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12. A statement that the cooperative is organized under the laws of this state
2and this chapter.
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3. The name of the person to whom the certificate is issued.
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4. The number and class of membership interests, and the designation of the
5series, if any, that the certificate represents.
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5. A statement that membership interests are subject to the articles and
7bylaws.
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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.
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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.
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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.
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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.
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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.
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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:
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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.
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2. The restriction is imposed under this chapter or is included in the articles
17or bylaws.
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3. The restriction relates to an uncertificated membership interest and is
19included in information sent to the holders of such a membership interest.
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(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.
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5(2) Permissible forms. A person may make a contribution to a cooperative by
6any of the following means:
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(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.
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(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.
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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:
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(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.
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(b) The acceptance of the contribution and the contribution's accorded value are
18both reflected in the required records of the cooperative.
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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.
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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.
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14(2) Restatement required. If a cooperative accepts a new contribution, the
15board shall restate the value of all old contributions.
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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:
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1. State the value accorded to the new contribution under s. 193.701 (3) (a).
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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.
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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.
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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.
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(b) The values determined under par. (a) 4. and allocated and added under par.
9(a) 5. may be positive, negative, or zero.
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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.
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(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.
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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.
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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.
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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.
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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.
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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:
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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.
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2. The total amount paid by the person under the contribution agreement.
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(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.
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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.
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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.
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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:
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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.
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(b) The bylaws provide for the reduced percentage and were approved by an
5affirmative vote of the patron members.
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(c) The bylaws were amended to provide for the reduced percentage and the
7amendment was approved by the affirmative vote of the patron members.
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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:
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(a) The articles provide for the reduced percentage and that provision was not
21included in the articles via amendment under s. 193.221 (3).
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(b) The bylaws provide for the reduced percentage and were adopted by an
23affirmative vote of the members.
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(c) The bylaws were amended to provide for the reduced percentage and the
25amendment was adopted by the affirmative vote of the members.
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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.
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5(2) Other reserves. The board may do any of the following with regard to
6profits allocated to the patron membership interests:
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(a) Set aside an amount not to exceed 5 percent of the annual profits of the
8cooperative for promoting and encouraging cooperative organization.
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(b) Establish and accumulate reserves for new buildings, machinery and
10equipment, depreciation, losses, and other proper purposes.
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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.
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19(4) Frequency of distribution. A cooperative shall make distributions under
20sub. (3) at least annually.
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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.
AB327,141,4
24(7) Patronage credits for ineligible members. If a nonmember patron with
25patronage credits is not qualified or eligible for membership, the cooperative may
1credit to the nonmember patron's account a refund due to the nonmember patron.
2The board may issue a certificate of interest to reflect any such credit and, after the
3board issues such a certificate, the patron may receive distributions of profits in the
4same manner as a patron member.
AB327,141,14
5193.731 Member control agreements. (1) Authorization and execution. 6Except as otherwise provided in this subsection, any person who has entered into a
7contribution agreement under s. 193.711 or an agreement to purchase cooperative
8securities, or any member, may enter into a written agreement with the cooperative
9that relates to the control of or the liquidation, dissolution, or termination of the
10cooperative, or any phase of the business and affairs of the cooperative. Such an
11agreement may not take effect unless signed by all persons who are then members
12and all persons who have entered into contribution agreements. An agreement
13under this subsection may not relate to patron member voting control under s.
14193.545 or patron member allocation and distribution provisions under s. 193.721.
AB327,141,18
15(2) Same effect as articles and bylaws. Wherever this chapter provides that
16a particular result may or shall be obtained through a provision in the articles or
17bylaws, the same result may be accomplished through a provision in an agreement
18under sub. (1) or a procedure established in such an agreement.
AB327,141,22
19(3) Other agreements not affected. This section does not limit the authority
20of persons to enter into agreements otherwise valid, nor is the procedure set forth in
21this section the exclusive method of agreement among members or between the
22members and the cooperative with respect to any of the matters described.
AB327,142,3
23193.735 Distribution of unclaimed property.
(1) Alternate procedure to
24distribute property. Notwithstanding s. 177.17 (4) (a) 2. and (b), a cooperative may
25distribute any property required to be reported under s. 177.17 (1) to an entity that
1is exempt from taxation under section
501 (a) of the Internal Revenue Code. A
2cooperative making a distribution under this subsection shall file all of the following
3with the state treasurer before making the distribution:
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(a) A verified written description and explanation of the distribution.
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(c) The name, address, and exemption number of the entity to which the
6property is to be distributed.
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(d) The approximate date of the distribution.
AB327,142,9
8(2) Reporting procedure not affected. Subsection (1) does not affect the
9requirement that a cooperative report property under s. 177.17 (1).
AB327,142,12
10(3) Owner's right extinguished on disbursement. The articles or bylaws may
11provide that a distribution under sub. (1) extinguishes all rights of the owner in and
12to the distributed property.
AB327,142,1313
subchapter Viii
AB327,142,1414
merger and consolidation
AB327,142,22
15193.801 Merger and consolidation.
(1) Authorization. Unless otherwise
16prohibited and except as otherwise provided in this subsection, a cooperative may
17merge or consolidate with a business entity by complying with this section and the
18applicable law of the jurisdiction under whose laws the surviving business entity will
19be organized. A cooperative may not merge or consolidate with a business entity
20organized under the laws of this state, other than an association, unless the law
21governing the business entity specifically authorizes merger or consolidation with
22a cooperative.
AB327,142,24
23(2) Plan. To initiate a merger or consolidation, the board shall prepare a
24written plan stating all of the following:
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1(a) The name of the cooperative and each business entity that is party to the
2merger or consolidation.
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(b) The name of the business entity that will survive the merger or
4consolidation.
AB327,143,85
(c) The manner and basis of converting membership or ownership interests in
6the cooperative and each business entity that is party to the merger or consolidation
7into membership or ownership interests in the surviving business entity, money, or
8other property.
AB327,143,99
(d) The terms of the merger or consolidation.
AB327,143,1110
(e) The proposed effect of the merger or consolidation on the members of each
11association that is party to the merger or consolidation.
AB327,143,1412
(f) For a consolidation, the contents of the articles or other organizational
13documents of the surviving business entity which will be filed with the jurisdiction
14in which the surviving business entity is organized.
AB327,143,16
15(3) Notice. (a) The board shall give notice of the merger or consolidation to
16each member. The notice shall contain all of the following: