§ 8501 Definitions.
As used in this chapter, unless the context otherwise requires:
(1) "Agricultural products" includes 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 does not include timber products.
(2) "Association" means a corporation formed under this chapter.
(3) "Patron" means a person engaged in agriculture whose products are sold by or supplies purchased through the association, or who has executed a contract with the association to sell all or a part of the patron's agricultural products to or through the association.
(4) "Person engaged in agriculture" means a person engaged in agriculture, dairying, livestock raising, poultry raising, floriculture, mushroom growing, beekeeping, horticulture and other allied occupations.
§ 8502 Formation of associations; advertisement of intention to apply for charter.
(a) Cooperative agricultural associations, instituted for the purposes of mutual help, having capital stock, may be formed under the provisions of this chapter by any number of persons, not less than 5, engaged in agriculture.
(b) Notice of an intention to apply for a charter or articles of association shall be inserted in 1 newspaper of general circulation, printed in the county where the principal place of business is situated, for 1 insertion, setting forth briefly the character and purpose of the corporation and the kind of service to be performed by it. The advertisement shall be published at least 3 days before the application is laid before the Secretary of State.
41 Del. Laws, c. 132, §§ 2, 4; 3 Del. C. 1953, § 8502.;
§ 8503 Articles of association; contents; acknowledgment.
(a) The articles of association of an intended association shall be subscribed by 5 or more persons, 3 of whom shall be citizens of this State, and shall set forth:
(1) The name of the association, which shall include the word "cooperative";
(2) The class of services to be performed by the association, which services shall be 1 or more of those enumerated in § 8507 of this title;
(3) The location of the registered office of the association, which shall be within this State;
(4) The term for which it is to exist;
(5) 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;
(6) The number of its directors for the first year, not less than 5, the names and residences of those who are chosen for directors for the first year, and the name and residence of the treasurer;
(7) Any other provisions, not inconsistent with law, which the association sees fit to adopt, governing the regulation and conduct of its affairs.
(b) The articles of association shall be acknowledged by not less than 5 of the subscribers thereto, before any officer authorized to take acknowledgments and administer oaths and affirmations in this State. The subscribers making the acknowledgment shall also make and subscribe an oath or affirmation before the authorized officer that the statements contained therein are true.
§ 8504 Certificate of incorporation; issuance and recording.
(a) The articles of association, accompanied with proof of publication of the notice provided for in § 8502 of this title, shall be presented to the Secretary of State, who shall examine the same, and if the Secretary of State finds the articles in proper form and within the purpose mentioned in this chapter, the Secretary of State shall endorse his or her 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. The 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. The articles of association shall be filed in the office of the Secretary of State.
(b) 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 situated. 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 articles of association.
(c) Certified copies of the records of articles of association shall be competent evidence for all purposes in the courts of this State.
§ 8505 Existing domestic corporations.
Corporations which exist under the laws of this State, and the purposes of which coincide with the purposes of associations incorporated under this chapter, shall, upon accepting this chapter, by a writing under the seal of the corporation, duly filed in the office of the Secretary of State, be entitled to all of the privileges, immunities, franchises and powers conferred by this chapter upon associations to be created under the chapter and, upon acceptance and approval thereof by the Secretary of State, he or she shall issue a certificate to the corporation reciting the same.
§ 8506 Reincorporation of foreign associations; procedure; effect.
(a) Cooperative agricultural associations or corporations created by or under the laws of any other state, doing business in this State, and in which 3 or more of the stockholders are citizens of this State, and which are organized and operating under laws similar to this chapter, may become corporations of this State under this chapter by preparing, having approved and recorded a certificate which shall state:
(1) The name of the corporation, which shall include or be changed to include the word "cooperative";
(2) Its purpose, which shall include 1 or more of the class of services enumerated in § 8507 of this title;
(3) 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;
(4) The term for which it is to exist;
(5) The number of stockholders and the total number of shares of stock outstanding;
(6) 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;
(7) The amount of its capital stock, and the number and par value of the shares into which it is divided;
(8) The name of the state and the name and citation of the statute or legislation under which it was originally created;
(9) 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.
