Cooperative Agricultural Associations or Corporations
CHAPTER 85. CORPORATION LAW FOR COOPERATIVE AGRICULTURAL ASSOCIATIONS
Subchapter III. Stock and Stockholders; Financial Operations
§ 8531. Issue, redemption and transfer of stock.
An association may transact or do business with or for patron stockholders or patrons not stockholders, and may issue and
sell its preferred stock to patrons or nonpatrons of the associations, but common stock of the association shall be sold to
patrons only. The certificate of common stock shall contain a provision that the association shall have an option to redeem
the stock at par value plus declared and unpaid dividends when the owner thereof has for a period of 12 months done no business
with the association, and shall contain a further provision that no sale or transfer of stock shall be valid without the written
consent of the association, and, if the association withholds its consent to such sale or transfer, then the association shall
redeem such stock at par value plus declared and unpaid dividends.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8531.;
§ 8532. Dividends on stock.
Dividends on the common stock shall be paid only after dividends are paid on the preferred stock, and the required surplus
fund set aside, and shall be not greater than 6 percent per annum, except as provided in this chapter. Dividends on preferred
stock shall be not greater than 12 percent per annum and shall be cumulative.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8532; 60 Del. Laws, c. 174, § 2.;
§ 8533. Liability of stockholders and officers for debts of association.
The officers and stockholders of an association, organized under and accepting this chapter, shall not be individually liable
for the debts of the association otherwise than as provided in this chapter. Each common stockholder of an association shall
be liable in his individual capacity to the amount of stock held by him for all work and labor done to carry on the operations
of the association. The terms "work" and "labor" as used in this section mean only such obligations incurred by the association
for salary and wages for actual labor and services performed by individuals.
41 Del. Laws, c. 132, §§ 8, 9; 3 Del. C. 1953, § 8533.;
§ 8534. Voting rights of stockholders.
Every common stockholder shall be entitled to 1 vote only, and no vote by proxy shall be permitted. This restriction shall
not affect any powers granted to the representative body or council, or the delegates thereto.
41 Del. Laws, c. 132, § 7; 3 Del. C. 1953, § 8534.;
§ 8535. Patronage refunds.
After payment of the dividend on the preferred stock, and after making provision from its net earnings for the reserve fund,
as provided in this chapter, the remainder of the net earnings of the association, not required for dividends on the common
stock, may, in the discretion of the directors, be distributed as a patronage refund. Patron stockholders may be entitled
to patronage refunds at double the rate of patronage refunds to which nonstockholder patrons shall be entitled. Patronage
refunds may be credited to the accounts of nonstockholders in the purchase of capital stock of the association.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8535.;
§ 8536. Reserve fund.
An association, after making provision for the payment of dividends on the preferred stock, and before payment of dividends
on the common stock, or the distribution of any patronage refund or dividend shall set aside 10 percent of the total net earnings,
annually, for a reserve fund, until the reserve fund equals at least 30 percent of the paid up capital stock. The reserve
fund shall be available for such purposes as are designated and authorized by the vote of two-thirds of the members of the
board of directors at a duly assembled meeting of the board, subject to the limitations and conditions provided for in the
bylaws of the association.
41 Del. Laws, c. 132, § 16; 3 Del. C. 1953, § 8536.;
§ 8537. Revolving reserve fund.
After payment of the dividend on preferred stock, and after making provision from its net earnings for the reserve fund, as
provided in § 8536 of this title, the remainder of the net earnings of the association not required for dividends on the common
stock and not distributable as a patronage refund may, at the discretion of the directors, be set up in a revolving reserve
fund to be kept on the books of the association in the names of the patrons, according to the volume or value of their patronage.
No stockholder or patron shall be entitled to payments from the revolving fund, except as provided by the board of directors,
which shall have full and complete control of the expenditure and use of the funds therein, the provisions herein contained
being merely authoritative and not mandatory.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8537.;
§ 8538. Annual audit and report.
At the close of each fiscal year, a complete audit of the operations of the association shall be made by a qualified accountant
employed by the board of directors. The written report of the accountant shall include statements of services rendered by
the association, the balance sheet, the receipts and disbursements, and the assets and liabilities, the total number of stockholders,
and other proper information, and shall be submitted to the members at the next regular meeting. Within 3 months after the
expiration of the fiscal year for which made, the secretary of the association shall file one copy of the report of the audit
with the Secretary of the Department of Agriculture of this State and one copy with the Dean of the School of Agriculture
of the University of Delaware. No person shall, without consent of the association, except in obedience to judicial process,
make or permit any disclosure whereby any information contained in the report may be identified as having been furnished by
the association.
