AB327,126,1612
2. The membership interests shall be patron membership interests and, if
13authorized, nonpatron membership interests subject to this chapter entitled to vote
14as provided in s. 193.555, and have equal rights and preferences in all matters not
15otherwise provided for by the board unless and to the extent that the articles or
16bylaws have fixed the relative rights and preferences of different classes and series.
AB327,126,1817
(b) All of the following apply to the rights and preferences of a class or series
18of membership interests:
AB327,126,2319
1. The rights and preferences may be made dependent upon facts ascertainable
20outside the articles or bylaws, or outside the resolution or resolutions under sub. (5)
21establishing the class or series, if the manner in which the facts operate upon the
22rights and preferences is clearly and expressly set forth in the articles or bylaws or
23in the resolution or resolutions establishing the class or series.
AB327,127,324
2. The rights and preferences may include by reference some or all of the terms
25of any agreements, contracts, or other arrangements entered into by the cooperative
1in connection with the establishment of the class or series if the cooperative retains
2at its principal office a copy of the agreements, contracts, or other arrangements or
3the portions thereof included by reference.
AB327,127,64
(c) If specified in the articles or bylaws, or the resolution under sub. (5)
5establishing the class or series, all of the following apply to membership interests of
6a class or series:
AB327,127,97
1. The membership interests are subject to the right of the cooperative to
8redeem any of those membership interests at a price fixed in the articles or bylaws
9or by the board.
AB327,127,1110
2. Owners of the membership interests may receive cumulative, partially
11cumulative, or noncumulative distributions.
AB327,127,1312
3. The membership interests may have preference over any other class or series
13of membership interests for the payment of distributions.
AB327,127,1514
4. The membership interests may be convertible into membership interests of
15any other class or series.
AB327,127,1716
5. The membership interests may have full, partial, or no voting rights, except
17as provided in s. 193.555.
AB327,127,25
18(4) Rights of judgment creditor. On application to the circuit court by any
19judgment creditor of a member, the court may order the payment of the unsatisfied
20amount of the judgment from a member's or an assignee's financial rights. Such a
21judgment creditor has only the rights of an assignee of a member's financial rights
22under s. 193.611. This subsection is the sole and exclusive remedy of a judgment
23creditor with respect to the judgment debtor's membership interest. This subsection
24does not deprive any member or assignee of financial rights of the benefit of any
25exemption under s. 815.18 applicable to the membership interest.
AB327,128,6
1(5) Board authority to fix terms. (a) If permitted under the bylaws, the board
2may adopt a resolution establishing a class or series of membership interests, setting
3forth the designation of the class or series, and fixing the relative rights and
4preferences of the class or series, consistent with this chapter. A resolution under
5this paragraph takes effect on the 3rd day after the date on which the statement
6required under par. (b) is given to the members, as determined by the board.
AB327,128,107
(b) The cooperative may not accept contributions for any membership interests
8established by resolution under par. (a) until the board gives the members a
9statement setting forth the name of the cooperative, the text of the resolution, and
10the date on which the resolution was adopted.
AB327,128,13
11(7) Security interest in cooperative securities. For the purpose of any law
12relating to security interests, a membership interest, governance or voting rights,
13and financial rights are each to be characterized as provided in s. 408.103 (3).
AB327,128,24
14(8) Powers of estate of a deceased or incompetent member and other
15fiduciaries. (a) Except as provided in par. (b), if a member who is an individual dies
16or a court adjudges the member to be incompetent to manage his or her person or
17property, or an order for relief under a judgment of bankruptcy is entered with
18respect to the member, the member's executor, administrator, guardian, conservator,
19trustee, or other legal representative may exercise all of the rights applicable to the
20member's membership interest for the purpose of settling the estate or
21administering the member's property. Except as provided in par. (b), if a member is
22not an individual and is dissolved, terminated, or placed by a court in receivership
23or bankruptcy, the member's legal representative or successor may exercise all of the
24rights applicable to the member's membership interest.
AB327,129,6
1(b) Subject to the articles and bylaws, if an event described in par. (a) causes
2the termination of a member's membership interest and the termination does not
3result in dissolution of the cooperative, the terminated member's interest is
4considered to be that of an assignee of financial rights under s. 193.611 and the rights
5to be exercised by the executor, administrator, guardian, conservator, trustee, legal
6representative, or successor are limited accordingly.
