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 3. Members [12400 - 12446]

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

ARTICLE 5. Rights and Obligations of Members and Creditors [12440 - 12446]
  ( Article 5 added by Stats. 1982, Ch. 1625, Sec. 3. )

12440.
  

(a) A member of a corporation is not, as such, personally liable for the debts, liabilities, or obligations of the corporation.

(b) No person is liable for any obligation arising from membership unless the person was admitted to membership upon the person’s application or with the person’s consent.

(c) The ownership of an interest in real property, when a condition of its ownership is membership in a corporation, shall be considered consent to such membership for the purpose of this section.

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

12441.
  

A corporation may levy dues, assessments, or fees upon its members pursuant to its articles or bylaws, but a member upon learning of them may avoid liability for them by promptly resigning from membership, except where the member is liable for them by contract, as a condition to ownership of an interest in real property, as an obligation arising out of the ownership of an interest in real property, or otherwise. Unless called to the attention of the member and agreed to in writing by the member, article or bylaw provisions authorizing such dues, assessments or fees do not, of themselves, create such liability. No action shall be brought by or on behalf of any creditor to levy or to require the levy of dues, assessments or fees upon the members of the corporation.

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

12442.
  

A person holding a membership as pledgee or a membership as executor, administrator, guardian, trustee, receiver or in any representative or fiduciary capacity is not personally liable for any unpaid balance of the purchase price of the membership, or for any amount owing to the corporation by the member, because the membership is so held, but the estate and funds in the hands of such fiduciary or representative are liable and the membership subject to sale therefor.

(Amended by Stats. 1983, Ch. 792, Sec. 22.)

12443.
  

(a) No action shall be brought by or on behalf of any creditor to reach and apply the liability, if any, of a member to the corporation to pay the amount due on such member’s membership or otherwise due to the corporation unless final judgment has been rendered in favor of the creditor against the corporation and execution has been returned unsatisfied in whole or in part or unless such proceedings would be useless.

(b) All creditors of the corporation, with or without reducing their claims to judgment, may intervene in any such creditor’s action to reach and apply unpaid amounts due the corporation and any or all members who owe amounts to the corporation may be joined in such action. Several judgments may be rendered for and against the parties to the action or in favor of a receiver for the benefit of the respective parties thereto.

(c) All amounts paid by any member in any such action shall be credited on the unpaid balance due the corporation by such member.

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

12444.
  

Nothing in this part shall be construed as in derogation of any rights or remedies which any creditor or member may have against any promoter, member, director, officer or the corporation because of participation in any fraud or illegality practiced upon such creditor or member by any such person or by the corporation or in derogation of any rights which the corporation may have by rescission, cancellation or otherwise because of any fraud or illegality practiced on it by any such person.

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

12445.
  

The articles or bylaws shall prescribe:

(a) The manner of determining each member’s share of the capital of the corporation contributed by the members and, if repayable, the time and manner for its repayment; and

(b) The manner of determining the value, if any, of the member’s interest in the corporation apart from contributed capital and the time and manner of the corporation’s purchase, if required, of such interest from a terminated member.

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

12446.
  

(a) Subject to subdivision (b), Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure shall not apply to any proprietary interest in a consumer cooperative corporation. Any proprietary interest that would otherwise escheat to the state pursuant to Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure shall instead become the property of the corporation.

(b) Notwithstanding subdivision (a), no proprietary interest shall become the property of the corporation under this section unless the following requirements are satisfied:

(1) The articles or bylaws shall specifically provide for the transfer of ownership of the otherwise escheated proprietary interests to the corporation.

(2) At least 60 days prior notice of the proposed transfer of the proprietary interest to the corporation is given to the affected member by first-class or second-class mail to the last address of the member shown on the corporation’s records, and by publication in a newspaper of general circulation in the county in which the corporation has its principal office. Notice given in the foregoing manner shall be deemed actual notice.

(3) No proprietary interest shall become the property of the corporation under this section if written notice objecting thereto is received by the corporation from the affected member prior to the date of the proposed transfer.

(c) For purposes of this section, a “proprietary interest” shall mean and include any membership, membership certificate, membership share, or share certificate of any class or series representing a proprietary interest in, and issued by, the corporation together with all accrued and unpaid dividends and patronage distributions relating thereto.

(Amended by Stats. 2013, Ch. 538, Sec. 8. Effective January 1, 2014.)

CORPCorporations Code - CORP5.