Cooperative Corporations

Title 1, Division 3, Part 2 of the Corporations Code deals with cooperative corporations. Chapter 1 contains general provisions, organization, and bylaws. Article 1 deals with title, purposes, and application of this part.

Section 12200 provides that this part is known as the Cooperative Corporation Law. This part is intended primarily to apply to the organization and operation of cooperatives, including consumer cooperatives, worker cooperatives, and cooperatives formed for the purpose of recycling or treating hazardous waste that elect to incorporate under its provisions.

Section 12201 states that a corporation may be formed under this part for any lawful purpose provided that it is organized and conducts its business primarily for the mutual benefit of its members as patrons of the corporation. The earnings, savings, or benefits of the corporation are to be used for the general welfare of the members or be proportionately and equitably distributed to some or all of its members or its patrons.

Section 12201.5 specifies that the net earnings and losses of a worker cooperative must be apportioned and distributed at the time and in the manner specified in the articles of incorporation or bylaws.

Article 2 deals with general provisions and definitions. Section 12210 provides that a corporation may be sued as provided in the Code of Civil Procedure.

Section 12211 requires any corporation, as a condition of its existence as a corporation, to be subject to the provisions of the Code of Civil Procedure authorizing the attachment of corporate property.

Section 12212 states that the fees of the Secretary of State for filing instruments by or on behalf of corporations are prescribed in law.

Section 12213 provides that any agreement, certificate, or other instrument filed pursuant to the provisions of this part, may be corrected with respect to any misstatement of fact contained therein, any defect in the execution thereof or any other error or defect contained therein, by filing a certificate of correction with specified language.

Section 12214 states that, upon receipt of any instrument by the Secretary of State for filing, if it conforms to law, it must be filed by, and in the office of the Secretary of State and the date of filing endorsed.

Section 12214.5 authorizes the Secretary of State to cancel the filing of articles if a check or other remittance accepted in payment of the filing fee or franchise tax is not paid upon presentation.

Section 12214.6 states that a corporation that fails to file a statement for an applicable filing period, has not filed a statement during the preceding 24 months, and was certified for penalty for the same filing period of the prior year, is subject to suspension pursuant to this section rather than to a penalty.

Section 12215 provides that any reference in this part to mailing means first-class mail, postage prepaid, unless registered or some other form of mail is specified or permitted.

Section 12216 states that, if the articles provide for more than one vote for any member on any matter, the references in law to a majority or other proportion of members mean, as to such matters, a majority or other proportion of the votes entitled to be cast.

Section 12217 states that all references in this part to financial statements of a corporation mean statements prepared in conformity with generally accepted accounting principles or some other basis of accounting which reasonably sets forth the assets and liabilities and the income and expenses of the corporation and discloses the accounting basis used in their preparation.

Section 12218 defines the term “independent accountant.”

Section 12219 specifies that any reference in this part to the time a notice is given or sent means, unless otherwise expressly provided, the time a written notice by mail is deposited in the United States mails, or by other specified means.

Section 12220 provides that a notice or report mailed or delivered as part of a newsletter, magazine or other organ regularly sent to members constitutes written notice or report pursuant to this part when addressed and mailed postage prepaid by first or second class mail or delivered to the member.

Section 12220.5 states that otherwise lawful corporate actions not in compliance, or purportedly not in compliance, with this division or the articles, bylaws, or a plan or agreement to which the corporation is a party in effect at the time of the corporate action, may be ratified, or validated by the superior court, in accordance with the provisions of this section.

Section 12221 defines the term “acknowledged.”

Section 12222 defines the term “approved by (or approval of) the board.”

Section 12223 defines the term “approval by (or approval of) a majority of all members.”

Section 12224 defines the term “approval by (or approval of) the members.”

Section 12225 defines the term “articles.”

Section 12226 defines the term “bylaws.”

Section 12227 defines the term “board.”

Section 12228 defines the term “business corporation.”

Section 12228.3 defines the term “capital account cooperative.”

Section 12228.5 defines the term “chairperson of the board.”

Section 12229 defines the term “chapter.”

Section 12230 defines the term “class.”

Section 12230.5 defines the term “collective board worker cooperative.”

Section 12231 defines the term “constituent corporation.”

Section 12232 defines the term “corporation.”

Section 12233 defines the term “directors.”

Section 12234 defines the term “disappearing corporation.”

Section 12235 defines the term “distribution.”

Section 12236 defines the term “domestic corporation.”

Section 12237 defines the term “foreign corporation.”

Section 12238 defines the terms “member,” “worker-member,” “community investor,” “worker,” and “candidate.”

Section 12239 defines the term “membership.”

Section 12240 defines the term “membership certificate.”

Section 12241 defines the term “officers’ certificate.”

Section 12242 defines the term “on the certificate.”

Section 12242.5 defines the term “other business entity.”

Section 12242.6 defines the term “parent party.”

Section 12243 defines the terms “ patrons” and “patronage.”

Section 12244 defines the term “patronage distribution.”

Section 12245 defines the term “person.”

Section 12245.2 defines the term “preferred memberships.”

Section 12246 defines the term “proper county.”

Section 12246.2 defines the term “series.”

Section 12247 defines the term “shareholder.”

Section 12248 defines the term “share certificate.”

Section 12249defines the term “surviving corporation.”

Section 12250 defines the term “vacancy.”

Section 12251 defines the term “verified.”

Section 12252 defines the term “vote.”

Section 12253 defines the term “voting power.”

Section 12253.5 defines the terms “worker cooperative” or “employment cooperative.”

Section 12254 defines the terms “written” and “in writing.”

Section 12255 defines the term “written ballot.”

Section 12256 states that a central organization is a corporation whose membership is composed, in whole or in part, of other corporations organized under this part.