Title XII, BUSINESS ENTITIES (Ch. 486 - 504C)

1. Qualification. A cooperative may be organized by one or more organizers who shall be adult natural persons, and who may act for themselves as individuals or as the agents of other entities. The organizers forming the cooperative need not be members of the cooperative. 2. Role …

1. Requirements. a. The articles of organization for the cooperative shall include all of the following: (1) The name of the cooperative. (2) The purpose of the cooperative. (3) The name and address of each organizer. (4) The period of duration for the cooperative, if the duratio…

1. Procedure. a. The articles of organization of a cooperative shall be amended only as follows: (1) The board, by majority vote, must pass a resolution stating the text of the proposed amendment. The text of the proposed amendment and an attached ballot, if the board has provide…

1. Commencement. The existence of a cooperative shall commence on or after the filing of articles of organization as provided in section 501A.503 . 2. Duration. A cooperative shall have a perpetual duration unless the cooperative provides for a limited period of duration in the a…

1. Required. A cooperative shall have bylaws governing the cooperative’s business affairs, structure, the qualifications, classification, rights and obligations of members, and the classifications, allocations, and distributions of membership interests, which are not otherwise pr…

1. Permanent records required to be kept. A cooperative shall keep as permanent records minutes of all meetings of its members and of the board, a record of all actions taken by the members or the board without a meeting by a written unanimous consent in lieu of a meeting, and a …

1. Generally. a. In addition to other powers, a cooperative as an agent or otherwise may do any of the following: (1) Perform every act necessary or proper to the conduct of the cooperative’s business or the accomplishment of the purposes of the cooperative. (2) Enjoy other right…

1. In anticipation of or during an emergency as defined in this section , the board may do any of the following: a. Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent. b. Relocate the principal office, designate alternative princ…

1. Authority. A cooperative and its patron member or patron may make and execute a marketing contract, requiring the patron member or patron to sell a specified portion of the patron member’s or patron’s agricultural commodity or product or specified commodity or product produced…

A cooperative shall be governed by its board of directors, which shall take all action for and on behalf of the cooperative, except those actions reserved or granted to members. Board action shall be by the affirmative vote of a majority of the directors voting at a duly called m…

The board shall not have less than five directors, except that a cooperative with fifty or fewer members may have three or more directors as prescribed in the cooperative’s articles or bylaws. 2005 Acts, ch 135, §36

1. First board. The organizers shall elect and obtain the acknowledgment of the first board to serve until directors are elected by members. Until election by members, the first board shall appoint directors to fill any vacancies. 2. Generally. a. Directors shall be elected for t…

1. Patron directors. If a patron member director’s position becomes vacant or a new director position is created for a director that was or is to be elected by patron members, the board, in consultation with the directors elected by patron members, shall appoint a patron member o…

1. Modification. The provisions of this section apply unless modified by the articles or the bylaws. 2. Removal of directors. A director may be removed at any time, with or without cause, if all of the following apply: a. The director was named by the board to fill a vacancy. b. …

1. Time and place. Meetings of the board may be held from time to time as provided in the articles or bylaws at any place within or without the state that the board may select or by any means described in subsection 2 . If the board fails to select a place for a meeting, the meet…

A majority, or a larger or smaller portion or number provided in the articles or bylaws, of the directors currently holding office is a quorum for the transaction of business. In the absence of a quorum, a majority of the directors present may adjourn a meeting from time to time …

1. Except as provided in subsection 2 , the board shall only take action at a duly held meeting by the affirmative vote of any of the following: a. A majority of directors present at the meeting. b. A majority of the directors’ voting power present at the meeting. 2. The articles…

1. Method. An action required or permitted to be taken at a board meeting may be taken by written action signed by all of the directors. If the articles or bylaws so provide, any action, other than an action requiring member approval, may be taken by written action signed by the …

The board shall establish an audit committee to review the financial information and accounting report of the cooperative. The cooperative shall have the financial information audited for presentation to the members unless the cooperative’s bylaws allow financial statements that …

1. Generally. A resolution approved by the affirmative vote of a majority of the board may establish committees having the authority of the board in the management of the business of the cooperative only to the extent provided in the resolution. Committees may include a special l…

1. Standard and liability. A director shall discharge the duties of the position of director in good faith, in a manner the director reasonably believes to be in the best interests of the cooperative, and with the care an ordinarily prudent person in a like position would exercis…

1. Conflict and procedure when conflict arises. a. A contract or other transaction between a cooperative and one or more of its directors, or between a cooperative and a business entity in or of which one or more of its directors are governors, directors, managers, officers, or l…

Except as otherwise provided in this chapter , a director, officer, employee, or member of the cooperative is not liable for the cooperative’s debts or obligations, and a director, officer, member, or other volunteer is not personally liable in that capacity for a claim based upo…

