193.631(2)(a)(a) A restriction under
sub. (1) is enforceable only if the restriction is not manifestly unreasonable under the circumstances and any of the following apply:
193.631(2)(a)1.
1. The restriction is noted conspicuously on a certificate of membership interest representing the membership interest or the existence of the restriction is noted on the certificate and reference is made to a separate document creating or describing the restriction.
193.631(2)(a)2.
2. The restriction is imposed under this chapter or is included in the articles or bylaws.
193.631(2)(a)3.
3. The restriction relates to an uncertificated membership interest and is included in information sent to the holders of such a membership interest.
193.631(2)(b)
(b) A restriction that is enforceable under
par. (a) may be enforced against the holder of the restricted membership interest or a successor or transferee of the holder, including a pledgee or a legal representative.
193.631 History
History: 2005 a. 441.
CONTRIBUTIONS, ALLOCATIONS,
AND DISTRIBUTIONS
193.701
193.701
Authorization, form, and acceptance. 193.701(1)(1)
Board may authorize. If authorized by the board, a cooperative may accept contributions, make contribution agreements under
s. 193.711, and make contribution rights agreements under
s. 193.715.
193.701(2)
(2) Permissible forms. A person may make a contribution to a cooperative by any of the following means:
193.701(2)(a)
(a) By paying money or transferring the ownership of an interest in property to the cooperative, or performing services to or for the benefit of the cooperative.
193.701(2)(b)
(b) Through a written obligation that is signed by the person and requires the person to pay money or transfer ownership of an interest in property to the cooperative or to perform services to or for the benefit of the cooperative.
193.701(3)
(3) Acceptance of contributions. No purported contribution is to be treated as or considered to be a contribution, unless all of the following apply:
193.701(3)(a)
(a) The board accepts the contribution on behalf of the cooperative and in that acceptance describes the contribution, including terms of future performance, if any, and states the value being accorded to the contribution.
193.701(3)(b)
(b) The acceptance of the contribution and the contribution's accorded value are both reflected in the required records of the cooperative.
193.701 History
History: 2005 a. 441.
193.702
193.702
Valuation; presumption and liability. The determinations of the board as to a contribution's accorded value under
s. 193.701 (3) (a) and the fairness to the cooperative of a contribution and any terms of payment or performance applicable to the contribution, the terms of any contribution agreement under
s. 193.711, and the terms of any contribution rights agreement under
s. 193.715 are presumed to be proper if the determinations are made in good faith and on the basis of methods that are reasonable under the circumstances. Directors who are present and entitled to vote, and who, intentionally or without reasonable investigation, fail to vote against approving a consideration that is unfair to the cooperative, or who overvalue property or services received or to be received by the cooperative as a contribution, are jointly and severally liable to the cooperative for the benefit of the members then existing who did not consent to and are damaged by the consideration or overvaluing of property or services, to the extent of the damages to those members. A director against whom a claim is asserted pursuant to this section, except in a case of knowing participation in a deliberate fraud, is entitled to contribution on an equitable basis from other directors who are liable under this section.
193.702 History
History: 2005 a. 441.
193.705
193.705
Restated value of previous contributions. 193.705(1)(1)
Definition. In this section, “old contributions" means all contributions reflected in the required records of a cooperative immediately before the time the cooperative accepts a new contribution.
193.705(2)
(2) Restatement required. If a cooperative accepts a new contribution, the board shall restate the value of all old contributions.
193.705(3)
(3) Restatement method for same series or class. 193.705(3)(a)(a) Unless otherwise provided in the articles or bylaws, the board shall restate the value of old contributions of the same series or class of the new contribution by following all of the following steps in numerical order:
193.705(3)(a)2.
2. Determine what the total value will be, after the restatement under this subsection, of all contributions of same series or class as the new contribution.
193.705(3)(a)3.
3. Subtract the value stated under
subd. 1. from the value determined under
subd. 2., yielding the total value, after the restatement under this subsection, of all the old contributions of the particular series or class.
193.705(3)(a)4.
4. Subtract the value, as reflected in the required records before the restatement under this subsection, of the old contributions from the value determined under
subd. 3., yielding the value to be allocated among and added to the old contributions of the particular series or class.
193.705(3)(a)5.
5. Allocate the value determined under
subd. 4. proportionally among the old contributions of the particular series or class, add the allocated values to the values of those old contributions, and change the required records accordingly.
193.705(3)(b)
(b) The values determined under
par. (a) 4. and allocated and added under
par. (a) 5. may be positive, negative, or zero.
193.705(4)
(4) Restatement method for different series or class. Unless otherwise provided in the articles or bylaws, the board shall restate the value of old contributions of a series or class different from that of the new contribution by following all of the following steps in alphanumerical order:
193.705(4)(a)
(a) Determine the percentage by which any restatement under
sub. (3) has changed the total contribution value reflected in the required records for the series or class of the new contribution.
193.705(4)(b)
(b) As to each old contribution of a different series or class, change the value reflected in the required records by the percentage determined under
par. (a). The percentage determined under
par. (a) may be positive, negative, or zero.
