. [308.09 s. 1]
Subd. 4. [ELECTION OF DIRECTORS.] All directors shall be
elected at the regular members' meeting for the terms of office
prescribed in the bylaws, except for directors elected at
district or local unit meetings. [308.09 s. 1]
Subd. 5. [NOTICE.] (a) The secretary shall give notice of
regular members' meetings by:
(1) publication in a legal newspaper published in the
county of the principal place of business of the cooperative;
(2) publication in a magazine, periodical, or other
publication of the cooperative that is regularly published by or
on behalf of the cooperative and circulated generally among
members; or
(3) mailing the regular members' meeting notice to each
member personally at the person's last known post office
address, which for a member cooperative means notice mailed to
the secretary of the cooperative.
(b) The regular members' meeting notice must be published
at least two weeks before the date of the meeting or mailed at
least 15 days before the date of the meeting. [308.09 s. 1]
Sec. 30. [308A.615] [SPECIAL MEMBERS' MEETINGS.]
Subdivision 1. [CALLING MEETING.] Special members'
meetings of the members may be called by:
(1) a majority vote of the board; or
(2) the written petition of at least 20 percent of the
members submitted to the president. [308.09 s. 2]
Subd. 2. [NOTICE.] (a) The president shall give notice of
a special members' meeting.
(b) The special members' meeting notice shall state the
time, place, and purpose of the special members' meeting.
(c) The special members' meeting notice shall be issued
within ten days from and after the date of the presentation of a
members' petition, and the special members' meeting must be held
by 30 days after the date of the presentation of the members'
petition. [308.09 s. 2]
Sec. 31. [308A.621] [CERTIFICATION OF MAILED MEETING
NOTICE.]
(a) After mailing special or regular members' meeting
notices, the secretary shall execute a certificate containing:
(1) a correct copy of the mailed notice;
(2) the date of mailing the notice; and
(3) a statement that the special or regular members'
meeting notices were mailed as prescribed by this section.
(b) The certificate shall be made a part of the record of
the meeting. [308.09 s. 2]
Sec. 32. [308A.625] [FAILURE TO RECEIVE MEETING NOTICE.]
Failure of a member to receive a special or regular
members' meeting notice does not invalidate an action that is
taken by the members at a members' meeting. [308.09 s. 2]
Sec. 33. [308A.631] [QUORUM.]
Subdivision 1. [QUORUM.] (a) Except as provided in
paragraph (b), the quorum for a members' meeting to transact
business is:
(1) ten percent of the total number of members for a
cooperative with 500 or less members; or
(2) 50 members for cooperatives with more than 500 members.
(b) The quorum provisions of paragraph (a) apply
notwithstanding quorum requirements of the articles or the
bylaws, except for:
(1) a larger quorum in articles filed by a cooperative
after March 26, 1949; or
(2) a larger quorum provided by amending the articles or
bylaws after May 1, 1959. [308.10]
Subd. 2. [QUORUM FOR VOTING BY MAIL.] In determining a
quorum at a meeting, on a question submitted to a vote by mail,
members present in person or represented by mail vote shall be
counted. The attendance of a sufficient number of members to
constitute a quorum shall be established by a registration of
the members of the cooperative present at the meeting. The
registration shall be verified by the president and secretary of
the cooperative and shall be reported in the minutes of the
meeting. [308.10]
Subd. 3. [MEETING ACTION INVALID WITHOUT QUORUM.] An
action by a cooperative is not valid or legal in the absence of
a quorum at the meeting at which the action was taken. [308.10]
Sec. 34. [308A.635] [MEMBER VOTING RIGHTS.]
Subdivision 1. [MEMBER HAS ONE VOTE.] A member of a
cooperative is only entitled to one vote. [308.07 s. 3]
Subd. 2. [SPOUSE MAY VOTE FOR MEMBER.] If a vote of
members is taken on any matter, including a petition pursuant to
section 216B.02, subdivision 4, the spouse of the member may
vote on behalf of the member unless the member has indicated
otherwise. [308.105]
Subd. 3. [RIGHT TO VOTE AT MEETING.] A member or delegate
may exercise voting rights on any matter that is before the
members at a members' meeting from the time the member or
delegate arrives at the members' meeting, unless the articles or
bylaws specify an earlier and specific time for closing the
right to vote. [308.07 s. 3]
Subd. 4. [VOTING METHOD.] A member's vote at a members'
meeting must be in person or by mail and not by proxy, except as
provided in subdivisions 2 and 5. [308.07 s. 3]
Subd. 5. [MEMBERS REPRESENTED BY DELEGATES.] (a) A
cooperative may provide in the articles or bylaws that local
units of members are entitled to be represented at members'
meetings by delegates chosen by the members of the unit. The
delegates may vote on matters at the members' meeting in the
same manner as a member. The delegates may only exercise the
voting rights on a basis and with the number of votes as
prescribed in the articles or bylaws.
(b) If the approval of a certain portion of the members is
required for adoption of amendments, a dissolution, a merger, a
consolidation, or a sale of assets, the votes of delegates shall
be counted as votes by the members represented by the delegate.
[308.07 s. 7]
Subd. 6. [ABSENTEE BALLOTS.] (a) A member who is absent
from a members' meeting may vote by mail on the ballot
prescribed in this subdivision on any motion, resolution, or
amendment that the board submits to the members.
(b) The ballot shall be in the form prescribed by the board
and contain:
(1) the exact text of the proposed motion, resolution, or
amendment to be acted on at the meeting; and
(2) spaces opposite the text of the motion, resolution, or
amendment in which the member may indicate an affirmative or
negative vote.
(c) The member shall express a choice by marking an "X" in
the appropriate space on the ballot. The ballot must be signed
by the member.
(d) A properly executed ballot shall be accepted by the
board and counted as the vote of the absent member at the
meeting. [308.07 s. 10]
Sec. 35. [308A.641] [VOTE OF COOPERATIVE CONSTITUTED OF
OTHER COOPERATIVES.]
A cooperative that is constituted entirely or partially of
other cooperatives or associations may authorize by the articles
or the bylaws for affiliated cooperative members to have an
additional vote for a stipulated amount of business transacted
between the member cooperative and the cooperative central
organization or a stipulated number of members in the member
cooperative. [308.07 s. 4]
Sec. 36. [308A.645] [VOTE OF CORPORATE STOCK HELD BY
COOPERATIVE.]
A cooperative that holds stock of another corporation may
by direction of the cooperative's board or members elect or
appoint a person to represent the cooperative at a meeting of
the corporation. The representative has authority to represent
the cooperative and may cast the cooperative's vote at the
corporation's meeting. [308.07 s. 3]
EARNINGS, RESERVE, AND DISTRIBUTIONS.
Sec. 37. [308A.701] [RESERVES.]
Subdivision 1. [CAPITAL RESERVE.] A cooperative may set
aside a portion of net income as the board determines advisable
to create or maintain a capital reserve. [308.12 s. 1]
Subd. 2. [ADDITIONAL RESERVES.] In addition to a capital
reserve, the board may:
(1) set aside an amount not to exceed five percent of the
annual net income of the cooperative for promoting and
encouraging cooperative organization; and
(2) establish and accumulate reserves for new buildings,
machinery and equipment, depreciation, losses, and other proper
purposes. [308.12 s. 1]
Sec. 38. [308A.705] [DISTRIBUTION OF INCOME.]
Subdivision 1. [DISTRIBUTION OF NET INCOME.] Net income in
excess of dividends on capital stock and additions to reserves
shall be distributed on the basis of patronage. [308.12 s. 1]
Subd. 2. [FREQUENCY OF INCOME DISTRIBUTION.] (a)
Distribution of net income shall be made at least annually.
(b) A cooperative with income from trucking operations may
only distribute net income annually. The board shall present to
the members at their annual meeting a report covering the
operations of the cooperative during the preceding fiscal year.
[308.12 s. 2]
Subd. 3. [DIVIDENDS.] Dividends may be paid on capital
stock only if the net income of the cooperative for the previous
fiscal year is sufficient. The dividends are not cumulative.
[308.12 s. 3]
Subd. 4. [FORM OF DISTRIBUTION.] A cooperative may
distribute net income in cash, credits, revolving fund
certificates, or its own or other securities. [308.12 s. 4]
Subd. 5. [ELIGIBLE NONMEMBER PATRONS.] (a) The members may
provide in the bylaws that nonmember patrons are allowed to
participate in the distribution of net income on equal terms
with member patrons. [308.12 s. 1]
(b) If a nonmember patron is qualified and eligible for
membership, the amount of patronage refund due shall be credited
to the patron's individual account.
(c) If the credits equal the value of a share of common
stock that entitles the stockholder to vote, or a membership, a
share of stock or a membership shall be issued to the nonmember
patron. [308.12 s. 1]
Subd. 6. [PATRONAGE CREDITS FOR INELIGIBLE MEMBERS.] If a
nonmember patron with patronage credits is not qualified or
eligible for membership, a refund due may be credited to the
patron's individual account. If the credited amount in the
individual account of a patron ineligible for membership equals
the value of a share of common stock and does not entitle the
holder to vote, or to preferred stock or a certificate of
interest, the board may issue a share of preferred stock or a
certificate of interest. After the patron is issued preferred
stock or a certificate of interest, the patron may participate
in the distribution of income on the same basis as a stockholder
or member. [308.12 s. 1]
Sec. 39. [308A.711] [DISTRIBUTION OF UNCLAIMED PROPERTY.]
Subdivision 1. [ALTERNATE PROCEDURE TO DISBURSE PROPERTY.]
Notwithstanding the provisions of section 345.43, a cooperative
may, in lieu of paying or delivering to the commissioner of
commerce the unclaimed property specified in its report of
unclaimed property, distribute the unclaimed property to a
corporation or organization that is exempt from taxation under
section 290.05, subdivision 1, paragraph (b), or 2. A
cooperative making the election to distribute unclaimed property
shall, within 20 days after the time specified in section 345.42
for claiming the property from the holder, file with the
commissioner of commerce:
(1) a verified written explanation of the proof of claim of
an owner establishing a right to receive the abandoned property;
(2) any errors in the presumption of abandonment;
(3) the name, address, and exemption number of the
corporation or organization to which the property was or is to
be distributed; and
(4) the approximate date of distribution. [308.12 s. 5]
Subd. 2. [REPORTING AND CLAIMING PROCEDURE NOT
AFFECTED.] This subdivision does not alter the procedure
provided in sections 345.41 and 345.42 for cooperatives to
report unclaimed property to the commissioner of commerce and
the requirement that claims of owners are made to the
cooperatives for a period of 65 days following the publication
of lists of abandoned property. [308.12 s. 5]
Subd. 3. [OWNER'S RIGHT EXTINGUISHED ON DISBURSEMENT.] The
right of an owner to unclaimed property held by a cooperative is
extinguished when the property is disbursed by the cooperative
to a tax-exempt organization in accordance with this section.
