Title XXIII, Private Corporations and Associations

A member, solely by reason of being a member, may not act for or bind the limited cooperative association.

(1) Unless the articles of association otherwise provide, a debt, obligation, or other liability of a limited cooperative association is solely that of the association and is not the debt, obligation, or liability of a member solely by reason of being a member. (2) Notwithstandin…

(1) Not later than ten (10) business days after receipt of a demand made in a record, a limited cooperative association shall permit a member to obtain, inspect, and copy in the association's principal office required information listed in KRS 272A.1- 120(1)(a) to (h) during regu…

(1) Members shall meet annually at a time provided in the organic rules or set by the board of directors not inconsistent with the organic rules. (2) An annual members meeting may be held inside or outside the Commonwealth of Kentucky at the place stated in the organic rules or s…

(1) A special meeting of members may be called only: (a) As provided in the organic rules; (b) By a majority vote of the board of directors on a proposal stating the purpose of the meeting; (c) By demand in a record signed by members holding at least twenty percent (20%) of the v…

(1) A limited cooperative association shall notify each member of the time, date, and place of a members meeting at least ten (10) and not more than sixty (60) days before the meeting. (2) Unless the articles of association otherwise provide, notice of an annual members meeting n…

(1) A member may waive notice of a members meeting before, during, or after the meeting. (2) A member's participation in a members meeting is a waiver of notice of that meeting unless the member objects to the meeting at the beginning of the meeting or promptly upon the member's …

Unless the organic rules otherwise require a greater number of members or percentage of the voting power, the voting member or members present at a members meeting constitute a quorum.

member. (1) Except as provided by subsections (2) and (3) of this section, each patron member has one (1) vote. (2) The organic rules may allocate voting power among patron members on the basis of one (1) or a combination of the following: (a) One (1) member, one (1) vote; (b) Us…

If the organic rules provide for investor members, each investor member has one (1) vote, unless the organic rules otherwise provide. The organic rules may provide for the allocation of investor member voting power by class, classes, or any combination of classes.

If a limited cooperative association has both patron and investor members, the following rules apply: (1) The total voting power of all patron members may not be less than a majority of the entire voting power entitled to vote; (2) Action on any matter is approved only upon the a…

(1) Unless the organic rules otherwise provide, voting by a proxy at a members meeting is prohibited. This subsection does not prohibit delegate voting based on district or class. (2) If voting by a proxy is permitted, a patron member may appoint only another patron member as a p…

(1) Unless the organic rules require that action be taken only at a members meeting, any action that may be taken by the members may be taken without a meeting if each member entitled to vote on the action consents in a record to the action. (2) Consent under subsection (1) of th…

(1) The organic rules may provide for the formation of geographic districts of patron members and: (a) For the conduct of patron member meetings by districts and the election of directors at the meetings; or (b) That districts may elect district delegates to represent and vote fo…

The state Department of Agriculture of the Commonwealth of Kentucky is hereby directed to assist in the organization of any association desiring to incorporate under the provisions of KRS 272.360 to 272.510 when requested to do so in writing by any twenty (20) or more eligible pe…

Associations incorporated under the provisions of KRS 272.360 to 272.510 shall be exempt from the provisions of law, now or hereafter enacted, relating to insurance companies or other organizations of a like or similar nature.

A member's interest: (1) Is personal property; (2) Consists of: (a) Governance rights; (b) Financial rights; and (c) The right or obligation, if any, to do business with the limited cooperative association; and (3) May be in certificated or uncertificated form.