193.705(5)
(5) Aggregating new contributions. If a cooperative accepts more than one new contribution of the same series or class at the same time, then for the purpose of the restatement required by this section the board may consider all such new contributions as if they were a single contribution.
193.705 History
History: 2005 a. 441.
193.711
193.711
Contribution agreements. 193.711(1g)
(1g)
Contribution agreements permitted. Pursuant to
s. 193.701 (1), a cooperative and a member or potential member may enter into an agreement requiring the member or potential member to contribute goods, services, or money to the cooperative as a condition of membership or receipt of a membership interest.
193.711(1r)
(1r) Signed writing required. A contribution agreement shall be in writing and signed by each person required to make a contribution under the agreement.
193.711(2)
(2) Agreement irrevocable for definite period; exceptions. A contribution agreement is irrevocable for a period of 6 months, unless otherwise provided in the contribution agreement or unless each person required to make a contribution under the agreement and, if in existence, the cooperative, consents to a different period of irrevocability.
193.711(3)
(3) Time of performance under agreement. Unless the contribution agreement provides otherwise, all payments or other actions required under the agreement shall be made or taken at the time or times determined by the board, except that a call made by the board for a person to make a payment or perform an action required under the agreement shall be uniform for all membership interests of the same class or series.
193.711(4)(a)(a) Unless the contribution agreement provides otherwise, if a person fails to make a payment required under the contribution agreement, the cooperative may bring an action for breach of contract, sell any membership interests that are subject to the contribution agreement pursuant to
par. (b) and bring an action to collect any deficiency, or cancel the contribution agreement pursuant to
par. (c). If a person fails to make a required contribution of property or services, the person shall pay to the cooperative an amount equal to that portion of the value of the contribution that has not been made, as stated in the cooperative's required records.
193.711(4)(b)
(b) To the extent provided in
par. (a), the cooperative may cancel the membership interests of any person who defaults on a contribution agreement and sell any membership interests that are subject to a contribution agreement if the amount due under the contribution agreement relating to those membership interests remains unpaid for a period of 20 days after the cooperative gives written notice of demand for payment to the person required to make the payment. The total offering price of the membership interests in such a sale shall be at least the amount of the balance owed by the person, plus the expenses incidental to the sale. If membership interests are sold pursuant to this paragraph, the cooperative shall pay to the person, or that person's legal representative, the lesser of the following:
193.711(4)(b)1.
1. The amount by which the proceeds of the sale, less the expenses incident to the sale and any additional amounts the person is required to pay under the terms of the contribution agreement as a result of the default, exceeds the amount of the payment the person failed to make.
193.711(4)(b)2.
2. The total amount paid by the person under the contribution agreement.
193.711(4)(c)
(c) To the extent provided in
par. (a), the cooperative may cancel a contribution agreement if the amount due under the contribution agreement remains unpaid for a period of 20 days after the cooperative gives written notice of demand for payment to the person required to make the payment. Unless the contribution agreement provides otherwise, if the cooperative cancels a contribution agreement pursuant to this paragraph, the cooperative may retain any payments made as provided in the contribution agreement.
193.711(5)
(5) Restrictions on assignment. Unless the articles or bylaws provide otherwise, a person may not assign, in whole or in part, that person's rights under a contribution agreement to a person who is not a member at the time of the assignment, unless all the members consent to the assignment in writing.
193.711 History
History: 2005 a. 441.
193.715
193.715
Contribution rights agreements. 193.715(1)
(1)
Contribution rights agreements permitted. Pursuant to
s. 193.701 (1) and subject to any restrictions in the articles or bylaws, a cooperative may enter into an agreement that provides a person rights to contribute goods, services, or money to the cooperative.
193.715(2)
(2) Writing required; terms included by reference. A contribution rights agreement shall be in writing. Terms of the agreement may be included by reference.
193.715(3)
(3) Restrictions on assignment. Unless the articles or bylaws provide otherwise, a person may not assign, in whole or in part, that person's rights under a contribution rights agreement to a person who is not a member at the time of the assignment, unless all the members consent to the assignment in writing.
193.715 History
History: 2005 a. 441.
193.721
193.721
Allocations of profits and distributions of cash and other assets. 193.721(1)
(1)
Allocation of profits and losses. Except as otherwise provided in this subsection and the articles or bylaws, profits and losses shall be allocated between patron membership interests collectively and nonpatron membership interests collectively on the basis of the value of contributions received from patron membership interests collectively and nonpatron membership interests collectively. The allocation of profits to patron membership interests collectively in a fiscal year may not be less than 51 percent of the total profits for that fiscal year, except that the allocation of profits to patron membership interests collectively in a fiscal year may not be less than 30 percent of the total profits for that fiscal year if any of the following apply:
193.721(1)(a)
(a) The articles were amended to provide for the reduced percentage and, notwithstanding
s. 193.221 (1) and
(3), the amendment was approved by the affirmative vote of the patron members.
193.721(1)(b)
(b) The bylaws provide for the reduced percentage and were approved by an affirmative vote of the patron members.
193.721(1)(c)
(c) The bylaws were amended to provide for the reduced percentage and the amendment was approved by the affirmative vote of the patron members.
