Title 10, Corporations

As used in this chapter, unless the context requires otherwise, the term: 1. "Association" includes both cooperatives and foreign cooperatives. 2. "Cooperative" means an association incorporated under this chapter. 3. "Corporation" means all corporations not associations. 4. "Ele…

1. For purposes of this chapter: a. A record or signature may not be denied legal effect or enforceability solely because it is in electronic form; b. A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation; c. If …

Cooperatives may be organized under this chapter for any lawful purpose except banking and insurance, but subject to statutes relating to the organization or operation of specified kinds of corporations or associations.

Unless otherwise provided by its articles, a cooperative may: 1. Exist perpetually. 2. Sue and be sued. 3. Have a seal. 4. Make contracts, incur liabilities, and borrow money; issue certificates representing indebtedness, or representing equity interests in its assets; acquire pr…

Five or more adults, one of whom must be a resident, may form a cooperative by signing, acknowledging, and filing articles of association.

The articles of association shall set forth: 1. The name of the cooperative. 2. The period of existence, unless perpetual. Cooperatives now organized under the provisions of chapter 4-07 or 10-15 are granted perpetual existence irrespective of the period of existence set forth in…

It is not necessary to set forth in the articles of association any of the powers granted by this chapter. The articles may include additional provisions, consistent with law, including provisions which are required or permitted to be set forth in the bylaws. Any provision requir…

An original of the articles of association, duly signed and acknowledged, must be delivered to the secretary of state for filing. The legal corporate existence of a cooperative begins when the certificate of association is issued by the secretary of state or on a later date as sp…

Upon receipt of the articles of association and payment of the required fees, the secretary of state shall issue a certificate of association. The certificate of association shall be conclusive evidence, except as against the state in a proceeding to cancel or revoke such certifi…

1. The cooperative name: a. Must be expressed in letters or characters used in the English language as those letters or characters appear in the American standard code for information interchange (ASCII) table. b. May contain the word "corporation" or "incorporated" or an abbrevi…

1. The exclusive right to the use of a name otherwise permitted by section 10-15-08.1 may be reserved by any person. 2. The reservation must be made by filing with the secretary of state a request that the name be reserved, together with the fees provided in section 10-15-54. If …

After articles have been filed, an organization meeting of the temporary board shall be held at the call of a majority of the incorporators or of a majority of the temporary directors for the adoption of bylaws, election of temporary officers, and transaction of other business.

The first meeting of the members shall be called by the temporary president or a majority of the temporary directors. Such meeting shall be held as soon as reasonably possible after the organization meeting of the temporary board but not later than six months after filing the art…

The initial bylaws of a cooperative may be adopted by the temporary board. Thereafter, bylaws may be adopted and amended only by the members, unless the members adopt a bylaw that permits the board to make and amend specified bylaws. Any bylaw adopted or amended by the board shal…

1. A cooperative shall maintain in this state either: a. Its principal office; or b. A registered agent as provided in chapter 10-01.1 and, if a noncommercial registered agent, the address of the registered office in this state. 2. The board may establish a registered agent and a…

Any process, notice, or demand required or permitted by law to be served upon the cooperative or its directors may be served as provided in chapter 10-01.1.

No cooperative funds may be used, nor any stock issued, in payment of any promotion expenses in excess of ten percent of the paid-up capital stock or membership fees. No commission or expenses shall be paid on the sale of stock in excess of ten percent of the par value thereof, a…

A cooperative may have one or more classes of members. Provisions for qualifications, requirements, method of acceptance, terms, conditions, termination, and other incidents of membership shall be set forth in the bylaws. Any person, including a partnership, incorporated or uninc…

Except as permitted in this section, no person other than a member may vote at any member meeting. 1. A person who has not fully paid for membership may not vote except as expressly permitted in the bylaws. If the cooperative permits two or more persons to hold one membership, th…

1. Unless the bylaws provide otherwise, member meetings shall be held at the principal office or such other place as the board may determine. 2. An annual member meeting shall be held at the time fixed in or pursuant to the bylaws. In the absence of a bylaw provision, such meetin…

A quorum at a member meeting shall be ten percent of the first one hundred members plus five percent of additional members, present in person or represented by delegates. Unless the bylaws fix a larger number of members to constitute a quorum, a quorum shall never be more than fi…

Whenever notice is required by this chapter to be given to any person, such notice shall be given either personally or by mail. If mailed, such notice is given when deposited in the United States mail, with postage prepaid thereon, addressed to such person at the person's address…

1. A cooperative organized with capital stock may issue the amount of stock stated in its articles. The stock may be divided into two or more classes with the designations, preferences, limitations, and relative rights as stated in the articles, except that: a. Stock as such has …

No stock certificate may be issued except upon payment of at least the par value of the stock it represents. No cooperative may issue stock or bonds except for money, labor done, or money or property actually received. All fictitious increases of stock or indebtedness are void. I…

A subscription for stock of a cooperative is irrevocable for six months unless otherwise provided by the subscription agreement or unless all subscribers consent to the revocation. A stockholder or subscriber is under no obligation to any person with respect to the stockholder's …