(b) The certificate shall be accompanied by another certificate, under the seal of the corporation, showing the consent of a majority in interest of the corporation to the application for a charter and to a renunciation of its original charter and of all privileges not enjoyed by corporations under this chapter under the laws of this State.
(c) Both certificates shall be acknowledged by at least 3 of the directors of the 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. The directors shall also make and subscribe an oath or affirmation before the recorder of deeds to be endorsed on the certificates that the statements contained therein are true. The certificates shall then be produced to the Secretary of State, who shall examine the same, and, if he or she finds the certificates to be in proper form and within the purposes named for associations under this chapter, he or she shall approve them, and endorse his or her approval thereon, and direct a certificate of incorporation to issue in the usual form incorporating the stockholders and their successors into a body politic and corporate, in deed and in law, by the name chosen. The certificate of incorporation shall be filed in the office of the Secretary of State, and a certified copy thereof, 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.
(d) From the date of the certificate of incorporation, the foreign association or corporation shall be, and exist as, a corporation of this State under the provisions of this chapter and of its charter. All rights, privileges, powers, immunities, lands, property and assets of whatever kind or character possessed and owned by the original corporation, shall vest in and be owned and enjoyed by the corporation so created as fully and with like effect as if its original charter had remained in force, save as by general law and by its certificate of incorporation is expressly stated otherwise. All suits, claims and demands by the corporation, in existence at the date of the new charter, shall and may be sued, prosecuted, and collected under the laws governing the corporation prior to its new charter. Claims and demands of every nature and character in existence at the date of the new charter may be collected from and of the newly chartered corporation as fully and with like effect as if no change had taken place.
§ 8507 General powers of associations.
An association incorporated under this chapter 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 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 1 or more of the kinds of service specified in this section, for the agricultural or other purposes of the stockholders.
41 Del. Laws, c. 132, § 3; 3 Del. C. 1953, § 8507.;
§ 8508 Specific powers of associations.
Each association formed under this chapter, by virtue of its existence as such, may:
(1) Have succession for the period limited in its articles of association, and, when no period is limited thereby, 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 chapter;
(2) Maintain and defend judicial proceedings by the name specified in the articles of association;
(3) Adopt and use a common seal and alter the same at pleasure;
(4) Hold, purchase, and transfer such real and personal property as the purposes of the corporation require;
(5) Elect a board of directors, which may appoint a president, vice-president, secretary, treasurer and other officers, agents and employees as are deemed necessary; prescribe their duties; require bonds of them, and dismiss them and any of them in accordance with this chapter and with the bylaws of the association;
(6) Make bylaws, 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) Perform for stockholders and other patrons the services described in the articles of association and authorized by this chapter;
(8) Make contracts necessary in the conduct of its operation and the transaction of its affairs;
(9) Borrow money necessary to the conduct of its operations, and issue notes, bonds and other evidences of indebtedness therefor, and give security in the form of mortgage or otherwise for the payment thereof;
(10) Cooperate with any other association or corporation, whether formed under this chapter 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 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 this chapter or otherwise, for the cooperative and more economical carrying on of its business, or any part or parts thereof; or any 2 or more cooperative associations, formed under this chapter 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 businesses;
(11) Foster membership in the association and solicit patrons by advertising or by educational or other lawful means;
(12) Exercise such incidental powers as are necessary in the conduct of its operations;
(13) Issue and sell its preferred and common stock, but no person shall become the owner of more than 5 percent of the outstanding common stock of the association;
(14) Purchase and hold stock of corporations engaged in the buying or selling of agricultural products as defined in this chapter, when such purchase and holding is in keeping with the purposes for which the association was formed.
41 Del. Laws, c. 132, § 5; 3 Del. C. 1953, § 8508.;
§ 8509 Adoption of bylaws.
Within 30 days after the recording of the articles of association in the office of the recorder of deeds, as prescribed in § 8504 of this chapter, 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, bylaws regulating the conduct and management of the association shall be adopted.
