CHAPTER 132 - CO-OPERATIVE AGRICULTURAL ASSOCIATIONS
AN ACT TO PROVIDE FOR THE INCORPORATION AND REGULATION OF COOPERATIVE AGRICULTURAL ASSOCIATIONS HAVING CAPITAL STOCK AND DEFINING AGRICULTURE SO AS TO INCLUDE PERSONS ENGAGED IN AGRICULTURE, DAIRYING, LIVESTOCK RAISING, POULTRY RAISING, FLORICULTURE, MUSHROOM GROWING, BEEKEEPING, HORTICULTURE, AND OTHER ALLIED OCCUPATIONS; AND PROVIDING PENALTIES.
Be it enacted by the Senate and House of Representatives of the State of Delaware, in General Assembly met:
Section 1. That in this Act, unless the context otherwise require, "association" means an association formed under this Act; the word "patron" means a person engaged in agriculture, as hereinafter defined, whose products are sold by or supplies purchased through the association, or who has executed a contract with the association as hereafter provided in section ten; "agricultural products" shall include all agricultural, horticultural, vegetable, fruit, and floricultural products of the soil, livestock and meats, wool, hides, poultry, eggs, dairy products, nuts, mushrooms, and honey, but shall not include timber products; words used import the singular or the plural as the case may demand.
Section 2. Cooperative agricultural associations, instituted for the purposes of mutual help, having capital stock, may be formed under the provisions of this Act by any number of persons, not less than five, engaged in agriculture. for the purposes of this Act, all persons engaged in agriculture, dairying, live stock raising, poultry raising, floriculture, mushroom growing, beekeeping, horticulture, and other allied occupations shall be deemed to be engaged in "agriculture."
Section 3. Associations incorporated under the provisions of this Act may engage in the buying and selling of agricultural products, taking title to such products or acting as agent for its stockholders, patrons, or any of them; may engage in or perform for its stockholders or patrons services connected with, the production, harvesting, preservation, drying, grading, canning, storing, handling, utilization, marketing, or sale of agricultural products produced by them; and may engage in or perform for its stockholders or patrons perform for services connected with, purchasing or leasing for use by them of supplies, including livestock, machinery, equipment, feed, fertilizer, electricity, and seeds, and the hiring of labor, or any one or more of the kinds of service specified in this section and for the agricultural or other purposes of such stockholders.
Section 4. The articles of association of an intended association must be subscribed by five or more persons, three of whom must be citizens of this State and shall set forth:
I. The name of the association, which shall include the word "cooperative."
. The class of services to be performed by the association, which services shall be one or more of those enumerated in section three of this Act.
I. The principal place where its business is to be transacted, which shall be within this State.
II. The term for which it is to exist.
III. The amount of its capital stock, and the number and par value of shares into which it is divided, the names and post-office addresses of the subscribers, the number of shares subscribed by each, and the amount of capital actually paid into the treasury.
IV. The number of its directors for the first year, not less than five, the names and residences of those who are chosen for directors for the first year, and the name and residence of the treasurer.
VII. Any other provisions, not inconsistent with law, which the association may see fit to adopt, governing the regulation and conduct of its affairs.
Notice of the intention to apply for any such charter shall be inserted in one newspaper, of general circulation, printed in the county where the principal place of business is situated, for one insertion, setting forth briefly the character and purpose of said corporation and the kind of service to be performed by it; such advertisement shall be at least three days before the application is laid before the Secretary of State.
The articles of association shall be acknowledged by not less than five of the subscribers thereto, before any officer authorized to take acknowledgments and administer oaths and affirmations in this State, and they shall also make and subscribe an oath or affirmation before said officer that the statements contained therein are true.
Said articles of association, accompanied with proof of publication of the notice hereinbefore provided to be given, shall then be presented to the Secretary of State, who shall examine the same, and if he finds it in proper form and within the purpose mentioned in this Act, he shall indorse his approval thereon, and direct a certificate of incorporation to issue in form similar to those issued to corporations organized under the general corporation law of this State, which certificate of incorporation shall incorporate the subscribers and their associates and successors into a body politic and corporate, in deed and in law, by the name chosen. Said articles of association shall be filed in the office of the Secretary of the State.
A certified copy of the articles of association, together with all endorsements, shall be recorded in the office of the recorder of deeds in and for the county where the principal place of business is situate. From thenceforth the subscribers thereto, their associates and successors shall be a body politic and corporate for the purposes and upon the terms named in the said article of association.