[308.12 s. 5]
MERGER AND CONSOLIDATION
Sec. 40. [308A.801] [MERGER AND CONSOLIDATION.]
Subdivision 1. [AUTHORIZATION.] Unless otherwise
prohibited, cooperatives or associations organized under the
laws of this state may merge or consolidate with each other or
with associations incorporated under the laws of another state
by complying with the provisions of this section or the law of
the state where the surviving or new association will exist.
[308.15 s. 4]
Subd. 2. [PLAN.] To initiate a merger or consolidation, a
written plan of merger or consolidation must be prepared by the
board or by a committee selected by the board or the members to
prepare a plan. The plan must state:
(1) the terms of the merger or consolidation;
(2) the proposed effect of the consolidation or merger on
the members of the cooperative; and
(3) for a consolidation, the plan must contain the articles
of the new association. [308.15 s. 4]
Subd. 3. [NOTICE.] (a) The board must mail a merger or
consolidation notice to each member. The notice must contain:
(1) the full text of the plan; and
(2) the time and place of the meeting at which the plan
will be considered.
(b) A cooperative or association with more than 200 members
may publish the merger or consolidation notice in the same
manner as a regular members' meeting notice. [308.15 s. 4]
Subd. 4. [ADOPTION OF PLAN.] (a) A plan of merger or
consolidation is adopted if:
(1) a quorum of the members is registered as being present
or represented by mail vote at the meeting; and
(2) the plan is approved by two-thirds of the votes cast.
(b) After the plan has been adopted, articles of merger or
consolidation stating the plan and the manner of adoption of the
plan shall be signed by the president, vice president,
secretary, or assistant secretary of each cooperative or
association merging or consolidating.
(c) The plan shall be approved by the attorney general.
(d) The articles of merger or consolidation shall be filed
in the office of the secretary of state and recorded in the
office of the county recorder of each county where each merging
or consolidating cooperative or association has a principal
place of business.
(e) For a merger, the articles of the surviving cooperative
or association are deemed amended to the extent provided in the
articles of merger.
(f) Unless otherwise provided in the plan, the merger or
consolidation is effective when the articles of merger or
consolidation are filed in the office of the secretary of state.
[308.15 s. 4]
Subd. 5. [EFFECT OF MERGER.] (a) After the effective date,
the cooperatives and associations that are parties to the plan
become a single association. For a merger, the surviving
association is the association designated in the plan. For a
consolidation, the new cooperative is the association provided
for in the plan. Except for the surviving or new association,
the separate existence of all cooperatives and associations that
are parties to the plan cease on the effective date of the
merger or consolidation.
(b) The surviving or new association possesses all of the
rights and property of each of the merged or consolidated
cooperatives or associations, and is responsible for all their
obligations. The title to property of the merged or
consolidated association is vested in the surviving or new
association without reversion or impairment of the title caused
by the merger or consolidation.
(c) The right of a creditor may not be impaired by the
merger or consolidation without the creditor's consent. [308.15
s. 4]
Subd. 6. [FILING FEE.] The fee to be paid to the secretary
of state for filing articles of merger is $50. [308.06 s. 4]
LIQUIDATION
Sec. 41. [308A.901] [LIQUIDATION.]
Subdivision 1. [MEMBERS MAY AUTHORIZE LIQUIDATION.] If a
liquidation is authorized by the members, the board may dispose
of all or substantially all of the property of the cooperative
on terms and conditions determined by the board. [308.05 s. 6]
Subd. 2. [RESOLUTION AT MEMBERS' MEETING.] The members may
authorize a liquidation by adopting a resolution at a members'
meeting. The notice of the members' meeting must include a
statement that the disposition of the property of the
cooperative will be considered at the meeting. If a quorum is
present in person or by mail ballot at the members' meeting, the
resolution approving of the liquidation is adopted if approved
by two-thirds of the votes cast, unless the articles or bylaws
of the cooperative require a greater proportion of the votes
cast or of the total number of members with voting rights to
approve liquidation. [308.05 s. 6]
Sec. 42. [308A.905] [DISSOLUTION OF COOPERATIVE.]
Subdivision 1. [VOLUNTARY DISSOLUTION.] (a) Voluntary
proceedings for dissolution of a cooperative may be initiated by
a resolution for dissolution adopted by two-thirds of the votes
cast on the question of dissolution at a members' meeting with a
quorum that is called to vote on dissolution of the
cooperative. [308.14 s. 2]
Subd. 2. [OUT OF COURT DISSOLUTION BY TRUSTEES.] (a) The
resolution may provide that the affairs of the cooperative will
be wound up out of court, if the resolution designates one or
more trustees to conduct the winding up. The resolution may
provide a method for filling vacancies in the office of trustees
and for the election of a president and secretary of the
trustees from their own number. [308.14 s. 2]
(b) The appointment is not operative until a certificate of
dissolution is filed.
(c) If a vacancy occurs in the office of trustee, it may be
filled by resolution adopted by a majority of the persons voting
at a members' meeting. The members' meeting may be called by
the remaining trustee or trustees, if any, and if none, then by
any member. Unless the resolution to dissolve provides
otherwise, the trustee or trustees may be removed with or
without cause by the vote of a majority of the members at a
members' meeting called for that purpose. [308.14 s. 2]
Subd. 3. [FILING CERTIFICATE OF DISSOLUTION.] (a) A
certificate of dissolution stating the resolution and the manner
of its adoption, signed by the president, vice president,
secretary or assistant secretary must be filed.
(b) If the articles have been filed with the secretary of
state, the certificate of dissolution must be filed with the
secretary of state.
(c) If the cooperative's current articles or certificate of
incorporation and amendments are not on file with the secretary
of state, the certificate of voluntary dissolution shall be
filed with the public officer having custody of the current
articles or certificate of incorporation and amendments.
(d) If the cooperative's current articles or certificate of
incorporation and amendments are not on file with a public
officer, the certificate of voluntary dissolution shall be filed
with the public officer with whom the articles or certificate
should have been filed pursuant to law. [308.14 s. 2]
Subd. 4. [COURT SUPERVISION OF DISSOLUTION.] If the
resolution to dissolve provides that the affairs of the
cooperative will be wound up under the supervision of the court,
the resolution shall authorize certain directors or members to
sign and present a petition to the court requesting that the
cooperative be wound up and dissolved under the supervision of
the court. If a cooperative is being wound up and dissolved out
of court, the trustee, or if there is more than one trustee, a
majority of the trustees, may by petition apply to the court for
a receiver and to have the proceedings continued under the
supervision of the court. After the petition is filed with the
court, the proceedings shall continue as if originally
instituted subject to the supervision of the court. [308.14 s.
2]
Subd. 5. [DUTIES OF TRUSTEES.] (a) Except as otherwise
provided in the resolution for dissolution, the trustee or
trustees appointed by the members to wind up the cooperative's
business must proceed as soon as practicable to:
(1) collect all sums due or owing to the cooperative;
(2) sell and convert all corporate assets into cash;
(3) collect remaining unpaid amounts on subscriptions to
shares; and
(4) pay all debts and liabilities of the cooperative
according to their respective priorities.
(b) Any property remaining after discharging the debts and
liabilities of the cooperative shall be distributed by the
trustee or trustees to the stockholders of the several classes
according to their respective priorities, members, or patrons of
the association. Stockholders of the several classes according
to their respective priorities shall first be paid the par value
of their shares, and the remainder of the property shall be
distributed among patrons, members, and common stockholders in
accordance with their interest in the reserves and surplus as
shown by the records of the cooperative.
(c) The resolution for dissolution may provide a different
method or plan of liquidation of the cooperative cooperative.
The resolution may include a plan or procedure for all or part
of the property of the cooperative to be acquired by another
cooperative or association. A plan of acquisition by a
cooperative or association contained in the resolution for
dissolution is invalid if all other provisions of this section
have been fully complied with. [308.14 s. 3]
Subd. 6. [UNDISTRIBUTED PROPERTY TO TAX EXEMPT
ORGANIZATION.] Notwithstanding subdivision 4 and the resolution
for dissolution, if five years after the resolution for
dissolution, property remains and is unable to be distributed
for any reason after discharging the debts and liabilities of
the cooperative, the undistributed property may be distributed
by the trustee or trustees to a tax exempt organization under
section 290.05, subdivision 2, or to a unit of state or local
government. [308.14 s. 3b]
Subd. 7. [DISSOLUTION ORDER.] Under a court supervised
dissolution, the court shall make an order dissolving the
cooperative when the business of the cooperative has been wound
up. [308.14 s. 4]
Subd. 8. [DISSOLUTION CERTIFICATE.] If the dissolution is
not a court supervised dissolution, the trustees, president or
secretary of the trustees, or the attorney representing the
trustees shall sign a certificate stating that the cooperative
has completely wound up its business and is dissolved. A
president, secretary, or attorney of the trustees must make an
affidavit stating that they are acting on behalf of the
trustees. [308.14 s. 4]
Subd. 9. [FILING OF DISSOLUTION ORDER OR DISSOLUTION
CERTIFICATE.] The order or certificate of dissolution shall be
filed for record in the same manner as a certificate of
dissolution and after filing the order or certificate of
dissolution the corporate existence of the cooperative
terminates. [308.14 s. 5]
Subd. 10. [OMITTED ASSETS.] The title to assets omitted
from the winding up shall vest in the trustees, or receivers,
for the benefit of the persons entitled to the assets and shall
be administered and distributed for those persons accordingly.
[308.14 s. 6]
Sec. 43. [308A.911] [DISSOLUTION OF CERTAIN RURAL
TELEPHONE COOPERATIVES.]
A rural cooperative telephone company organized under
Revised Statutes 1905, chapter 58, or the general laws of
Minnesota 1905, chapters 276 and 313, may dissolve by voluntary
proceedings as provided by sections 302A.721 to 302A.733, after
a resolution for dissolution is adopted by a majority of the
voting power of all stockholders or members at a meeting called
to consider the dissolution. [308.341]
Sec. 44. [REPEALER.]
