16-6a-207 - Incorporation of cooperative association.
16-6a-207. Incorporation of cooperative association.
(1) (a) If a cooperative association meets the requirements of Subsection (1)(b), it may:
(i) be incorporated under this chapter; and
(ii) use the word "cooperative" as part of its corporate or business name.
(b) A cooperative association described in Subsection (1)(a):
(i) may not be:
(A) an association subject to the insurance or credit union laws of this state;
(B) a health insurance purchasing association as defined in Section 31A-34-103; or
(C) a health insurance purchasing alliance licensed under Title 31A, Chapter 34,Voluntary Health Insurance Purchasing Alliance Act; and
(ii) shall state in its articles of incorporation that:
(A) a member may not have more than one vote regardless of the number or amount ofstock or membership capital owned by the member unless voting is based in whole or in part onthe volume of patronage of the member with the cooperative association; and
(B) savings in excess of dividends and additions to reserves and surplus shall bedistributed or allocated to members or patrons on the basis of patronage.
(2) (a) Any cooperative association incorporated in accordance with Subsection (1):
(i) has all the rights and is subject to the limitations provided in Section 3-1-11; and
(ii) may pay dividends on its stock, if it has stock, subject to the limitations of Section3-1-11.
(b) The articles of incorporation or the bylaws of a cooperative association incorporatedin accordance with Subsection (1) may provide for:
(i) the establishment and alteration of voting districts;
(ii) the election of delegates to represent:
(A) the districts described in Subsection (2)(b)(i); and
(B) the members of the districts described in Subsection (2)(b)(i);
(iii) the establishment and alteration of director districts; and
(iv) the election of directors to represent the districts described in Subsection (2)(b)(ii)by:
(A) the members of the districts; or
(B) delegates elected by the members.
(3) (a) A corporation organized under Title 3, Uniform Agricultural CooperativeAssociation Act, or Title 16, Chapter 16, Uniform Limited Cooperative Association Act, mayconvert itself into a cooperative association subject to this chapter by adopting appropriateamendments to its articles of incorporation by which:
(i) it elects to become subject to this chapter; and
(ii) makes changes in its articles of incorporation that are:
(A) required by this chapter; and
(B) any other changes permitted by this chapter.
(b) The amendments described in Subsection (3)(a) shall be adopted and filed in themanner provided by the law then applicable to the cooperative nonprofit corporation.
(4) Notwithstanding Subsection (1), a health insurance purchasing association may notuse the word "cooperative" or "alliance" but may use the word "association."
(5) Except as otherwise provided in this section, a cooperative nonprofit corporation issubject to this chapter.
(6) A corporation that is a cooperative under this chapter may convert to a limitedcooperative association under Title 16, Chapter 16, Uniform Limited Cooperative AssociationAct, by complying with that chapter.
Amended by Chapter 363, 2008 General Session