Code Section Group

Corporations Code - CORP

TITLE 1. CORPORATIONS [100 - 14631]

  ( Title 1 enacted by Stats. 1947, Ch. 1038. )

DIVISION 3. CORPORATIONS FOR SPECIFIC PURPOSES [12000 - 14631]

  ( Division 3 enacted by Stats. 1947, Ch. 1038. )

PART 2. COOPERATIVE CORPORATIONS [12200 - 12704]

  ( Heading of Part 2 amended by Stats. 2015, Ch. 192, Sec. 2. )

CHAPTER 1. General Provisions, Organization and Bylaws [12200 - 12340]

  ( Chapter 1 added by Stats. 1982, Ch. 1625, Sec. 3. )

ARTICLE 4. Articles of Incorporation [12310 - 12317]
  ( Article 4 added by Stats. 1982, Ch. 1625, Sec. 3. )

12310.
  

The articles of incorporation of a corporation formed under this part shall set forth:

(a) The name of the corporation.

(b) The following statement:


“This corporation is a cooperative corporation organized under the Cooperative Corporation Law. The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the law.”

[The articles may include a further description of the corporation’s purpose.]


(c) The name and street address in this state of the corporation’s initial agent for service of process in accordance with subdivision (b) of Section 12570.

(d) The initial street address of the corporation.

(e) The initial mailing address of the corporation, if different from the initial street address.

(f) Whether the voting power or the proprietary interests of the members are equal or unequal. If the voting power or proprietary interests of the members are unequal, the articles shall state either (i) the general rule or rules by which the voting power and proprietary interests of the members shall be determined or (ii) that such rule or rules shall be prescribed in the corporation’s bylaws. Equal voting power means voting power apportioned on the basis of one vote for each member. Equal proprietary rights means property rights apportioned on the basis of one proprietary unit for each member.

(g) Pursuant to Section 12310.5, the articles of incorporation may state whether the cooperative has elected to be governed as a worker cooperative.

(Amended by Stats. 2015, Ch. 192, Sec. 11. Effective January 1, 2016.)

12310.5.
  

(a) A corporation organized under this part may elect to be governed as a worker cooperative by making the following statement in its articles of incorporation or its amended articles of incorporation:

“This corporation is a worker cooperative corporation organized under the Cooperative Corporation Law.”

(b) A corporation that makes the election to be governed as a worker cooperative, unless expressly exempted, shall be governed by all the provisions of this part.

(Added by Stats. 2015, Ch. 192, Sec. 12. Effective January 1, 2016.)

12311.
  

(a) The names of all corporations formed under this part shall include “cooperative.” No corporation shall be formed under this part unless there is affixed or prefixed to its name some word or abbreviation which will indicate that it is a corporation, as distinguished from a natural person, a firm, or an unincorporated association.

(b) No person shall adopt or use the word “cooperative” or any abbreviation or derivation thereof, or any word similar thereto, as part of the name or designation under which it does business in this state, unless incorporated as provided in this part or unless incorporated as a nonprofit cooperative association under Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code, as a stock cooperative, as defined in Section 11003.2 of the Business and Professions Code, as a limited-equity housing cooperative, as defined in Section 817 of the Civil Code, as a credit union or organization owned for the mutual benefit of credit unions, or under some other law of this state enabling it to do so. However, the foregoing prohibition shall be inapplicable to any credit union or organization owned for the mutual benefit of credit unions, any housing cooperative, the financing of which is insured, guaranteed, or provided, in whole or in part, by a public or statutorily chartered entity pursuant to a program created for housing cooperatives, a nonprofit corporation, a majority of whose membership is composed of cooperative corporations, or an academic institution that serves cooperative corporations.

(c) A domestic or foreign corporation or association which did business in this state under a name or designation including the word “cooperative” prior to September 19, 1939, and which conducts business on a cooperative basis substantially as set forth in this part, may continue to do business under that name or designation.

(d) Any person, firm, individual, partnership, trust, domestic corporation, foreign corporation, or association which did business in this state under a name or designation including the word “cooperative” prior to September 19, 1939, but which does not conduct business on a cooperative basis as contemplated by Section 12201 of this part, may continue to do business under that name or designation if the words “not organized under the law relating to cooperative corporations” are always placed immediately after the name or designation wherever it is used.

(e) Any foreign corporation, organized under and complying with the cooperative law of the state or other jurisdiction of its creation, may use the term “cooperative” in this state if it has complied with the laws of this state applicable to foreign corporations, insofar as those laws are applicable to it, and if it is doing business on a cooperative basis as contemplated by Section 12201.

