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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.
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(b) A cooperative with more than 200 members may provide the notice in the
20same manner as notice of a regular members' meeting.
AB327,143,24
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.
AB327,144,104
(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.
AB327,145,4
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.
AB327,147,2
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.
AB327,147,4
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:
AB327,149,522
(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.
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(d) An abandonment may be approved by adoption, by the board of any
8cooperative that is party to the merger, of a resolution abandoning the merger,
9subject to the contract rights of any other person under the plan of merger. If a
10business entity other than a cooperative is party to the merger, an abandonment may
11be approved by a resolution of the governing body of the business entity adopted
12according to the laws under which the business entity is organized, subject to the
13contract rights of any other person under the plan of merger.
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14(2) Articles of abandonment. The board or other governing body of any
15business entity that approves an abandonment under sub. (1) shall file with the
16department articles of abandonment that contain all of the following:
AB327,149,1717
(a) The names of the business entities that were party to the proposed merger.
AB327,149,1918
(b) The provisions under sub. (1) under which the proposed merger is
19abandoned.
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(c) If the proposed merger is abandoned under sub. (1) (d), the text of the
21resolution approving the abandonment.
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subchapter IX
AB327,149,2323
Dissolution
AB327,150,2
24193.905 Voluntary dissolution; winding up. (1) Notice of dissolution. 25To initiate a voluntary dissolution the board shall file with the department a notice
1of intent to dissolve. The board may not file a notice under this subsection unless the
2notice is approved by affirmative vote of the members.
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3(1m) Collection and payment of debts. After a notice is filed under sub. (1),
4the board shall proceed as soon as possible to collect, or make provision for the
5collection of, all unpaid subscriptions for shares and all other debts owing to the
6cooperative and pay, or make provision for the payment of, all debts, obligations, and
7liabilities of the cooperative according to the priority accorded to the debts,
8obligation, and liabilities, by law.
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9(2) Transfer of assets. After a notice is filed under sub. (1), the board may
10lease or dispose of all or substantially all of the property and assets of the cooperative
11without a vote of the members.
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12(3) Distribution to members and former members. Any property of the
13cooperative remaining after discharge of the cooperative's debts, obligations, and
14liabilities may be distributed to the members and former members as provided in the
15bylaws.
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16(4) Unclaimed assets. (a) If the articles or bylaws so provide, assets
17distributable in the course of the dissolution of a cooperative that remain unclaimed
18as provided in this paragraph may be forfeited to the cooperative in the manner set
19forth in s. 185.03 (10), except that the board, a committee designated by the board
20to liquidate the cooperative's assets, or a court, trustee, or other person authorized
21to liquidate the assets of the cooperative may declare the funds forfeited, give the
22notice, determine the purpose or purposes, and dedicate the funds as provided under
23s. 185.03 (10) and except that any of these persons may declare the funds forfeited
24no earlier than 2 years and no later than 5 years after the funds are first made
25available to their owners in the course of the liquidation of the cooperative.
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1(b) Assets distributable in the course of the dissolution of a cooperative that are
2not forfeited under par. (a) shall be reported and delivered to the state treasurer as
3provided under ch. 177.
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4(5) Articles of dissolution. After payment of all debts, obligations, and
5liabilities of the cooperative has been made or provided for as required under sub.
6(1m) and the remaining property of the cooperative has been distributed as provided
7under sub. (3) or otherwise disposed of under sub. (4), the board shall file with the
8department articles of dissolution. The articles of dissolution shall state all of the
9following, as applicable:
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(a) That all debts, obligations, and liabilities of the cooperative have been paid
11or adequate provisions have been made for their payment or time periods during
12which claims may be made against the cooperative have expired and no other claims
13are outstanding.
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(b) That the remaining assets of the cooperative have been distributed to the
15members, pursuant to a liquidation authorized by the members, or as provided under
16sub. (4).
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(c) That legal, administrative, or arbitration proceedings by or against the
18cooperative are not pending or adequate provision has been made for the satisfaction
19of a judgment, order, or decree that may be entered against the cooperative in such
20a pending proceeding.
AB327,151,22
21(6) Effective date. A cooperative is dissolved upon the filing of the articles of
22dissolution as required under sub. (5).
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23(7) Certificate. Upon accepting articles of dissolution for filing, the
24department shall issue to the dissolved cooperative or its legal representative a
25certificate of dissolution that contains all of the following:
AB327,152,1
1(a) The name of the dissolved cooperative.
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(b) The date the articles of dissolution were filed with the department.
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(c) A statement that the cooperative is dissolved.
AB327,152,6
4193.911 Revocation of dissolution proceedings. (1) Authority to revoke. 5Dissolution proceedings under s. 193.905 may be revoked before the articles of
6dissolution are filed with the department as required under s. 193.905 (5).
AB327,152,13
7(2) Revocation by members. The chairperson may call a members' meeting to
8submit to the members the question of revoking dissolution proceedings under s.
9193.905. The dissolution proceedings are revoked if the proposed revocation is
10approved at the members' meeting by a majority of the votes cast or, for a cooperative
11with articles or bylaws requiring more than majority approval or other conditions for
12approval, by a sufficient vote as required under the articles or bylaws or by satisfying
13the other conditions for approval.
AB327,152,17
14(3) Filing with the department. The chairperson of the board or the records
15officer shall file with the department a notice of revocation promptly after the
16revocation is approved as provided under sub. (2). The revocation is effective upon
17filing of the notice under this subsection.
AB327,153,3
18193.925 Court-supervised voluntary dissolution. After a notice of intent
19to dissolve is filed as required under s. 193.905 (1) and before a certificate of
20dissolution is issued under s. 193.905 (7), the cooperative or, for good cause shown,
21a member or creditor of the cooperative may petition the circuit court for the county
22where the registered address of the cooperative is located to have the dissolution
23conducted under the supervision of the court. Section 193.905 does not apply to a
24dissolution conducted under the supervision of the court under this section. Section
25193.911 applies to a dissolution conducted under the supervision of the court under
1this section. The court may grant equitable relief that it deems appropriate in a
2dissolution conducted under its supervision under this section, if the supervision
3resulted from an application by the cooperative.
AB327,153,6
4193.931 Involuntary dissolution. (1) Causes of action. (a) A member may
5bring an action against a cooperative for dissolution, liquidation, and equitable relief
6if any of the following apply:
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1. The directors or the persons having the authority otherwise vested in the
8board are deadlocked in the management of the cooperative's affairs and the
9members are unable to break the deadlock.
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2. The directors or those in control of the cooperative have acted fraudulently,
11illegally, or in a manner unfairly prejudicial toward one or more members in their
12capacities as members, directors, or officers.
AB327,153,1513
3. For a period that includes the time when 2 consecutive regular members'
14meetings were held, the members failed to elect successors to directors whose terms
15expired or would have expired upon the election and qualification of their successors.
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4. The cooperative's assets are being misapplied or wasted.
AB327,153,1817
5. The cooperative's period of duration as provided in the articles has expired
18and has not been lawfully extended.