DIY Legal Forms

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Model Bylaws Non Stock or Stock Cooperative



[name of cooperative]

Article I



1.01. Qualifications. Any person, firm, partnership, corporation, or association (including both landlords and tenants in share tenancies) who: (a) produces agricultural goods; (b) pays a membership fee; and (c) meets any other uniform requirements set by the Board of Directors (Board), may be a member of this Cooperative. A nontransferable certificate of membership will be issued to each member of the Cooperative. This certificate may be in any form that the Board specifies.

1.02. Suspension or Termination.

a. Basis for Suspension or Termination. A member's rights may be suspended, or his membership terminated, after a hearing by the Board. In order for this to result, the Board must determine that the member (i) has ceased to be an eligible member; (ii) has not marketed, through the Cooperative, products covered by a marketing contract with the Cooperative for a period of [number] years; or (iii) has not otherwise patronized the Cooperative.

b. Rights and Interests. The rights and interests of the member in the Cooperative cease upon the termination of membership. The member is entitled only to payment or credit for an equitably appraised value of the member's property rights and interests in the Cooperative. This value will be determined, conclusively, by the Board.

The obligations or liabilities of either party under any contract with the Cooperative are not affected by the termination of membership of any party, but can only be terminated in accordance with the terms of such contract.

[Alternative Article if Cooperative is formed with capital stock]

Article I


1.01. Membership. Each member of the Cooperative will hold one fully paid share of its common stock. The Articles of Incorporation of the Cooperative contain the necessary requirements for ownership of common stock.

1.02. Representation. A corporate member of the Cooperative may authorize, in writing, an individual to represent him. This written authorization must be filed with the Cooperative.

Article II


2.01. Annual Meetings. The Cooperative will hold its annual meeting in [town or city, state], at [time] AM [PM] [time zone], on the [number] day of [month] of each year, or on a date that the Board chooses at least [number] days in advance.

2.02. Special Meetings. The Cooperative may call a special meeting at any time, by order of the Board. Such a meeting must be called if requested in writing by at least ........ percent (........%) of the members. Not less than [number] signatures are required in such a request. This request must state the time, place, and object of the meeting.

2.03. Notice of Meeting. The members must be notified of every regular and special meeting. This notice will be mailed to the last known post office address of each member not less than [number] days before the meeting. The notice must state the time, place, and object of the meeting. Business not specified in the notice of a special meeting will not be permitted at that meeting.

2.04. Voting. At each meeting, a member has one vote on each matter submitted to a vote. All matters will be decided by a vote of the majority of the members voting on that matter. Voting by proxy or cumulative voting is not permitted.

2.05. Absentee Ballots. Members may vote on specific matters, other than the removal of Directors, by ballot mailed to the Secretary, if all members have been notified, in writing, by the Board of the exact motion or resolution to be voted on and a copy of it is attached to the vote mailed to the Secretary.

2.06. Quorum Requirements. A quorum exists if [number] members or ........ percent (........%) of the total number of members, whichever is greater, is present. If, however, the total number of members is greater than [number], [number] members or ........ percent (........%) of the total number of members, whichever is greater, constitutes a quorum. If a quorum is not present, a majority of those present may adjourn the meeting, without further notice.

2.07. Order of Business, at the Annual Meeting. The order of business at the annual meeting will be:

a. Determination of quorum;

b. Proof of timely notice of meeting;

c. Reading and disposition of minutes;

d. Annual reports of officers and committees;

e. Unfinished business;

f. New business;

g. Election of Directors; and

h. Adjournment.

Article III


3.01. Number and Qualification of Directors. The Board of Directors will consist of [number] members. To be a member of the Board, an individual must be a member of the Cooperative. A member may not be on the Board if he is in competition with, or affiliated with, any business that is in competition with the Cooperative. A Director will lose his position if it is found, after a hearing, by a majority of the Board that the Director is or has been in competition with the Cooperative, or is so affiliated.

3.02. Election of Directors. Directors will be elected to succeed the incorporating Directors at the first annual meeting of the Board. The schedule of elections will be as follows:

a. [number] Directors will be elected for one year.

b. [number] Directors will be elected for two years.

c. [number] Directors will be elected for three years.

After these terms have expired, each Director will be elected for a three-year term. There must be at least two candidates for each Director's position. Directors will be elected by secret ballot. The nominee receiving the greatest number of votes will be elected.

