Virginia Code 13.1-354: Internal capital accounts; redemption of shares; collective reserve account
A. A worker cooperative shall establish through its articles of incorporation or bylaws a system of internal capital accounts to reflect the book value and to determine the redemption price of membership shares, nonvoting shares, and written notices of allocation. As used in this section, “written notice of allocation” means a written instrument that discloses to a member the stated dollar amount of such member’s patronage allocation and the terms for payment of that amount by the worker cooperative.
Terms Used In Virginia Code 13.1-354
- Collective reserve account: means an account on the corporate books representing the worker cooperative's entire net book value minus balances in any other equity accounts. See Virginia Code 13.1-346
- Member: means an individual who has been accepted for membership in, and owns a membership share issued by, a worker cooperative. See Virginia Code 13.1-346
- Patronage: means the amount of work performed for a worker cooperative, measured in accordance with criteria set forth in the articles of incorporation or bylaws of the worker cooperative. See Virginia Code 13.1-346
- Person: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
- Worker: means an individual employed by a worker cooperative. See Virginia Code 13.1-346
- Worker cooperative: means a corporation incorporated under the provisions of Article 3 (§ 13. See Virginia Code 13.1-346
B. The articles of incorporation or bylaws of a worker cooperative may permit the periodic redemption of written notices of allocation and nonvoting shares and shall provide for recall and redemption of the membership share upon termination of membership in the cooperative.
C. The articles of incorporation or bylaws may provide for the worker cooperative to pay or credit interest on the balance in each member’s internal capital account.
D. The articles of incorporation or bylaws may authorize assignment of a portion of retained net earnings and net losses to a collective reserve account. Earnings assigned to the collective reserve account may be used for any and all corporate purposes as determined by the board of directors.
E. A worker cooperative may issue nonvoting shares to members and nonmembers. Nonvoting shares may be redeemed or retired by the worker cooperative on such terms and conditions as may be provided in the articles of incorporation or bylaws. Payment for nonvoting shares may be made in cash, services, or property as determined by the board.
F. Any worker cooperative issuing shares under this article may accept registrations of such shares in the names of two or more persons, payable to any one of them, or to any one of them or the survivor, and any person so named, whether the others be living or not, may accept dividend payments and withdraw from the association and receive the amount payable on withdrawal in the same manner and on the same terms as are allowed by law and the articles of incorporation and bylaws in case of any other member or shareholder, and the receipt or acceptance of dividends or amounts payable on withdrawal by the person so paid shall be a valid and sufficient release and discharge of the association for any payment so made.
2020, c. 673.