Title XXIII, Private Corporations and Associations

This chapter may be cited as the Kentucky Uniform Limited Cooperative Association Act.

As used in this chapter: (1) "Appropriate court" means the Circuit Court for the county of the Commonwealth in which the limited cooperative association's principal office is located or, if none, the county in which the registered office is or was last located; (2) "Articles of a…

chapter. A limited cooperative association governed by this chapter is subject to any amendment or repeal of this chapter.

(1) A limited cooperative association organized under this chapter is an autonomous, unincorporated association of persons united to meet their mutual interests through a jointly owned enterprise primarily controlled by those persons, which permits combining: (a) Ownership, finan…

(1) A limited cooperative association is an entity distinct from its members. (2) A limited cooperative association may be organized for any lawful purpose, whether or not for profit. (3) This chapter does not alter or amend any law that governs the licensing and regulation of an…

(1) A limited cooperative association may sue and be sued in its own name and do all things necessary or convenient to carry on its activities. (2) An association may maintain an action against a member for harm caused to the association by the member's violation of a duty to the…

The law of this Commonwealth governs: (1) The internal affairs of a limited cooperative association; and (2) The liability of a member as member and a director as director for the debts, obligations, or other liabilities of a limited cooperative association.

(1) It shall be the policy of the General Assembly through this chapter to give maximum effect to the principles of freedom of contract and to the enforceability of organic rules. Unless displaced by particular provisions of this chapter, the principles of law and equity shall su…

No cooperative, foreign cooperative, or agreements between cooperatives and their members shall be considered a conspiracy, a combination in restraint of trade, an illegal monopoly, or an attempt to lessen competition, fix prices arbitrarily, or create a combination or pool in vi…

The name of a limited cooperative association shall satisfy the requirements of KRS 14A.3-010.

(1) The relations between a limited cooperative association and its members are consensual. Unless required, limited, or prohibited by this chapter, the organic rules may provide for any matter concerning the relations among the members of the association and between the members …

(1) Subject to subsection (2) of this section, a limited cooperative association shall maintain in a record available at its principal office: (a) A list containing the name, last known street address and, if different, mailing address, and term of office of each director and off…

cooperative association. (1) A person may have a patron member's interest and an investor member's interest. (2) When a person acts as a patron member, the person is subject to this chapter and the organic rules governing patron members. (3) When a person acts as an investor memb…

A limited cooperative association shall designate and continuously maintain in this Commonwealth a registered office and agent registered in accordance with KRS 14A.4- 010.

The organic rules shall establish the amount, manner, or method of determining any contribution requirements for members or shall authorize the board of directors to establish the amount, manner, or other method of determining any contribution requirements for members.

(1) Unless the organic rules otherwise provide, the contributions of a member to a limited cooperative association may consist of tangible or intangible property or other benefit to the association, including money, labor, or other services performed or to be performed, promissor…

(1) Except as otherwise provided in the agreement, the following rules apply to an agreement made by a person before formation of a limited cooperative association to make a contribution to the association: (a) The agreement is irrevocable for six (6) months after the agreement i…

(1) The organic rules may provide for allocating profits of a limited cooperative association among members, among persons that are not members but conduct business with the association, to an unallocated account, or to any combination thereof. Unless the organic rules otherwise …

(1) Unless the organic rules otherwise provide and subject to KRS 272A.10-070, the board of directors may authorize, and the limited cooperative association may make, distributions to members. (2) Unless the organic rules otherwise provide, distributions to members may be made in…

Property distributed to a member by a limited cooperative association, other than money, may be redeemed or repurchased as provided in the organic rules, but a redemption or repurchase may not be made without authorization by the board of directors. The board may withhold authori…

(1) A limited cooperative association may not make a distribution if, after the distribution: (a) The association would not be able to pay its debts as they become due in the ordinary course of the association's activities; (b) The association's assets would be less than the sum …

(1) A director who consents to a distribution that violates KRS 272A.10-070 is personally liable to the limited cooperative association for the amount of the distribution which exceeds the amount that could have been distributed without the violation if it is established that in …

(1) A person has the power to dissociate as a member at any time, rightfully or wrongfully, by express will. (2) Unless the organic rules otherwise provide, a member's dissociation from a limited cooperative association is wrongful only if the dissociation: (a) Breaches an expres…

(1) Upon a member's dissociation: (a) Subject to KRS 272A.11-030, the person has no further rights as a member; and (b) Subject to KRS 272A.11-030 and Subchapter 16 of this chapter, any financial rights owned by the person in the person's capacity as a member immediately before d…

Unless the organic rules provide for greater rights, if a member is dissociated because of death or is expelled by reason of being adjudged incompetent, the member's personal representative or other legal representative may exercise the rights of a transferee of the member's fina…

A limited cooperative association is dissolved only as provided in this subchapter and upon dissolution winds up in accordance with.