Minnesota Statutes 1988, sections 308.01; 308.02; 308.03;
308.05; 308.06; 308.061; 308.062; 308.07; 308.071; 308.08;
308.09; 308.10; 308.105; 308.11; 308.111; 308.12; 308.13;
308.14; 308.15; 308.16; 308.17; 308.18; 308.29; 308.30; 308.31;
308.32; 308.34; 308.341; 308.35; 308.36; 308.361; 308.37;
308.39; 308.40; 308.41; 308.42; 308.43; 308.51; 308.52; 308.53;
308.54; 308.55; 308.56; 308.57; 308.58; 308.59; 308.60; 308.61;
308.62; 308.63; 308.64; 308.65; 308.66; 308.67; 308.68; 308.69;
308.70; 308.71; 308.72; 308.73; 308.74; 308.75; 308.76; 308.77;
308.78; 308.79; 308.80; 308.81; 308.82; 308.83; 308.84; 308.85;
308.853; 308.854; 308.901; 308.902; 308.903; 308.904; 308.905;
and 308.92, are repealed.
ARTICLE 2
CORRECTION OF CROSS-REFERENCES
Section 1. Minnesota Statutes 1988, section 47.20,
subdivision 2, is amended to read:
Subd. 2. [DEFINITIONS.] For the purposes of this section
the terms defined in this subdivision have the meanings given
them:
(1) "Actual closing costs" mean reasonable charges for or
sums paid for the following, whether or not retained by the
mortgagee or lender:
(a) Any insurance premiums including but not limited to
premiums for title insurance, fire and extended coverage
insurance, flood insurance, and private mortgage insurance, but
excluding any charges or sums retained by the mortgagee or
lender as self-insured retention.
(b) Abstracting, title examination and search, and
examination of public records.
(c) The preparation and recording of any or all documents
required by law or custom for closing a conventional or
cooperative apartment loan.
(d) Appraisal and survey of real property securing a
conventional loan or real property owned by a cooperative
apartment corporation of which a share or shares of stock or a
membership certificate or certificates are to secure a
cooperative apartment loan.
(e) A single service charge, which includes any
consideration, not otherwise specified herein as an "actual
closing cost" paid by the borrower and received and retained by
the lender for or related to the acquisition, making,
refinancing or modification of a conventional or cooperative
apartment loan, and also includes any consideration received by
the lender for making a borrower's interest rate commitment or
for making a borrower's loan commitment, whether or not an
actual loan follows the commitment. The term service charge
does not include forward commitment fees. The service charge
shall not exceed one percent of the original bona fide principal
amount of the conventional or cooperative apartment loan, except
that in the case of a construction loan, the service charge
shall not exceed two percent of the original bona fide principal
amount of the loan. That portion of the service charge imposed
because the loan is a construction loan shall be itemized and a
copy of the itemization furnished the borrower. A lender shall
not collect from a borrower the additional one percent service
charge permitted for a construction loan if it does not perform
the service for which the charge is imposed or if third parties
perform and charge the borrower for the service for which the
lender has imposed the charge.
(f) Charges and fees necessary for or related to the
transfer of real or personal property securing a conventional or
cooperative apartment loan or the closing of a conventional or
cooperative apartment loan paid by the borrower and received by
any party other than the lender.
(2) "Contract for deed" means an executory contract for the
conveyance of real estate, the original principal amount of
which is less than $100,000. A commitment for a contract for
deed shall include an executed purchase agreement or earnest
money contract wherein the seller agrees to finance any part or
all of the purchase price by a contract for deed.
(3) "Conventional loan" means a loan or advance of credit,
other than a loan or advance of credit made by a credit union or
made pursuant to section 334.011, to a noncorporate borrower in
an original principal amount of less than $100,000, secured by a
mortgage upon real property containing one or more residential
units or upon which at the time the loan is made it is intended
that one or more residential units are to be constructed, and
which is not insured or guaranteed by the secretary of housing
and urban development, by the administrator of veterans affairs,
or by the administrator of the farmers home administration, and
which is not made pursuant to the authority granted in
subdivision 1, clause (3) or (4). The term mortgage does not
include contracts for deed or installment land contracts.
(4) "Cooperative apartment loan" means a loan or advance of
credit, other than a loan or advance of credit made by a credit
union or made pursuant to section 334.011, to a noncorporate
borrower in an original principal amount of less than $100,000,
secured by a security interest on a share or shares of stock or
a membership certificate or certificates issued to a stockholder
or member by a cooperative apartment corporation, which may be
accompanied by an assignment by way of security of the
borrower's interest in the proprietary lease or occupancy
agreement in property issued by the cooperative apartment
corporation and which is not insured or guaranteed by the
secretary of housing and urban development, by the administrator
of veterans affairs, or by the administrator of the farmers home
administration.
(5) "Cooperative apartment corporation" means a corporation
or association cooperative organized under sections 308.05 to
308.18 chapter 308A or chapter 317, the shareholders or members
of which are entitled, solely by reason of their ownership of
stock or membership certificates in the corporation or
association, to occupy one or more residential units in a
building owned or leased by the corporation or association.
(6) "Forward commitment fee" means a fee or other
consideration paid to a lender for the purpose of securing a
binding forward commitment by or through the lender to make
conventional loans to two or more credit worthy purchasers,
including future purchasers, of residential units, or a fee or
other consideration paid to a lender for the purpose of securing
a binding forward commitment by or through the lender to make
conventional loans to two or more credit worthy purchasers,
including future purchasers, of apartments as defined in section
515.02 to be created out of existing structures pursuant to the
Minnesota condominium act, or a fee or other consideration paid
to a lender for the purpose of securing a binding forward
commitment by or through the lender to make cooperative
apartment loans to two or more credit worthy purchasers,
including future purchasers, of a share or shares of stock or a
membership certificate or certificates in a cooperative
apartment corporation; provided, that the forward commitment
rate of interest does not exceed the maximum lawful rate of
interest effective as of the date the forward commitment is
issued by the lender.
(7) "Borrower's interest rate commitment" means a binding
commitment made by a lender to a borrower wherein the lender
agrees that, if a conventional or cooperative apartment loan is
made following issuance of and pursuant to the commitment, the
conventional or cooperative apartment loan shall be made at a
rate of interest not in excess of the rate of interest agreed to
in the commitment, provided that the rate of interest agreed to
in the commitment is not in excess of the maximum lawful rate of
interest effective as of the date the commitment is issued by
the lender to the borrower.
(8) "Borrower's loan commitment" means a binding commitment
made by a lender to a borrower wherein the lender agrees to make
a conventional or cooperative apartment loan pursuant to the
provisions, including the interest rate, of the commitment,
provided that the commitment rate of interest does not exceed
the maximum lawful rate of interest effective as of the date the
commitment is issued and the commitment when issued and agreed
to shall constitute a legally binding obligation on the part of
the mortgagee or lender to make a conventional or cooperative
apartment loan within a specified time period in the future at a
rate of interest not exceeding the maximum lawful rate of
interest effective as of the date the commitment is issued by
the lender to the borrower; provided that a lender who issues a
borrower's loan commitment pursuant to the provisions of a
forward commitment is authorized to issue the borrower's loan
commitment at a rate of interest not to exceed the maximum
lawful rate of interest effective as of the date the forward
commitment is issued by the lender.
(9) "Finance charge" means the total cost of a conventional
or cooperative apartment loan including extensions or grant of
credit regardless of the characterization of the same and
includes interest, finders fees, and other charges levied by a
lender directly or indirectly against the person obtaining the
conventional or cooperative apartment loan or against a seller
of real property securing a conventional loan or a seller of a
share or shares of stock or a membership certificate or
certificates in a cooperative apartment corporation securing a
cooperative apartment loan, or any other party to the
transaction except any actual closing costs and any forward
commitment fee. The finance charges plus the actual closing
costs and any forward commitment fee, charged by a lender shall
include all charges made by a lender other than the principal of
the conventional or cooperative apartment loan. The finance
charge, with respect to wraparound mortgages, shall be computed
based upon the face amount of the wraparound mortgage note,
which face amount shall consist of the aggregate of those funds
actually advanced by the wraparound lender and the total
outstanding principal balances of the prior note or notes which
have been made a part of the wraparound mortgage note.
(10) "Lender" means any person making a conventional or
cooperative apartment loan, or any person arranging financing
for a conventional or cooperative apartment loan. The term also
includes the holder or assignee at any time of a conventional or
cooperative apartment loan.
(11) "Loan yield" means the annual rate of return obtained
by a lender over the term of a conventional or cooperative
apartment loan and shall be computed as the annual percentage
rate as computed in accordance with sections 226.5 (b), (c) and
(d) of Regulation Z, Code of Federal Regulations, title 12,
section 226, but using the definition of finance charge provided
for in this subdivision. For purposes of this section, with
respect to wraparound mortgages, the rate of interest or loan
yield shall be based upon the principal balance set forth in the
wraparound note and mortgage and shall not include any interest
differential or yield differential between the stated interest
rate on the wraparound mortgage and the stated interest rate on
the one or more prior mortgages included in the stated loan
amount on a wraparound note and mortgage.
(12) "Monthly index of the federal home loan mortgage
corporation auction yields" means the net weighted average yield
of accepted offers in the eight month forward commitment program
of the federal home loan mortgage corporation in a month.
(13) "Person" means an individual, corporation, business
trust, partnership or association or any other legal entity.
(14) "Residential unit" means any structure used
principally for residential purposes or any portion thereof, and
includes a unit in a townhouse or planned unit development, a
condominium apartment, a nonowner occupied residence, and any
other type of residence regardless of whether the unit is used
as a principal residence, secondary residence, vacation
residence or residence of some other denomination.
(15) "Vendor" means any person or persons who agree to sell
real estate and finance any part or all of the purchase price by
a contract for deed. The term also includes the holder or
assignee at any time of the vendor's interest in a contract for
deed.
Sec. 2. Minnesota Statutes 1988, section 117.232,
subdivision 1, is amended to read:
Subdivision 1. When acquisition of private property is
accomplished by the state department of transportation by direct
purchase the owner shall be entitled to reimbursement for
appraisal fees, not to exceed a total of $500. When acquisition
of private property is accomplished by any other acquiring
authority, the owner is entitled to reimbursement for appraisal
fees, not to exceed $500, if the owner is otherwise entitled to
reimbursement under sections 117.50 to 117.56. The purchaser in
all instances shall inform the owner of the right, if any, to
reimbursement for appraisal fees reasonably incurred, in an
amount not to exceed $500, together with relocation costs,
moving costs and any other related expenses to which an owner is
entitled by sections 117.50 to 117.56. This subdivision does
not apply to acquisition for utility purposes made by a public
service corporation organized pursuant to section 300.03 or
electric cooperative associations organized pursuant to section
308.05 chapter 308A.