41 Del. Laws, c. 132, § 17; 3 Del. C. 1953, § 8538; 57 Del. Laws, c. 764, § 27.;
Cooperative Agricultural Associations or Corporations
CHAPTER 85. CORPORATION LAW FOR COOPERATIVE AGRICULTURAL ASSOCIATIONS
Subchapter III. Stock and Stockholders; Financial Operations
§ 8531. Issue, redemption and transfer of stock.
An association may transact or do business with or for patron stockholders or patrons not stockholders, and may issue and
sell its preferred stock to patrons or nonpatrons of the associations, but common stock of the association shall be sold to
patrons only. The certificate of common stock shall contain a provision that the association shall have an option to redeem
the stock at par value plus declared and unpaid dividends when the owner thereof has for a period of 12 months done no business
with the association, and shall contain a further provision that no sale or transfer of stock shall be valid without the written
consent of the association, and, if the association withholds its consent to such sale or transfer, then the association shall
redeem such stock at par value plus declared and unpaid dividends.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8531.;
§ 8532. Dividends on stock.
Dividends on the common stock shall be paid only after dividends are paid on the preferred stock, and the required surplus
fund set aside, and shall be not greater than 6 percent per annum, except as provided in this chapter. Dividends on preferred
stock shall be not greater than 12 percent per annum and shall be cumulative.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8532; 60 Del. Laws, c. 174, § 2.;
§ 8533. Liability of stockholders and officers for debts of association.
The officers and stockholders of an association, organized under and accepting this chapter, shall not be individually liable
for the debts of the association otherwise than as provided in this chapter. Each common stockholder of an association shall
be liable in his individual capacity to the amount of stock held by him for all work and labor done to carry on the operations
of the association. The terms "work" and "labor" as used in this section mean only such obligations incurred by the association
for salary and wages for actual labor and services performed by individuals.
41 Del. Laws, c. 132, §§ 8, 9; 3 Del. C. 1953, § 8533.;
§ 8534. Voting rights of stockholders.
Every common stockholder shall be entitled to 1 vote only, and no vote by proxy shall be permitted. This restriction shall
not affect any powers granted to the representative body or council, or the delegates thereto.
41 Del. Laws, c. 132, § 7; 3 Del. C. 1953, § 8534.;
§ 8535. Patronage refunds.
After payment of the dividend on the preferred stock, and after making provision from its net earnings for the reserve fund,
as provided in this chapter, the remainder of the net earnings of the association, not required for dividends on the common
stock, may, in the discretion of the directors, be distributed as a patronage refund. Patron stockholders may be entitled
to patronage refunds at double the rate of patronage refunds to which nonstockholder patrons shall be entitled. Patronage
refunds may be credited to the accounts of nonstockholders in the purchase of capital stock of the association.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8535.;
§ 8536. Reserve fund.
An association, after making provision for the payment of dividends on the preferred stock, and before payment of dividends
on the common stock, or the distribution of any patronage refund or dividend shall set aside 10 percent of the total net earnings,
annually, for a reserve fund, until the reserve fund equals at least 30 percent of the paid up capital stock. The reserve
fund shall be available for such purposes as are designated and authorized by the vote of two-thirds of the members of the
board of directors at a duly assembled meeting of the board, subject to the limitations and conditions provided for in the
bylaws of the association.
41 Del. Laws, c. 132, § 16; 3 Del. C. 1953, § 8536.;
§ 8537. Revolving reserve fund.
After payment of the dividend on preferred stock, and after making provision from its net earnings for the reserve fund, as
provided in § 8536 of this title, the remainder of the net earnings of the association not required for dividends on the common
stock and not distributable as a patronage refund may, at the discretion of the directors, be set up in a revolving reserve
fund to be kept on the books of the association in the names of the patrons, according to the volume or value of their patronage.
No stockholder or patron shall be entitled to payments from the revolving fund, except as provided by the board of directors,
which shall have full and complete control of the expenditure and use of the funds therein, the provisions herein contained
being merely authoritative and not mandatory.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8537.;
§ 8538. Annual audit and report.
At the close of each fiscal year, a complete audit of the operations of the association shall be made by a qualified accountant
employed by the board of directors. The written report of the accountant shall include statements of services rendered by
the association, the balance sheet, the receipts and disbursements, and the assets and liabilities, the total number of stockholders,
and other proper information, and shall be submitted to the members at the next regular meeting. Within 3 months after the
expiration of the fiscal year for which made, the secretary of the association shall file one copy of the report of the audit
with the Secretary of the Department of Agriculture of this State and one copy with the Dean of the School of Agriculture
of the University of Delaware. No person shall, without consent of the association, except in obedience to judicial process,
make or permit any disclosure whereby any information contained in the report may be identified as having been furnished by
the association.