Except as otherwise provided in KRS 272A.12-030 and 272A.12-040, a limited cooperative association is dissolved and its activities shall be wound up: (1) Upon the occurrence of an event or at a time specified in the articles of association; (2) Upon the action of the association'…

(1) The appropriate court may dissolve a limited cooperative association or order any action that under the circumstances is appropriate and equitable: (a) In a proceeding initiated by the Attorney General, if: 1. The association obtained its articles of association through fraud…

A majority of the organizers or initial directors of a limited cooperative association that has not yet begun business activity or the conduct of its affairs may dissolve the association.

(1) Except as otherwise provided in KRS 272A.12-040, for a limited cooperative association to voluntarily dissolve: (a) A resolution to dissolve shall be approved by a majority vote of the board of directors unless a greater percentage is required by the organic rules; (b) The bo…

(1) A limited cooperative association continues after dissolution only for purposes of winding up its activities. (2) In winding up a limited cooperative association's activities, the board of directors shall cause the association to: (a) Discharge its liabilities, settle and clo…

(1) In winding up a limited cooperative association's business, the association shall apply its assets to discharge its obligations to creditors, including members that are creditors. The association shall apply any remaining assets to pay in money the net amount distributable to…

(1) Subject to subsection (4) of this section, a dissolved limited cooperative association may dispose of the known claims against it by following the procedure in subsections (2) and (3) of this section. (2) A dissolved limited cooperative association may notify its known claima…

(1) A dissolved limited cooperative association may publish notice of its dissolution and request persons having claims against the association to present them in accordance with the notice. (2) A notice under subsection (1) of this section shall: (a) Be published at least once i…

(1) Upon application by a dissolved limited cooperative association that has published a notice under KRS 272A.12-090, the appropriate court may determine the amount and form of security to be provided for payment of claims against the association that are contingent, have not be…

(1) A limited cooperative association that has dissolved shall deliver to the Secretary of State for filing articles of dissolution that state: (a) The name of the association; (b) The date the association dissolved; and (c) Any other information the association considers relevan…

A member may maintain a derivative action to enforce a right of a limited cooperative association if: (1) The member demands that the association bring an action to enforce the right; and (2) Any of the following occur: (a) The association does not, within ninety (90) days after …

(1) A derivative action to enforce a right of a limited cooperative association may be maintained only by a person that: (a) Is a member or a dissociated member at the time the action is commenced and: 1. Was a member when the conduct giving rise to the action occurred; or 2. Who…

In a derivative action to enforce a right of a limited cooperative association, the complaint shall be verified and shall state: (1) The date and content of the plaintiff's demand under KRS 272A.13-010(1) and the association's response; (2) If ninety (90) days have not expired si…

A derivative action to enforce a right of a limited cooperative association may not be discontinued or settled without the court's approval.

(1) Except as otherwise provided in subsection (2) of this section: (a) Any proceeds or other benefits of a derivative action to enforce a right of a limited cooperative association, whether by judgment, compromise, or settlement, belong to the association and not to the plaintif…

(1) The laws of the state or other jurisdiction under which a foreign limited cooperative association is organized govern relations among the members of the foreign cooperative and between the members and the foreign cooperative. (2) A foreign limited cooperative association shal…

The Attorney General may maintain an action to restrain a foreign limited cooperative association from transacting business in this Commonwealth in violation of this chapter.

Unless the articles of association otherwise provide, member approval under KRS 272A.15-020 is not required for a limited cooperative association to: (1) Sell, lease, exchange, license, or otherwise dispose of all or any part of the assets of the association in the usual and regu…

A sale, lease, exchange, license, or other disposition of assets of a limited cooperative association, other than a disposition described in KRS 272A.15-010, requires approval of the association's members under KRS 272A.15-030 and 272A.15-040 if the disposition leaves the associa…

For a limited cooperative association to dispose of assets under KRS 272A.15-020: (1) A majority of the board of directors, or a greater percentage if required by the organic rules, shall approve the proposed disposition; and (2) The board of directors shall call a members meetin…

(1) Subject to subsection (2) of this section, a disposition of assets under KRS 272A.15-020 shall be approved by: (a) At least two-thirds (2/3) of the voting power of members present at a members meeting called under KRS 272A.15-030(2); and (b) If the limited cooperative associa…

As used in this subchapter, unless the context otherwise requires: (1) "Constituent entity" means an entity that is a party to a merger; (2) "Constituent limited cooperative association" means a limited cooperative association that is a party to a merger; (3) "Converted entity" m…

A foreign entity may convert to a limited cooperative association as provided in KRS 272A.17-040(6).

(1) A foreign entity that has been converted into a limited cooperative association is for all purposes the same entity that existed before the conversion but, after conversion, it is organized under this chapter and is subject to that law and other law as it applies thereto. (2)…