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Co-Operative Act

(805 ILCS 310/) Co-operative Act.

(805 ILCS 310/1) (from Ch. 32, par. 305)
Sec. 1. Any 5 or more subscribers to the shares of the capital stock of a corporation to be organized under this Act who may be desirous of uniting in any co-operative association for the purpose of purchasing of or selling to all shareholders and others, all sorts of groceries, provisions and any other articles of merchandise, for cash or otherwise at wholesale or retail, at such reasonable prices over the cost thereof as will enable the members of such association to obtain or dispose of such commodities at the smallest practicable rate of cost, or who may be desirous of engaging as shareholders in any association for the operating of a business by such shareholders, or who may be desirous of becoming interested in other like associations–may become incorporated for that purpose by making a statement to that effect under their signatures and duly acknowledged before an officer authorized to take acknowledgments, setting forth: (a) the name of the corporation; (b) the address, including street and number, if any, of its initial registered office in this State, and the name of its initial registered agent at such address; (c) the period of duration, which may be perpetual; (d) the name and address, including street and number, if any, of each incorporator; (e) the purpose or purposes for which the corporation is organized; (f) the aggregate number of shares which the corporation shall have authority to issue; and if the shares are to consist of one class only, the par value of each of the shares; or, if the shares are to be divided into classes, the number of shares of each class, if any, that are to have a par value of each share of each such class, and the number of shares of each class, if any, that are to be without par value; (g) if the shares are to be divided into classes, the designation of each class and a statement of the preferences, qualifications, limitations, restrictions, and the special or relative rights in respect of the shares of each class; (h) the number and class of shares to be issued by the corporation before it commences business, and the consideration to be received by the corporation therefor, which shall be not less than $1,000. If shares of more than one class are to be issued, the consideration for shares of each class shall be separately stated; (i) the number of directors to be elected at the first meeting of shareholders; (j) any provisions, not inconsistent with law, which the incorporators may choose to insert, for the regulation of the internal affairs of the corporation.
(Source: P.A. 99-677, eff. 7-29-16.)

(805 ILCS 310/2) (from Ch. 32, par. 306)
Sec. 2. No person shall be permitted to subscribe for more than 10 shares of the capital stock of such association, nor shall any person be permitted to own or control more than 10 shares of the capital stock of such association. The shares of stock shall not be less than $5 nor more than $1,000 a share, and subscriptions thereto shall be made payable to the association at such time or times and in such manner as shall be determined by the directors. No stock shall be issued except at its par value and no stock shall be issued in amount to exceed $10,000 to any one shareholder, except as hereinafter provided for in Section 12 of this Act.
No commission shall be directly or indirectly charged, secured, or collected for selling stock in such association, and any person, firm or corporation, charging, receiving or procuring, directly or indirectly, any such commission commits a petty offense and shall be fined not less than $5 nor more than $100.
(Source: P.A. 98-1122, eff. 8-26-14.)

(805 ILCS 310/3) (from Ch. 32, par. 307)
Sec. 3. Corporations organized under this act may provide in their by-laws that when a shareholder is desirous of disposing of his stock, he shall first give the corporation an opportunity to purchase the same, after reasonable notice; and nothing in this act shall be construed as prohibiting or preventing the making of an agreement between the subscribers or purchasers of such shares that they and each of the subscribers to the shares of capital stock of such corporation, and subsequent purchasers of shares shall, before disposing of their shares, give to the said corporation an opportunity to purchase the same, after reasonable notice, at the amount paid for said shares to said corporation and reasonable interest thereon. All shares purchased by the corporation under the provisions of this section shall be held only for sale to new shareholders.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/4) (from Ch. 32, par. 308)
Sec. 4. Duplicate originals of the articles of incorporation shall be delivered to the Secretary of State. If the Secretary of State finds that the articles of incorporation conform to law, he shall, when all franchise taxes, fees, and charges have been paid: (a) Endorse on each of such duplicate originals the word “Filed,” and the month, day, and year of the filing thereof; (b) file one of such duplicate originals in his office; (c) return a true copy of the articles of incorporation to the incorporators or their representative, who shall within 15 days file such document for record in the office of the recorder of the county in which the registered office of the corporation in this State is situated. Upon the filing of the articles of incorporation by the Secretary of State, the corporate existence shall begin, and such articles of incorporation shall be conclusive evidence, except as against the State, that all conditions precedent required to be performed by the incorporators have been complied with and that the corporation has been incorporated under this Act.
(Source: P.A. 96-66, eff. 1-1-10.)

(805 ILCS 310/5) (from Ch. 32, par. 309)
Sec. 5. Such corporations shall be required to file in the office of the Secretary of State the same reports and to pay to him the same license fees, franchise taxes and other fees, as required of corporations organized under an act entitled “An Act to revise the law relating to corporations for pecuniary profit,” filed July 13, 1933, and all amendments thereto.
(Source: Laws 1935, p. 606.)