Certified copies of the records thereof shall be competent evidence for all purposes in the courts of this State.
Section 5. Each association, so formed under the provisions of this Act, and when so formed, by virtue of its existence as such, shall have the following powers:
1. To have succession for the period limited in its articles of association, and, when no period is limited thereby, to exist perpetually, subject to the power of the General Assembly under the Constitution of the State, and, unless sooner dissolved by operation of law or under the provisions of this Act.
2. To maintain and defend judicial proceedings by the name specified in the articles of association.
3. To adopt and use a common seal and alter the same at pleasure.
4. To hold, purchase, and transfer such real and personal property as the purposes of the corporation require.
5. To elect a board of directors, which shall have power to appoint a president, vice-president, secretary, treasurer and other officers, agents, and employees which may be deemed necessary; to prescribe their duties; to require bonds of them, and to dismiss them and any of them in accordance with this Act and with the by-laws of said association.
6. To make by-laws, not inconsistent with the law, for the management of its property, the regulation of its affairs and the conduct and management of the association.
7. To perform for stockholders and other patrons the service described in the articles of association and authorized by this Act.
8. To make contracts necessary in the conduct of its operation and the transaction of its affairs.
9. To borrow money necessary to the conduct of its operations, and to issue notes, bonds, and other evidences of indebtedness therefor, and to give security in the form of mortgage or .otherwise for the payment thereof.
0. To cooperate with any other such association or corporation, whether formed under this Act or otherwise, for the purpose of promoting the objects for which it was incorporated, or the objects for which any other similar association was formed. Any such association may, upon resolution adopted by its board of directors, enter into all necessary and proper stipulations, agreements, contracts, and arrangements with any other cooperative corporation, association, or associations, formed under the provisions of this Act or otherwise, for the cooperative and more economical carrying on of its business, or any part or parts thereof; or any two or more cooperative associations, formed under the provisions of this Act or otherwise, may, upon resolutions adopted by their respective boards of directors, for the purpose of more economically carrying on their respective businesses, by agreement between them, unite in employing and using, or several such associations may separately employ and use, the same methods, means, and agencies, which agencies may be another such association or associations for carrying on and conducting their respective business.
8. To foster membership in the association and solicit patrons by advertising or by educational or other lawful means.
9. To exercise such incidental powers as may be necessary in the conduct of its operations.
10. To issue and sell its preferred and common stock, but no person shall become the owner of more than five per centum of the outstanding common stock of the association.
11. To purchase and hold stock of corporations engaged in the buying or selling of agricultural products as herein defined, when such purchase and holding shall be in keeping with the purposes for which the association was formed.
Section 6. Any association may transact or do business with Or for patron stockholders or patrons not stockholders, and may issue and sell its preferred stock to patrons or non-patrons of the associations; but common stock of the association shall be sold to patrons only; and the certificate of common stock shall contain a provision that the association shall have an option to redeem the stock at par value plus declared and unpaid dividends when the owner thereof has for a period of twelve months, done no business with the association, and shall contain a further provision that no sale or transfer of stock shall be valid without the written consent of the association, and, if the association withholds its consent to such sale or transfer, then the association shall redeem such stock at par value plus declared and unpaid dividends. Dividends on the common stock shall be paid only after dividends are paid on the preferred stock, and the required surplus fund set aside, and shall be not greater than six per centum per annum, except as hereinafter provided. Dividends on preferred stock shall be not greater than six per centum per annum and shall be cumulative.
After payment of the dividend on the preferred stock, and after making provision from its net earnings for the reserve fund, as hereinafter provided, the remainder of the net earnings of the association, not required for dividends on the common stock, may, in the discretion of the directors, be distributed as a patronage refund. Patron stockholders may be entitled to patronage refunds at double the rate of patronage refunds to which non-stockholder patrons shall be entitled. Patronage refunds may be credited to the accounts of non-stockholders in the purchase of capital stock of the association.
After payment of the dividend on preferred stock, and after making provision from its net earnings for the reserve fund, as hereinafter provided, in section 16, the remainder of the net earnings of the association not required for dividends on the common stock and not distributable as a patronage refund, may, in the discretion of the Directors, be set up in a revolving reserve fund to be kept on the books of the association in the names of the patrons, according to the volume or value of their patronage. No stockholder or patron shall be entitled to payments from the revolving fund, except as provided by the Board of Directors, which shall have full and complete control of the expenditure and use of the funds therein, the provisions herein contained being merely authoritative and not mandatory.
