Member authority concerning certain cooperative property.
Except as provided in s. 193.443
, a cooperative may sell, lease, transfer, or otherwise dispose of all or substantially all of its property and assets, including its good will, not in the usual and regular course of its business, upon those terms and conditions that the board considers expedient, when approved by the affirmative vote of the members owning a majority of the voting power of the interests entitled to vote and by the board. Notwithstanding s. 193.511 (6)
, 193.515 (3)
, and 193.553
, written notice of any members' meeting at which a vote will be taken under this section shall be given to all members. The written notice shall state that a purpose of the meeting is to consider the sale, lease, transfer, or other disposition of all or substantially all of the property and assets of the cooperative.
History: 2005 a. 441
Membership interests. 193.601(1)
Amounts and divisions of membership interests.
To the extent permitted under this chapter, a cooperative may increase, decrease, establish, or alter the authorized amount and divisions of membership interests by amending the articles under s. 193.221
or the bylaws under s. 193.241
(2) Issuance and acquisition of membership interests generally.
A cooperative may issue authorized membership interests on terms and conditions prescribed in the articles or bylaws or, if authorized in the articles or bylaws, on terms and conditions determined by the board. The cooperative shall disclose to any person to whom a membership interest is issued, before issuance, the organizational and capital structure of the cooperative, known business prospects and risks of the cooperative, and the nature of the governance and financial rights of the membership interest being acquired and of other classes of membership and membership interests. The cooperative shall notify all members, before issuance, of any membership interest issued by the cooperative. The cooperative may not issue a membership interest to any person unless the subscription price of the membership interest has been paid for in money or property. If the subscription price is paid for in property, the value of the property to be contributed shall be approved by the board.
(3) Transferring ownership of membership interests.
After issuance by the cooperative, ownership of a membership interest may be transferred only with the approval of the board. The board may adopt resolutions prescribing procedures to approve transfers prospectively.
(4) Patron membership interests.
Except as otherwise provided in this subsection, if nonpatron membership interests are authorized by the patron members, all patron membership interests, collectively, shall have not less than 51 percent of the cooperative's financial rights to profit allocations and distributions. The patron members by majority vote may authorize that the patron membership interests, collectively, may have less than 51 percent, but not less than 30 percent, of the cooperative's financial rights to profit allocations and distributions, and this change must be included in the bylaws. Notwithstanding s. 193.221 (1)
, an amendment of the articles under this subsection may be adopted only if approved by the affirmative vote of the patron members.
(5) First privilege to purchase membership interests.
The articles or bylaws may provide the patron members, individually or collectively, or the cooperative with the first privilege of purchasing the membership interests of any class of membership interests offered for sale. If the articles or bylaws provide patron members with a first privilege to purchase membership interests under this subsection, the articles or bylaws shall include a procedure by which patron members may proceed to acquire the membership interests. If the cooperative acquires a membership interest under this subsection, the cooperative may hold the interest to be reissued or may retire and cancel the interest.
(6) Nonpatron membership interests.
If nonpatron membership interests are authorized by the patron members, each person to whom a nonpatron membership interest is issued shall sign a member control agreement or a statement agreeing to abide by any applicable conditions imposed under the bylaws. Unless the bylaws contain a sufficient description, the cooperative shall provide to a person to whom a nonpatron membership interest is issued, before issuance, a description of the rights and obligations applicable to holders of that nonpatron membership interest, the transferability of that nonpatron membership interest, and the manner in which profits and losses are divided and allocated among the membership interests and membership classes.
(6m) Allocation of profits, losses, and distributions.
If the articles or bylaws do not otherwise provide for the allocation of the profits and losses between patron membership interests and any authorized nonpatron membership interests, then the allocation of profits and losses among nonpatron membership interests individually and patron membership interests collectively shall be allocated based on the value of contributions to capital made according to the patron membership interests collectively and the nonpatron membership interests individually to the extent the contributions have been accepted by the cooperative. Distributions of cash or other assets of the cooperative shall be allocated among the membership interests as provided in the articles and bylaws, subject to the provisions of this chapter. If not otherwise provided in the articles or bylaws, distributions shall be made on the basis of value of the capital contributions of the patron membership interests collectively and the nonpatron membership interests to the extent the contributions have been accepted by the cooperative.
(7) Reacquisition of nonpatron membership interests after dissent.