[Alternative Section]

3.02. Election of Directors by District.

a. Establishing Districts. Incorporating Directors will serve as Directors until the first annual meeting of the members or until their successors have been elected and qualified. The territory served by the Cooperative will be divided into districts by the incorporating Directors based on geographic areas with approximately equal numbers of either members or volume of business.

b. Redistricting. A redistricting committee will be established by the Board every year. This committee will consist of one member from each district. No Director may be on the committee. The committee must meet at least [number] days before the annual meeting and, if it thinks advisable, redistrict the territory. Maps and descriptions of the current districts will be kept in the Cooperative's principal office.

c. District Meetings. The time and place in each district for meetings to nominate Directors will be set by the Board. These district meetings will be held between [number] to [number] days before the annual meeting. Notice of district meetings must be mailed to each member in the district at least [number] days before the meeting.

d. District Elections. Members present at the district meetings will constitute a quorum. A chairman will be elected by these members. Not more than two candidates may be nominated at such meetings for the Directors' positions. Within [number] days of the selection of these candidates by the members, the Chairman will certify this selection to the Secretary.

e. Schedule of Elections. Beginning with [year], the schedule of elections will be as follows:

i. [number] Directors will be elected for one year.

ii. [number] Directors will be elected for two years.

iii. [number] Directors will be elected for three years.

After these terms have expired, each Director will be elected for a three-year term. These Directors will be elected by secret ballot at the annual meetings of members. The candidates will be selected from nominations made at the district meetings, as well as nominations of members made from the floor of the annual meeting.

[Optional Section]

3.02A. Nominations.

a. Nominating Committee. The Board will appoint a nominating committee of [number] members, to be chosen from different sections of the country to guarantee equitable representation. This committee will be appointed not less than [number] or more than [number] days before the date of the meeting of the members at which Directors are to be elected. A Director may not serve on this committee. At least [number] days before the meeting at which the election takes place, the committee will post, at the Cooperative's principal office, a list of nominations for the Board. This list must have at least two candidates for each position that will be filled by the election. At least [number] days before the meeting, the Secretary will mail to members a statement containing the number of Board members to be elected and the names and addresses of the candidates.

b. Nomination by Members. [Number] or more members, together, may make nominations in addition to those made by the nominating committee. The Secretary must post these nominations in the same place as the committee's nominations.

Nominations made by petition must be received at least [number] days before the meeting for election of Directors, to be included on the official ballot. If nominations are made later than this, they are considered nominations from the floor.

3.03. Election of Officers. The Board will elect a president, vice-president, secretary, and treasurer. The Board will do this within [number] days after the Board's first election and every annual election of Directors that follows. The President and Vice-President must be members of the Board.

All officers will hold their positions until (a) the election and qualification of their successor; (b) their early removal due to death or resignation; or (c) their removal for cause.

3.04. Vacancies. If a vacancy, other than by expiration of a term, occurs on the Board, it will be filled by appointment by the remaining Board members, until the next regular Board meeting.

3.05. Board Meetings. The Board will hold regular meetings. These are to be held [time, place, and period, e.g., monthly], or at other times and places as the Board may determine.

3.06. Special Meetings.

a. Who May Call Meeting. The President or a majority of the Directors may call a special meeting of the Board.

b. Procedure to Call Meeting. The call must be in writing, state the time and place of the meeting, and be signed by the person who called the meeting. This call must be addressed and delivered to the Secretary of the Board.

c. Business on Agenda. Any business may be discussed at a special meeting.

3.07. Notice of Board Meetings. The Secretary must give each Director oral or written notice of all Board meetings, at least [number] hours before the meeting. This notice may be waived in writing by all the Directors. A Director's presence at a meeting is equivalent to waiver of notice of that meeting.

3.08. Compensation. Whether the members of the Board or executive committee are to be compensated will be determined by the members of the Cooperative, at either a special or at the annual meeting. A Board member will not be allowed to hold any position in the Cooperative on a regular salaried basis.

3.09. Quorum. A majority of the Board is a quorum for any Board meeting.

Article IV


4.01. General Powers. The Board of Directors will be in charge of all the business and exercise all the powers of the Cooperative. The only exceptions to this exclusive grant of power are the powers that are reserved to the members of the Cooperative by law, or by the Articles of Incorporation or Bylaws of the Cooperative.

The rules and regulations that the Board establishes are not to be inconsistent with the law, the Articles of Incorporation, or Bylaws of the Cooperative.