(805 ILCS 310/6) (from Ch. 32, par. 310)
Sec. 6. Associations formed under this act shall be bodies corporate and politic for the period for which they are organized, may sue and be sued, may have a common seal, which they may alter or renew at pleasure, may own, possess and enjoy so much real and personal estate as shall be necessary for the transaction of their business, and may sell and dispose of the same when, in the opinion of the shareholders, it is not required for the use of the association.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/7) (from Ch. 32, par. 311)
Sec. 7. Every such association shall be managed by a board of not less than 5 directors. The directors shall be elected by and from the shareholders of the association at such time and for such term of office as the by-laws may prescribe and shall hold office for the time for which elected, and until their successors are elected, and shall enter upon the discharge of their duties; but a majority of the shareholders voting in person or by proxy shall have the power at any regular or special shareholders’ meeting, legally called, to remove any director or officer for cause and to fill the vacancy, and thereupon the director or officer so removed shall cease to be a director or officer of the association. The officers of every such association shall be a president, one or more vice presidents, a secretary and a treasurer, who shall be elected annually by the directors, and a manager who shall be under the control of the directors at all times, and each of the officers, except the manager, may be a director of the association. The office of the secretary and the treasurer can be combined, and when so combined the person holding the offices shall be the secretary-treasurer.
(Source: P.A. 76-1068.)

(805 ILCS 310/8) (from Ch. 32, par. 312)
Sec. 8. The association may amend its articles of incorporation by a two-thirds vote of its shareholders at any regular shareholders’ meeting called for that purpose, or at a special meeting on 10 days’ notice to the shareholders: In either case the power to amend the articles of incorporation shall include the power to increase or diminish the amount of capital stock and the number and par value of shares, the par value, however, not to be reduced below that provided for in this act; Provided, however, that the amount of the capital stock shall not be diminished below the amount of paid up capital at the time the amendment is adopted, unless there be, at that time, in the treasury sufficient undivided profits over and above all legal debts or other like obligations to off-set the capital so returned to shareholders. Within 30 days after the adoption of an amendment to its articles of incorporation the association shall cause a certified copy of such amendment to be recorded in the office of the Secretary of State and of the recorder in the county where the principal place of business is located.
(Source: P.A. 83-358.)

(805 ILCS 310/9) (from Ch. 32, par. 313)
Sec. 9. No shareholder in any association shall own more than 10 shares nor of a greater aggregate par value than $10,000, except as hereinafter provided.
(Source: P.A. 98-1122, eff. 8-26-14.)

(805 ILCS 310/10) (from Ch. 32, par. 314)
Sec. 10. At any regular or special meeting, legally called, an association organized under this Act or as a co-operative association under “The General Corporation Act”, approved June 28, 1919, as amended may, by a majority vote of its members invest not to exceed twenty-five per cent of its paid-up common stock and reserve fund in the capital stock of any corporation or other co-operative association; and any association organized under this Act or organized as a co-operative association under the General Incorporation Act, which is a member of, and is selling its products to or through or buying products from or through another association organized under this Act, or as a co-operative association under the General Incorporation Act, may hold stock in such latter association to any amount which is necessary in order that continuous capital may be raised for such latter association from its member associations, based in amount upon the volume of business transacted by such member associations with said association: Provided, however, that ten days’ notice has been previously given to each shareholder, stating in said notice the purpose of the meeting.
(Source: P.A. 83-333.)

(805 ILCS 310/11) (from Ch. 32, par. 315)
Sec. 11. Whenever an association created under this act shall purchase the business of another association, person or persons, it may pay for the same in whole or in part by issuing shares of its capital stock to an amount, which at par value, would equal the fair market value of the business so purchased, and in such case the transfer to the association of such business at such valuation shall be equivalent to payment in cash for the shares of stock so issued.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/12) (from Ch. 32, par. 316)
Sec. 12. In case the cash value of such purchased business exceeds five hundred dollars, the directors of the association are authorized to hold the shares in excess of five hundred dollars in trust for the vendor or his assignee and dispose of the same to such persons, and within such times as may be mutually satisfactory to the parties in interest, and to pay the proceeds thereof as currently received to the former owner of said shares. Certificates of stock shall not be issued to any subscriber until fully paid, but the by-laws of the association may allow subscribers to vote as shareholders: Provided, part of the stock subscribed has been paid in cash.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/13) (from Ch. 32, par. 317)
Sec. 13. Corporations organized under this Act may borrow money at legal rates of interest and pledge their property, both real and personal, to secure payment thereof, and may have and exercise all power necessary and requisite to carry into effect the objects for which they may be formed.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/14) (from Ch. 32, par. 318)
Sec. 14. At any regularly called general or special meeting of the shareholders a written vote received by mail from any absent shareholder and signed by him may be read in such meeting, and shall be equivalent to a vote of each of the shareholders so signing; provided, he has been previously notified in writing of the exact motion or resolution upon which such vote is taken, and a copy of same is forwarded with and attached to the vote so mailed by him.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/15) (from Ch. 32, par. 319)
Sec. 15. So much of the profits or earnings of such association, as may seem best to the directors, shall be distributed to those entitled thereto by its by-laws, and in the proportions and at the times therein prescribed, which shall be as often as once in twelve months, provided that any member failing to keep on deposit with such association the amount or amounts from time to time required to be kept on deposit by its by-laws shall share in any such distribution only in the proportion to which he has complied with such by-laws.
(Source: Laws 1965, p. 2179.)