Sec. 3. Minnesota Statutes 1988, section 216B.027,
subdivision 5, is amended to read:
Subd. 5. [PETITIONS; VOTING.] Notwithstanding the
provisions of section 308.09 article 1, sections 29 and 30, upon
receipt of a written petition concerning governance matters
signed by at least 500 stockholders or five percent of the
stockholders, whichever is less, of a retail cooperative
electric association, the matter in the petition must be
presented to the stockholders of the cooperative for a vote at
the next annual meeting. Petitions must be received by the
cooperative electric association 60 days prior to the scheduled
annual meeting. For purposes of this section, "governance
matters" means matters properly contained in the articles of
incorporation or bylaws by adopting, amending, or repealing
bylaws or the articles of incorporation.
Sec. 4. Minnesota Statutes 1988, section 237.075,
subdivision 9, is amended to read:
Subd. 9. [ELECTION ON REGULATION.] For the purposes of
this section, "telephone company" shall not include a
cooperative telephone association organized under the provisions
of chapter 308, an independent telephone company, or a
municipal, unless the cooperative telephone association,
independent telephone company, or municipal makes the election
provided in this subdivision.
A cooperative telephone association may elect to become
subject to rate regulation by the commission pursuant to this
section. The election shall be (a) approved by the board of
directors of the association in accordance with the procedures
for amending the articles of incorporation contained in section
308.15, subdivision 1 article 1, section 11, excluding the
filing requirements; or (b) approved by a majority of members or
stockholders voting by mail ballot initiated by petition of no
fewer than five percent of the members or stockholders of the
association. The ballot to be used for the election shall be
approved by the board of directors and the department of public
service. The department shall mail the ballots to the
association's members who shall return the ballots to the
department. The department will keep the ballots sealed until a
date agreed upon by the department and the board of directors.
On this date, representatives of the department and the
association shall count the ballots. If a majority of the
association's members who vote elect to become subject to rate
regulation by the commission, the election shall be effective 30
days after the date the ballots are counted. For purposes of
this section, the term "member or stockholder" shall mean
either the member or stockholder of record or the spouse of the
member or stockholder unless the association has been notified
otherwise in writing.
A municipal may elect to become subject to rate regulation
by the commission pursuant to this section. The election shall
be (a) approved by resolution of the governing body of the
municipality; or (b) approved by a majority of the customers of
the municipal voting by mail ballot initiated by petition of no
fewer than 20 percent of the customers of the municipal. The
ballot to be used for the election shall be approved by the
governing body of the municipality and the department of public
service. The department shall mail the ballots to the
municipal's customers who shall return the ballots to the
department. The department will keep the ballots sealed until a
date agreed upon by the department and the governing body of the
municipality. On this date, representatives of the department
and the municipal shall count the ballots. If a majority of the
customers of the municipal who vote elect to become subject to
rate regulation by the commission, the election shall be
effective 30 days after the date the ballots are counted. For
purposes of this section, the term "customer" shall mean either
the person in whose name the telephone service is registered or
the spouse of the person unless the municipal utility has been
notified otherwise in writing.
An independent telephone company may elect to become
subject to rate regulation by the commission pursuant to this
section. The election shall be (a) approved by the board of
directors of the company in accordance with the procedures for
amending the articles of incorporation contained in sections
302A.133 to 302A.139, excluding the filing requirements; or (b)
approved by a majority of subscribers voting by mail ballot
initiated by petition of no fewer than five percent of the
subscribers of the company. The ballot to be used for the
election shall be approved by the board of directors and the
department of public service. The department shall mail the
ballots to the company's subscribers who shall return the
ballots to the department. The department will keep the ballots
sealed until a date agreed upon by the department and the board
of directors. On this date, representatives of the department
and the company shall count the ballots. If a majority of the
company's subscribers who vote elect to become subject to rate
regulation by the commission, the election shall be effective 30
days after the date the ballots are counted. For purposes of
this section the term "subscriber" shall mean either the person
in whose name the telephone service is registered or the spouse
of the person unless the independent telephone company has been
notified otherwise in writing.
Sec. 5. Minnesota Statutes 1988, section 273.124,
subdivision 3, is amended to read:
Subd. 3. [COOPERATIVES AND CHARITABLE CORPORATIONS.] When
one or more dwellings, or one or more buildings which each
contain several dwelling units, are owned by a corporation or
association organized under sections 308.05 to 308.18 chapter
308A, and each person who owns a share or shares in the
corporation or association is entitled to occupy a dwelling, or
dwelling unit in the building, the corporation or association
may claim homestead treatment for each dwelling, or for each
unit in case of a building containing several dwelling units,
for the dwelling or for the part of the value of the building
occupied by a shareholder. Each dwelling or unit must be
designated by legal description or number, and the gross tax
capacity of each dwelling that qualifies for assessment under
this subdivision must include not more than one-half acre of
land, if platted, nor more than 80 acres if unplatted. The
gross tax capacity of the building or buildings containing
several dwelling units is the sum of the gross tax capacities of
each of the respective units comprising the building. To
qualify for the treatment provided by this subdivision, the
corporation or association must be wholly owned by persons
having a right to occupy a dwelling or dwelling unit owned by
the corporation or association. A charitable corporation
organized under the laws of Minnesota and not otherwise exempt
thereunder with no outstanding stock qualifies for homestead
treatment with respect to member residents of the dwelling units
who have purchased and hold residential participation warrants
entitling them to occupy the units.
Sec. 6. Minnesota Statutes 1988, section 273.124,
subdivision 6, is amended to read:
Subd. 6. [LEASEHOLD COOPERATIVES.] When one or more
dwellings or one or more buildings which each contain several
dwelling units is owned by a nonprofit corporation subject to
the provisions of chapter 317 or a limited partnership which
corporation or partnership operates the property in conjunction
with a cooperative association, homestead treatment may be
claimed by the cooperative association on behalf of the members
of the cooperative for each dwelling unit occupied by a member
of the cooperative. The cooperative association must provide
the assessor with the social security numbers of those members.
To qualify for the treatment provided by this subdivision, the
following conditions must be met: (a) the cooperative
association must be organized under sections 308.05 to 308.18
chapter 308A; (b) the cooperative association must have a lease
for occupancy of the property for a term of at least 20 years;
(c) to the extent permitted under state or federal law, the
cooperative association must have a right under a written
agreement with the owner to purchase the property if the owner
proposes to sell it; if the cooperative association does not
purchase the property when it is offered for sale, the owner may
not subsequently sell the property to another purchaser at a
price lower than the price at which it was offered for sale to
the cooperative association unless the cooperative association
approves the sale; and (d) if a limited partnership owns the
property, it must include as the managing general partner either
the cooperative association or a nonprofit organization
operating under the provisions of chapter 317. Homestead
treatment must be afforded to units occupied by members of the
cooperative association and the units must be assessed as
provided in subdivision 3, provided that any unit not so
occupied shall be classified and assessed pursuant to the
appropriate class. No more than three acres of land may, for
assessment purposes, be included with each dwelling unit that
qualifies for homestead treatment under this subdivision.
Sec. 7. Minnesota Statutes 1988, section 273.132,
subdivision 5, is amended to read:
Subd. 5. [APPROPRIATION.] The amount necessary to make the
payments required under this section is appropriated from the
general fund in the state treasury to the commissioners of
revenue and education for property taxes payable in 1989.
Sec. 8. Minnesota Statutes 1988, section 363.01,
subdivision 32, is amended to read:
Subd. 32. [COOPERATIVE APARTMENT CORPORATION.]
"Cooperative apartment corporation" means a corporation or
association organized under sections 308.05 to 308.18 chapter
308A or chapter 317, the shareholders or members of which are
entitled, solely by reason of their ownership of stock or
membership certificates in the corporation or association, to
occupy one or more residential units in a building owned or
leased by the corporation or association.
Sec. 9. Minnesota Statutes 1988, section 500.20,
subdivision 2a, is amended to read:
Subd. 2a. [RESTRICTION OF DURATION OF CONDITION.] Except
for any right to reenter or to repossess as provided in
subdivision 3, all private covenants, conditions, or
restrictions created by which the title or use of real property
is affected, cease to be valid and operative 30 years after the
date of the deed, or other instrument, or the date of the
probate of the will, creating them, and may be disregarded.
This subdivision does not apply to covenants, conditions,
or restrictions:
(1) that were created before August 1, 1988, by deed or
other instrument dated on or after August 1, 1982, or by will
the date of death of the testator of which was on or after
August 1, 1982;
(2) that were created before August 1, 1959, under which a
person who owns or has an interest in real property against
which the covenants, conditions, or restrictions have been filed
claims a benefit of the covenant, condition, or restriction if
the person records in the office of the county recorder or files
in the office of the registrar of titles in the county in which
the real estate affected is located, on or before March 30,
1989, a notice sworn to by the claimant or the claimant's agent
or attorney: setting forth the name of the claimant; describing
the real estate affected; describing the deed, instrument, or
will creating the covenant, condition, or restriction; and
stating that the covenant, condition, or restriction is not
nominal and may not be disregarded under subdivision 1;
(3) that are created by the declaration, bylaws, floor
plans, or condominium plat of a condominium created before
August 1, 1980, under sections 515.01 to 515.29 or created on or
after August 1, 1980, under sections 515A.1-101 to 515A.4-117,
or by any amendments of the declaration, bylaws, floor plans, or
condominium plat;
(4) that are created by the articles of incorporation,
bylaws, or proprietary leases of a cooperative association
formed under sections 308.05 to 308.18 chapter 308A;
(5) that are created by a declaration or other instrument
that authorizes and empowers a corporation of which the
qualification for being a stockholder or member is ownership of
certain parcels of real estate, to hold title to common real
estate for the benefit of the parcels;
(6) that are created by a deed, declaration, reservation,
or other instrument by which one or more portions of a building,
set of connecting or adjacent buildings, or complex or project
of related buildings and structures share support, structural
components, ingress and egress, or utility access with another
portion or portions; or
(7) that were created after July 31, 1959, and before
August 1, 1982, under which a person who owns or has an interest
in real estate against which covenants, conditions, or
restrictions have been filed claims a benefit of the covenants,
conditions, or restrictions if the person records in the office
of the county recorder or files in the office of the registrar
of titles in the county in which the real estate affected is
located during the period commencing on the 28th anniversary of
the date of the deed or instrument, or the date of the probate
of the will, creating them and ending on the 30th anniversary, a
notice as described in clause (2).