Section 7. Every common stockholder shall be entitled to one vote only, and no vote by proxy shall be permitted: Provided, however, that this shall not affect any powers granted to the representative body on council, or the delegates thereto.
Section 8. The officers and stockholders of an association, organized under and accepting the provisions of this Act, shall not be individually liable for the debts of said association otherwise than in this Act provided.
Section 9. Each common stockholder of such association shall be liable in his individual capacity to the amount of stock held by him for all work and labor done to carry on the operations of said association. The terms "work" and "labor" as used herein shall mean only such obligations incurred by the association for salary and wages for actual labor and services performed by individuals.
Section 10. The association may engage in buying and selling agricultural products and supplies and take title thereto. The association may make and execute contracts with its stockholder and other patrons requiring them to sell all or any specified part of their agricultural products or specified commodities exclusively to or through the association or any facilities to be created by the association.
Such contracts may provide that the association may blend proceeds of such sales in one or more, or all markets, and equalize returns between all stockholders and other patrons in such markets, and may provide that the association may establish pools and, in the case of milk, base rating plan or any plan for production control.
Such contracts may also authorize the association to collect the proceeds of the sales of such products or commodities' direct from the buyer thereof, and such authority shall be construed as-coupled with an interest in favor of the association and the other patrons there not revocable by the stockholder or patron as long as such contract is in effect.
Such contracts may authorize the association to make, or to permit the buyer to make, such deductions from the proceeds of the sales of such products or commodities and payment thereof to the association as may be provided in such contracts, and such authority shall be construed as coupled with an interest in favor of the association and the other patrons there not revocable by the stockholder or patron as long as such contract is in effect.
Where such contract provided that the association is authorized to collect the price of products or commodities sold through the association or facilities created by it, the association shall have the right to maintain an action against any buyer of such products or commodities for such price, in its own name, without joining such stockholder or patron, with the same force and effect as if the association held title to the products or commodities and to the claim for the price thereof. It shall not be a defense to any such buyer to plead payment of the price to the stockholder or patron where such buyer has notice of the contract between the association and its stockholder or patron prior to the alleged payment.
Where such contract provides that the association is authorized to make, or have the buyer make, a deduction from the proceeds of the sale of products or commodities sold through the association or facilities created by it, to be paid to the association, the association shall have the right to maintain an action for such deduction, in its own name, without joining its stockholder or patron, with the same force and effect as if the association held title to the products or commodities and to the claim for the full price thereof. It shall not be a defense to any such buyer to plead payment of the price to the stockholder or patron where such buyer has notice of the contract between the association and its stockholder or patron prior to the alleged payment.
Where such contract provides that the association is authorized to make, or have the buyer make, a deduction from the proceeds of the sale of products or commodities sold through the association or facilities created by it, to be paid to the association, the association shall have the right to maintain an action for such deduction, in its own name, without joining its stockholder or patron, with the same force and effect as if the association held title to the products or commodities or to the claim for the full price of the products or commodities, or to a claim in the amount of such deduction. It shall not be a defense to such buyer to plead payment of all of the price of the products or commodities, including the deduction authorized to be made, to the stockholder or patron where such buyer has notice of the contract between the association and its stockholder or patron prior to such payment, or to plead that the effect of the provisions of this Act constitute a partial assignment of the claim of the stockholder or patron.
In addition to the foregoing rights, the association shall have granted by such contract rights, which its members individually have, arising out of the production, sale, handling or delivery of products or commodities covered by such contracts.
The association may join in a single suit any number of claims for the proceeds of products or commodities, or deductions therefrom, or any other claims arising from the sale, handling or delivery of such products or commodities, which its stockholders or patrons may have against any buyer, regardless of the fact that these claims may arise from the sale of products or commodities of different stockholders or patrons.
If stockholders and patrons contract a sale to the association, it shall be conclusively held that title to the products passes absolutely and unreservedly to the association at the time of delivery out of the possession of the stockholder or patron, or at any other time, expressly and definitely agreed in said contract. The contract may provide that the association may sell or resell the products delivered by its stockholders and other patrons, with or without taking title thereto, and pay over to its stockholders and patrons the resale price, after deducting all necessary overhead and other costs and expenses, interest, dividends on the preferred and common stock, and other proper reserves: Provided, however, that such contract shall specify a reasonable period during each year during which the association or any stockholder or patron so contracting with the association may terminate the contract. The association, as agent, for a stockholder or other patron, may buy agricultural supplies for him and sell his agricultural or other kindred products.
