S.B. 96-39 Colorado Cooperative Act - repeal of Colorado Marketing Law. Repeals and reenacts the "Cooperative Marketing Law" as the "Colorado Cooperative Act" ("the Act"). Clarifies the Act's flexibility and availability to types of businesses and industries other than agriculture. States that, if a matter is not covered by the "Colorado Cooperative Act", the "Colorado Business Corporation Act" shall apply unless the cooperative elects to have the "Colorado Nonprofit Corporation Act" apply. Establishes a procedure for a business formed under other statutes, but operating as a cooperative, to amend its organizational documents and organize under the "Colorado Cooperative Act".
Requires the commissioner of agriculture to be notified when a cooperative dissolves. Allows the commissioner to promulgate rules that require reports to be submitted if the commissioner deems it necessary. Makes optional the involvement of the department of agriculture in the formation of agricultural cooperatives. Permits the commissioner to provide direction and assistance. Allows the department to become involved in monitoring or assisting agricultural cooperatives if the commissioner determines it necessary.
Prohibits the use of the word "cooperative" in a business, corporation, trade name, trade mark, service brand, or designation except as specified in the Act. Provides for enforcement by the cooperative or its members.
States filing requirements and the effective date and time of a cooperative's articles. Removes the former permissive posting of notice of meetings to consider amendments to the articles. Empowers the board of directors to make limited amendments to the articles.
Permits the establishment of bylaws consistent with the former "Cooperative Marketing Law". Requires that certain provisions be contained in the bylaws if they are not stated in the articles.
Allows cooperative membership to persons other than agricultural producers for nonagricultural cooperatives. Provides for evidence of membership, allows nonvoting equity investments by nonmembers, limits liability of members, and authorizes the organization of membership by districts.
Permits a cooperative organized without stock to issue preferred equity similar to preferred stock. Permits payment for membership stock to be made by adequately secured notes. Deletes a restriction on redemption of stock that prohibits a cooperative from redeeming stock when the debts of the cooperative exceed 50% of its assets. Clarifies that a stock cooperative may limit dividends on stock held by its voting members. Requires cooperatives to periodically set aside a portion of net margins, per unit retains, or other funds for reserve, distribution, patronage refunds, and capital or another lawful purpose. Requires net margins to be distributed at least once every 12 months. Permits the use of preferred equity as well as preferred stock to acquire property and other interests in other entities by the cooperative.
Reduces the minimum number of directors from 5 to 3 and allows the number of directors to be stated in the articles or the bylaws. Establishes a minimum quorum for membership meetings. Specifies how members may vote. Prohibits cumulative and proxy voting. Permits proportional voting based on patronage if allowed in the articles of the cooperative. Prohibits the use of proportional voting for any vote that requires a majority vote or more of the total number of members. Establishes that all members have at least one vote. Permits up to 20% of the directors to be nonmembers. Deletes the old provision regarding appointment of one or more of the directors by public officials. Sets procedures for meetings of the board. Sets procedures for removal of a director by the board or a majority of the members of the cooperative. Enables the cooperative to indemnify its board of directors, officers, agents, and employees in the same manner as corporations unless otherwise limited by the "Colorado Cooperative Act".
Deletes the provision that makes it a misdemeanor for a person to maliciously and knowingly spread false reports about the finances, management, or activity of a cooperative.
Provides a limited antitrust exemption if the existence of a cooperative and contracts between the cooperative and its members do not in and of themselves constitute an antitrust violation. Exempts cooperatives from securities laws.
Details procedures for merger, consolidation, and share or equity capital exchange of the cooperative. Explains how a cooperative may merge or consolidate with another foreign or domestic cooperative or entity and exchange shares or equity. Allows the merger of parent and subsidiary cooperatives.
Authorizes a dissolution by a majority of the board of a cooperative if it has not yet issued memberships. Establishes a procedure for dissolution of a cooperative after memberships have been issued. Establishes a procedure for the disposition of claims made against the cooperative by written notice to known claimants and by publication to unknown claimants. Sets forth methods for the enforcement of claims made against the dissolved cooperative. Clarifies the procedures for and effects of administrative and judicial dissolution of a cooperative.
Removes the residency requirement for establishing a cooperative in Colorado. Allows a cooperative organized in another state or country to transact business in Colorado once it has applied for and received authority to transact business from the secretary of state. Provides procedures for the establishment, operation, and dissolution of foreign cooperatives.
Makes the provisions of this act applicable to existing domestic corporations, associations, or cooperatives organized pursuant to the former "Cooperative Marketing Law". Makes existing domestic corporations, associations, or cooperatives formed pursuant to the article governing agricultural and livestock associations subject to the article governing cooperatives in general until they elect to be governed by the "Colorado Cooperative Act". Repeals the article governing agricultural and livestock associations.
APPROVED by Governor April 23, 1996
EFFECTIVE July 1, 1996
H.B. 96-1285 Colorado Business Corporation Act - revisions. Clarifies the conclusiveness of, and the procedures for, the filing of articles of incorporation by the secretary of state. Clarifies that nonprofit corporations organized under the "Colorado Nonprofit Corporation Act" are not subject to the provisions of the "Colorado Business Corporation Act".
Establishes procedures necessary to effectuate a reverse stock split. Specifies that each outstanding share of the class must be divided by the same divisor as every other share of the class. Requires shareholder notice of a meeting at which a reverse split will be considered. Requires a shareholder vote on reverse stock splits.
Allows the effective date of shareholder action without a meeting to be a date other than the date the writings are received by the corporation or later than such date.
Defines "registered agent" and "registered office". Allows a corporation not to have a registered office in this state. No longer allows less than a majority of the number of directors for a quorum of the board of directors. Exempts transactions with wholly owned subsidiaries from the definition of "conflicting interest transaction".
Allows dissolution of a corporation upon expiration of the period of duration for corporations with a finite life span. Clarifies that no articles of dissolution need to be filed by a corporation that is dissolved upon such expiration.
Specifies that dissenters' rights may not be exercised in connection with certain transactions with respect to shares of a class or series of shares that either were listed on a national securities exchange registered under the federal "Securities Exchange Act of 1934" or on the national market system of the national association of securities dealers automated quotation system, or were held of record by more than two thousand shareholders, unless shareholders will receive anything other than shares in the surviving corporation, cash in lieu of fractional shares, or shares of listed stock in exchange for their shares. Clarifies that a shareholder who was entitled to dissent but was not given proper notice is not precluded from demanding payment for the shares.
Establishes procedures to determine dates and locations for annual and special meetings of shareholders for corporations that have no such provisions in their bylaws.
Allows the survival of remedies and title to property of domestic corporations after dissolutions occurring prior to July 1, 1994. Permits the public trustee to convey and dispose of corporate property of such a corporation upon the death of the last remaining director.
APPROVED by Governor June 1, 1996
EFFECTIVE June 1, 1996
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