41 Del. Laws, c. 132, § 11; 3 Del. C. 1953, § 8509.;
§ 8510 Provisions of bylaws.
Bylaws shall, within the limits of this chapter, prescribe:
(1) The time, place and manner of calling and holding meetings. Meetings of stockholders may be held (a) by a meeting at large at such place as may be designated by the bylaws or action of the board of directors, or (b) by 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 bylaws, or (c) by 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 stockholder members of such districts or locals and need not necessarily be held at the same time in each district or local. The bylaws 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 nomination, election and removal, their powers and duties; the number, not less than a majority, necessary to the exercise of their powers; and the method of fixing their compensation, if any. The board of directors may, by resolution adopted by a majority of the whole board, delegate 2 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 bylaws 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 with the return of the votes 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;
(5) 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 which may thus be created shall be filled as in other cases. A representative body or council, if created, shall have, in addition to the powers provided by this chapter, such other powers as are provided by the bylaws, which by the bylaws may be made advisory only;
(6) The method or methods by which the bylaws may, from time to time, be adopted, altered, amended or repealed. The authority to make, alter, amend or repeal bylaws may be expressly vested by the bylaws 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 bylaws made by the board of directors, and subject to the power of the stockholders to change or repeal bylaws made by either the directors or the representative body or council. 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.
41 Del. Laws, c. 132, § 11; 3 Del. C. 1953, § 8510.;
§ 8511 Exclusive buy and sell requirements of bylaws; liquidated damages; enforcement.
The bylaws may require common stockholders 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 such stockholders, by giving notice prescribed in the bylaws, may withdraw and be released from their obligation to employ the services of the association in respect to such products and supplies. The bylaws or contracts, or both, may fix, as liquidated damages, specific sums to be paid to the association to reimburse it for any damages which it, or the stockholders, sustain by the failure of any common stockholder or other patron to perform any obligation to the association under the articles of association, the bylaws, 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.
41 Del. Laws, c. 132, § 12; 3 Del. C. 1953, § 8511.;
§ 8512 Amendment of articles of association.
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 has been given as prescribed in the bylaws. A copy of such amendment, signed and acknowledged by not less than 3 of the directors, shall be presented to the Secretary of State, who shall examine the same, and, if he or she finds it in proper form, shall endorse approval thereon. The amendment shall then be filed in the office of the Secretary of State. A certified copy of the amendment, together with the endorsements thereon, shall then be recorded in the office of the recorder of deeds in the county where the principal place of business is situated.
§ 8513 Dissolution of associations.
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.
41 Del. Laws, c. 132, § 19; 3 Del. C. 1953, § 8513.;
§ 8514 Sale of assets.
Any association organized, existing or registered as a cooperative agricultural association under this chapter may sell, lease or exchange all its property and assets, including its goodwill and its corporate franchises, upon such terms and conditions and for such consideration as its board of directors deems expedient and for the best interests of the corporation, when authorized by written consent of the holders of a majority of the stock issued and outstanding having voting power or by vote of said stockholders at a meeting duly called for that purpose. No such authorization by vote or written consent is required where its board of directors determines that the fair value of its property and assets is less than the par value of its outstanding stock and its property and assets are sold to another association organized, existing or doing business as a cooperative agricultural association in this State and registered as provided under this chapter, in exchange for the obligation to purchase or redeem, at the par value, any of its stock offered for sale or redemption by its stockholders and the obligation to assume and pay all its debts.
§ 8515 Registered office in State; principal office or place of business in State.
(a) Every association created under this chapter shall have and maintain in this State a registered office which may, but need not be, the same as its place of business.
(b) Whenever the term "principal place, where its business is to be transacted," "principal place of business" or "principal office" is or has been used in the articles of association of a cooperative agricultural association, or in any other document, or in any statute, it shall be deemed to mean and refer to, unless the context indicates otherwise, the association's registered office required under § 8503(a)(3) of this title; and it shall not be necessary for any association to amend its articles of association or any other documents to comply with this section.