An association organized under this Act shall not be deemed to be a combination in restraint of trade, nor an illegal monopoly, nor an attempt to lessen competition or fix prices arbitrarily, or to create a combination or pool in violation of any law of this State, nor shall the marketing contracts between the association and its members, or any agreement authorized by this Act, be so considered, nor shall the association be deemed to be a party to a combination in restraint of trade, or illegal monopoly, by reason of any agreement made with buyers of products or commodities sold to or through the association or facilities created by it, in accordance with the provisions of this Act.
Section 11. Within thirty days after the recording of the articles of association in the office of the recorder of deeds, as prescribed in section four of this Act, a call, signed by not less than a majority of the directors, shall be issued for a meeting of the common stockholders. At such meeting, or any adjourned session or sessions thereof, by-laws regulating and conducting the management of the association shall be adopted. Such by-laws shall, within the limits of this Act, prescribe:
1. The time, place and manner of calling and holding meetings. Meetings of stockholders may be held (a) through a meeting at large at such place as may be designated by the by-laws or action of the Board of Directors, or (b) through a meeting of delegates elected to represent the stockholders by the respective local or district organizations in such manner as may be provided by the by-laws, or (c) through district or local meetings held in the several districts or locals into which the association has divided itself. Meetings in districts or locals shall be of stockholders members of such districts or locals and need not necessarily be held at the same time in each district or local. The by-laws may provide that the Board of Directors may take a vote of the stockholders on a specific case or resolution by mail signed or unsigned ballot.
2. The number of directors, the time and manner of their election and removal, and their powers and duties; and the number, not less than a majority, necessary to the exercise of their powers, and the method of fixing their compensation, if any, provided that the Board of Directors may, by resolution adopted by a majority of the whole Board, delegate two or more of its number to constitute an executive committee, which, to the extent provided in such resolution, shall have and exercise the authority of the Board of Directors in the management of the corporation. The by-laws may provide a system for the nomination of directors by a representative body or council, or otherwise, and for their election, either at large or by districts, by votes cast by stockholders in district or local organizations--the return of such votes to be made to the central office for tabulation.
3. The officers, their terms of office, the time and manner of their appointment, their powers and duties, and the method of fixing their compensation, if any.
4. Regulations governing the sale, transfer and redemption of common stock.
0. Any other provisions deemed proper and necessary to carry out the purposes, for which the association was formed, including provisions, if deemed advisable, for the creation of a representative body or council, which, among other powers, may be granted power to hear and determine charges against any member of the board of directors, and power to remove any director where such charges are sustained--the vacancy thus created to be filled as in other cases. A representative body or council, if created, shall have, in addition to the powers provided by this Act, such other powers as provided by the by-laws, which by such by-laws may be made advisory only.
Such by-laws shall provide the method or methods by which the by-laws may, from time to time, be adopted, altered, amended or repealed; the authority to make, alter, amend or repeal by-laws may be expressly vested by the by-laws in the board of directors or in a representative body or council, subject to the power of the representative body or council to change or repeal by-laws made by the board of directors, and subject to the power of the stockholders to change or repeal by-laws made by either the directors or the representative body or council; provided, however, that notice of all amendments proposed by the stockholders, the representative body or council, or the directors shall be given either to the stockholders individually or by publication in such regularly published paper or periodical, if any, as shall be established by the association and distributed to stockholders.
Section 12. The by-laws may require a common stockholder to sell all or any part of their specifically enumerated agricultural or other similar products, and to buy all or any part of their specifically enumerated supplies, exclusively through the association, but, in such case, shall specify a reasonable period in each year during which any such stockholder, by giving notice prescribed in the by-laws, may withdraw and be released from his obligation to employ the services of the association in respect to such products and supplies. The by-laws and/or contracts may fix, as liquidated damages, specific sums to be paid to the association to reimburse it for any damages which it, or the stockholders, may sustain by the failure of any common stockholder or other patron to perform any obligation to the association under the articles of association, the by-laws, or any contract with the association, and such provision shall be valid and enforceable in the courts of this State. A court of equity may grant an injunction to prevent breach of the contract and may decree specific performance thereof.