1. Definitions. As used in this section , all of the following apply: a. “Official capacity” means any of the following: (1) With respect to a director, the position of director in a cooperative. (2) With respect to a person other than a director, the elective or appointive offic…

1. Required officers. a. The board shall elect all of the following: (1) A chairperson. (2) One or more vice chairpersons. b. The board shall elect or appoint all of the following: (1) A records officer. (2) A financial officer. c. The officers, other than the chief executive off…

1. Requirement. A cooperative shall have one or more patron members. 2. Grouping of members. a. A cooperative may group members and patron members in districts, units, or on another basis if and as authorized in its articles or bylaws. The articles or bylaws may include authoriza…

A member is not, merely on the account of that status, personally liable for the acts, debts, liabilities, or obligations of a cooperative. A member is liable for any unpaid subscription for the membership interest, unpaid membership fees, or a debt for which the member has separ…

1. Annual meeting. Regular members’ meetings shall be held annually at a time determined by the board, unless otherwise provided for in the bylaws. 2. Location. The regular members’ meeting shall be held at the principal place of business of the cooperative or at another convenie…

1. Calling meeting. Special members’ meetings of the members may be called by any of the following: a. A majority vote of the board. b. The written petition of at least twenty percent of the patron members and, if authorized by the articles or bylaws, twenty percent of the nonpat…

1. Certificate of mailing. After mailing special or regular members’ meeting notices or otherwise delivering the notices, the cooperative shall execute a certificate containing the date of mailing or delivery of the notice and a statement that the special or regular members’ meet…

1. Quorum. The quorum for a members’ meeting to transact business shall be by any of the following: a. Ten percent of the total number of members of a cooperative with five hundred or fewer members. b. Fifty members for cooperatives with more than five hundred members. 2. Quorum …

1. Construction and application. This section shall be construed and applied to all of the following: a. To facilitate remote communication consistent with other applicable law. b. To be consistent with reasonable practices concerning remote communication and with the continued e…

1. Action by affirmative vote of members. a. The members shall take action by the affirmative vote of the members of the greater of any of the following: (1) A majority of the voting power of the membership interests present and entitled to vote on that item of business. (2) A ma…

1. Method. An action required or permitted to be taken at a meeting of the members may be taken by written action signed, or consented to by authenticated electronic communication, by all of the members. If the articles, bylaws, or a member control agreement so provide, any actio…

1. Patron and nonpatron member voting. A patron member of a cooperative is only entitled to one vote on an issue to be voted upon by members holding patron membership interests. However, if authorized in the cooperative’s articles or bylaws, a patron member may be entitled to add…

1. Patron members to have an additional vote. A cooperative may authorize by the articles or the bylaws for patron members to have an additional vote for all of the following: a. A stipulated amount of business transacted between the patron member and cooperative. b. A stipulated…

1. Determination. The board may fix a date not more than sixty days, or a shorter time period provided in the articles or bylaws, before the date of a meeting of members as the date for the determination of the owners of membership interests entitled to notice of and entitled to …

1. Membership interests held by another organization. Membership interests of a cooperative reflected in the required records as being owned by another domestic business entity or foreign business entity may be voted by the chairperson, chief executive officer, or another legal r…

1. Authorization. a. A patron member may only grant a proxy to vote to another patron member. b. A member may cast or authorize the casting of a vote by any of the following: (1) Filing a written appointment of a proxy with the board at or before the meeting at which the appointm…

1. Member approval not required. A cooperative may, by affirmative vote of a majority of the board present, upon those terms and conditions and for those considerations, which may be money, securities, or other instruments for the payment of money or other property, as the board …

A cooperative that holds ownership interests of another business entity may, by direction of the cooperative’s board, elect or appoint a person to represent the cooperative at a meeting of the business entity. The representative has authority to represent the cooperative and may …

1. Patron membership interests. Patron membership interests shall be the only membership interests of a cooperative unless nonpatron memberships are authorized under subsection 2 . If nonpatron interests are authorized, the patron membership interests collectively shall have not …

1. Assignment of financial rights permitted. Except as provided in subsection 3 , a member’s financial rights are transferable in whole or in part. 2. Effect of assignment of financial rights. An assignment of a member’s financial rights entitles the assignee to receive, to the e…

1. Generally. A membership interest is personal property. A member has no interest in specific cooperative property. All property of the cooperative is property of the cooperative. 2. Statement of membership interest. At the request of any member, the cooperative shall state in w…

1. Certificated — uncertificated. The membership interests of a cooperative shall be either certificated or uncertificated. Each holder of certificated membership interests issued is entitled to a certificate of membership interest. 2. Signature required. Certificates shall be si…

1. Issuance. A new membership interest certificate may be issued under section 554.8405 in place of one that is alleged to have been lost, stolen, or destroyed. 2. Not overissue. The issuance of a new certificate under this section does not constitute an overissue of the membersh…