A notice filed in accordance with clause (2) or (7) delays
application of this subdivision to the covenants, conditions, or
restrictions for a period ending on the later of seven years
after the date of filing of the notice, or until final judgment
is entered in an action to determine the validity of the
covenants, conditions, or restrictions, provided in the case of
an action the summons and complaint must be served and a notice
of lis pendens must be recorded in the office of the county
recorder or filed in the office of the registrar of titles in
each county in which the real estate affected is located within
seven years after the date of recording or filing of the notice
under clause (2) or (7).
County recorders and registrars of titles shall accept for
recording or filing a notice conforming with this subdivision
and charge a fee corresponding with the fee charged for filing a
notice of lis pendens of similar length. The notice may be
discharged in the same manner as a notice of lis pendens and
when discharged, together with the information included with it,
ceases to constitute either actual or constructive notice.
ARTICLE 3
AMENDMENTS TO ARTICLE 1
Section 1. Article 1 is amended by adding a section to
read:
Sec. 3a. [308A.015] [RESERVATION OF RIGHT.]
The state reserves the right to amend or repeal the
provisions of this chapter by law. A cooperative incorporated
or governed by this chapter is subject to this reserved right.
[308.81, 302A.041]
Sec. 2. Article 1 is amended by adding a section to read:
Sec. 4a. [308A.025] [REGISTERED OFFICE.]
Subdivision 1. [REGISTERED OFFICE.] A cooperative must
continuously maintain a registered office in this state. A
registered office need not be the same as the principal place of
business of the cooperative. [302A.121 s. 1]
Subd. 2. [REGISTERED AGENT.] A cooperative may designate a
registered agent. The registered agent may be a natural person
residing in this state, a domestic corporation, or a foreign
corporation authorized to transact business in this state. The
registered agent must maintain an office that is identical with
the registered office. [302A.121 s. 2]
Subd. 3. [DESIGNATION OR CHANGE OF REGISTERED OFFICE OR
REGISTERED AGENT.] A cooperative may designate or change its
registered office, designate or change its registered agent, or
state a change in the name of its registered agent, by filing a
statement with the secretary of state containing:
(1) the name of the cooperative;
(2) the new address of the cooperative's registered office;
(3) the name of the cooperative's registered agent, if any;
(4) a statement that the address of its registered office
and the address of the office of its registered agent, as
changed, will be identical; and
(5) a statement that the change of registered office or
registered agent was authorized by a resolution approved by the
affirmative vote of a majority of the board. [302A.123 s. 1]
Subd. 4. [RESIGNATION OF AGENT.] A registered agent of a
cooperative may resign by filing with the secretary of state a
signed written notice of resignation, including a statement that
a signed copy of the notice has been given to the cooperative at
its principal place of business or to a legal representative of
the cooperative. The appointment of the agent terminates 30
days after the notice is filed with the secretary of state.
[302A.123 s. 2]
Subd. 5. [CHANGE OF ADDRESS OR NAME OF AGENT.] If the
address or name of a registered agent changes, the agent must
change the address of the registered office or the name of the
registered agent of the cooperative represented by the agent by
filing with the secretary of state the statement required in
subdivision 3, except that the statement need only be signed by
the registered agent, need not be responsive to subdivision 3,
clause (5), but must state that a copy of the statement has been
mailed to the cooperative or to the legal representative of the
cooperative. [302A.123 s. 3]
Sec. 3. Article 1, section 10, subdivision 2, is amended
to read:
Subd. 2. [FILING ARTICLES.] (a) The original articles must
be filed with the secretary of state and a copy filed in the
office of the county recorder of the county where the principal
place of business of the cooperative is located.
(b) The fee for filing the articles with the secretary of
state is $60. [308.06 s. 4]
Sec. 4. Article 1, section 10, is amended by adding a
subdivision to read:
Subd. 3. [PRESUMPTION IN FILING ARTICLES.] (a) When the
articles of incorporation have been filed with the secretary of
state and the required fee has been paid to the secretary of
state, it is presumed that:
(1) all conditions precedent that are required to be
performed by the incorporators have been complied with;
(2) the cooperative has been incorporated; and
(3) the secretary of state shall issue a certificate of
incorporation to the cooperative. [302A.155]
Sec. 5. Article 1, section 11, is amended to read:
Sec. 11. [308A.135] [AMENDMENT OF ARTICLES.]
Subdivision 1. [PROCEDURE.] (a) The articles of a
cooperative must be amended as provided in this subdivision.
(b) The board by majority vote must pass a resolution
stating the text of the proposed amendment. The text of the
proposed amendment and an attached mail ballot, if the board has
provided for a mail ballot in the resolution, must be mailed
with a regular or special meeting notice to each member. The
notice must designate the time and place of the meeting for the
proposed amendment to be considered and voted on. A cooperative
with more than 200 members may publish the notice, proposed
amendment, and ballot in the manner provided for a regular
meeting notice.
(c) If a quorum of the members is registered as being
present or represented by mail vote at the meeting, the proposed
amendment is adopted:
(1) if approved by a majority of the votes cast; or
(2) for a cooperative with articles or bylaws requiring
more than majority approval or other conditions for approval,
the amendment is approved by a proportion of the votes cast or a
number of total members as required by the articles or bylaws
and the conditions for approval in the articles or bylaws have
been satisfied. [308.15 s. 1]
(d) Subd. 2. [FILING.] After an amendment has been adopted
by the members, a certificate stating the amendment and the
manner of adoption shall must be signed by the chair, vice
chair, president, vice president, secretary, or assistant
secretary, and a copy of the amendment filed in the office of
the secretary of state and the office of the county recorder of
the county where the cooperative's principal place of business
is located. [308.15 s. 1]
Subd. 3. [CERTIFICATE.] (a) A certificate must be prepared
stating:
(1) the vote and meeting of the board adopting a resolution
of the proposed amendment;
(2) the notice given to members of the meeting that the
amendment was adopted;
(3) the quorum registered at the meeting; and
(4) the vote cast adopting the amendment.
(b) The certificate must be signed by the chair, vice
chair, president, vice president, secretary, or assistant
secretary and filed with the records of the cooperative.
Subd. 4. [AMENDMENT BY BOARD.] A majority of directors may
amend the articles if the cooperative does not have any members
or stockholders with voting rights. [302A.133]
Sec. 6. Article 1, section 13, subdivision 1, is amended
to read:
Subdivision 1. [AMENDMENT OF ARTICLES.] An association or
corporation organized defectively under other law of this state
that has conducted its business upon the cooperative plan and
has in good faith carried on and transacted business, may amend
its articles of incorporation in their entirety to be governed
by this chapter. The articles of amendment shall be filed with
the secretary of state and a copy of the articles recorded in
the office of the county recorder of the county where the
principal place of business of the corporation or association is
located. [308.36 s. 1]
Sec. 7. Article 1, section 15, subdivision 1, is amended
to read:
Subdivision 1. [COMMENCEMENT OF BUSINESS CORPORATE
EXISTENCE.] A cooperative may commence business when ten percent
of the authorized capital stock has been subscribed and paid
in The corporate existence of a cooperative begins when the
articles are filed with the secretary of state. [302A.153]
Sec. 8. Article 1 is amended by adding a section to read:
Sec. 15a. [308A.161] [COMMENCEMENT OF BUSINESS.]
A cooperative may commence business when ten percent of the
authorized capital stock has been subscribed and paid in.
[308.07 s. 2]
Sec. 9. Article 1 is amended by adding a section to read:
Sec. 16a. [308A.165] [BYLAWS.]
Subdivision 1. [GENERAL PROVISIONS.] A cooperative may,
but need not, have bylaws. [302A.181]
Subd. 2. [ADOPTION AND AMENDMENT.] The bylaws of a
cooperative may be adopted or amended at a regular or special
members' meeting if:
(1) the notice of the meeting contains a summary statement
of the proposed bylaws or amendment;
(2) a quorum is registered as being present or represented
by mail vote if authorized by the board; and
(3) the bylaws or amendment is approved by a majority of
the votes cast, or for a cooperative with articles or bylaws
requiring more than majority approval or other conditions for
approval, the bylaws or amendment is approved by a proportion of
the votes 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. [308.15 s. 2]
Subd. 3. [CONTENTS.] 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,
including:
(1) the number of directors, and the qualifications, manner
of election, powers, duties, and compensation, if any, of
directors;
(2) the qualifications of members, stockholders, and
patrons and limitations on their number;
(3) the manner of admission, withdrawal, suspensions, and
expulsion of members;
(4) property, voting, and other rights and privileges of
members;
(5) the appointment and authority of committees;
(6) the appointment or election, duties, compensation, and
tenure of officers;
(7) the time, place, and manner of calling, conducting, and
giving notice of member, board, and committee meetings, or of
conducting mail ballots; and
(8) the making of reports and financial statements to
members.
Sec. 10. Article 1, section 17, subdivision 9, is amended
to read:
Subd. 9. [LENDING AND BORROWING MONEY.] A cooperative may
loan or borrow money to or from individual members,
cooperatives, or associations from which it is constituted with
security that it considers sufficient in dealing with the member
members, cooperatives, or associations. [308.05 s. 2]
Sec. 11. Article 1, section 17, subdivision 10, is amended
to read:
Subd. 10. [ACQUISITION AND DISPOSAL OF STOCK.] (a) A
cooperative may purchase, acquire, hold, or dispose of the stock
of another association or corporation, whether incorporated
under the laws of this state or another state, and assume all
rights, interests, privileges, responsibilities, and obligations
arising out of the ownership of the stock after approval by the
board to allow the cooperative to join with other cooperatives
and associations in this state and other states, to form
district, state, or national organizations or market agencies.
[308.05 s. 1]
(b) A cooperative may acquire and hold stock in another
corporation organized under the law of this state or another
state of the United States, including a corporation organized:
(1) as a federation of associations;
(2) for the purpose of forming a district, state, or
national marketing, sales, or service agency; or
(3) for the purpose of acquiring marketing facilities at
terminal or other markets in this state or other states.
[308.07 s. 3]
(c) A cooperative may purchase, own, and hold shares of
capital stock, memberships, interests in nonstock capital,
evidences of indebtedness of any domestic or foreign corporation
when reasonably necessary or incidental to accomplish the
purposes stated in the articles. [308.37]
Sec. 12. Article 1, section 17, subdivision 11, is amended
to read:
Subd. 11. [FIDUCIARY POWERS.] (a) A cooperative may
exercise any and all fiduciary powers in relations with members,
cooperatives, or associations from which it is constituted.
