Chapter 308B — Minnesota Cooperative Associations Act

308B.001 Citation This chapter is called the Minnesota Cooperative Associations Act. 308B.005 Definitions Defines key terms used throughout the cooperative associations law. 308B.007 Legal Recognition of Electronic Records and Signatures Electronic records and signatures are legally valid for cooperative business. 308B.101 Reservation of Right The state can change or remove cooperative laws at any time. 308B.111 Filing Fees The filing fee for cooperative documents with the Secretary of State is $35. 308B.115 Registered Office and Agent Every cooperative must have a registered office on file with the state. 308B.121 Annual Renewal Cooperatives must file an annual renewal with the Secretary of State or face dissolution. 308B.151 This section was repealed. 308B.152 Foreign Cooperatives; Sections Applicable Out-of-state cooperatives must follow chapter 303 to do business in Minnesota. 308B.201 Organizational Purpose A cooperative can be formed for any lawful purpose, including marketing farm products or providing services. 308B.205 Organizers One or more adults can organize a cooperative and do not need to be members. 308B.211 Cooperative Name A cooperative must have a unique name that is different from other businesses on file with the state. 308B.215 Articles of Organization Articles of organization must include the cooperative's name, purpose, organizers, and registered office. 308B.221 Amendment of Articles Cooperative articles can be amended by a board resolution followed by a majority vote of members. 308B.225 Amendment of Organizational Documents to Be Governed by This Chapter A cooperative formed under chapter 308A can convert to this chapter by amending its articles. 308B.231 Curative Filing The Secretary of State can fix a filing error by revoking it and allowing a corrected filing for $500. 308B.235 Existence A cooperative begins to exist when its articles are filed and lasts forever unless the articles say otherwise. 308B.241 Bylaws Every cooperative must have bylaws covering its business, member rights, and how interests are divided. 308B.245 Cooperative Records Cooperatives must keep permanent records of meetings, finances, member lists, and governing documents. 308B.301 Powers Cooperatives have broad powers to buy, sell, hold property, make contracts, and conduct business. 308B.305 Emergency Powers During emergencies like disasters, the board can change leadership and relocate offices. 308B.311 Agricultural Product Marketing Contracts Cooperatives can make marketing contracts with members to sell farm products, lasting up to 10 years. 308B.401 Board Governs Cooperative The board of directors governs the cooperative and must act in the best interests of all members. 308B.405 Number of Directors A cooperative must have at least 5 directors, or 3 if it has 50 or fewer members. 308B.411 Election of Directors Directors are elected by members, and a majority must be members elected by patron interest holders. 308B.415 Filling Vacancies The board fills director vacancies by appointment until the next member meeting election. 308B.421 Removal of Directors Directors can be removed with or without cause by a majority vote of the members who elected them. 308B.425 Board of Directors' Meetings Board meetings can be held anywhere and by phone or video if directors can all hear each other. 308B.431 Quorum A majority of directors in office is a quorum unless the articles or bylaws set a different number. 308B.435 Act of Board of Directors The board acts by majority vote of directors present, as long as a quorum exists. 308B.441 Action Without a Meeting Directors can take action without a meeting if all directors sign a written consent. 308B.445 Audit Committee The board must set up an audit committee to review the cooperative's finances. 308B.451 Committees The board can create committees with board-level authority for specific tasks. 308B.455 Standard of Conduct Directors must act in good faith, in the cooperative's best interest, and with ordinary care. 308B.461 Director Conflicts of Interest A director's conflict of interest does not void a transaction if it is fair and properly disclosed. 308B.465 Limitation of Director's Liability A cooperative's articles can limit a director's personal liability for money damages, with exceptions. 308B.471 Indemnification Cooperatives must pay legal costs for directors and officers sued for actions taken in their official roles. 308B.475 Officers The board must elect a chair, vice-chair, records officer, and financial officer. 308B.501 Members A cooperative must have at least one member, and members can be grouped into districts or units. 308B.505 Member Not Liable for Cooperative Debts Members are not personally liable for the cooperative's debts just because they are members. 308B.511 Regular Members' Meetings Cooperatives must hold an annual meeting where officers report on business and directors are elected. 308B.515 Special Members' Meetings Special meetings can be called by the board or by petition of at least 20% of patron members. 308B.521 Certification of Meeting Notice The cooperative must certify that meeting notices were properly mailed or delivered. 308B.525 Quorum A quorum requires 10% of members if 500 or fewer, or 50 members if more than 500. 308B.531 Remote Communications for Member Meetings Members can attend and vote at meetings by phone, video, or other remote methods if authorized. 308B.535 Act of Members Members act by majority vote of voting power present, as long as a quorum exists. 308B.541 Action Without a Meeting Members can take action without a meeting if all members sign a written consent. 