Section 13. The board of directors of each association shall consist of not less than five members.
The by-laws of the association shall provide a method by which directors shall be nominated and elected, and may provide that the territory in which the association has stockholders shall be divided into districts, and may apportion the directors to be elected to the respective districts on the basis either of the number of stockholders or the quantity of the commodities produced for sale through the association in the respective districts; and meetings for the nomination and election of directors may be held by the stockholders either at the principal office of the corporation, or at district or local meetings of the stockholders held at the usual meeting places of local groups of stockholders that are organized' for administrative purposes in the several communities, or by delegates or representatives chosen for that purpose by the stockholders in meetings assembled in the several local communities, as the bylaws may direct. Directors shall hold office until their successors shall enter upon the discharge of their duties. Vacancies shall be filled for the unexpired terms by the board of directors at any regular meeting, or at any special meeting called for that purpose. The board of directors shall manage the affairs of the association and shall perform such other duties as may be specifically imposed upon the board by this Act. The board of directors shall be a continuing body, the term of one-third, or as near as may be, of whom shall expire each year, and the by-laws of the association shall so regulate the terms of directors, including the terms of additional directors that may be authorized, from time to time, as to make effective this principle.
Section 14. Any director of the association may, for cause, at any regular meeting, or any special meeting called for that purpose, be removed from office by the vote of not less than two-thirds of the stockholders present, or by the two-third vote of such representative body as shall be created and authorized by the bylaws to cause such removal. Any officer of the association may, for cause, at any regular meeting of the board of directors, or any special meeting of said board called for the purpose, be removed from office by the vote of not less than two-thirds of the directors present. Ten days written notice of the time and place and object of any such meeting shall be given, in the manner prescribed in the by-laws, to the members of the body authorized to cause the removal, and to the directors or officers against whom charges are to be presented. Such directors or officers shall, at the same time, be informed of the nature of the charges, to be preferred against them, and at such meeting shall have the opportunity to be heard in person or by counsel and by witnesses in regard thereto.
Section 15. The officers of every association shall include a president, vice-president, secretary and treasurer, who shall be appointed annually by the board of directors. The president and vice-president shall be appointed from among the directors. The secretary and treasurer may be non-stockholders. The office of secretary and treasurer may be combined and one individual appointed thereto. Vacancies in said offices shall be filled for the unexpired term by the board of directors in the manner provided for the original appointment of officers. Such officers shall hold their offices until their successors are appointed and qualified and shall have entered upon the discharge of their duties. The board of directors shall require the treasurer, and may require such other officers, agents, and employees charged by the association with responsibility for the custody of funds or property, to give bond, with sufficient surety, for the faithful performance of their duties as such, the premium on such bond to be paid by the association.
Section 16. Any such association, after making provision for the payment of dividends on the preferred stock, and before payment of dividends on the common stock, or the distribution of any patronage refund or dividend shall set aside ten per centum of the total net earnings, annually, for a reserve fund, until the reserve fund shall equal at least thirty per centum of the paid up capital stock. The reserve fund shall be available for such purposes as shall be designated and authorized by the vote of two-thirds of the members of the board of directors at a duly assembled meeting of said board, subject to such limitations and conditions as shall be provided for in the by-laws of the association.