1. When a security issued by a cooperative is missing, the cooperative shall issue a duplicate security if the owner so requests and furnishes an indemnity acceptable to the cooperative. 2. When records showing ownership of securities or apportionment of equity interest in the as…

1. A cooperative is not liable for acting upon wrongful transfers of its securities unless it has notice that the certificate was not transferred by a proper person or has notice that the transfer was wrongful. 2. As used in this section: a. "Proper person" means the registered o…

1. The business and affairs of a cooperative shall be managed by a board of directors. Every director shall be a member or a representative of a member who is other than a natural person. The bylaws shall prescribe any other qualifications for directors and may provide that direc…

1. Meetings of the board shall be held at such place and upon such notice as is prescribed in or pursuant to the bylaws. 2. Unless a greater number is required in the bylaws, a majority of the directors in office shall constitute a quorum for transaction of business. Unless a gre…

If the bylaws so provide, the board may elect an executive committee to consist of three or more directors. When the board is not in session, such committee shall have all powers of the board except in respect to: 1. Powers reserved by the board to itself. 2. Apportionment or dis…

Any action which may be taken at a member meeting may be taken without a meeting if a writing setting forth and approving the action taken shall be signed by a majority of the members entitled to vote on such action. Any action which may be taken at a meeting of the directors or …

1. The principal officers of a cooperative are a president, one or more vice presidents and a treasurer as prescribed in the bylaws, and a secretary. They shall be elected annually by the board at such time and in such manner as the bylaws provide. Each principal officer except t…

1. Unless the bylaws provide otherwise, only the members may establish compensation or other benefits for a director, not available generally to officers and employees, for services as a director. 2. Unless the bylaws provide otherwise, for prior or future services of any officer…

1. Directors, trustees, and officers, and the manager who is the person most responsible for carrying out the policies and directives of the trustees, officers, or board of directors, are immune from civil liability for any act or omission relating to their service or function as…

1. Except as authorized by the members, the board may not dispose of all or substantially all of a cooperative's fixed assets. At any meeting the members may authorize the disposition of all or substantially all of a cooperative's fixed assets if: a. Notice that such disposition …

At least once annually the directors shall determine and distribute net proceeds as follows: 1. There shall be deducted from total proceeds: a. All operating expenses and costs. b. The cost of supplies, commodities, equipment, and other property or services procured or sold for p…

1. Any distribution of proceeds or redemption of, or payment based upon, any security by a domestic cooperative, excluding all credit unions, which remains unclaimed six years after the date authorized for retirement or payment in cash or other property, may be forfeited by the b…

1. A cooperative shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of meetings of its members, board, and executive committee. The cooperative shall keep at its principal office records of the names and addresses of all me…

At any member meeting, a cooperative may adopt any amendment to its articles which is lawful under section 10-15-05 if a statement of the nature of the amendment was contained in the notice of the meeting. An amendment is adopted when approved by members holding a majority of the…

1. Amendments to articles must be signed and acknowledged by an officer of the cooperative and set forth: a. The name of the cooperative. b. The amendments and date of adoption. c. The number of members. d. The number of members voting for and against the amendment. 2. One copy o…

A cooperative may, by action taken in the manner required for an amendment, adopt restated articles which shall state they supersede existing articles and amendments. Restated articles shall meet all requirements of original articles except: 1. Incorporators constituting the temp…

Certified copies of any order of a court of the United States, in proceedings under the bankruptcy laws, shall be filed as an amendment if the order affects an amendment to the articles. The principal officers of a cooperative shall cause each order to be promptly filed after it …

If otherwise lawful, any two or more associations may merge or consolidate under this chapter or under the law of the state where the surviving or new association will exist. Before a cooperative may merge or consolidate with any other association, a written plan of merger or con…

1. Articles of merger or consolidation shall set forth the approved plan and such other information as is required by section 10-15-38. They shall be signed by two principal officers of each association merging or consolidating, sealed with the seal of each such association if an…

1. Any cooperative may divide itself into two or more cooperatives under this chapter. A written plan of division shall be prepared by the board or by a committee selected by the board for that purpose. Such plan shall set forth all the terms of the division and the proposed effe…

A corporation may convert itself into a cooperative by adopting an amendment to its articles by which it elects to become subject to this chapter, together with changes in its articles required by this chapter and other desirable changes permitted by this chapter. Such amendment …

1. At any member meeting, whether or not a quorum is present, a cooperative may dissolve if: a. Notice that a resolution for dissolution will be considered and acted upon has been given to all members and to all other persons entitled by the articles to vote thereon. b. Such reso…

1. A cooperative may be dissolved involuntarily by a decree of the district court where the principal office or registered agent is located in an action commenced by the attorney general when any of the following is established: a. The cooperative's certificate of association was…

1. The district court of the county where the principal office or registered agent of the cooperative is located may liquidate the assets and business of such cooperative when an action for that purpose is filed by or on behalf of: a. A majority of the designated committee or dir…

1. Upon filing the articles or decree of dissolution, title to any property omitted from the final distribution vests in the surviving directors or committee members who signed the articles, as trustees. They have all the powers of the cooperative with respect to such property an…