Unless the articles or bylaws provide otherwise, a nonpatron member may force the cooperative to acquire the member's nonpatron membership interests as provided under this subsection if the articles or bylaws are amended in a manner that materially and adversely affects the rights and preferences applicable to the nonpatron membership interests of the nonpatron member. If approval of the amendment is not required of the members, the nonpatron member shall file a notice of dissent and intent to demand fair value of the membership interests with the cooperative within 30 days after the date on which notice of the amendment is given to members. If approval of the amendment is required of the members, the nonpatron member shall file a notice of dissent and intent to demand fair value of the membership interests with the cooperative before the vote on the proposed amendment and shall not vote in favor of the proposed amendment. After receipt of a notice under this subsection and, if applicable, after approval of the amendment, the cooperative shall rescind the amendment within 60 days after receipt of the notice or acquire the membership interests by paying the fair value of the membership interests to the dissenting member within 180 days after receipt of the notice. Upon acquiring the membership interests, the cooperative may hold the interests to be reissued or may retire and cancel the interests.
History: 2005 a. 441
Cooperative securities. 193.605(1)
Applicability of ch. 408 to cooperative securities.
To the extent that the provisions of this chapter concerning the authorization, issuance, control, use, and rights of membership interests or concerning the stock of a cooperative are inconsistent with ch. 408
, the provisions of this chapter apply.
(2) Liability of cooperative for wrongful transfers of its securities. 193.605(2)(a)1.
"Proper person" means the registered owner or last prior transferee, whether or not described as fiduciary for another, or his or her authorized agent or legal representative or the successor to his or her interest by operation of law.
"Wrongful transfer" means a transfer which is in excess of the authorization or capacity of the transferor, or which is made in breach of the transferor's fiduciary duty.
A cooperative may not be held liable for acting upon wrongful transfers of its securities which are not "securities" as defined in s. 408.102
, unless it has notice that the certificate was not transferred by a proper person or has notice that the transfer was a wrongful transfer.
When a security issued by a cooperative, which is not a "security" as defined in s. 408.102
, is missing, the cooperative shall issue a duplicate security if the owner so requests and furnishes an indemnity acceptable to the cooperative.
When records showing ownership of securities or apportionment of equity or membership interests are missing and the information therein contained is necessary to a proposed redemption of the interest, the cooperative may give notice and redeem by satisfying all of the following:
The cooperative shall set aside an amount equal to the value of the interests to be redeemed.
The cooperative shall give notice of such redemption to all owners of interests of which the cooperative has knowledge.
If there are interests, the ownership of which is unknown to the cooperative, it shall publish notice of the redemption at least once a month for 4 months in a publication circulated among members of cooperatives in the area, and also publish a class 3 notice, under ch. 985
History: 2005 a. 441
Assignment of financial rights. 193.611(1)
Assignment of financial rights permitted.
Except as provided in sub. (3)
, a member's financial rights in a cooperative are transferable in whole or in part.
(2) Effect of assignment of financial rights.
An assignment of a member's financial rights under sub. (1)
entitles the assignee to receive, to the extent assigned, only the share of profits and losses and the distributions to which the assignor would otherwise be entitled. An assignment of a member's financial rights under sub. (1)
does not dissolve the cooperative and does not entitle or empower the assignee to become a member, to exercise any governance rights, to receive any notices from the cooperative, or to cause dissolution. The assignment may not allow the assignee to control the member's exercise of governance or voting rights.
(3) Restrictions on assignment of financial rights. 193.611(3)(a)(a)
A restriction on the assignment of financial rights in a cooperative may be imposed in the articles, in the bylaws, in a member control agreement, by a resolution adopted by the members at a members' meeting, or by an agreement among members and the cooperative. A restriction is not binding with respect to financial rights reflected in the required records of the cooperative before the adoption of the restriction, unless the owners of those financial rights are parties to the agreement or voted in favor of the restriction.
Subject to par. (c)
, a restriction under par. (a)
is enforceable only if the restriction is not manifestly unreasonable under the circumstances and is noted conspicuously in the required records of the cooperative. Such a restriction may be enforced against the owner of the restricted financial rights or a successor or transferee of the owner, including a pledgee or a legal representative.
A restriction on an assignment of financial rights under par. (a)
which is otherwise valid and in effect at the time of the issuance of a statement of membership interest issued by the cooperative under s. 193.615
but which is not reflected in that statement is ineffective against an assignee who takes an assignment in reliance on the statement.
A security interest in a member's financial rights may be foreclosed and otherwise enforced, and a secured party may assign a member's financial rights in accordance with ch. 408
, without the consent or approval of the member whose financial rights are subject to the security interest.