308B.545 Member Voting Rights Each patron member gets one vote, though bylaws may allow extra votes based on patronage. 308B.551 Patron Member Voting Based on Patronage Patron members may get extra votes based on how much business they do with the cooperative. 308B.555 Voting Rights The board can set a record date up to 60 days before a meeting to determine who can vote. 308B.561 Voting by Organizations and Legal Representatives Business entities that are members can vote through their officers or legal representatives. 308B.565 Proxies Patron members may only give proxy voting rights to another patron member. 308B.571 Sale of Property and Assets Selling all cooperative assets in the normal course of business needs only board approval. 308B.575 Vote of Ownership Interests Held by Cooperative A cooperative can appoint someone to vote its ownership interests in another business entity. 308B.601 Membership Interests Membership interests can be changed by amending the articles or bylaws at a members' meeting. 308B.605 Assignment of Financial Rights A member's financial rights (like profit sharing) can be transferred, but not voting rights. 308B.611 Nature of a Membership Interest and Statement of Interest Owned A membership interest is personal property; members do not own specific cooperative property. 308B.615 Certificated Membership Interests Membership interests can be issued as certificates (paper) or uncertificated (electronic records). 308B.621 Lost Certificates; Replacement A cooperative can issue a new membership certificate to replace one that is lost, stolen, or destroyed. 308B.625 Restriction on Transfer or Registration of Membership Interests Transfer restrictions on membership interests must be noted on the certificate to be enforceable. 308B.627 Member Control Agreements Members can make binding written agreements about how the cooperative is controlled and operated. 308B.701 Authorization, Form, and Acceptance of Contributions The board must authorize all contributions, which can be money, property, or services. 308B.705 Restatement of Value of Previous Contributions When a new contribution is accepted, the board must recalculate the value of all existing contributions. 308B.711 Contribution Agreements A contribution agreement must be in writing and signed to be enforceable. 308B.715 Contribution Rights Agreements Cooperatives can enter written agreements giving people the right to make future contributions. 308B.721 Allocations and Distributions to Members Profits and losses must be split between patron and other members as the bylaws provide. 308B.725 Allocations and Distributions to Patron Members Net income for patron members is distributed based on patronage after setting aside reserves. 308B.735 Distribution of Unclaimed Property A cooperative may donate unclaimed member property to a tax-exempt organization instead of the state. 308B.801 Merger and Consolidation Cooperatives can merge with other cooperatives or LLCs by following specific plan and vote requirements. 308B.805 Merger of Subsidiary A parent cooperative owning 90% or more of a subsidiary can merge it without a member vote. 308B.835 Abandonment A merger plan can be abandoned before it takes effect by the same vote that approved it. 308B.901 Methods of Dissolution A cooperative can be dissolved either by its members or by court order. 308B.903 Notice of Intent to Dissolve Before dissolving, the cooperative must file a notice of intent to dissolve with the Secretary of State. 308B.905 Winding up After filing intent to dissolve, the board must collect debts, pay creditors, and distribute remaining assets. 308B.911 Revocation of Dissolution Proceedings Members can vote to reverse a dissolution before articles of dissolution are filed with the state. 308B.915 Statute of Limitations Creditor claims against a dissolving cooperative are barred 2 years after the dissolution notice is filed. 308B.921 Articles of Dissolution Articles of dissolution are filed after all debts are paid and remaining assets are distributed. 308B.925 Application for Court-supervised Voluntary Dissolution A cooperative, member, or creditor can ask a court to supervise the dissolution process. 308B.931 Court-ordered Remedies or Dissolution A court can order dissolution if directors are deadlocked, assets are wasted, or fraud has occurred. 308B.935 Procedure in Involuntary or Court-supervised Voluntary Dissolution In court-supervised dissolution, the court can appoint a receiver and set deadlines for creditor claims. 308B.941 Receiver Qualifications and Powers A court-appointed receiver must be a competent person who is not a party to the dissolution case. 308B.945 Dissolution Action by Attorney General; Administrative Dissolution The Attorney General can dissolve a cooperative that got its articles by fraud or abused its authority. 308B.951 Filing Claims in Court-supervised Dissolution Proceedings In court-supervised dissolution, creditors must file sworn claims by the court's deadline. 308B.955 Discontinuance of Court-supervised Dissolution Proceedings Court-supervised dissolution can be stopped if the court finds there is no valid reason to dissolve. 308B.961 Court-supervised Dissolution Order The court issues a dissolution order after all claims are settled and assets are distributed. 308B.965 Filing Court's Dissolution Order After a court orders dissolution, the order is filed with the Secretary of State at no charge. 308B.971 Barring of Claims Claims not filed by the court's deadline are permanently barred unless the creditor had no notice. 308B.975 Right to Sue or Defend After Dissolution After dissolution, former officers, directors, or members can still sue or defend claims for the cooperative.