AB327,129,11
7(9) Liability of subscribers and members with respect to membership
8interests. A subscriber for membership interests or a member of a cooperative is
9under no obligation to the cooperative or its creditors with respect to the membership
10interests subscribed for or owned, except to pay to the cooperative the full
11consideration for which the membership interests are issued or to be issued.
AB327,129,15
12193.621 Certificated membership interests. (1) Certificated interests
13authorized. A membership interest of a cooperative may be certificated. The
14cooperative shall provide each holder of a certificated membership interest with a
15certificate of membership interest under sub. (2).
AB327,129,22
16(2) Requirements of certificate; generally. (a) A certificate of membership
17interest shall be signed by an agent or officer authorized in the articles or bylaws to
18sign the certificate or, in the absence of such an authorization, by the chairperson of
19the board or the records officer of the cooperative. If the person who signs the
20certificate subsequently ceases to have the capacity to sign the certificate before the
21certificate is issued, the cooperative may issue the certificate with the same effect as
22if the person had that capacity on the date of its issue.
AB327,129,2423
(b) A certificate of membership interest shall contain all of the following
24information on the certificate's face:
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1. The name of the cooperative.
AB327,130,2
12. A statement that the cooperative is organized under the laws of this state
2and this chapter.
AB327,130,33
3. The name of the person to whom the certificate is issued.
AB327,130,54
4. The number and class of membership interests, and the designation of the
5series, if any, that the certificate represents.
AB327,130,76
5. A statement that membership interests are subject to the articles and
7bylaws.
AB327,130,128
6. Any restrictions on transfer of the membership interests that the certificate
9represents, including any requirement for the approval of the board and first rights
10to purchase by the cooperative. Notwithstanding any other provision of this
11subsection, the information required under this subdivision may be stated by
12reference to the back of the certificate or to another document.
AB327,130,21
13(3) Requirements of certificate; multiple series or classes. A certificate of
14membership interest representing a membership interest issued by a cooperative
15that is authorized to issue membership interests of more than one class or series shall
16set forth upon the face or back of the certificate, or shall state that the cooperative
17will furnish to any member upon request and without charge, a full statement of the
18designations, preferences, limitations, and relative rights of the membership
19interests of each class or series authorized to be issued, so far as they have been
20determined, and the authority of the board to determine the relative rights and
21preferences of subsequent classes or series.
AB327,130,24
22(4) Prima facie evidence. A certificate of membership interest issued under
23this section is prima facie evidence of the ownership of the membership interest that
24the certificate represents.
AB327,131,11
1(5) Uncertificated membership interests authorized. Unless uncertificated
2membership interests are prohibited by the articles or bylaws, the board may adopt
3a resolution permitting uncertificated membership interests. Such a resolution does
4not apply to a membership interest represented by a certificate until the certificate
5is surrendered to the cooperative. Within a reasonable time after the issuance or
6transfer of an uncertificated membership interest, the cooperative shall send to the
7new member a statement containing the information required under sub. (2) (b) and
8(3) to be stated on certificates, unless the cooperative is publicly held and has adopted
9a system of issuance, recordation, and transfer of its membership interests by
10electronic or other means not involving an issuance of certificates, in compliance
11with section 17A of the Securities Exchange Act of 1934.
AB327,131,15
12(6) Comparable rights. Except as otherwise provided under this chapter, the
13rights and obligations of holders of certificated membership interests are identical
14to the rights and obligations of holders of uncertificated membership interests of the
15same class and series.
AB327,131,20
16193.625 Replacement certificates. (1) Issuance. A cooperative may issue
17a replacement certificate of membership interest under s. 193.621 using the
18procedure specified in s. 408.405 (1), if the owner of the membership interest
19represented in a certificate claims that the certificate has been lost, destroyed or
20wrongfully taken.
AB327,131,22
21(2) Not an overissue. The issuance of a replacement certificate under sub. (1)
22is not an overissue of the membership interest it represents.
AB327,132,8
23193.631 Restriction on transfer or registration of membership
24interests. (1) How imposed. A restriction on the transfer, including registration,
25of a membership interest may be imposed in the articles, in the bylaws, in a member
1control agreement, by a resolution adopted by the members, or by an agreement
2among or other written action by members or among them and the cooperative. A
3restriction imposed by a member control agreement or other written action of
4members is effective only against the parties to the agreement or written action or
5the members who assent pursuant to a member resolution. A restriction is not
6binding with respect to membership interests issued prior to the adoption of the
7restriction, unless the holders of those membership interests are parties to the
8agreement or voted in favor of the restriction.