[308.05 s. 2]
(b) A cooperative may take, receive, and hold real and
personal property, including the principal and interest of money
or other funds and rights in a contract, in trust for any
purpose not inconsistent with the purposes of the cooperative in
its articles, and may exercise fiduciary powers in relation to
taking, receiving, and holding the real and personal property.
Sec. 13. Article 1, section 18, subdivision 2, is amended
to read:
Subd. 2. [TITLE TO PRODUCTS.] If a sale is contracted to
the cooperative, the sale transfers title to the products
absolutely, except for recorded liens and security interest, to
the cooperative on delivery of the products or at another
specified time if expressly provided in the contract. The
contract may allow the cooperative to sell or resell the
products of its members, or patrons, with or without taking
title to the product, and pay the resale price to the patron,
after deducting all necessary selling, overhead, and other costs
and expenses, including other proper reserves, and interest not
exceeding eight percent per annum on common stock. [308.68]
Sec. 14. Article 1, section 18, subdivision 4, is amended
to read:
Subd. 4. [DAMAGES FOR BREACH OF CONTRACT.] The bylaws or
the marketing contract may set specific sums, as liquidated
damages to be paid by the member or patron to the cooperative
for breach of any provisions of the marketing contract regarding
the sale or delivery or withholding of products including and
may provide that the member or patron will pay the costs,
premiums for bonds, expenses, and fees if an action is brought
on the contract by the cooperative. The remedies for breach of
contract are valid and enforceable in the courts of this state.
The provisions shall be enforced as liquidated damages and are
not to be considered or regarded as a penalty. [308.05 s. 4,
308.69]
Sec. 15. Article 1, section 21, subdivision 4, is amended
to read:
Subd. 4. [VOTE BY MAIL.] (a) A member may not vote by mail
for a director unless mail voting is authorized for election of
directors by the articles or bylaws.
(b) The ballot shall be in a form prescribed by the board.
(c) The member shall mark the ballot for the candidate
chosen and mail the ballot to the cooperative in a sealed plain
envelope inside another envelope bearing the shareholder's
member's name.
(d) If the ballot of the member is received by the
cooperative on or before the date of the regular members'
meeting, the ballot shall be accepted and counted as the vote of
the absent member. [308.071 s. 2]
Sec. 16. Article 1 is amended by adding a section to read:
Sec. 22a. [308A.315] [FILLING VACANCIES.]
If a director's position is vacant, the board may appoint a
member of the cooperative to fill the director's position until
the next regular or special members' meeting. At the next
regular or special members' meeting, the members must elect a
director to fill the unexpired term of the vacant director's
position. [302A.225]
Sec. 17. Article 1 is amended by adding a section to read:
Sec. 22b. [308A.321] [REMOVAL OF DIRECTORS.]
Members may remove a director at a members' meeting for
cause related to the duties of the position of director and fill
the vacancy caused by the removal. [308.11]
Sec. 18. Article 1, section 24, subdivision 5, is amended
to read:
Subd. 5. [REMOVAL OF OFFICERS.] Members may remove an
officer at a members' meeting for cause related to the duties of
the position of the officer and fill the vacancy caused by the
removal. [308.11]
Sec. 19. Article 1, section 28, is amended to read:
Sec. 28. [308A.605] [MEMBER AND STOCKHOLDER VIOLATIONS.]
Subdivision 1. [STOCKHOLDER VIOLATIONS.] (a) A stockholder
who knowingly, intentionally, or repeatedly violates a provision
of the bylaws may be required by the board to surrender stock of
any class owned by the stockholder.
(b) The cooperative shall refund to the stockholder for the
surrendered stock the lesser of the par value or the book value
of the stock.
(c) Stock required to be surrendered shall be retired and
canceled by the board. [308.07 s. 9]
Subd. 2. [MEMBER VIOLATIONS.] A member who knowingly,
intentionally, or repeatedly violates a provision of the bylaws
may be required by the board to surrender membership in the
cooperative.
Sec. 20. Article 1, section 29, subdivision 2, is amended
to read:
Subd. 2. [LOCATION.] The regular members' meeting shall be
held at the principal place of business of the cooperative, or
at another place conveniently located within the area served by
the cooperative place as determined by the bylaws or the board.
A cooperative constituted entirely or partially of other
cooperatives or associations organized under the laws of another
state, or doing business in another state, may hold regular
members' meetings at a place within or outside of the state, as
designated in the notice of the meeting. [308.09 s. 1]
Sec. 21. Article 1, section 30, subdivision 2, is amended
to read:
Subd. 2. [NOTICE.] (a) The chair or president shall give
notice of a special members' meeting by:
(1) publication in a legal newspaper published in the
county of the principal place of business of the cooperative;
(2) publication in a magazine, periodical, or other
publication of the cooperative that is regularly published by or
on behalf of the cooperative and circulated generally among
members; or
(3) mailing the special members' meeting notice to each
member personally at the person's last known post office
address, which for a member cooperative means notice mailed to
the secretary of the cooperative.
(b) The special members' meeting notice shall state the
time, place, and purpose of the special members' meeting.
(c) The special members' meeting notice shall be issued
within ten days from and after the date of the presentation of a
members' petition, and the special members' meeting must be held
by 30 days after the date of the presentation of the members'
petition. [308.09 s. 2]
Sec. 22. Article 1, section 31, is amended to read:
Sec. 31. [308A.621] [CERTIFICATION OF MAILED MEETING
NOTICE.]
(a) After mailing special or regular members' meeting
notices, the secretary shall execute a certificate containing:
(1) a correct copy of the mailed or published notice;
(2) the date of mailing or publishing the notice; and
(3) a statement that the special or regular members'
meeting notices were mailed or published as prescribed by this
section.
(b) The certificate shall be made a part of the record of
the meeting. [308.09 s. 2]
Sec. 23. Article 1, section 34, subdivision 4, is amended
to read:
Subd. 4. [VOTING METHOD.] A member's vote at a members'
meeting must be in person or by mail if a mail vote is
authorized by the board, and not by proxy, except as provided in
subdivisions 2 and 5. [308.07 s. 3]
Sec. 24. Article 1, section 34, subdivision 6, is amended
to read:
Subd. 6. [ABSENTEE BALLOTS.] (a) A member who is absent
from a members' meeting may vote by mail on the ballot
prescribed in this subdivision on any motion, resolution, or
amendment that the board submits for vote by mail to the members.
(b) The ballot shall be in the form prescribed by the board
and contain:
(1) the exact text of the proposed motion, resolution, or
amendment to be acted on at the meeting; and
(2) spaces opposite the text of the motion, resolution, or
amendment in which the member may indicate an affirmative or
negative vote.
(c) The member shall express a choice by marking an "X" in
the appropriate space on the ballot. The ballot must be signed
by the member.
(d) A properly executed ballot shall be accepted by the
board and counted as the vote of the absent member at the
meeting. [308.07 s. 10]
Sec. 25. Article 1, section 38, subdivision 4, is amended
to read:
Subd. 4. [FORM OF DISTRIBUTION.] A cooperative may
distribute net income in cash, capital stock credits, allocated
patronage equities, revolving fund certificates, or its own or
other securities. [308.12 s. 4]
Sec. 26. Article 1, section 40, subdivision 2, is amended
to read:
Subd. 2. [PLAN.] To initiate a merger or consolidation, a
written plan of merger or consolidation must be prepared by the
board or by a committee selected by the board or the members to
prepare a plan. The plan must state:
(1) the names of the constituent cooperatives or
associations;
(2) the name of the surviving or new cooperative or
association;
(3) the manner and basis of converting stock or membership
of the constituent cooperatives or associations into stock or
membership in the surviving or new cooperative or association;
(4) the terms of the merger or consolidation;
(2) (5) the proposed effect of the consolidation or merger
on the members of the cooperative; and
(3) (6) for a consolidation, the plan must contain the
articles of the new association. [308.15 s. 4]
Sec. 27. Article 1, section 40, subdivision 4, is amended
to read:
Subd. 4. [ADOPTION OF PLAN.] (a) A plan of merger or
consolidation is adopted if:
(1) a quorum of the members is registered as being present
or represented by mail vote at the meeting; and
(2) the plan is approved by two-thirds of the votes cast,
or for a cooperative with articles or bylaws requiring more than
two-thirds of the votes cast or other conditions for approval,
the plan is approved by a proportion of the votes cast or a
number of total members as required by the articles or bylaws
and the conditions for approval in the articles or bylaws have
been satisfied.
(b) After the plan has been adopted, articles of merger or
consolidation stating the plan and the manner of adoption of
that the plan was adopted according to this chapter shall be
signed by the chair, vice chair, president, vice president,
secretary, or assistant secretary of each cooperative or
association merging or consolidating.
(c) The plan articles of merger or consolidation shall be
approved by the attorney general filed in the office of the
secretary of state.
(d) For a merger, the articles of the surviving cooperative
or association are deemed amended to the extent provided in the
articles of merger or consolidation shall be filed in the office
of the secretary of state and reported in the office of the
county recorder of each county where each merging or
consolidating cooperative or association has a principal place
of business.
(e) For a merger, the articles of the surviving cooperative
or association are deemed amended to the extent provided in the
articles of merger. Unless a later date is provided in the plan,
the merger or consolidation is effective when the articles of
merger or consolidation are filed in the office of the secretary
of state. [308.15 s. 4]
(f) Unless otherwise provided in the plan, the merger or
consolidation is effective when the articles of merger or
consolidation are filed in the office of The secretary of state
shall issue a certificate of the merged or consolidated
cooperative or association.
Sec. 28. Article 1, section 40, subdivision 6, is amended
to read:
Subd. 6. [FILING FEE.] The fee to be paid to the secretary
of state for filing articles of merger or consolidation is $50.
[308.06 s. 4]
Sec. 29. Article 1, section 41, subdivision 2, is amended
to read:
Subd. 2. [RESOLUTION AT MEMBERS' MEETING.] The members may
authorize a liquidation by adopting a resolution at a members'
meeting. The notice of the members' meeting must include a
statement that the disposition of the property of the
cooperative will be considered at the meeting. If a quorum is
present in person or by mail ballot at the members' meeting, the
resolution approving of the liquidation is adopted if:
(1) approved by two-thirds of the votes cast, unless the;
or
(2) for a cooperative with articles or bylaws of the
cooperative require a greater requiring more than two-thirds for
approval or other conditions for approval, the resolution is
approved by the proportion of the votes cast or a number of the
total number of members with voting rights to approve
liquidation as required by the articles or bylaws and the
conditions for approval in the articles or bylaws have been
satisfied. [308.05 s. 6]
Sec. 30. Article 1 is amended by adding a section to read:
Sec. 42a. [308A.905] [METHODS OF DISSOLUTION.]