193.721(2)
(2) Distribution of cash or other assets. If not stated in the articles, the bylaws shall prescribe the distribution of cash or other assets of the cooperative among the membership interests of the cooperative. Unless the articles or bylaws provide otherwise, the cooperative shall distribute cash or other assets to patron membership interests collectively and nonpatron membership interests collectively on the basis of the value of contributions received by the cooperative from patron membership interests collectively and nonpatron membership interests collectively. The distributions to patron membership interests collectively in any fiscal year may not be less than 51 percent of the total distributions for that fiscal year, except that distributions to patron membership interests collectively in a fiscal year may not be less than 30 percent of the total distributions for that fiscal year if any of the following apply:
193.721(2)(a)
(a) The articles provide for the reduced percentage and that provision was not included in the articles via amendment under
s. 193.221 (3).
193.721(2)(b)
(b) The bylaws provide for the reduced percentage and were adopted by an affirmative vote of the members.
193.721(2)(c)
(c) The bylaws were amended to provide for the reduced percentage and the amendment was adopted by the affirmative vote of the members.
193.721 History
History: 2005 a. 441.
193.725
193.725
Allocations and distributions of profits to patron members. 193.725(1)(1)
Capital reserves. A cooperative may set aside any portion of profits allocated to the patron membership interests that the board determines is advisable for the purpose of creating or maintaining a capital reserve.
193.725(2)
(2) Other reserves. The board may do any of the following with regard to profits allocated to the patron membership interests:
193.725(2)(a)
(a) Set aside an amount not to exceed 5 percent of the annual profits of the cooperative for promoting and encouraging cooperative organization.
193.725(2)(b)
(b) Establish and accumulate reserves for new buildings, machinery and equipment, depreciation, losses, and other proper purposes.
193.725(3)
(3) Patronage distributions. Profits allocated to patron members in excess of dividends on equity and additions to reserves shall be allocated and distributed to patron members on the basis of patronage and, if the bylaws provide, to nonmember patrons as so provided. A cooperative may establish allocation units and pooling arrangements and may account for and distribute profits to patrons on the basis of allocation units and pooling arrangements. A cooperative may offset the losses of an allocation unit or pooling arrangement against the profits of other allocation units or pooling arrangements.
193.725(4)
(4) Frequency of distribution. A cooperative shall make distributions under
sub. (3) at least annually.
193.725(5)
(5) Form of distribution. A cooperative may make distributions under
sub. (3) in the form of cash, capital credits, allocated patronage equities, revolving fund certificates, or its own or other securities.
193.725(7)
(7) Patronage credits for ineligible members. If a nonmember patron with patronage credits is not qualified or eligible for membership, the cooperative may credit to the nonmember patron's account a refund due to the nonmember patron. The board may issue a certificate of interest to reflect any such credit and, after the board issues such a certificate, the patron may receive distributions of profits in the same manner as a patron member.
193.725 History
History: 2005 a. 441.
193.731
193.731
Member control agreements. 193.731(1)
(1)
Authorization and execution. Except as otherwise provided in this subsection, any person who has entered into a contribution agreement under
s. 193.711 or an agreement to purchase cooperative securities, or any member, may enter into a written agreement with the cooperative that relates to the control of or the liquidation, dissolution, or termination of the cooperative, or any phase of the business and affairs of the cooperative. Such an agreement may not take effect unless signed by all persons who are then members and all persons who have entered into contribution agreements. An agreement under this subsection may not relate to patron member voting control under
s. 193.545 or patron member allocation and distribution provisions under
s. 193.721.
193.731(2)
(2) Same effect as articles and bylaws. Wherever this chapter provides that a particular result may or shall be obtained through a provision in the articles or bylaws, the same result may be accomplished through a provision in an agreement under
sub. (1) or a procedure established in such an agreement.
193.731(3)
(3) Other agreements not affected. This section does not limit the authority of persons to enter into agreements otherwise valid, nor is the procedure set forth in this section the exclusive method of agreement among members or between the members and the cooperative with respect to any of the matters described.
193.731 History
History: 2005 a. 441.
193.735
193.735
Distribution of unclaimed property. 193.735(1)
(1)
Alternate procedure to distribute property. Notwithstanding
s. 177.17 (4) (a) 2. and
(b), a cooperative may distribute any property required to be reported under
s. 177.17 (1) to an entity that is exempt from taxation under section
501 (a) of the Internal Revenue Code. A cooperative making a distribution under this subsection shall file all of the following with the secretary of revenue before making the distribution:
193.735(1)(a)
(a) A verified written description and explanation of the distribution.
193.735(1)(c)
(c) The name, address, and exemption number of the entity to which the property is to be distributed.
193.735(2)
(2) Reporting procedure not affected. Subsection (1) does not affect the requirement that a cooperative report property under
s. 177.17 (1).
193.735(3)
(3) Owner's right extinguished on disbursement. The articles or bylaws may provide that a distribution under
sub. (1) extinguishes all rights of the owner in and to the distributed property.
193.735 History
History: 2005 a. 441;
2013 a. 20.
MERGER AND CONSOLIDATION
193.801
193.801
Merger and consolidation.