(805 ILCS 310/16) (from Ch. 32, par. 320)
Sec. 16. Every association organized under the terms of this Act shall annually, on or before the first day of March of each year, make a report of the condition and business of the association as of December 31 of the preceding year, to the Secretary of State, such report shall contain the name of the company, its principal place of business in this State and generally a statement as to its business, showing total amount of business transacted, amount of capital stock subscribed for and paid in, number of shareholders, total expense of operation, amount of indebtedness or liabilities, and its profits and losses.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/17) (from Ch. 32, par. 321)
Sec. 17. All co-operative corporations and joint stock corporations, companies, associations, voluntary unincorporated associations or partnerships heretofore organized under prior statutes, or who shall be doing business as co-operative institutions with the objects enumerated in this Act, shall have the benefit of the provisions of this Act and be bound thereby, on filing with the Secretary of State a written declaration, signed and sworn to by the president and secretary, to the effect, that it or they, have by a two-thirds vote of its shareholders or its members, decided to accept the benefits of this Act and be bound by the same.
(Source: Laws 1917, p. 303.)

(805 ILCS 310/18) (from Ch. 32, par. 322)
Sec. 18. All stock subscribed for shall be paid for within one year and in default thereof shall be forfeited with the payments made thereon to the society.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/19) (from Ch. 32, par. 323)
Sec. 19. The by-laws shall provide that the profits shall be distributed, first-upon stock and to purchasers or sellers (customers) based upon the percentage of purchases, or sales; or, second-to purchasers or sellers exclusively, based upon the percentage of purchasers or sales; and no vested interest shall attach to any of the above methods which shall prevent changing from and substituting another provision provided herein.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/20) (from Ch. 32, par. 324)
Sec. 20. Societies incorporated under this Act may purchase and own stock in other societies incorporated under this Act, or similar Co-operative Acts of other States, or incorporations of this or other States organized to promote and inculcate the principles of co-operation, with the same voice and voting power as provided for individual shareholders, as limited in section 10 of this Act.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/21) (from Ch. 32, par. 325)
Sec. 21. Shareholders may vote in person or by written proxy.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/22) (from Ch. 32, par. 326)
Sec. 22. No corporation or association hereafter organized or doing business for profit in this State shall be entitled to use the term “Co-operative” as a part of its corporate or other business name or title unless it has complied with the provisions of this Act, except (1) a corporation organized under the Business Corporation Act of 1983 for the purpose of ownership or administration of residential property on a cooperative basis, (2) a cooperative corporation organized under the General Not For Profit Corporation Act of 1986 or its predecessor or successor statutes, or (3) a limited worker cooperative association organized under the Limited Worker Cooperative Association Act. Any corporation or association violating the provision of this Section may be enjoined from doing business under such name at the instance of any shareholder of any association or corporation organized under this Act.
(Source: P.A. 101-292, eff. 1-1-20.)

(805 ILCS 310/23) (from Ch. 32, par. 327)
Sec. 23. Every assignment or transfer of stock shall be recorded in the books of the association, and each shareholder shall be liable jointly with the association as well as severally, for the debts of the association only to the extent of the amount that may be unpaid upon the share or shares held by him. No assignor of a share or shares shall be released from any such indebtedness by reason of the assignment of his share or shares, but shall remain liable jointly with the assignee and the association, or severally until the stock is fully paid up.
No assignment shall be made to any person who already holds shares of stock to the limit provided for in this Act and any assignment of stock shall be made only with the approval of a majority of the directors, and no transfer of stock shall be made except by the consent of the directors as shown on the records of the association: Provided, that any person demanding the assignment or transfer of any share or shares in such association to himself shall have the right to appeal from the action of the board of directors, to the members of the association at its first regular or special meeting thereafter, and ask that he be admitted to the association as a shareholder, and the action of the shareholders at such meeting shall be final; and also provided that such shareholders shall not have the power to direct the transfer of stock to any person in excess of the amount which such individual shareholder may hold under the terms of this Act.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/24) (from Ch. 32, par. 328)
Sec. 24. Shareholders at any regular meeting or any special meeting called for that purpose may adopt by-laws not inconsistent with the provisions of this Act.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/25) (from Ch. 32, par. 329)
Sec. 25. The invalidity of any portion of this Act shall in no way affect the validity of any other portion thereof which can be given effect without such invalid part.
(Source: Laws 1915, p. 325.)

(805 ILCS 310/26) (from Ch. 32, par. 330)
Sec. 26. This Act may be cited as the “Co-operative Act.”
(Source: Laws 1915, p. 325.)

(805 ILCS 310/27) (from Ch. 32, par. 331)
Sec. 27. The Secretary of State shall provide uniform blanks for the use of associations incorporated under this Act.
(Source: Laws 1915, p. 325.)

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