A cooperative may be dissolved by the members or by order
of the court. [302A.701]
Sec. 31. Article 1 is amended by adding a section to read:
Sec. 43a. [308A.911] [VOLUNTARY DISSOLUTION BY MEMBERS.]
Subdivision 1. [MEETING TO CONSIDER DISSOLUTION.] A
regular or a special members' meeting may be called to consider
dissolution of a cooperative. [302A.721 s. 1, 2]
Subd. 2. [APPROVAL.] The proposed dissolution must be
submitted for approval at the members' meeting. The dissolution
must be started if a quorum is present and the proposed
dissolution is approved at a meeting by two-thirds of the votes
cast, or for a cooperative with articles or bylaws requiring a
greater proportion of the votes cast or other conditions for
approval, the dissolution is approved by the proportion of votes
cast or the number of total members required by the articles or
bylaws and the conditions for approval in the articles or bylaws
are satisfied. [302A.721 s. 1, 2]
Subd. 3. [REVOCATION OF DISSOLUTION.] The members retain
the right to revoke the dissolution proceedings and the right to
remove directors and fill vacancies on the board. [302A.723 s.
2]
Subd. 4. [NOTICE OF INTENT TO DISSOLVE.] Before a
cooperative begins dissolution, a notice of intent to dissolve
must be filed with the secretary of state. The notice must
contain:
(1) the name of the cooperative;
(2) the date and place of the members' meeting at which the
resolution was approved; and
(3) a statement that the requisite vote of the members
approved the proposed dissolution. [302A.723 s. 1]
Subd. 5. [BUSINESS AFTER DISSOLUTION BEGINS.] After the
notice of intent to dissolve has been filed with the secretary
of state, the cooperative may carry on its business only to the
extent necessary for the winding up of the cooperative unless
the members revoke the dissolution proceedings. The existence
of the cooperative continues to the extent necessary to wind up
the affairs of the cooperative until the dissolution proceedings
are revoked or articles of dissolution are filed with the
secretary of state. [302A.723 s. 2.]
Subd. 6. [REMEDIES CONTINUED.] The filing with the
secretary of state of a notice of intent to dissolve does not
affect a remedy in favor of the cooperative or a remedy against
the cooperative or its directors, officers, or members in their
capacities, except as provided in section 57. [302A.723 s. 3]
Sec. 32. Article 1 is amended by adding a section to read:
Sec. 44a. [308A.915] [WINDING UP.]
Subdivision 1. [COLLECTION AND PAYMENT OF DEBTS.] After
the notice of intent to dissolve has been filed with the
secretary of state, the board, or the officers acting under the
direction of the board, shall proceed as soon as possible:
(1) to collect or make provision for the collection of all
debts due or owing to the cooperative, including unpaid
subscriptions for shares; and
(2) to pay or make provision for the payment of all debts,
obligations, and liabilities of the cooperative according to
their priorities. [302A.725 s. 1]
Subd. 2. [TRANSFER OF ASSETS.] After the notice of intent
to dissolve has been filed with the secretary of state, the
board may sell, lease, transfer, or otherwise dispose of all or
substantially all of the property and assets of the dissolving
cooperative without a vote of the members. [302A.725 s. 2]
Subd. 3. [DISTRIBUTION TO MEMBERS.] Tangible and
intangible property, including money, remaining after the
discharge of the debts, obligations, and liabilities of the
cooperative or association may be distributed to the members and
former members as provided in the bylaws. If previously
authorized by the members, the tangible and intangible property
of the cooperative may be liquidated and disposed of at the
discretion of the board. [302A.725 s. 3]
Sec. 33. Article 1 is amended by adding a section to read:
Sec. 45. [308A.921] [REVOCATION OF DISSOLUTION
PROCEEDINGS.]
Subdivision 1. [AUTHORITY TO REVOKE.] Dissolution
proceedings may be revoked before the articles of dissolution
are filed with the secretary of state. [302A.731 s. 1]
Subd. 2. [REVOCATION BY MEMBERS.] The chair or president
may call a members' meeting to consider the advisability of
revoking the dissolution proceedings. The question of the
proposed revocation must be submitted to the members at the
members' meeting called to consider the revocation. The
dissolution proceedings are revoked if the proposed revocation
is approved at the members' meeting by a majority of the members
of the cooperative, or for a cooperative with articles or bylaws
requiring a greater number of members, the number of members
required by the articles or bylaws. [302A.731 s. 2]
Subd. 3. [FILING WITH SECRETARY OF STATE.] Revocation of
dissolution proceedings is effective when a notice of revocation
is filed with the secretary of state. After the notice is
filed, the cooperative may resume business.
Sec. 34. Article 1 is amended by adding a section to read:
Sec. 46. [308A.925] [STATUTE OF LIMITATIONS.]
The claim of a creditor or claimant against a dissolving
cooperative is barred if the claim has not been enforced by
initiating legal, administrative, or arbitration proceedings
concerning the claim by two years after the date the notice of
intent to dissolve is filed with the secretary of state, subject
to the provisions of section 57.
Sec. 35. Article 1 is amended by adding a section to read:
Sec. 47. [308A.931] [ARTICLES OF DISSOLUTION.]
Subdivision 1. [CONDITIONS TO FILE.] Articles of
dissolution of a cooperative shall be filed with the secretary
of state after payment of the claims of all known creditors and
claimants has been made or provided for and the remaining
property has been distributed by the board.
Subd. 2. [CONTENTS OF ARTICLES.] The articles of
dissolution must state:
(1) that all debts, obligations, and liabilities of the
cooperative have been paid or discharged or adequate provisions
have been made for them or time periods under section 45 have
run and other claims are not outstanding;
(2) that the remaining property, assets, and claims of the
cooperative have been distributed among the members or pursuant
to a liquidation authorized by the members; and
(3) that legal, administrative, or arbitration proceedings
by or against the cooperative are not pending or adequate
provision has been made for the satisfaction of a judgment,
order, or decree that may be entered against the cooperative in
a pending proceeding.
Subd. 3. [DISSOLUTION EFFECTIVE ON FILING.] The
cooperative is dissolved when the articles of dissolution have
been filed with the secretary of state. [302A.733 s. 3]
Subd. 4. [CERTIFICATE.] The secretary of state shall issue
to the dissolved cooperative or its legal representative a
certificate of dissolution that contains:
(1) the name of the dissolved cooperative;
(2) the date the articles of dissolution were filed with
the secretary of state; and
(3) a statement that the cooperative is dissolved.
[302A.733 s. 4]
Sec. 36. Article 1 is amended by adding a section to read:
Sec. 48. [308A.935] [APPLICATION FOR COURT-SUPERVISED
VOLUNTARY DISSOLUTION.]
After a notice of intent to dissolve has been filed with
the secretary of state and before a certificate of dissolution
has been issued, the cooperative or, for good cause shown, a
member or creditor may apply to a court within the county where
the registered office is located to have the dissolution
conducted or continued under the supervision of the court as
provided in section 50. [302A.741]
Sec. 37. Article 1 is amended by adding a section to read:
Sec. 49. [308A.941] [COURT-ORDERED REMEDIES OR
DISSOLUTION.]
Subdivision 1. [CONDITIONS FOR RELIEF.] A court may grant
equitable relief that it deems just and reasonable in the
circumstances or may dissolve a cooperative and liquidate its
assets and business:
(1) in a supervised voluntary dissolution that is applied
for by the cooperative;
(2) in an action by a member when it is established that:
(i) the directors or the persons having the authority
otherwise vested in the board are deadlocked in the management
of the cooperative's affairs and the shareholders or members are
unable to break the deadlock;
(ii) the directors or those in control of the cooperative
have acted fraudulently, illegally, or in a manner unfairly
prejudicial toward one or more members in their capacities as
members, directors, or officers;
(iii) the members of the cooperative are so divided in
voting power that, for a period that includes the time when two
consecutive regular members' meetings were held, they have
failed to elect successors to directors whose terms have expired
or would have expired upon the election and qualification of
their successors;
(iv) the cooperative assets are being misapplied or wasted;
or
(v) the period of duration as provided in the articles has
expired and has not been extended as provided in this chapter;
(3) in an action by a creditor when:
(i) the claim of the creditor against the cooperative has
been reduced to judgment and an execution on the judgment has
been returned unsatisfied; or
(ii) the cooperative has admitted in writing that the claim
of the creditor against the cooperative is due and owing and it
is established that the cooperative is unable to pay its debts
in the ordinary course of business; or
(4) in an action by the attorney general to dissolve the
cooperative in accordance with this chapter when it is
established that a decree of dissolution is appropriate.
[302A.751 s. 1]
Subd. 2. [CONDITION OF COOPERATIVE OR ASSOCIATION.] In
determining whether to order equitable relief or dissolution,
the court shall take into consideration the financial condition
of the cooperative but may not refuse to order equitable relief
or dissolution solely on the ground that the cooperative has
accumulated operating net income or current operating net income.
[302A.751 s. 3]
Subd. 3. [DISSOLUTION AS REMEDY.] In deciding whether to
order dissolution of the cooperative, the court must consider
whether lesser relief suggested by one or more parties, such as
a form of equitable relief or a partial liquidation, would be
adequate to permanently relieve the circumstances established
under subdivision 1, clause (2) or (3). Lesser relief may be
ordered if it would be appropriate under the facts and
circumstances of the case. [302A.751 s. 3b]
Subd. 4. [EXPENSES.] If the court finds that a party to a
proceeding brought under this section has acted arbitrarily,
vexatiously, or otherwise not in good faith, the court may in
its discretion award reasonable expenses, including attorneys'
fees and disbursements, to any of the other parties. [302A.751
s. 4]
Subd. 5. [VENUE.] Proceedings under this section shall be
brought in a court within the county where the registered office
of the cooperative is located. [302A.751]
Subd. 6. [PARTIES.] It is not necessary to make members
parties to the action or proceeding unless relief is sought
against them personally. [302A.751]
Sec. 38. Article 1 is amended by adding a section to read:
Sec. 50. [308A.945] [PROCEDURE IN INVOLUNTARY OR
COURT-SUPERVISED VOLUNTARY DISSOLUTION.]