(Amended by Stats. 2011, Ch. 442, Sec. 28. Effective January 1, 2012.)

12312.
  

The articles of incorporation may set forth a further statement limiting the purposes or powers of the corporation.

(Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

12313.
  

(a) The articles of incorporation may set forth any or all of the following provisions, which shall not be effective unless expressly provided in the articles:

(1) A provision limiting the duration of the corporation’s existence to a specified date.

(2) A provision providing for the distribution of the remaining assets of the corporation, after payment or adequate provision for all of its debts and liabilities, to a charitable trust.

(b) Nothing contained in subdivision (a) shall affect the enforceability, as between the parties thereto, of any lawful agreement not otherwise contrary to public policy.

(c) The articles of incorporation may set forth any or all of the following provisions:

(1) The names and addresses of the persons appointed to act as initial directors.

(2) Provisions concerning the transfer of memberships, in accordance with Section 12410.

(3) The classes of members, if any, and if there are two or more classes, the rights, privileges, preferences, restrictions, and conditions attaching to each class.

(4) Any other provision, not in conflict with law, for the management of the activities and for the conduct of the affairs of the corporation, including any provision which is required or permitted by this part to be stated in the bylaws.

(5) A provision conferring upon members the right to determine the consideration for which memberships shall be issued.

(6) A provision authorizing the board of directors, within any limits or restrictions stated, to fix the rights, privileges, preferences, restrictions, and conditions attaching to any wholly unissued class of memberships authorized in the bylaws or the articles.

(7) If the bylaws or articles authorize a class of memberships to be divisible into series, a provision authorizing the board of directors, within any limits or restrictions stated, to fix the rights, privileges, preferences, restrictions, and conditions attaching to any wholly unissued series of a membership class authorized to be divisible into series, and to fix the number of memberships in the series and the designation of the series. As to any series, the number of which is authorized to be fixed by the board, the articles may also authorize the board to increase or decrease, but not below the number of memberships then outstanding, the number of memberships of any such series subsequent to the issuance of that series. Unless the articles or bylaws provide otherwise, in case the number of memberships of any series is decreased, the memberships constituting this decrease shall resume the status which they had prior to the adoption of the board resolution originally fixing the number of memberships of the series.

(Amended by Stats. 2013, Ch. 538, Sec. 3. Effective January 1, 2014.)

12314.
  

The articles of incorporation of a central organization, as defined in Section 12256, organized under or subject to this part may provide for unequal voting power of its members based upon the number of its members’ members, the patronage of its members, or both. In no event shall any member have less than one vote.

(Amended by Stats. 1983, Ch. 792, Sec. 10.)

12315.
  

For all purposes other than an action in the nature of quo warranto, a copy of the articles of a corporation duly certified by the Secretary of State is conclusive evidence of the formation of the corporation and prima facie evidence of its corporate existence.

(Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

12316.
  

If initial directors have not been named in the articles of incorporation, the incorporators may do whatever is necessary and proper to perfect the organization of the corporation, including the adoption and amendment of bylaws of the corporation and the election of directors and officers, until the directors are elected.

(Added by Stats. 1983, Ch. 792, Sec. 11.)

12317.
  

(a) A worker cooperative may, in its articles or bylaws, establish itself as a capital account cooperative.

(b) The articles or bylaws of a capital account cooperative may authorize assignment of a portion of retained net earnings and net losses to an unallocated capital account. The unallocated capital account in a capital account cooperative shall reflect any paid-in capital and retained net earnings not allocated to individual members. Earnings assigned to the unallocated capital account may be used for any and all corporate purposes, as determined by the board of directors.

(c) The system of member and unallocated capital accounts may be used to determine the redemption price of member shares, capital stock, and written notices of allocation. The articles or bylaws may provide for the capital account cooperative worker cooperative to pay or credit interest on the balance in each member’s capital account.

(d) The articles or bylaws of a capital account cooperative may permit the periodic redemption of written notices of allocation and capital stock and shall provide for recall and redemption of membership shares upon termination of membership in the cooperative. However, no redemption may occur that would result in the liability of any director or officer pursuant to Article 2 (commencing with Section 12370) of Chapter 2.

(e) As used in this section, “written notice of allocation” has the same meaning as defined in Section 1388 (b) of the Internal Revenue Code.

(Added by Stats. 2015, Ch. 192, Sec. 13. Effective January 1, 2016.)

CORPCorporations Code - CORP4.