41 Del. Laws, c. 132, § 17; 3 Del. C. 1953, § 8538; 57 Del. Laws, c. 764, § 27.;
Cooperative Agricultural Associations or Corporations
CHAPTER 85. CORPORATION LAW FOR COOPERATIVE AGRICULTURAL ASSOCIATIONS
Subchapter III. Stock and Stockholders; Financial Operations
§ 8531. Issue, redemption and transfer of stock.
An association may transact or do business with or for patron stockholders or patrons not stockholders, and may issue and
sell its preferred stock to patrons or nonpatrons of the associations, but common stock of the association shall be sold to
patrons only. The certificate of common stock shall contain a provision that the association shall have an option to redeem
the stock at par value plus declared and unpaid dividends when the owner thereof has for a period of 12 months done no business
with the association, and shall contain a further provision that no sale or transfer of stock shall be valid without the written
consent of the association, and, if the association withholds its consent to such sale or transfer, then the association shall
redeem such stock at par value plus declared and unpaid dividends.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8531.;
§ 8532. Dividends on stock.
Dividends on the common stock shall be paid only after dividends are paid on the preferred stock, and the required surplus
fund set aside, and shall be not greater than 6 percent per annum, except as provided in this chapter. Dividends on preferred
stock shall be not greater than 12 percent per annum and shall be cumulative.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8532; 60 Del. Laws, c. 174, § 2.;
§ 8533. Liability of stockholders and officers for debts of association.
The officers and stockholders of an association, organized under and accepting this chapter, shall not be individually liable
for the debts of the association otherwise than as provided in this chapter. Each common stockholder of an association shall
be liable in his individual capacity to the amount of stock held by him for all work and labor done to carry on the operations
of the association. The terms "work" and "labor" as used in this section mean only such obligations incurred by the association
for salary and wages for actual labor and services performed by individuals.
41 Del. Laws, c. 132, §§ 8, 9; 3 Del. C. 1953, § 8533.;
§ 8534. Voting rights of stockholders.
Every common stockholder shall be entitled to 1 vote only, and no vote by proxy shall be permitted. This restriction shall
not affect any powers granted to the representative body or council, or the delegates thereto.
41 Del. Laws, c. 132, § 7; 3 Del. C. 1953, § 8534.;
§ 8535. Patronage refunds.
After payment of the dividend on the preferred stock, and after making provision from its net earnings for the reserve fund,
as provided in this chapter, the remainder of the net earnings of the association, not required for dividends on the common
stock, may, in the discretion of the directors, be distributed as a patronage refund. Patron stockholders may be entitled
to patronage refunds at double the rate of patronage refunds to which nonstockholder patrons shall be entitled. Patronage
refunds may be credited to the accounts of nonstockholders in the purchase of capital stock of the association.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8535.;
§ 8536. Reserve fund.
An association, after making provision for the payment of dividends on the preferred stock, and before payment of dividends
on the common stock, or the distribution of any patronage refund or dividend shall set aside 10 percent of the total net earnings,
annually, for a reserve fund, until the reserve fund equals at least 30 percent of the paid up capital stock. The reserve
fund shall be available for such purposes as are designated and authorized by the vote of two-thirds of the members of the
board of directors at a duly assembled meeting of the board, subject to the limitations and conditions provided for in the
bylaws of the association.
41 Del. Laws, c. 132, § 16; 3 Del. C. 1953, § 8536.;
§ 8537. Revolving reserve fund.
After payment of the dividend on preferred stock, and after making provision from its net earnings for the reserve fund, as
provided in § 8536 of this title, the remainder of the net earnings of the association not required for dividends on the common
stock and not distributable as a patronage refund may, at the discretion of the directors, be set up in a revolving reserve
fund to be kept on the books of the association in the names of the patrons, according to the volume or value of their patronage.
No stockholder or patron shall be entitled to payments from the revolving fund, except as provided by the board of directors,
which shall have full and complete control of the expenditure and use of the funds therein, the provisions herein contained
being merely authoritative and not mandatory.
41 Del. Laws, c. 132, § 6; 3 Del. C. 1953, § 8537.;
§ 8538. Annual audit and report.
At the close of each fiscal year, a complete audit of the operations of the association shall be made by a qualified accountant
employed by the board of directors. The written report of the accountant shall include statements of services rendered by
the association, the balance sheet, the receipts and disbursements, and the assets and liabilities, the total number of stockholders,
and other proper information, and shall be submitted to the members at the next regular meeting. Within 3 months after the
expiration of the fiscal year for which made, the secretary of the association shall file one copy of the report of the audit
with the Secretary of the Department of Agriculture of this State and one copy with the Dean of the School of Agriculture
of the University of Delaware. No person shall, without consent of the association, except in obedience to judicial process,
make or permit any disclosure whereby any information contained in the report may be identified as having been furnished by
the association.
41 Del. Laws, c. 132, § 17; 3 Del. C. 1953, § 8538; 57 Del. Laws, c. 764, § 27.;