450.99 Cooperative plan; definition; allocation of reserved earnings; cooperative corporations; use of term “cooperative,”“co-op,” or variation thereof.
Sec. 99. Corporations may engage in any lawful business within this state upon any cooperative plan adopted by the incorporators, or by the shareholders at any annual or special meeting. For the purpose of this act, the term “cooperative plan” shall be deemed to mean a mode of operation whereby the earnings of the corporation are distributed on the basis of, or in proportion to, the value of property bought from or sold to shareholders and/or members or other persons, or labor performed for, or services rendered to, or by the corporation: Provided, That the foregoing definition shall not be construed as prohibiting any such corporation from paying limited dividends to stockholders and/or members upon stock and/or membership investment, or from reserving a certain proportion of earnings for future operations or for future distribution. Earnings so reserved shall be allocated on the books of the corporation or a means provided for such allocation to the stockholders and/or members or other persons entitled to such earnings, before general distribution of earnings shall have been authorized and made. Corporations organized under a cooperative plan and governed by sections 98 to 109, inclusive, of this act are hereinafter in this act called cooperative corporations and they may use the term “cooperative”, “co-op”, or any variation thereof in their name.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 10, 1942;¾CL 1948, 450.99;¾Am. 1984, Act 298, Eff.
Jan. 1, 1985.
450.100 Cooperative corporations; shares of stock, contents.
Sec. 100. Same; contents of certificates of stock. There shall be printed upon each share of stock issued by co-operative corporations a condensed statement of every article or by-law which in anywise limits the shareholders’ right to assign or transfer such shares or to vote the total number of shares held at meetings of the corporation, or which forbids voting by proxy. The provisions of the uniform stock transfer law of this state shall not be held to apply to the shares of stock of such co-operative corporations in any manner or to any extent inconsistent with the provisions of sections 98 to 116, both inclusive, of this act.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾CL 1948, 450.100.
450.101 Cooperative corporations; shareholders’ powers; directors, election, term, number; voting.
Sec. 101. The shareholders of any cooperative corporation shall have power: to adopt bylaws for the government and regulation of its business management, and to amend such bylaws; to determine the manner of distributing the earnings of the corporation upon a cooperative plan; to limit and define the powers and duties and the number of directors and officers; to delegate to the directors any particular power or authority which the shareholders themselves possess, excepting the right to elect or dismiss directors and to amend the articles; to fix the time for holding the elections of its directors, which, shall be annual unless a longer term is prescribed in the articles or bylaws: Provided, That in the event directors are elected for a term of more than 1 year, the bylaws shall prescribe the length of term and the number of directors to be elected each year, to determine whether or not voting by proxy shall be allowed, and if so allowed, when and how, to provide the manner in which directors and officers may be removed and their successors elected at any time by vote of the shareholders; to determine whether or not shareholders shall be limited to 1 vote each, regardless of the number of shares held; to determine the number of shareholders attending any meeting, or the number of shares represented at any meeting of shareholders which shall constitute a quorum, which may be less than a majority; to determine the manner in which shareholders may vote by mail, if the articles or bylaws provide for such voting; and to provide a limitation upon the amount of capital stock which may be owned by any 1 shareholder therein; all of which shall be included in the bylaws or in the articles.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 10, 1942;¾CL 1948, 450.101;¾Am. 1949, Act 232, Eff.
Sept. 23, 1949.
450.102 Cooperative corporations; membership, regulations.
Sec. 102. Same; membership. The shareholders of every co-operative corporation may also provide in their articles or by-laws, the necessary qualifications of shareholders or members, together with provisions limiting, prescribing or regulating the transfer of such membership, and the terms and conditions under which, if at all, membership or certificates of stock may be transferred. No sale, transfer or assignment of membership rights or of any stock in any co-operative corporation shall be valid unless made in accordance with its articles or by-laws; nor shall any purchase and sale of any such shareholder’s stock or privileges in such corporation made under execution, or in the course of bankruptcy proceedings, or by any legal process or by operation of law, give any person any shareholder’s or membership right, title or interest in and to such corporation, unless in accordance with its articles or by-laws.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾CL 1948, 450.102.
450.103 Cooperative corporations; amendments to articles.
Sec. 103. Same; amendment to articles. One-tenth of the entire number of shareholders of any cooperative corporation may propose any desired amendment to the articles or to the bylaws of such corporation, and any amendment so proposed shall be voted upon at the next annual meeting by the shareholders.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 10, 1942;¾CL 1948, 450.103.
450.104 Cooperative corporations; reserve funds, investment; shareholders, vote.
Sec. 104. Same; investment of reserve fund. At any regular meeting, or any duly called special meeting, at which the quorum fixed by the bylaws shall be present, the shareholders of any cooperative corporation may by a majority vote of such shareholders present in person, subscribe for shares and invest a portion of the reserve fund of such corporation, not to exceed at any time 20 per cent in the aggregate of its capital, in the capital stock or membership capital of any other cooperative corporation or corporations with which it desires to cooperate or affiliate: Provided, however, That this provision shall not be construed to prevent such corporation from accepting patronage dividends in the form of stock or otherwise from such other corporation in any amount.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 10, 1942;¾CL 1948, 450.104.
450.105 Cooperative corporations; purchase of business; payment, methods.
Sec. 105. Same; purchase of business of another corporation. Whenever any cooperative corporation shall purchase the business of another corporation, firm or person or persons, it may pay for the same in whole or in part by issuing to the selling corporation, firm, person or persons, shares of its capital stock to an amount which, at par value, would equal the fair market value of the business so purchased, and in such case the transfer to the purchasing corporation of such business at such valuation shall be equivalent to payment in cash for the shares of stock so issued.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 10, 1942;¾CL 1948, 450.105.
450.106 Cooperative corporations; distribution of dividends; reserves; distribution of cooperative dividends; determining annual privilege fee.
Sec. 106. The shareholders of every cooperative corporation shall provide in the bylaws what percent upon the paid-up capital stock of the corporation, not exceeding 8% per annum, shall be first paid and distributed to the holders of the paid-up capital stock as dividends before dividing the surplus earnings or profits, as provided in this act, and whether or not the dividends shall be cumulative. The bylaws shall further provide what amount or percentage of the annual profit and earnings of the business, over and above the dividends to shareholders shall be retained and kept in the treasury of the corporation as a reserve, and in what manner, method, and proportion the surplus annual earnings and profits of the business of the corporation, in excess of the dividends and reserves, shall be divided up and distributed as a cooperative dividend, under the cooperative plan or principle adopted by the corporation among shareholders or members doing business with the corporation; and may also provide for cooperative dividends to nonstockholders or nonmembers. For the purposes of determining the amount owing by the cooperative corporation as an annual privilege fee, the balance of the reserve in excess of 30% of the paid-up capital of the corporation shall be considered as surplus.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 10, 1942;¾CL 1948, 450.106;¾Am. 1978, Act 121,
Imd. Eff. Apr. 25, 1978.
450.107 Cooperative corporations; surplus earnings, distribution; failure, penalty.
Sec. 107. Same; surplus earnings. The surplus earnings and profits of every co-operative corporation shall be distributed to those entitled thereto at such times as the by-laws may provide, which shall be as often as once in each year. If any such corporation shall fail for 5 consecutive years to pay the dividend upon its paid-up capital stock in accordance with the provisions of its by-laws, a majority of the shareholders may petition the circuit court in chancery, in the county in which the registered office of such corporation is located, for the dissolution of such corporation. If, upon the hearing the court finds the allegations of the petition are substantially true, such corporation may be dissolved, its business wound up and its property distributed as the court may order and decree.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾CL 1948, 450.107.
450.108 Cooperative corporations; dealing in commodities; contracts, agreements.
Sec. 108. Same; contracts and agreements. Every cooperative corporation engaged in buying, handling, selling or dealing in farm produce or other agricultural products, canned goods, or byproducts of any such goods, wares, merchandise or commodities, may enter into any and all necessary contracts with stockholders, members or other persons respecting the terms of such transaction, and may deal in such commodities upon commission or brokerage basis, by agency agreements, or upon a warehouse storage plan.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 10, 1942;¾CL 1948, 450.108.
450.109 Cooperative corporations; breach of contract; encouragement prohibited; penalty.
Sec. 109. Same; persons liable for damage for encouraging breach of contracts and agreements. Any person, firm, or corporation who solicits or persuades or permits or aids or abets, any stockholder and/or member or other person to breach a contract with a cooperative corporation, by accepting or receiving from such stockholder and/or member or other person, products for sale, marketing, manufacturing, or processing for sale, contrary to the terms of any marketing agreement of which said person or any member of said firm or any officer or manager of said corporation has knowledge or notice, shall be liable to the cooperative corporation aggrieved in a civil suit in the penal sum of $500.00 for each such contract; and such cooperative corporation shall be entitled to an injunction against such person, firm, or corporation to prevent further breaches and a multiplicity of actions thereon. In addition, said person, firm, or corporation shall pay to the cooperative a reasonable attorney’s fee and all costs involved in any litigation or proceedings at law or chancery.
History: 1931, Act 327, Eff. Sept. 18, 1931;¾Am. 1941, Act 327, Eff. Jan. 1942;¾CL 1948, 450.109.