AB327,132,11
9(2) Restrictions permitted. (a) A restriction under sub. (1) is enforceable only
10if the restriction is not manifestly unreasonable under the circumstances and any of
11the following apply:
AB327,132,1512
1. The restriction is noted conspicuously on a certificate of membership interest
13representing the membership interest or the existence of the restriction is noted on
14the certificate and reference is made to a separate document creating or describing
15the restriction.
AB327,132,1716
2. The restriction is imposed under this chapter or is included in the articles
17or bylaws.
AB327,132,1918
3. The restriction relates to an uncertificated membership interest and is
19included in information sent to the holders of such a membership interest.
AB327,132,2220
(b) A restriction that is enforceable under par. (a) may be enforced against the
21holder of the restricted membership interest or a successor or transferee of the
22holder, including a pledgee or a legal representative.
AB327,132,2323
subchapter vii
AB327,132,2524
contributions, allocations,
25
and distributions
AB327,133,4
1193.701 Authorization, form, and acceptance. (1) Board may authorize. 2If authorized by the board, a cooperative may accept contributions, make
3contribution agreements under s. 193.711, and make contribution rights agreements
4under s. 193.715.
AB327,133,6
5(2) Permissible forms. A person may make a contribution to a cooperative by
6any of the following means:
AB327,133,87
(a) By paying money or transferring the ownership of an interest in property
8to the cooperative, or performing services to or for the benefit of the cooperative.
AB327,133,119
(b) Through a written obligation that is signed by the person and requires the
10person to pay money or transfer ownership of an interest in property to the
11cooperative or to perform services to or for the benefit of the cooperative.
AB327,133,13
12(3) Acceptance of contributions. No purported contribution is to be treated
13as or considered to be a contribution, unless all of the following apply:
AB327,133,1614
(a) The board accepts the contribution on behalf of the cooperative and in that
15acceptance describes the contribution, including terms of future performance, if any,
16and states the value being accorded to the contribution.
AB327,133,1817
(b) The acceptance of the contribution and the contribution's accorded value are
18both reflected in the required records of the cooperative.
AB327,134,9
19193.702 Valuation; presumption and liability. The determinations of the
20board as to a contribution's accorded value under s. 193.701 (3) (a) and the fairness
21to the cooperative of a contribution and any terms of payment or performance
22applicable to the contribution, the terms of any contribution agreement under s.
23193.711, and the terms of any contribution rights agreement under s. 193.715 are
24presumed to be proper if the determinations are made in good faith and on the basis
25of methods that are reasonable under the circumstances. Directors who are present
1and entitled to vote, and who, intentionally or without reasonable investigation, fail
2to vote against approving a consideration that is unfair to the cooperative, or who
3overvalue property or services received or to be received by the cooperative as a
4contribution, are jointly and severally liable to the cooperative for the benefit of the
5members then existing who did not consent to and are damaged by the consideration
6or overvaluing of property or services, to the extent of the damages to those members.
7A director against whom a claim is asserted pursuant to this section, except in a case
8of knowing participation in a deliberate fraud, is entitled to contribution on an
9equitable basis from other directors who are liable under this section.
AB327,134,13
10193.705 Restated value of previous contributions. (1) Definition. In this
11section, "old contributions" means all contributions reflected in the required records
12of a cooperative immediately before the time the cooperative accepts a new
13contribution.
AB327,134,15
14(2) Restatement required. If a cooperative accepts a new contribution, the
15board shall restate the value of all old contributions.
AB327,134,19
16(3) Restatement method for same series or class. (a) Unless otherwise
17provided in the articles or bylaws, the board shall restate the value of old
18contributions of the same series or class of the new contribution by following all of
19the following steps in numerical order:
AB327,134,2020
1. State the value accorded to the new contribution under s. 193.701 (3) (a).
AB327,134,2221
2. Determine what the total value will be, after the restatement under this
22subsection, of all contributions of same series or class as the new contribution.
AB327,134,2523
3. Subtract the value stated under subd. 1. from the value determined under
24subd. 2., yielding the total value, after the restatement under this subsection, of all
25the old contributions of the particular series or class.
AB327,135,4
14. Subtract the value, as reflected in the required records before the
2restatement under this subsection, of the old contributions from the value
3determined under subd. 3., yielding the value to be allocated among and added to the
4old contributions of the particular series or class.
AB327,135,75
5. Allocate the value determined under subd. 4. proportionally among the old
6contributions of the particular series or class, add the allocated values to the values
7of those old contributions, and change the required records accordingly.
AB327,135,98
(b) The values determined under par. (a) 4. and allocated and added under par.
9(a) 5. may be positive, negative, or zero.
AB327,135,13
10(4) Restatement method for different series or class. Unless otherwise
11provided in the articles or bylaws, the board shall restate the value of old
12contributions of a series or class different from that of the new contribution by
13following all of the following steps in alphanumerical order:
AB327,135,1614
(a) Determine the percentage by which any restatement under sub. (3) has
15changed the total contribution value reflected in the required records for the series
16or class of the new contribution.
AB327,135,1917
(b) As to each old contribution of a different series or class, change the value
18reflected in the required records by the percentage determined under par. (a). The
19percentage determined under par. (a) may be positive, negative, or zero.
AB327,135,23
20(5) Aggregating new contributions. If a cooperative accepts more than one
21new contribution of the same series or class at the same time, then for the purpose
22of the restatement required by this section the board may consider all such new
23contributions as if they were a single contribution.
AB327,136,3
24193.711 Contribution agreements. (1g) Contribution agreements
25permitted. Pursuant to s. 193.701 (1), a cooperative and a member or potential
1member may enter into an agreement requiring the member or potential member to
2contribute goods, services, or money to the cooperative as a condition of membership
3or receipt of a membership interest.
AB327,136,5
4(1r) Signed writing required. A contribution agreement shall be in writing
5and signed by each person required to make a contribution under the agreement.
AB327,136,10
6(2) Agreement irrevocable for definite period; exceptions. A contribution
7agreement is irrevocable for a period of 6 months, unless otherwise provided in the
8contribution agreement or unless each person required to make a contribution under
9the agreement and, if in existence, the cooperative, consents to a different period of
10irrevocability.
AB327,136,16
11(3) Time of performance under agreement. Unless the contribution
12agreement provides otherwise, all payments or other actions required under the
13agreement shall be made or taken at the time or times determined by the board,
14except that a call made by the board for a person to make a payment or perform an
15action required under the agreement shall be uniform for all membership interests
16of the same class or series.
AB327,136,25
17(4) Failure to perform; remedies. (a) Unless the contribution agreement
18provides otherwise, if a person fails to make a payment required under the
19contribution agreement, the cooperative may bring an action for breach of contract,
20sell any membership interests that are subject to the contribution agreement
21pursuant to par. (b) and bring an action to collect any deficiency, or cancel the
22contribution agreement pursuant to par. (c). If a person fails to make a required
23contribution of property or services, the person shall pay to the cooperative an
24amount equal to that portion of the value of the contribution that has not been made,
25as stated in the cooperative's required records.
AB327,137,10
1(b) To the extent provided in par. (a), the cooperative may cancel the
2membership interests of any person who defaults on a contribution agreement and
3sell any membership interests that are subject to a contribution agreement if the
4amount due under the contribution agreement relating to those membership
5interests remains unpaid for a period of 20 days after the cooperative gives written
6notice of demand for payment to the person required to make the payment. The total
7offering price of the membership interests in such a sale shall be at least the amount
8of the balance owed by the person, plus the expenses incidental to the sale. If
9membership interests are sold pursuant to this paragraph, the cooperative shall pay
10to the person, or that person's legal representative, the lesser of the following:
AB327,137,1411
1. The amount by which the proceeds of the sale, less the expenses incident to
12the sale and any additional amounts the person is required to pay under the terms
13of the contribution agreement as a result of the default, exceeds the amount of the
14payment the person failed to make.
AB327,137,1515
2. The total amount paid by the person under the contribution agreement.
AB327,137,2216
(c) To the extent provided in par. (a), the cooperative may cancel a contribution
17agreement if the amount due under the contribution agreement remains unpaid for
18a period of 20 days after the cooperative gives written notice of demand for payment
19to the person required to make the payment. Unless the contribution agreement
20provides otherwise, if the cooperative cancels a contribution agreement pursuant to
21this paragraph, the cooperative may retain any payments made as provided in the
22contribution agreement.
AB327,138,2
23(5) Restrictions on assignment. Unless the articles or bylaws provide
24otherwise, a person may not assign, in whole or in part, that person's rights under
1a contribution agreement to a person who is not a member at the time of the
2assignment, unless all the members consent to the assignment in writing.
AB327,138,6
3193.715 Contribution rights agreements.
(1) Contribution rights
4agreements permitted. Pursuant to s. 193.701 (1) and subject to any restrictions in
5the articles or bylaws, a cooperative may enter into an agreement that provides a
6person rights to contribute goods, services, or money to the cooperative.
AB327,138,8
7(2) Writing required; terms included by reference. A contribution rights
8agreement shall be in writing. Terms of the agreement may be included by reference.
AB327,138,12
9(3) Restrictions on assignment. Unless the articles or bylaws provide
10otherwise, a person may not assign, in whole or in part, that person's rights under
11a contribution rights agreement to a person who is not a member at the time of the
12assignment, unless all the members consent to the assignment in writing.
AB327,138,23
13193.721 Allocations of profits and distributions of cash and other
14assets. (1) Allocation of profits and losses. Except as otherwise provided in this
15subsection and the articles or bylaws, profits and losses shall be allocated between
16patron membership interests collectively and nonpatron membership interests
17collectively on the basis of the value of contributions received from patron
18membership interests collectively and nonpatron membership interests collectively.
19The allocation of profits to patron membership interests collectively in a fiscal year
20may not be less than 51 percent of the total profits for that fiscal year, except that the
21allocation of profits to patron membership interests collectively in a fiscal year may
22not be less than 30 percent of the total profits for that fiscal year if any of the following
23apply:
AB327,139,3
1(a) The articles were amended to provide for the reduced percentage and,
2notwithstanding s. 193.221 (1) and (3), the amendment was approved by the
3affirmative vote of the patron members.
AB327,139,54
(b) The bylaws provide for the reduced percentage and were approved by an
5affirmative vote of the patron members.
AB327,139,76
(c) The bylaws were amended to provide for the reduced percentage and the
7amendment was approved by the affirmative vote of the patron members.
AB327,139,19
8(2) Distribution of cash or other assets. If not stated in the articles, the
9bylaws shall prescribe the distribution of cash or other assets of the cooperative
10among the membership interests of the cooperative. Unless the articles or bylaws
11provide otherwise, the cooperative shall distribute cash or other assets to patron
12membership interests collectively and nonpatron membership interests collectively
13on the basis of the value of contributions received by the cooperative from patron
14membership interests collectively and nonpatron membership interests collectively.
15The distributions to patron membership interests collectively in any fiscal year may
16not be less than 51 percent of the total distributions for that fiscal year, except that
17distributions to patron membership interests collectively in a fiscal year may not be
18less than 30 percent of the total distributions for that fiscal year if any of the following
19apply:
AB327,139,2120
(a) The articles provide for the reduced percentage and that provision was not
21included in the articles via amendment under s. 193.221 (3).
AB327,139,2322
(b) The bylaws provide for the reduced percentage and were adopted by an
23affirmative vote of the members.
AB327,139,2524
(c) The bylaws were amended to provide for the reduced percentage and the
25amendment was adopted by the affirmative vote of the members.
AB327,140,4
1193.725 Allocations and distributions of profits to patron members. (1) 2Capital reserves. A cooperative may set aside any portion of profits allocated to the
3patron membership interests that the board determines is advisable for the purpose
4of creating or maintaining a capital reserve.
AB327,140,6
5(2) Other reserves. The board may do any of the following with regard to
6profits allocated to the patron membership interests:
AB327,140,87
(a) Set aside an amount not to exceed 5 percent of the annual profits of the
8cooperative for promoting and encouraging cooperative organization.
AB327,140,109
(b) Establish and accumulate reserves for new buildings, machinery and
10equipment, depreciation, losses, and other proper purposes.
AB327,140,18
11(3) Patronage distributions. Profits allocated to patron members in excess of
12dividends on equity and additions to reserves shall be allocated and distributed to
13patron members on the basis of patronage and, if the bylaws provide, to nonmember
14patrons as so provided. A cooperative may establish allocation units and pooling
15arrangements and may account for and distribute profits to patrons on the basis of
16allocation units and pooling arrangements. A cooperative may offset the losses of an
17allocation unit or pooling arrangement against the profits of other allocation units
18or pooling arrangements.
AB327,140,20
19(4) Frequency of distribution. A cooperative shall make distributions under
20sub. (3) at least annually.
AB327,140,23
21(5) Form of distribution. A cooperative may make distributions under sub. (3)
22in the form of cash, capital credits, allocated patronage equities, revolving fund
23certificates, or its own or other securities.