4.02. Manager. The Board may employ, compensate, and define the duties of a manager.

4.03. Bonds and Insurance.

a. Bonds. The manager, as well as any other officers, agents, or employees who deal with any funds or property of the Cooperative, will be required to give adequate bonds. The cost of these bonds will be paid by the Cooperative. They must be with a responsible bonding company and approved by the Board. If cash security is posted, the bonds will be unnecessary.

b. Insurance. Adequate insurance for and against (i) the property of the Cooperative; (ii) the property in possession of or stored by the Cooperative; and (iii) liability for accidents to the public and to employees must be provided by the Board.

4.04. Finances of the Cooperative. The Board is responsible for establishing and maintaining an accounting and record-keeping system. The books of the Cooperative shall be audited at least once a year. This must be done by an independent certified public accountant hired by the Board. The auditor will make a written report of the audit that will be given to the members of the Cooperative at the annual meeting. The report must contain, at a minimum, a balance sheet and operating statement for the fiscal period involved in the audit.

Article V


5.01. President's Duties. The President is to (a) preside over all meetings of the Cooperative and Board; (b) sign all membership certificates and other papers of the Cooperative as authorized by the Board, but the Board may authorize others to sign checks, contracts, or other instruments in writing on behalf of the Cooperative; and (c) perform any other duties that are usually performed by a president, or that are prescribed by the Board.

5.02. Vice-President's Duties. The Vice-President will take over the President's duties if the President is absent or becomes disabled.

5.03. Secretary's Duties. The Secretary will (a) keep a complete record of all meetings of the Cooperative and the Board; (b) be in charge of the supervision of the books and records of the Cooperative; (c) sign all membership certificates, along with the President, as well as other papers of the Cooperative, as authorized by the Board; (d) serve all notices on Cooperative members, required by law and by the Bylaws of the Cooperative; (e) make a full report to the members of the Cooperative, at the annual meeting, of all the matters related to his position; (f) keep complete membership records; (g) keep the corporate seal; (h) make all reports required by law; and (i) perform any other duties, as required by the Cooperative or the Board.

5.04. Treasurer's Duties. The Treasurer will perform all duties with respect to the Cooperative's finances that the Board prescribes.

5.05. Manager's Duties. The Manager will be in charge of the day-to-day operations of the Cooperative. This includes the purchasing, marketing, and handling of all products and supplies of the Cooperative. The Manager will also be in charge of the employment, supervision, and dismissal of all employees of the Cooperative. In addition, he will make annual and other statements, as directed by the Board, and exercise any other authority vested in him by the Board.

Article VI


6.01. Executive Committee. An executive committee, consisting of [number] members may be appointed by the Board from its own membership. The Board will determine the tenure of office, power, and duties of the executive committee. The Board may give to this executive committee, subject to the Board's supervision, any of the Board's powers or functions.

Copies of the minutes of any meeting of the executive committee will be mailed to all Directors within [number] days of the meeting.

6.02. Other Committees. The Board may appoint other committees, if it thinks that it is necessary to do so.

Article VII


7.01. Membership Certificates. The Board will cause appropriate certificates of membership to be issued.

[Alternative Article if Cooperative has capital stock]

Article VII


7.01. Common Stock. The face of each share of Common Stock must state the class of the stock and the privileges, voting rights, restrictions, and qualifications of shares of that class, if any, as specified in the Articles of Incorporation.

7.02. Preferred Stock. The face of each share of Preferred Stock must state the preferences, privileges, voting rights, restrictions, and qualifications of these shares, as specified in the Articles of Incorporation.

Article VIII


8.01. Profits, Interest, and Dividends. The Cooperative will operate as and provide a cooperative service, on a cost basis, for the mutual benefit of its patrons (members and nonmembers). The Cooperative will not pay any interest or dividends to its patrons for capital that they have furnished to the Cooperative.

8.02. Patron's Capital. All patrons will furnish capital to the Cooperative by their patronage of the facilities and services of the Cooperative. Any funds received by the Cooperative, in excess of operating costs and expenses of the Cooperative (including interest from nonpatronage sources), will be considered capital contributions by patrons. The Cooperative must account to all patrons, on a patronage basis, for all amounts received by it after payment of operating costs and expenses chargeable against services furnished.

8.03. Refunds. The Cooperative must refund all funds in excess of operating costs and expenses, in cash or by credits to a capital account, to or for each patron. At the end of each fiscal year, the records of the Cooperative must clearly note the amount of capital furnished by each patron. Within [number] months of the end of its fiscal year, the Cooperative must give written notice of allocation (defined in 26 USC § 1388) of the amount of capital credited to each patron.