Subdivision 1. [ACTION BEFORE HEARING.] In dissolution
proceedings before a hearing can be completed the court may:
(1) issue injunctions;
(2) appoint receivers with all powers and duties that the
court directs;
(3) take actions required to preserve the cooperative's
assets wherever located; and
(4) carry on the business of the cooperative. [302A.753 s.
1]
Subd. 2. [ACTION AFTER HEARING.] After a hearing is
completed, on notice the court directs to be given to parties to
the proceedings and to other parties in interest designated by
the court, the court may appoint a receiver to collect the
cooperative's assets, including amounts owing to the cooperative
by subscribers on account of an unpaid portion of the
consideration for the issuance of shares. A receiver has
authority, subject to the order of the court, to continue the
business of the cooperative and to sell, lease, transfer, or
otherwise dispose of the property and assets of the cooperative
either at public or private sale. [302A.753 s. 2]
Subd. 3. [DISCHARGE OF OBLIGATIONS.] The assets of the
cooperative or the proceeds resulting from a sale, lease,
transfer, or other disposition shall be applied in the following
order of priority or:
(1) the costs and expenses of the proceedings, including
attorneys' fees and disbursements;
(2) debts, taxes and assessments due the United States, the
state of Minnesota and their subdivisions, and other states and
their subdivisions, in that order;
(3) claims duly proved and allowed to employees under the
provisions of the workers' compensation act except that claims
under this clause may not be allowed if the cooperative has
carried workers' compensation insurance, as provided by law, at
the time the injury was sustained;
(4) claims, including the value of all compensation paid in
a medium other than money, proved and allowed to employees for
services performed within three months preceding the appointment
of the receiver, if any; and
(5) other claims proved and allowed. [302A.753 s. 3 ]
Subd. 4. [REMAINDER TO MEMBERS.] After payment of the
expenses of receivership and claims of creditors are proved, the
remaining assets, if any, may be distributed to the members or
distributed pursuant to an approved liquidation plan. [302A.753
s. 4]
Sec. 39. Article 1 is amended by adding a section to read:
Sec. 51. [308A.951] [RECEIVER QUALIFICATIONS AND POWERS.]
Subdivision 1. [QUALIFICATIONS.] A receiver must be a
natural person or a domestic corporation or a foreign
corporation authorized to transact business in this state. A
receiver must give a bond as directed by the court with the
sureties required by the court. [302A.755 s. 1]
Subd. 2. [POWERS.] A receiver may sue and defend in all
courts as receiver of the cooperative. The court appointing the
receiver has exclusive jurisdiction of the cooperative and its
property. [302A.755 s. 2]
Sec. 40. Article 1 is amended by adding a section to read:
Sec. 52. [308A.955] [DISSOLUTION ACTION BY ATTORNEY
GENERAL.]
Subdivision 1. [CONDITIONS TO BEGIN ACTION.] A cooperative
may be dissolved involuntarily by a decree of a court in this
state in an action filed by the attorney general if it is
established that:
(1) the articles and certificate of incorporation were
procured through fraud;
(2) the cooperative was incorporated for a purpose not
permitted by this chapter;
(3) the cooperative has flagrantly violated a provision of
this chapter, has violated a provision of this chapter more than
once, or has violated more than one provision of this chapter;
or
(4) the cooperative has acted, or failed to act, in a
manner that constitutes surrender or abandonment of the
cooperative's franchise, privileges, or enterprise. [302A.757
s. 1]
Subd. 2. [NOTICE TO COOPERATIVE.] An action may not be
commenced under this section until 30 days after notice to the
cooperative by the attorney general of the reason for the filing
of the action. If the reason for filing the action is an act
that the cooperative has done, or omitted to do, and the act or
omission may be corrected by an amendment of the articles or
bylaws or by performance of or abstention from the act, the
attorney general shall give the cooperative 30 additional days
to make the correction before filing the action. [302A.757 s.
2]
Sec. 41. Article 1 is amended by adding a section to read:
Sec. 53. [308A.961] [FILING CLAIMS IN COURT-SUPERVISED
DISSOLUTION PROCEEDINGS.]
Subdivision 1. [FILING UNDER OATH.] In proceedings to
dissolve a cooperative, the court may require all creditors and
claimants of the cooperative to file their claims under oath
with the court administrator or with the receiver in a form
prescribed by the court. [302A.759 s. 1]
Subd. 2. [DATE TO FILE CLAIM.] (a) If the court requires
the filing of claims, the court shall:
(1) set a date, by order, at least 120 days after the date
the order is filed, as the last day for the filing of claims;
and
(2) prescribe the notice of the fixed date that shall be
given to creditors and claimants.
(b) Before the fixed date, the court may extend the time
for filing claims. Creditors and claimants failing to file
claims on or before the fixed date may be barred, by order of
court, from claiming an interest in or receiving payment out of
the property or assets of the cooperative. [302A.759 s. 2]
Sec. 42. Article 1 is amended by adding a section to read:
Sec. 54. [308A.965] [DISCONTINUANCE OF COURT-SUPERVISED
DISSOLUTION PROCEEDINGS.]
The involuntary or supervised voluntary dissolution of a
cooperative may be discontinued at any time during the
dissolution proceedings if it is established that cause for
dissolution does not exist. The court shall dismiss the
proceedings and direct the receiver, if any, to redeliver to the
cooperative its remaining property and assets. [302A.761]
Sec. 43. Article 1 is amended by adding a section to read:
Sec. 55. [308A.971] [COURT-SUPERVISED DISSOLUTION ORDER.]
Subdivision 1. [CONDITIONS FOR DISSOLUTION ORDER.] In an
involuntary or supervised voluntary dissolution after the costs
and expenses of the proceedings and all debts, obligations, and
liabilities of the cooperative have been paid or discharged and
the remaining property and assets have been distributed to its
members or, if its property and assets are not sufficient to
satisfy and discharge the costs, expenses, debts, obligations,
and liabilities, when all the property and assets have been
applied so far as they will go to their payment according to
their priorities, the court shall enter an order dissolving the
cooperative. [302A.763 s. 1]
Subd. 2. [DISSOLUTION EFFECTIVE ON FILING ORDER.] When the
order dissolving the cooperative or association has been
entered, the cooperative or association is dissolved. [302A.763
s. 2]
Sec. 44. Article 1 is amended by adding a section to read:
Sec. 56. [308A.975] [FILING COURT'S DISSOLUTION ORDER.]
After the court enters an order dissolving a cooperative,
the court administrator shall cause a certified copy of the
dissolution order to be filed with the secretary of state. The
secretary of state may not charge a fee for filing the
dissolution order. [302A.765]
Sec. 45. Article 1 is amended by adding a section to read:
Sec. 57. [308A.981] [BARRING OF CLAIMS.]
Subdivision 1. [CLAIMS BARRED.] A person who is or becomes
a creditor or claimant before, during, or following the
conclusion of dissolution proceedings, who does not file a claim
or pursue a remedy in a legal, administrative, or arbitration
proceeding during the pendency of the dissolution proceeding, or
has not initiated a legal, administrative, or arbitration
proceeding before the commencement of the dissolution
proceedings, and all those claiming through or under the
creditor or claimant, are forever barred from suing on that
claim or otherwise realizing upon or enforcing it, except as
provided in this section. [302A.781 s. 1]
Subd. 2. [CERTAIN UNFILED CLAIMS ALLOWED.] By one year
after articles of dissolution have been filed with the secretary
of state pursuant to this chapter, or a dissolution order has
been entered, a creditor or claimant who shows good cause for
not having previously filed the claim may apply to a court in
this state to allow a claim:
(1) against the cooperative to the extent of undistributed
assets; or
(2) if the undistributed assets are not sufficient to
satisfy the claim, the claim may be allowed against a member to
the extent of the distributions to members in dissolution
received by the member. [302A.781 s. 2]
Subd. 3. [OMITTED CLAIMS ALLOWED.] Debts, obligations, and
liabilities incurred during dissolution proceedings must be paid
or provided for by the cooperative before the distribution of
assets to a member. A person to whom this kind of debt,
obligation, or liability is owed but is not paid may pursue any
remedy against the officers, directors, or members of the
cooperative before the expiration of the applicable statute of
limitations. This subdivision does not apply to dissolution
under the supervision or order of a court. [302A.781 s. 3]
Sec. 46. Article 1 is amended by adding a section to read:
Sec. 58. [308A.985] [RIGHT TO SUE OR DEFEND AFTER
DISSOLUTION.]
After a cooperative has been dissolved, any of its former
officers, directors, or members may assert or defend, in the
name of the cooperative, a claim by or against the cooperative.
[302A.783]
Sec. 47. Article 1 is amended by adding a section to read:
Sec. 59. [COOPERATIVES ORGANIZED UNDER CHAPTER 308 SUBJECT
TO THIS ACT.]
A cooperative organized under the general cooperative laws,
Minnesota Statutes 1988, sections 308.05 to 308.18, or the
agricultural marketing act, Minnesota Statutes 1988, sections
308.52 to 308.85, is deemed to be organized under and subject to
this act and has the power to perform every act and thing
necessary or proper to the conduct of the cooperative's business
or the accomplishment of the purposes of the cooperative, and
has other rights, powers, or privileges granted by the laws of
this state to other corporations, except those that are
inconsistent with the express provisions of this act.
Sec. 48. Article 1, section 44, is amended to read:
Sec. 44 60. [REPEALER.]
Minnesota Statutes 1988, sections 308.01; 308.02; 308.03;
308.05; 308.06; 308.061; 308.062; 308.07; 308.071; 308.08;
308.09; 308.10; 308.105; 308.11; 308.111; 308.12; 308.13;
308.14; 308.15; 308.16; 308.17; 308.18; 308.29; 308.30; 308.31;
308.32; 308.34; 308.341; 308.35; 308.36; 308.361; 308.37;
308.39; 308.40; 308.41; 308.42; 308.43; 308.51; 308.52; 308.53;
308.54; 308.55; 308.56; 308.57; 308.58; 308.59; 308.60; 308.61;
308.62; 308.63; 308.64; 308.65; 308.66; 308.67; 308.68; 308.69;
308.70; 308.71; 308.72; 308.73; 308.74; 308.75; 308.76; 308.77;
308.78; 308.79; 308.80; 308.81; 308.82; 308.83; 308.84; 308.85;
308.853; 308.854; 308.901; 308.902; 308.903; 308.904; 308.905;
and 308.92, are repealed.
Sec. 49. [REPEALER.]
Article 1, sections 16, 22, 42, and 43, are repealed.
Presented to the governor May 15, 1989
Signed by the governor May 16, 1989, 6:20 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes