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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:
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(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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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8(2) Reporting procedure not affected. Subsection (1) does not affect the
9requirement that a cooperative report property under s. 177.17 (1).
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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.
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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.
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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.
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(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.
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(d) The terms of the merger or consolidation.
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(e) The proposed effect of the merger or consolidation on the members of each
11association that is party to the merger or consolidation.
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(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.
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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:
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1. The full text of the plan under sub. (2).
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2. The time and place of the meeting at which the plan will be considered.
AB327,143,2019
(b) A cooperative with more than 200 members may provide the notice in the
20same manner as notice of a regular members' meeting.
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21(4) Adoption of plan; articles of merger or consolidation. (a) If a quorum
22of the members eligible to vote is registered as being present or represented by
23alternative vote at the meeting specified in the notice under sub. (3), the plan of
24merger or consolidation may be adopted by the following means, as applicable:
AB327,143,2525
1. By a majority of the votes cast.
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12. For a cooperative with articles or bylaws requiring more than majority
2approval or other conditions for approval, by a sufficient vote as required under the
3articles or bylaws or by satisfying the other conditions for approval.
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(b) If a plan is adopted under par. (a), the chairperson, vice-chairperson,
5records officer, or documents officer of each association that is party to the merger
6or consolidation shall execute articles of merger or consolidation which state the plan
7and the fact that the plan was adopted. The business entity surviving the merger
8or consolidation shall file the articles of merger with the department. If the business
9entity surviving the merger or consolidation is organized under the laws of this state,
10the department shall issue a certificate of organization to the business entity.
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11193.805 Merger of subsidiary or parent.
(1) When authorized; plan of
12merger. (a) Except as otherwise provided in this paragraph, a parent cooperative
13that owns at least 90 percent of the outstanding ownership interests of each class and
14series of a subsidiary business entity, other than ownership interests that, absent
15this section, would not be entitled to vote on a merger, may merge the subsidiary into
16the parent or the parent into the subsidiary without a vote of the members of the
17parent or the members of the subsidiary by complying with this section and the
18applicable law of the jurisdiction under whose laws the business entity surviving the
19merger will be organized. Except as otherwise provided in this paragraph, a parent
20cooperative that owns at least 90 percent of the outstanding ownership interests of
21each class and series of 2 or more subsidiary business entities, other than ownership
22interests that, absent this section, would not be entitled to vote on a merger, may
23merge the subsidiaries into one another without a vote of the members of the parent
24or the members of the subsidiaries by complying with this section and the applicable
25law of the jurisdiction under whose laws the business entity surviving the merger
1will be organized. This paragraph does not permit a cooperative to merge with a
2business entity organized under the laws of this state, other than an association,
3unless the law governing the business entity specifically authorizes merger with a
4cooperative.
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(b) To initiate a merger under par. (a), the board shall prepare a written plan
6stating all of the following:
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1. The name of each subsidiary that is party to the merger, the name of the
8parent, and the name of the business entity surviving the merger.
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2. Except as provided in subd. 3., the manner and basis of converting
10membership or ownership interests in the parent and each subsidiary that is party
11to the merger, as applicable, into membership or ownership interests in the surviving
12business entity, money, or other property.
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3. If the parent is party to the merger but is not the surviving business entity
14and if the surviving business entity is a cooperative, a provision for the pro rata
15issuance of membership interests of the surviving business entity to the holders of
16membership interests in the parent on surrender of any certificates for shares of the
17parent.
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4. If the surviving business entity is a subsidiary cooperative, a statement of
19any amendments to the articles of the surviving business entity that will be part of
20the merger.
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(c) If the parent is party to the merger but is not the surviving business entity,
22the plan under par. (b) shall be approved by the affirmative vote of the holders of a
23majority of the voting power of all membership interests of the parent entitled to vote
24at a regular or special meeting.
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1(2) Notice. No later than 10 days after the effective date of the merger, the
2board of the parent shall give notice of the merger, including a copy of the plan of
3merger, to each member of each subsidiary that is party to the merger.
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4(3) Articles of merger. The board of the parent shall file with the department
5articles of merger, signed by the chairperson or his or her designee, containing all of
6the following:
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(a) The plan of merger.
