Utah Code 16-6a-207. Incorporation of cooperative association

16-6a-207. Incorporation of cooperative association.

(1)

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Terms Used In Utah Code 16-6a-207

Articles of incorporation: include :

(a)	amended articles of incorporation;

(b)	restated articles of incorporation;

(c)	articles of merger; and

(d)

a document of a similar import to the documents described in Subsections (3)(a) through (c). See Utah Code 16-6a-102

Bylaws: includes :

(i)	amended bylaws; and

(ii)

restated bylaws. See Utah Code 16-6a-102

cooperative: means a nonprofit corporation organized or existing under this chapter. See Utah Code 16-6a-102

Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.

Director: means a member of the board of directors. See Utah Code 16-6a-102

Member: includes :

(i)	"voting member"; and

(ii)

a shareholder in a water company. See Utah Code 16-6a-102

Membership: refers to the rights and obligations of a member or members. See Utah Code 16-6a-102

State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5

Vote: includes authorization by:

(a)	written ballot; and

(b)

written consent. See Utah Code 16-6a-102

(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 an association subject to the insurance or credit union laws of this state; 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 of stock or membership capital owned by the member unless voting is based in whole or in part on the volume of patronage of the member with the cooperative association; and

(B)	savings in excess of dividends and additions to reserves and surplus shall be distributed 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 Section 3-1-11.

(b)

The articles of incorporation or the bylaws of a cooperative association incorporated in 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 Cooperative Association Act, or Title 16, Chapter 16, Uniform Limited Cooperative Association Act, may convert itself into a cooperative association subject to this chapter by adopting appropriate amendments 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 the manner provided by the law then applicable to the cooperative nonprofit corporation.

(4)	Except as otherwise provided in this section, a cooperative nonprofit corporation is subject to this chapter.

(5)	A corporation that is a cooperative under this chapter may convert to a limited cooperative association under Title 16, Chapter 16, Uniform Limited Cooperative Association Act, by complying with that chapter.

Amended by Chapter 168, 2017 General Session

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