Title 18 — Business Structure and Function

[Reserved.] COL 2025-04-22 ARTICLE 6 MEMBER’S INTEREST IN LIMITED COOPERATIVE ASSOCIATION

A member’s interest: (a) is personal property; (b) consists of: (1) governance rights; (2) financial rights; and (3) the right or obligation, if any, to do business with the limited cooperative association; and (c) may be in certificated or uncertificated form.

(a) Unless the organic rules establish investor members’ interests, a member’s interest is a patron member’s interest. (b) If a limited cooperative association has investor members, while a person is a member of the association, the person: (1) if admitted as a patron member, rem…

(a) The provisions of this Act relating to the transferability of a member’s interest are subject to the Uniform Commercial Code of Guam, 13 GCA §§ 1101 through 10104. (b) Unless the organic rules otherwise provide, a member’s interest other than financial rights is not transfera…

(a) A member or transferee may create an enforceable security interest in its financial rights in a limited cooperative association. (b) Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the member’s governance rights in a lim…

(a) On application by a judgment creditor of a member or transferee, The Superior Court of Guam may enter a charging order against the financial rights of the judgment debtor for the unsatisfied amount of the judgment. Except as otherwise provided in Subsection (f) of this Sectio…

(a) In this Article, “marketing contract” means a contract between a limited cooperative association and another person that need not be a patron member: (1) requiring the other person to sell, or deliver for sale or marketing on the person’s behalf, a specified part of the perso…

(a) If a marketing contract provides for the sale of products, commodities, or goods to a limited cooperative association, the sale transfers title to the association upon delivery or at any other specific time expressly provided by the contract. (b) A marketing contract may: (1)…

The initial duration of a marketing contract may not exceed ten (10) years, but the contract may be self-renewing for additional periods not exceeding five (5) years each. Unless the contract provides for another manner or time for termination, either party may terminate the cont…

(a) Damages to be paid to a limited cooperative association for breach or anticipatory repudiation of a marketing contract may be liquidated, but only at an amount or under a formula that is reasonable in light of the actual or anticipated harm caused by the breach or repudiation…

(a) A limited cooperative association must have a board of directors of at least three (3) individuals unless the association has fewer than three (3) members. If the association has fewer than three (3) members, the number of directors may not be fewer than the number of members…

A debt, obligation, or other liability of a limited cooperative association is solely that of the association and is not a debt, obligation, or liability of a director solely by reason of being a director. An individual is not personally liable, directly or indirectly, for an obl…

(a) Unless the organic rules otherwise provide, and subject to Subsection (c) of this Section, each director of a limited cooperative association must be an individual who is a member of the association or an individual who is designated by a member that is not an individual for …

(a) Unless the organic rules require a greater number: (1) the number of directors that must be patron members may not be fewer than: (A) two (2), if there are two (2) or three (3) directors; (B) four (4), if there are four (4) or five (5) directors; (C) six (6), if there are six…

(a) Unless the organic rules otherwise provide, and subject to Subsections (c) and (d) of this Section and § 17302(d), the term of a director expires at the annual members meeting following the director’s election or appointment. The term of a director may not exceed three (3) ye…

A director may resign at any time by giving notice in a record to the limited cooperative association. Unless the notice states a later effective date, a resignation is effective when the notice is received by the association.

(a) Unless organic rules otherwise provide, the following rules apply: (1) Members may remove a director with or without cause. (2) A member or members holding at least ten (10) percent of the total voting power entitled to be voted in the election of a director may demand remova…

(a) A board of directors may suspend a director if, considering the director’s course of conduct and the inadequacy of other available remedies, immediate suspension is necessary for the best interests of the association and the director is engaging, or has engaged, in: (1) fraud…

(a) Unless the organic rules otherwise provide, a vacancy on the board of directors must be filled: (1) within a reasonable time by majority vote of the remaining directors until the next annual members meeting or a special meeting of members called to fill the vacancy; and (2) f…

Unless the organic rules otherwise provide, the board of directors may set the remuneration of directors and of nondirector committee members appointed under § 17817(a).