8.04. Operating Losses. Any operating loss will be borne by the patrons on as equitable a basis as possible. This will be achieved by apportioning the loss among the patrons during the year of the loss. The Board will determine the basis on which capital furnished by patrons could be reduced if the Cooperative incurs a loss other than an operating loss, so that the loss may be equitably apportioned among the patrons.

8.05. Retired Capital. The capital credited to patrons' accounts may be fully or partially retired if the Board determines that the financial condition of the Cooperative will not be impaired. The capital will be retired in order of priority according to the year when it was credited; that is, the capital first received by the Cooperative will be the first retired.

The Board will have the power to retire any capital credited to patrons' accounts on such terms and conditions as may be agreed upon by the parties, provided the interests of the Cooperative and its patrons will be served and funds are available for these purposes.

8.06. Transfer. The Board must consent to the assignment or transfer of any amount credited to the capital account of a patron. The assignment or transfer will not be binding on the Cooperative (a) without this consent and (b) until it is entered in the books of the Cooperative.

8.07. Consent. Anyone who (a) applies for and is accepted to membership in this Cooperative and (b) is already a member of the Cooperative on the date this Bylaw becomes effective and continues as a member after that, consents, by such acts, that the amount of distribution of the member's patronage after [date] will be taken into account at their stated dollar amounts. These funds will be taken into account in the manner provided in 26 USC § 1385(a) for the taxable year that a written notice of allocation of capital is received by the patron. These allocations to capital are to be made by written notice of allocations (defined in 26 USC § 1388) to the patron by the Cooperative.

8.08. Notification of Adoption of This Article. Written notification of the adoption, a statement of significance, and a copy of the provision of this Article 8 will be given separately to each member and prospective member before he becomes a member of the Cooperative.

Article IX


9.01. Dissolution. If the Cooperative is dissolved: (a) Its debts and liabilities will be paid; (b) all capital furnished through patronage will be retired on a pro rata basis, without priority; and (c) the remaining property and assets of the Cooperative will be distributed among members and former members in the proportion that each member's patronage bears to patronage of all members, unless the law provides otherwise.

[Alternative Article if Cooperative has capital stock]

Article IX



9.01. Dissolution. If the Cooperative is dissolved: (a) The debts and liabilities will be paid; (b) the par value of the stockholders' shares will be returned; and (c) thereafter, capital furnished through patronage will be retired on a pro rata basis, without priority. The remaining property and assets of the Cooperative will be distributed among members and former members in the proportion that each member's patronage bears to patronage of all members, unless the law provides otherwise.

Article X


10.01. Claims Controlled by Article X. A claim against the Cooperative for money is subject to this Article when the Cooperative (a) is ready, willing, and able to pay a claim; and (b) has generally paid or is paying claims arising under similar circumstances; but (c) cannot pay this claim because it does not know the whereabouts or address of the person entitled to the payment.

10.02. Removal of the Claim From the Cooperative's Books. The Cooperative will remove the claim from its books if it is not paid within [number] years after it became payable. The Cooperative must have sent, by registered U.S. mail, return receipt requested, written notice of the removal of the claim from its books, at least [number] days before it is removed from the Cooperative's books. This notice must be sent to the person entitled to the payment according to the Cooperative's records, at that person's last address according to the Cooperative's records. The Cooperative will continue to maintain a memorandum record of the claim and pay the principal, without interest, of this claim to anyone who can establish his right to receive payment to the satisfaction of the Cooperative. These payments will be paid out of the special account noted below.

Any amounts the Cooperative recovered under this Article, after taxes due are deducted, will be put in a special account.

Article XI


11.01. Fiscal Year. The Cooperative's fiscal year will begin on the first day of [month] of each year, and end on the last day of [month] of the following year.

Article XII


12.01. Waiver of Notice. If the Bylaws require that notice of a meeting be given to any Cooperative or Board member, he may waive that notice in writing. If a Cooperative or Board member attends a meeting, that attendance serves as a waiver of notice. If the member is attending that meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called, then attendance is not deemed to be waiver of notice.

12.02. Printing of Bylaws. The Bylaws and Articles of Incorporation will be printed in a pamphlet, after adoption. A copy will be delivered to each member and individuals who later become members of the Cooperative, as shown on the record books.

12.03. Seal. The name of the Cooperative and year of its incorporation will be inscribed on the corporate seal.

Article XIII


13.01. Amendments. A bylaw may be amended at any regular or special meeting by an affirmative vote of the majority of members voting, if the notice of this meeting included a notice of the nature of the proposed amendment.