Title 16, Business Entities

16-16-502. Becoming a member. A person becomes a member: (1) as provided in the organic rules; (2) as the result of a merger or conversion under Chapter 1a, Part 7, Merger, or Chapter 1a, Part 9, Conversion; or (3) with the consent of all the members.

16-16-503. No power as member to bind association. A member, solely by reason of being a member, may not act for or bind the limited cooperative association.

16-16-504. No liability as member for association's obligations. Unless the articles of organization 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…

16-16-505. Right of member and former member to information. (1) Not later than 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 informa…

16-16-506. Annual meeting of members. (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 this state at the place stated in th…

16-16-507. Special meeting of members. (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…

16-16-508. Notice of members meeting. (1) A limited cooperative association shall notify each member of the time, date, and place of a members meeting at least 15 and not more than 60 days before the meeting. (2) Unless the articles of organization otherwise provide, notice of an…

16-16-509. Waiver of members meeting notice. (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 …

16-16-510. Quorum of members. 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.

16-16-511. Voting by patron members. Except as provided by Subsection 16-16-512(1), each patron member has one vote. The organic rules may allocate voting power among patron members as provided in Subsection 16-16-512(1).

16-16-512. Determination of voting power of patron member. (1) The organic rules may allocate voting power among patron members on the basis of one or a combination of the following: (a) one member, one vote; (b) use or patronage; (c) equity; or (d) if a patron member is a cooper…

16-16-513. Voting by investor members. If the organic rules provide for investor members, each investor member has one 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 comb…

16-16-514. Voting requirements for members. (1) If a limited cooperative association has both patron and investor members, the following rules apply: (a) the total voting power of all patron members may not be less than a majority of the entire voting power entitled to vote; and …

16-16-515. Manner of voting. (1) Unless the organic rules otherwise provide, voting by a proxy at a members meeting is prohibited. This Subsection (1) does not prohibit delegate voting based on district or class. (2) If voting by a proxy is permitted, a patron member may appoint …

16-16-516. Action without a meeting. (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. (…

16-16-517. Districts and delegates -- Classes of members. (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 distr…

16-16-601. Member's interest. 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 uncertifi…

16-16-602. Patron and investor members' interests. (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, whi…

16-16-603. Transferability of member's interest. (1) The provisions of this chapter relating to the transferability of a member's interest are subject to Title 70A, Uniform Commercial Code. (2) Unless the organic rules otherwise provide, a member's interest other than financial r…

16-16-604. Security interest and set-off. (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 …

16-16-605. Charging orders for judgment creditor of member or transferee. (1) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the financial rights of the judgment debtor for the unsatisfied amount of the judgment. A char…

16-16-701. Authority. In this part, "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 p…

16-16-702. Marketing contracts. (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. (…

16-16-703. Duration of marketing contract. The initial duration of a marketing contract may not exceed 10 years, but the contract may be self-renewing for additional periods not exceeding five years each. Unless the contract provides for another manner or time for termination, ei…

16-16-704. Remedies for breach of contract. (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 anticipa…

16-16-801. Board of directors. (1) A limited cooperative association shall have a board of directors of at least three individuals, unless the association has fewer than three members. If the association has fewer than three members, the number of directors may not be fewer than …

16-16-802. No liability as director for limited cooperative association's obligations. 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…

16-16-803. Qualifications of directors. (1) Unless the organic rules otherwise provide, and subject to Subsection (3), 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 a member that …

16-16-804. Election of directors and composition of board. (1) Unless the organic rules require a greater number: (a) the number of directors that shall be patron members may not be fewer than: (i) one, if there are two or three directors; (ii) two, if there are four or five dire…

16-16-805. Term of director. (1) Unless the organic rules otherwise provide, and subject to Subsections (3) and (4) and Subsection 16-16-303(3), the term of a director expires at the annual members meeting following the director's election or appointment. The term of a director m…

16-16-806. Resignation of director. 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.

16-16-807. Removal of director. Unless the 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 10% of the total voting power entitled to be voted in the election of a directo…

16-16-808. Suspension of director by board. (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 directo…

16-16-809. Vacancy on board. (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 …

16-16-810. Remuneration of directors. Unless the organic rules otherwise provide, the board of directors may set the remuneration of directors and of nondirector committee members appointed under Subsection 16-16-817(1).

16-16-811. Meetings. (1) A board of directors shall meet at least annually and may hold meetings inside or outside this state. (2) Unless the organic rules otherwise provide, a board of directors may permit directors to attend or conduct board meetings through the use of any mean…

16-16-812. Action without meeting. (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) may be withdrawn by a director …

16-16-813. Meetings and notice. (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 o…

16-16-814. Waiver of notice of meeting. (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 p…

16-16-815. Quorum. (1) 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. (2) If a quorum of the board of directors is present at the beg…

16-16-816. Voting. (1) Each director shall have one 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…

16-16-817. Committees. (1) Unless the organic rules otherwise provide, a board of directors may create one or more committees and appoint one or more individuals to serve on a committee. (2) Unless the organic rules otherwise provide, an individual appointed to serve on a committ…

16-16-818. Standards of conduct and liability. Except as otherwise provided in Section 16-16-820: (1) 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 Title 3, U…

16-16-819. Conflict of interest. (1) The law applicable to conflicts of interest between a director of an entity organized under Title 3, Uniform Agricultural Cooperative Association Act, governs conflicts of interest between a limited cooperative association and a director or me…

16-16-820. Other considerations of directors. 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 lo…

16-16-821. Right of director or committee member to information. A director or a member of a committee appointed under Section 16-16-817 may obtain, inspect, and copy all information regarding the state of activities and financial condition of the limited cooperative association …