(a) A board of directors shall meet at least annually and shall hold meetings on Guam. (b) Unless the organic rules otherwise provide, a board of directors may permit directors to attend or conduct board meetings through the use of any means of communication, if all directors att…

(a) Any action by a board of directors shall not be taken without a meeting. COL 2025-04-22

(a) The board of directors shall establish a time, date, and place for regular board meetings, and notice of the time, date, place, and purpose of those meetings is required. (b) The notice of the time, date, and place of a special meeting of a board of directors must be given to…

(a) Unless the organic rules otherwise provide, a director may waive any required notice of a meeting of the board of directors in a record before, during, or after the meeting. (b) Unless the organic rules otherwise provide, a director’s participation in a meeting is a waiver of…

(a) Unless the articles of organization provide for a greater number, a majority of the total number of directors specified by the organic rules constitutes a quorum for a meeting of the directors. (b) If a quorum of the board of directors is present at the beginning of a meeting…

(a) Each director shall have one (1) vote for purposes of decisions made by the board of directors. (b) Unless the organic rules otherwise provide, the affirmative vote of a majority of directors present at a meeting is required for action by the board of directors.

(a) Unless the organic rules otherwise provide, a board of directors may create one (1) or more committees and appoint one (1) or more individuals to serve on a committee. (b) Unless the organic rules otherwise provide, an individual appointed to serve on a committee of a limited…

Except as otherwise provided in § 17820 of this Act: (a) the discharge of the duties of a director or member of a committee of the board of directors is governed by the law applicable to directors of entities organized under the Guam Business Corporation Act, 18 GCA Chapter 28, a…

(a) The law applicable to conflicts of interest between a director of an entity organized under the Guam Business Corporation Act, 18 GCA Chapter 28, governs conflicts of interest between a limited cooperative association and a director or member of a committee of the board of di…

(a) Unless the articles of organization otherwise provide, in considering the best interests of a limited cooperative association, a director of the association in discharging the duties of director, in conjunction with considering the long and short term interest of the associat…

A director or a member of a committee appointed under § 17817 may obtain, inspect, and copy all information regarding the state of activities and financial condition of the limited cooperative association and other information regarding the activities of the association if the in…

(a) A limited cooperative association has the officers: (1) provided in organic rules; or (2) established by the board of directors in a manner not inconsistent with the organic rules. (b) organic rules may designate or, if either do not designate, the board of directors shall de…

(a) The board of directors may remove an officer at any time with or without cause. (b) An officer of a limited cooperative association may resign at any time by giving notice in a record to the association. Unless the notice specifies a later time, the resignation is effective w…

(a) Indemnification and advancement of expenses of an individual who has incurred liability or is a party, or is threatened to be made a party, to litigation because of the performance of a duty to, or activity on behalf of, a limited cooperative association is governed by 18 GCA…

An agent is one who represents another, called the principal, in dealings with third persons. Such representation is called agency. SOURCE: CC § 2295. All sources in this Chapter are to the original enactment in 1953 unless otherwise stated.

Any person having capacity to contract may appoint an agent, and any person may be an agent. SOURCE: CC § 2296.

COL120106 An agent for a particular act or transaction is called a special agent. All others are general agents. SOURCE: CC § 2297.

An agency is either actual or ostensible. SOURCE: CC § 2298.

An agency is actual when the agent is really employed by the principal. SOURCE: CC § 2299.

An agency is ostensible when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him. SOURCE: CC § 2300. NOTE: No '§ 2301-2303 existed in the Civil Code. ---------- ARTICLE 2 AUTHORITY OF…

An agent may be authorized to do any acts which his principal might do, except those to which the latter is bound to give his personal attention. SOURCE: CC § 2304.

Every act which, according to this Code, may be done by or to any person, may be done by or to the agent of such person for that purpose, unless a contrary intention clearly appears. SOURCE: CC § 2305. NOTE: The term Code refers to the former Civil Code, which now is found in a n…

An agent can never have authority, either actual or ostensible, to do an act which is, and is known or suspected by the person with whom he deals, to be a fraud upon the principal. SOURCE: CC § 2306.

An agency may be created, and an authority may be conferred, by a precedent authorization or a subsequent ratification. SOURCE: CC § 2307. COL120106

A consideration is not necessary to make an authority, whether precedent or subsequent, binding upon the principal. SOURCE: CC § 2308.

An oral authorization is sufficient for any purpose, except that an authority to enter into a contract required by law to be in writing can only be given by an instrument in writing. SOURCE: CC § 2309.

A ratification can be made only in the manner that would have been necessary to confer an original authority for the act ratified, or where an oral authorization would suffice, by accepting or retaining the benefit of the act, with notice thereof. SOURCE: CC § 2310.

Ratification of a part of an indivisible transaction is a ratification of the whole. SOURCE: CC § 2311.

A ratification is not valid unless, at the time of ratifying the act done, the principal has power to confer authority for such an act. SOURCE: CC § 2312.

No unauthorized act can be made valid, retroactively, to the prejudice of third persons, without their consent. SOURCE: CC § 2313.