SENATE BILL NO. 122
INTRODUCED BY D. SHEA
AN ACT GENERALLY REVISING THE COOPERATIVE ASSOCIATION LAWS; ELIMINATING THE 40-YEAR LIMIT ON EXISTENCE FOR COOPERATIVE ASSOCIATIONS; CHANGING THE LIMIT ON THE NUMBER OF PERSONS WHO MAY FORM A COOPERATIVE ASSOCIATION; REMOVING THE MINIMUM REQUIREMENT FOR INITIALLY SUBSCRIBED STOCK; ELIMINATING PRICE LIMITS ON COOPERATIVE ASSOCIATION SHARES; AUTHORIZING THE SECRETARY OF STATE TO ESTABLISH FILING FEES COMMENSURATE WITH COSTS; AND AMENDING SECTIONS 35-15-103, 35-15-201, 35-15-203, 35-15-204, 35-15-205, AND 35-15-401, MCA.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 35-15-103, MCA, is amended to read:
"35-15-103. Powers. (1) Associations formed under this chapter shall be are bodies corporate and politic for the period
for which they are organized, not exceeding 40 years which may be of perpetual duration.
(2) Associations An association formed under this chapter may:
(a) sue and be sued;
(b) have a common seal which they that the association may alter or renew at pleasure;
(c) own, possess, and enjoy so much real and personal property as shall be necessary for the transaction of their
business and sell and dispose of the same property; and
(d) borrow money and pledge their property, both real and personal, to secure the payment thereof of any borrowed
money.
(3) Associations formed under this chapter shall have and exercise all powers necessary and requisite to carry into effect
the objects for which they the associations may be formed and such as are, including those powers usually exercised by
cooperative associations, subject to all duties, restrictions, and liabilities set forth in the general laws in relation relating to
similar corporations, except so far as the same may be that are not limited or enlarged by this chapter."
Section 2. Section 35-15-201, MCA, is amended to read:
"35-15-201. Incorporation. (1) Whenever any number of persons, not less than three or more than seven, may two or
more persons desire to become incorporated incorporate as a cooperative association for the purpose of trade or of
prosecuting carrying out any branch of industry or the purchase and distribution of commodities for consumption or in the
borrowing or lending of money among members for industrial purposes, they the persons shall make prepare a statement to
that effect under their hands setting that also sets forth:
(a) the name of the proposed corporation cooperative association;
(b) its capital stock;
(c) its location;
(d) the duration of the association; and
(e) the particular branch or branches of industry which they that the association intend intends to prosecute carry out.
(2) In addition to provisions the items required in subsection (1), the statement of incorporation may also contain
provisions not inconsistent with law regarding the liability provisions as set forth in 35-1-216.
(3) The statement, accompanied by the required filing fee, shall must be filed in the office of the secretary of state as the
articles of incorporation of the association. The After receiving the statement and the fee, the secretary of state shall
thereupon issue to such the persons forming the association a license as commissioners to open books for subscription to
the capital stock of such corporation, the association at such a time and place as they that the persons forming the
association may determine, for which he shall receive the fee of $20."
Section 3. Section 35-15-203, MCA, is amended to read:
"35-15-203. First meeting. As soon as 10 or more the initial shares of the capital stock shall be have been subscribed,
the commissioners shall convene a meeting of the subscribers for the purpose of electing directors, adopting bylaws, and
transacting such other business as shall properly come before them. Notice thereof shall of the meeting must be given to
each subscriber by depositing same in the post office mailing the notice, properly addressed, at least 10 days before the time
fixed, meeting. The notice must contain stating the object, time, and place of said the meeting."
Section 4. Fees for filing, copying, and services. (1) The secretary of state shall establish by rule fees for filing documents and issuing certificates as required by this chapter.
(2) The secretary of state shall establish by rule fees for copying documents, priority handling, transmitting or filing facsimile copies, and providing computer-generated information.
(3) The fees prescribed under this section must be reasonably related to the costs of processing the documents and providing the services. The secretary of state shall maintain records sufficient to support the fees established under this section.
Section 5. Section 35-15-204, MCA, is amended to read:
"35-15-204. Issuance of certificate of organization -- effect. (1) The commissioners shall make a full report of their
proceedings the first meeting, including therein a copy of the notice provided for in the preceding section 35-15-203, a copy
of the subscription list, a copy of the bylaws adopted by the association, and the names of the directors elected and their
respective terms of office,. which The report shall must be executed by at least a majority of the commissioners and shall
must be filed in the office of the secretary of state along with any required filing fee. The secretary of state shall, thereupon
upon filing the report, issue a certificate of the complete completed organization of the association,. making a part thereof a
copy of all papers filed in his office in and about the organization and duly authenticated under his hand and seal of the
state, for which he shall receive the sum of $20, and thereupon a certified copy of said certificate shall be filed in the office
of the county clerk in which the principal office of the association is located.
(2) Upon the filing of said certified copy the report of the first meeting and the statement of incorporation with the
secretary of state and the issuance of the certificate provided for in subsection (1), the association shall be deemed is
considered to be fully organized and may proceed to engage in business."
Section 6. Section 35-15-205, MCA, is amended to read:
"35-15-205. Amendment of articles of incorporation. At any time after the filing of the certificate of complete
organization, the articles of incorporation may be amended. Any amendment of the articles of incorporation shall first must
be first approved by two-thirds of the directors and then adopted by a vote of not less than two-thirds of those stockholders
voting thereon on the issue at any regular meeting of the stockholders or at a special meeting of the stockholders called for
that purpose. A certificate setting forth such any amendment shall must be executed on behalf of the association by its
president or vice-president vice president and its corporate seal affixed thereto and attested to by its secretary. Such The
certificate and any required filing fee shall must be filed in the office of the secretary of state, who shall thereupon issue a
certificate of amendment of the articles of incorporation, for which he shall receive the sum of $10, and thereupon a
certified copy of such certificate shall be filed in the office of the county clerk in which the principal office of the
association is located."
Section 7. Section 35-15-401, MCA, is amended to read:
"35-15-401. Classes of stock. (1) The purchase price of the shares of stock shall not be less than $10 or more than
$5,000 per share must be set by the cooperative association and may be made payable in installments.
(2) Every A cooperative association may divide its shares of stock into preferred and common stock. The holders of
preferred stock shall have no may not have voting power and shall may not participate in the management and affairs of the
association,. and the The owners thereof of preferred stock shall share in the profits of the association to the extent of not
exceeding 6% per annum on the par value thereof determined by the cooperative association. The common stock may be
divided into classes of different values, and the owners thereof of the common stock shall share in the profits of the
association in proportion to the par value of their shares as determined by the cooperative association. However, the owners
of common stock in the different classes shall have the same power and vote voting rights in the association.
(3) The stock heretofore issued in classes of different par values by any cooperative association is hereby legalized and
made valid."
Section 8. Codification instruction. [Section 4] is intended to be codified as an integral part of Title 35, chapter 15, part 2, and the provisions of Title 35, chapter 15, part 2, apply to [section 4].
Section 9. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].
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