Section 17. At the close of each fiscal year, a complete audit of the operations of the association shall be made, by a qualified accountant or accountants, employed by the board of directors, the written report of whom shall include statements of services rendered by the association, the balance sheet, the receipts and disbursements, and the assets and liabilities, the total number of stockholders, and other proper information, and shall be submitted to the members at the next regular meeting. Within three months after the expiration of the fiscal year for which made, the secretary of said association shall file one copy of said report of the audit with the Secretary of State Board of Agriculture of this State and one copy with the Dean of the School of Agriculture of the University of Delaware. No person shall, without consent of the association, except in obedience to judicial process, make or permit any disclosure whereby any information contained in said report may be identified as having been furnished by said association. No person, association, co-partnership, or corporation, or its or their agents, employees, or officers, shall knowingly induce or attempt to induce any stockholder of an association organized hereunder to breach his marketing contract with the association, nor maliciously and knowingly spread false reports about the finances or management thereof. Producers of agricultural products or commodities shall have the right to form or become stockholders or patrons in cooperative agricultural associations organized or registered under this Act, and it shall be unlawful for any person, association, co-partnership or corporation directly or indirectly to interfere with, restrain or coerce such producers in the exercise of this right. It shall be unlawful for buyers of agricultural products or commodities from producers or from such cooperative agricultural association, whose stockholders or patrons sell all or any part of their agricultural products or commodities to or through the association or facilities created by it (1) to distribute or circulate any blacklist of stockholders or patrons of such cooperative agricultural association, or to advise any person of the membership of any producer in such cooperative agricultural association, for the purpose of preventing the purchase or sale of or payment for agricultural products or commodities produced, sold or offered for sale by such producer so blacklisted or so named, or (2) to dominate or interfere with the formation, existence or administration of any such cooperative agricultural association by any means, including but not limited to the following: (a) by participating or assisting in, supervising, controlling or dominating the initiation or creation of any cooperative agricultural association or its business (as distinguished from social or educational), meetings or elections, and no certificate of incorporation under this Act shall issue to any persons or corporation so dominated, nor shall any rights under Section 25 of this Act accrue to a corporation so dominated, (b) by making known to such producers the buyer's approval or disapproval of any cooperative agricultural association for the purpose of encouraging or discouraging membership or shareholding therein, becoming a patron, contracting or cooperating therewith; provided that nothing in this Act shall preclude a buyer from making an agreement with a cooperative agricultural association (not established, administered or assisted by any action of the buyer) requiring membership or shareholding therein, becoming a patron contracting or cooperating therewith; provided that nothing in this Act shall preclude a buyer from making an agreement with a cooperative agricultural association (not established administered or assisted by any action of the buyer) requiring membership or shareholding therein, becoming a patron, contracting or cooperating therewith as a condition of the purchase of a producer's agricultural association has as its stockholders or patrons a majority of the producers supplying such buyer with the agricultural commodity or product sold to such buyer, (3) to encourage or discourage membership or shareholding in any cooperative agricultural association or becoming a patron, contracting or cooperating with the same, provided that nothing in this Act shall preclude a buyer from making an agreement with such cooperative agricultural association (not established, administered or assisted by any action of the buyer) requiring membership or shareholding therein, becoming a patron, contracting or cooperating therewith as a condition of purchase of a producer's agricultural products or commodities, if such cooperative agricultural association has as its stockholders or patrons a majority of the producers supplying such buyer with the agricultural commodity or products sold to such buyer, provided further that "buyer" as used in this Section shall not include a buyer which is a cooperative agricultural association of producers. Nothing in this Section shall prevent a cooperative agricultural association (not established, administered or assisted by any action of the buyer) or its officers or agents from bargaining with buyers or prospective buyers of their products with regard to prices therefor, and practices, terms, conditions, rules and regulations pertaining to the industry in which they are engaged. Any such person violating the prohibitions set forth in this section shall be guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine not more than three hundred dollars, or imprisonment for not more than six months, or both, at the discretion of the court, and shall be liable to the association aggrieved in a civil suit in trespass in the penal sum of One Hundred Dollars for each such offense and such association shall be entitled to an injunction against such person, association, co-partnership or corporation to prevent continuation of such conduct.
Section 18. The articles of association may be amended pursuant to an affirmative vote of two-thirds of all the common stockholders or the members of a representative body or council in attendance at any regular meeting, or at a special meeting called for the purpose, due notice of the time, place and object of which regular or special meeting shall have been given as prescribed in the by-laws. A copy of such amendment, signed and acknowledged by not less than three of the directors, shall be presented to the Secretary of State, who shall examine the same, and, if he finds it in proper form, he shall indorse his approval thereon. Said amendment shall then be filed in the office of the Secretary of State. A certified copy of said amendment, together with the endorsements thereon, shall then be recorded in the office for the recording of deeds in the county where the principal place of business is situate.
Section 19. Any association may cease to do business and be dissolved in the same manner as corporations are dissolved under the general corporation laws of the State.
Section 20. No association organized under the provisions of this Act shall be liable for the payment of any State tax upon its right to do business in this State, upon its earnings or income, or any part thereof, upon its capital stock, or upon any scrip, bonds, certificates, or other evidences of indebtedness issued by such corporation, and all stocks, bonds, et cetera, issued by such associations shall be exempt from all State taxation; and such associations shall not be required to file reports relative to such taxes as are or may be by law required of corporations not exempt from the payment of such taxes.