History: 2005 a. 441
Nature and terms of a membership interest and statement of interest owned. 193.615(1)
A membership interest is personal property. A membership interest does not give the owner of the interest any interest in specific cooperative property. All property of the cooperative is property of the cooperative itself.
(2) Statement of membership interest.
At the request of any member, the cooperative shall state in writing the particular membership interest owned by that member as of the date the cooperative makes the statement. The statement shall describe the member's rights to vote, if any, and to share in profits, losses, and distributions, restrictions on assignments of the member's financial rights under s. 193.611 (3)
or voting rights under s. 193.555
, and any assignment of the member's rights then in effect other than a security interest.
(3) Terms of membership interests generally. 193.615(3)(a)(a)
All the membership interests of a cooperative shall satisfy all of the following:
Unless the articles or bylaws provide otherwise, the membership interests shall be of one class, without series.
The membership interests shall be patron membership interests and, if authorized, nonpatron membership interests subject to this chapter entitled to vote as provided in s. 193.555
, and have equal rights and preferences in all matters not otherwise provided for by the board unless and to the extent that the articles or bylaws have fixed the relative rights and preferences of different classes and series.
All of the following apply to the rights and preferences of a class or series of membership interests:
The rights and preferences may be made dependent upon facts ascertainable outside the articles or bylaws, or outside the resolution or resolutions under sub. (5)
establishing the class or series, if the manner in which the facts operate upon the rights and preferences is clearly and expressly set forth in the articles or bylaws or in the resolution or resolutions establishing the class or series.
The rights and preferences may include by reference some or all of the terms of any agreements, contracts, or other arrangements entered into by the cooperative in connection with the establishment of the class or series if the cooperative retains at its principal office a copy of the agreements, contracts, or other arrangements or the portions thereof included by reference.
If specified in the articles or bylaws, or the resolution under sub. (5)
establishing the class or series, all of the following apply to membership interests of a class or series:
The membership interests are subject to the right of the cooperative to redeem any of those membership interests at a price fixed in the articles or bylaws or by the board.
Owners of the membership interests may receive cumulative, partially cumulative, or noncumulative distributions.
The membership interests may have preference over any other class or series of membership interests for the payment of distributions.
The membership interests may be convertible into membership interests of any other class or series.
The membership interests may have full, partial, or no voting rights, except as provided in s. 193.555
(4) Rights of judgment creditor.
On application to the circuit court by any judgment creditor of a member, the court may order the payment of the unsatisfied amount of the judgment from a member's or an assignee's financial rights. Such a judgment creditor has only the rights of an assignee of a member's financial rights under s. 193.611
. This subsection is the sole and exclusive remedy of a judgment creditor with respect to the judgment debtor's membership interest. This subsection does not deprive any member or assignee of financial rights of the benefit of any exemption under s. 815.18
applicable to the membership interest.
If permitted under the bylaws, the board may adopt a resolution establishing a class or series of membership interests, setting forth the designation of the class or series, and fixing the relative rights and preferences of the class or series, consistent with this chapter. A resolution under this paragraph takes effect on the 3rd day after the date on which the statement required under par. (b)
is given to the members, as determined by the board.
The cooperative may not accept contributions for any membership interests established by resolution under par. (a)
until the board gives the members a statement setting forth the name of the cooperative, the text of the resolution, and the date on which the resolution was adopted.
(7) Security interest in cooperative securities.
For the purpose of any law relating to security interests, a membership interest, governance or voting rights, and financial rights are each to be characterized as provided in s. 408.103 (3)
(8) Powers of estate of a deceased or incompetent member and other fiduciaries. 193.615(8)(a)(a)
Except as provided in par. (b)
, if a member who is an individual dies or a court adjudges the member to be incompetent to manage his or her person or property, or an order for relief under a judgment of bankruptcy is entered with respect to the member, the member's executor, administrator, guardian, conservator, trustee, or other legal representative may exercise all of the rights applicable to the member's membership interest for the purpose of settling the estate or administering the member's property. Except as provided in par. (b)
, if a member is not an individual and is dissolved, terminated, or placed by a court in receivership or bankruptcy, the member's legal representative or successor may exercise all of the rights applicable to the member's membership interest.