(1) Unless the organic rules establish investor members' interests, a member's interest is a patron member's interest. (2) Unless the organic rules otherwise provide, if a limited cooperative association has investor members, while a person is a member of the association, the per…

(1) The provisions of this chapter relating to the transferability of a member's interest are subject to the Uniform Commercial Code as enacted in the Commonwealth of Kentucky in KRS Chapter 355. (2) Unless the organic rules otherwise provide, a member's interest other than finan…

(1) A member or transferee may create an enforceable security interest in its financial rights in a limited cooperative association. (2) Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the member's governance rights in a lim…

(1) This section provides the exclusive remedy by which the judgment creditor of a member or the assignee of a member may satisfy a judgment out of the judgment debtor's limited financial rights in a limited cooperative association. (2) On application to a court of competent juri…

As used in this subchapter, "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 th…

(1) 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. (2) A marketing contract may: (a)…

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…

(1) 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…

(1) A limited cooperative association shall 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 membe…

(1) 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…

(1) Unless the organic rules otherwise provide, and subject to subsection (3) of this section, each director of a limited cooperative association shall be an individual who is a member of the association or an individual who is designated by an entity member for purposes of quali…

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

(1) Unless the organic rules otherwise provide, and subject to subsections (3) and (4) of this section and KRS 272A.3-020(5), 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…

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.

(1) Members may remove a director with or without cause. (2) A member or members holding at least ten percent (10%) of the total voting power entitled to be voted in the election of a director may demand removal of the director by one (1) or more signed petitions submitted to the…

(1) 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: (a) Fraud…

(1) Unless the organic rules otherwise provide, a vacancy on the board of directors shall be filled: (a) 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 (b) …

Unless the organic rules otherwise provide, the board of directors may set the remuneration of directors and of nondirector committee members appointed under KRS 272A.8-170.

(1) A board of directors shall meet at least annually and may hold meetings inside or outside of the Commonwealth of Kentucky. (2) Unless the organic rules provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by,…

(1) Unless prohibited by the organic rules, any action that may be taken by a board of directors may be taken without a meeting if each director consents in a record to the action. (2) Consent under subsection (1) of this section may be withdrawn by a director in a record at any …

(1) Unless the organic rules otherwise provide, a board of directors may establish a time, date, and place for regular board meetings, and notice of the time, date, place, or purpose of those meetings is not required. (2) Unless the organic rules otherwise provide, notice of the …

(1) 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. (2) Unless the organic rules otherwise provide, a director's participation in a meeting is a waiver of…

(1) Unless the articles of association 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. (2) If a quorum of the board of directors is present at the beginning of a meeting,…

(1) Each director shall have one (1) vote for purposes of decisions made by the board of directors. (2) 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. (3) Directors…

(1) 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. (2) Unless the organic rules otherwise provide, an individual appointed to serve on a committee of a limited…

Except as otherwise provided in KRS 272A.8-190: (1) The fiduciary duties a director owes to the limited cooperative association include the duty of loyalty and the duty of care set forth in subsections (2) and (3) of this section; (2) A director's duty of loyalty to the limited c…

Unless the articles of association otherwise provide, in considering the best interests of a limited cooperative association, in discharging the duties of director, in conjunction with considering the long- and short-term interest of the association and its patron members, a dire…

A director or a member of a committee appointed under KRS 272A.8-170 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…

(1) A limited cooperative association has the officers: (a) Provided in the organic rules; or (b) Established by the board of directors in a manner not inconsistent with the organic rules. (2) The organic rules may designate or, if the rules do not designate, the board of directo…

(1) The board of directors may remove an officer at any time with or without cause. (2) 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…

(1) The organic rules may provide indemnification to a director for judgments, settlements, penalties, fines, or expenses incurred in a proceeding to which a director is a party because the person is a director. (2) No indemnification may be provided for conduct violating the sta…

(1) Any corporation, association or company using the word "cooperative" as part of its name in violation of KRS 272.044 shall be fined not less than fifty dollars ($50) nor more than one thousand dollars ($1,000), and may be enjoined from doing business under that name by any co…

521.020, or 521.050. (1) If a domestic cooperative corporation or association is convicted of a violation of KRS 506.010, 506.030, 506.040, 521.020, or 521.050, or if an officer, employee, or agent of the corporation or association is convicted of violating any section specified …