Section 21. Corporations already existing under the laws of this State, the purpose of which coincide with the purposes of associations incorporated under this Act, upon accepting the provisions of this Act, by writing under the seal of said corporation, duly filed in the office of the Secretary of State, shall be entitled to all of the privileges, immunities, franchises, and powers conferred by this Act upon associations to be created under the same, and, upon acceptance and approval thereof by the Secretary of State, he shall issue a certificate to said corporation reciting the same.
Section 22. Cooperative agricultural associations or corporations created by or under the laws of any other State, doing business in this State, and in which three or more of the stockholders are citizens of this State, and organized and operating under laws similar to this Act, may become corporations of this State under the provisions of this Act by preparing, having approved and recorded a certificate in which shall be stated:
First. The name of the corporation, which shall include or made to include the word "cooperative."
Second. Its purpose, which shall include one or more of the class of services enumerated in section three of this Act.
Third. The principal place where its business is to be transacted, which shall be within this State, and at which it keeps a record of the names and residences of the stockholders and the number of shares held by each.
Fourth. The term for which it is to exist.
Fifth. The number of stockholders and the total number of shares of stock outstanding.
Sixth. The number of its directors, and the names and residences of those elected for the current year, and the name and residence of the treasurer.
Seventh. The amount of its capital stock, and the number and par value of the shares into which it is divided.
Eighth. The legislation under which it was originally created.
Ninth. Its financial condition at the date of the certificate, showing capital stock paid in, funded debt, floating debt, estimated value of property and cash assets, if any.
Said certificate shall be accompanied by a certificate, under the seal of said corporation, showing the consent of a majority in interest of such corporation to such application for a charter and to a renunciation of its original charter and of all privileges not enjoyed by corporations under this Act under the laws of this State.
Section 23. Said certificates shall be acknowledged by at least three of the directors of said corporation before the recorder of deeds of the county in which the chief operations are to be carried on or in which the principal office is situated; and said directors shall also make and subscribe an oath or affirmation before him to be endorsed on the said certificate that the statements contained therein are true. The said certificate shall then be produced to the Secretary of State, who shall examine the same, and, if he find it to be in proper form and within the purposes named for associations under this Act, he shall approve the same, and endorse his approval thereon, and direct a certificate of incorporation to issue in the usual form incorporating said stockholders and their successors into a body politic and corporate, in deed and in law, by the name chosen; and the said certificate shall be filed in the office of the Secretary of State; a certified copy of said certificate with all its endorsements shall then be recorded in the office for the recording of deeds in and for the county where the chief operations are to be carried on.
Section 24. From the date of said certificate of incorporation, said corporation shall be and exist as a corporation of this State under the provisions of this Act and of its charter; and all of the rights, privileges, powers, immunities, lands, property and assets of whatever kind or character the same may be possessed and owned by the original corporation, shall vest in and be owned and enjoyed by the said corporation so created as fully and with like effect as if its original charter had remained in force, save as by general law and said certificate expressly stated otherwise; and all suits, claims and demands by said corporation, in existence at the date of said new charter, shall and may be sued, prosecuted, and collected under the laws governing the said corporation prior to its new charter; and claims and demands of every nature and character in existence at the date of said new charter may be collected from and of said new chartered corporation as fully and with like effect as if no change had taken place.
Section 25. Corporations heretofore or hereafter organized under the laws of any other State, the purposes of which coincide with the purposes of associations incorporated under this Act, shall be allowed to carry on any proper activities, operations, and functions in this State, upon compliance with the legal requirements applicable to foreign corporations desiring to do business in this State, with power to make any and all contracts which could be made by any association incorporated hereunder, which contracts shall be legal and valid and enforceable in this State with the same force and effect as if the said corporation were organized hereunder. And such associations or corporations shall be entitled to all of the rights, exemptions, remedies and protection available for cooperative agricultural associations formed under the provisions set forth in this Act, with the same force and effect as if such association or corporation were organized hereunder. Any such association or corporation shall be treated as organized hereunder with regard to the prohibition and penalty provisions set forth in this Act.
Section 26. If any clause, sentence, paragraph or part of this Act shall, for any reason, be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph or part thereof directly involved in the controversy in which said judgment shall have been rendered.
Section 27. All Acts or parts of Act inconsistent herewith are hereby repealed.
Section 28. This Act shall be effective immediately upon its passage and approval.
Approved May 20, 1937.