Subject to the articles and bylaws, if an event described in par. (a)
causes the termination of a member's membership interest and the termination does not result in dissolution of the cooperative, the terminated member's interest is considered to be that of an assignee of financial rights under s. 193.611
and the rights to be exercised by the executor, administrator, guardian, conservator, trustee, legal representative, or successor are limited accordingly.
(9) Liability of subscribers and members with respect to membership interests.
A subscriber for membership interests or a member of a cooperative is under no obligation to the cooperative or its creditors with respect to the membership interests subscribed for or owned, except to pay to the cooperative the full consideration for which the membership interests are issued or to be issued.
History: 2005 a. 441
Certificated membership interests. 193.621(1)
Certificated interests authorized.
A membership interest of a cooperative may be certificated. The cooperative shall provide each holder of a certificated membership interest with a certificate of membership interest under sub. (2)
(2) Requirements of certificate; generally. 193.621(2)(a)(a)
A certificate of membership interest shall be signed by an agent or officer authorized in the articles or bylaws to sign the certificate or, in the absence of such an authorization, by the chairperson of the board or the records officer of the cooperative. If the person who signs the certificate subsequently ceases to have the capacity to sign the certificate before the certificate is issued, the cooperative may issue the certificate with the same effect as if the person had that capacity on the date of its issue.
A certificate of membership interest shall contain all of the following information on the certificate's face:
A statement that the cooperative is organized under the laws of this state and this chapter.
The name of the person to whom the certificate is issued.
The number and class of membership interests, and the designation of the series, if any, that the certificate represents.
A statement that membership interests are subject to the articles and bylaws.
Any restrictions on transfer of the membership interests that the certificate represents, including any requirement for the approval of the board and first rights to purchase by the cooperative. Notwithstanding any other provision of this subsection, the information required under this subdivision may be stated by reference to the back of the certificate or to another document.
(3) Requirements of certificate; multiple series or classes.
A certificate of membership interest representing a membership interest issued by a cooperative that is authorized to issue membership interests of more than one class or series shall set forth upon the face or back of the certificate, or shall state that the cooperative will furnish to any member upon request and without charge, a full statement of the designations, preferences, limitations, and relative rights of the membership interests of each class or series authorized to be issued, so far as they have been determined, and the authority of the board to determine the relative rights and preferences of subsequent classes or series.
(4) Prima facie evidence.
A certificate of membership interest issued under this section is prima facie evidence of the ownership of the membership interest that the certificate represents.
(5) Uncertificated membership interests authorized.
Unless uncertificated membership interests are prohibited by the articles or bylaws, the board may adopt a resolution permitting uncertificated membership interests. Such a resolution does not apply to a membership interest represented by a certificate until the certificate is surrendered to the cooperative. Within a reasonable time after the issuance or transfer of an uncertificated membership interest, the cooperative shall send to the new member a statement containing the information required under sub. (2) (b)
to be stated on certificates, unless the cooperative is publicly held and has adopted a system of issuance, recordation, and transfer of its membership interests by electronic or other means not involving an issuance of certificates, in compliance with section 17A of the Securities Exchange Act of 1934.
(6) Comparable rights.
Except as otherwise provided under this chapter, the rights and obligations of holders of certificated membership interests are identical to the rights and obligations of holders of uncertificated membership interests of the same class and series.
History: 2005 a. 441
Replacement certificates. 193.625(1)
A cooperative may issue a replacement certificate of membership interest under s. 193.621
using the procedure specified in s. 408.405 (1)
, if the owner of the membership interest represented in a certificate claims that the certificate has been lost, destroyed or wrongfully taken.
(2) Not an overissue.
The issuance of a replacement certificate under sub. (1)
is not an overissue of the membership interest it represents.
History: 2005 a. 441
Restriction on transfer or registration of membership interests. 193.631(1)
A restriction on the transfer, including registration, of a membership interest may be imposed in the articles, in the bylaws, in a member control agreement, by a resolution adopted by the members, or by an agreement among or other written action by members or among them and the cooperative. A restriction imposed by a member control agreement or other written action of members is effective only against the parties to the agreement or written action or the members who assent pursuant to a member resolution. A restriction is not binding with respect to membership interests issued prior to the adoption of the restriction, unless the holders of those membership interests are parties to the agreement or voted in favor of the restriction.
A restriction under sub. (1)
is enforceable only if the restriction is not manifestly unreasonable under the circumstances and any of the following apply:
The restriction is noted conspicuously on a certificate of membership interest representing the membership interest or the existence of the restriction is noted on the certificate and reference is made to a separate document creating or describing the restriction.