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(b) The number of outstanding membership interests of each class and series
9of each subsidiary that is party to the merger, other than the classes or series that,
10absent this section, would not be entitled to vote on a merger, and the number of such
11membership interests owned by the parent.
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(c) A statement that the plan of merger has been approved by the parent under
13this section.
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14(5) Certificate. If the business entity surviving the merger is organized under
15the laws of this state, the department shall issue a certificate of organization to the
16business entity upon receipt of the articles of merger.
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17(6) Rights of dissenting owners. If, immediately prior to a merger under this
18section, a business entity that is party to the merger is owned, at least in part, by
19persons other than the parent or an affiliate of the parent, those persons have
20dissenters' rights under the law governing that business entity's organization.
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21(7) Nonexclusivity. Mergers authorized under sub. (1) (a) may instead be
22accomplished under s. 193.801, in which case this section does not apply.
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23193.807 Effective date; effect of merger or consolidation. (1) Effective
24date. Unless a later date is provided in the plan of merger or consolidation or is
1required under other applicable law, a merger or consolidation is effective when the
2articles of merger or consolidation are filed with the department.
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3(2) Effect of merger or consolidation. All of the following occur when a
4merger or consolidation takes effect:
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(a) All business entities that are party to the merger or consolidation become
6the business entity surviving the merger or consolidation, as designated in the plan,
7and the separate existence of every business entity that is party to the merger or
8consolidation, except the business entity surviving the merger or consolidation,
9ceases.
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(b) The title to all property owned by each business entity that is party to the
11merger or consolidation is vested in the surviving business entity without reversion
12or impairment.
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(c) If, under the laws applicable to a business entity that is a party to the merger
14or consolidation, one or more of the owners thereof is liable for the debts and
15obligations of such business entity, such owner or owners shall continue to be liable
16for the debts and obligations of the business entity, but only for such debts and
17obligations accrued during the period or periods in which such laws are applicable
18to such owner or owners. This paragraph does not affect liability under any taxation
19laws.
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(d) If, under the laws applicable to the surviving business entity, one or more
21of the owners thereof is liable for the debts and obligations of such business entity,
22the owner or owners of a business entity that is party to the merger, other than the
23surviving business entity, who become subject to such laws shall be liable for the
24debts and obligations of the surviving business entity to the extent provided in such
25laws, but only for such debts and obligations accrued after the merger or
1consolidation. The owner or owners of the surviving business entity prior to the
2merger shall continue to be liable for the debts and obligations of the surviving
3business entity to the extent provided in par. (c). This paragraph does not affect
4liability under any taxation laws.
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(e) The surviving business entity has all liabilities of each business entity that
6is party to the merger or consolidation.
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(f) A civil, criminal, administrative, or investigatory proceeding pending by or
8against any business entity that is a party to the merger or consolidation may be
9continued as if the merger or consolidation did not occur, or the surviving business
10entity may be substituted in the proceeding for the business entity whose existence
11ceased.
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(g) The articles or other similar governing document of the surviving business
13entity shall be amended to the extent provided in the plan.
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(h) The interests of each business entity that is party to the merger that are to
15be converted into shares, interests, obligations, or other securities of the surviving
16business entity or any other business entity or into cash or other property are
17converted, and the former holders of the interests are entitled only to the rights
18provided in the articles of merger or consolidation to their dissenters' rights under
19the laws applicable to each business entity that is party to the merger.
AB327,148,21
20193.835 Abandonment of merger. (1) Authority and procedure. A merger
21may be abandoned before it takes effect by any of the following means:
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(b) An abandonment may be approved at a meeting by the affirmative vote of
23the holders of a majority of the voting power of the membership interests of each
24cooperative that is party to the merger who are entitled to vote on the approval of the
25plan of merger, except that the board of a cooperative that is party to the merger may
1approve the abandonment if no members of that cooperative are entitled to vote. In
2addition to the other requirements of this paragraph, if a business entity other than
3a cooperative is party to the merger, an abandonment may only be approved by
4taking any actions to approve the abandonment that are required by the laws under
5which the business entity is organized.
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(c) An abandonment may be approved as provided in the plan of merger.