2006 Minnesota Statutes

308B.601 MEMBERSHIP INTERESTS.
    Subdivision 1. Amounts and divisions of membership interests. The authorized amount
and divisions of patron membership interests and, if authorized, nonpatron membership interests
may be increased, decreased, established, or altered, in accordance with the restrictions in this
chapter by amending the articles or bylaws at a regular members' meeting or at a special members'
meeting called for the purpose of the amendment.
    Subd. 2. Issuance of membership interests. Authorized membership interests may be
issued on terms and conditions prescribed in the articles, bylaws, or if authorized in the articles
or bylaws as determined by the board. The cooperative shall disclose to any person or entity
acquiring membership interests to be issued by the cooperative, the organization, capital structure,
and known business prospects and risks of the cooperative, the nature of the governance and
financial rights of the membership interest being acquired and of other classes of membership
and membership interests. The cooperative shall notify all members of the membership interests
being issued by the cooperative. A membership interest may not be issued until the subscription
price of the membership interest has been paid for in money or property with the value of the
property to be contributed approved by the board.
    Subd. 3. Patron membership interests. The patron membership interests collectively
shall have not less than 60 percent of the cooperative's financial rights to profit allocations
and distributions. If authorized in the original articles as filed, or articles or bylaws adopted
by an affirmative vote of the patron members, or the articles or bylaws are amended by the
affirmative vote of patron members, then the cooperative's financial rights to profit allocations and
distributions to patron members collectively may be not less than 15 percent.
    Subd. 4. Transferring or selling membership interests. After issuance by the cooperative,
membership interests in a cooperative may only be sold or transferred with the approval of the
board. The board may adopt resolutions prescribing procedures to prospectively approve transfers.
    Subd. 5. Nonpatron membership interests. If authorized by the articles, the cooperative
may solicit and issue nonpatron membership interests on terms and conditions determined by
the board and disclosed in the articles, bylaws, or by separate disclosure to the members. Each
member acquiring nonpatron membership interests shall sign a member control agreement or
agree to the conditions of the bylaws, either of which shall describe the rights and obligations
of the member as it relates to the nonpatron membership interests, the financial and governance
rights, the transferability of the nonpatron membership interests, the division and allocations of
profits and losses among the membership interests and membership classes, and financial rights
upon liquidation. If the articles or bylaws do not otherwise provide for the allocation of the profits
and losses between patron membership interests and nonpatron membership interests, then the
allocation of profits and losses among nonpatron membership interests individually and patron
membership interests collectively shall be allocated on the basis of the value of contributions
to capital made according to the patron membership interests collectively and the nonpatron
membership interests individually to the extent the contributions have been accepted by the
cooperative. Distributions of cash or other assets of the cooperative shall be allocated among the
membership interests as provided in the articles and bylaws, subject to the provisions of this
chapter. If not otherwise provided in the articles or bylaws, distributions shall be made on the
basis of value of the capital contributions of the patron membership interests collectively and
the nonpatron membership interests to the extent the contributions have been accepted by the
cooperative.
    Subd. 6. Cooperative first right to purchase membership interests. The articles or bylaws
may provide that the cooperative or the patron members, individually or collectively, have the
first privilege of purchasing the membership interests of any class of membership interests offered
for sale. The first privilege to purchase membership interests may be satisfied by notice to other
members that the membership interests are for sale and a procedure by which members may
proceed to attempt to purchase and acquire the membership interests. A membership interest
acquired by the cooperative may be held to be reissued or may be retired and canceled.
    Subd. 7. Payment for nonpatron membership interests. Subject to the provisions in the
articles and bylaws, a member may dissent from and obtain payment for the fair value of the
member's nonpatron membership interests in the cooperative if the articles or bylaws are amended
in a manner that materially and adversely affects the rights and preferences of the nonpatron
membership interests of the dissenting member. The dissenting member shall file a notice of
intent to demand fair value of the membership interest with the records officer of the cooperative
within 30 days after the amendment of the bylaws and notice of the amendment to members,
otherwise the right of the dissenting member to demand payment of fair value for the membership
interest is waived. If a proposed amendment of the articles or bylaws must be approved by the
members, a member who is entitled to dissent and who wishes to exercise dissenter's rights
shall file a notice to demand fair value of the membership interest with the records officer of the
cooperative before the vote on the proposed action and shall not vote in favor of the proposed
action, otherwise the right to demand fair value for the membership interest by the dissenting
member is waived. After receipt of the dissenting member's demand notice and approval of the
amendment, the cooperative has 60 days to rescind the amendment or otherwise the cooperative
shall remit the fair value for the member's interest to the dissenting member by 180 days after
receipt of the notice. Upon receipt of the fair value for the membership interest, the member has
no further member rights in the cooperative.
History: 2003 c 105 art 1 s 54