Connecticut 2019 Regular Session

Connecticut Senate Bill SB00138 Compare Versions

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	7	+	General Assembly Substitute Bill No. 138
	8	+	January Session, 2019
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4		-	Substitute Senate Bill No. 138
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6		-	Public Act No. 19-65
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9		-	AN ACT MODERNIZING T HE STATE'S COOPERATI VE
10		-	~~ASSOCIATION~~ STATUTES .
	14	+	AN ACT MODERNIZING T HE STATE'S COOPERATI VE ASSOCIATION
	15	+	STATUTES.
11	16		Be it enacted by the Senate and House of Representatives in General
12	17		Assembly convened:
13	18
14		-	Section 1. Section 33-183 of the general statutes is repealed and the
15		-	following is substituted in lieu thereof (Effective October 1, 2019):
16		-	[Seven] Three or more persons of lawful age [,] and inhabitants of
17		-	this state, may, by written articles of [agreement] association, associate
18		-	themselves together for the purposes of trade or for carrying on any
19		-	lawful mercantile, mechanical, manufacturing or agricultural business
20		-	within this state, and, when such articles of association have been
21		-	executed and filed in the office of the Secretary of the State, the
22		-	franchise tax provided by section 33-187, as amended by this act, paid
23		-	to, and such articles of association approved by, said secretary, such
24		-	persons shall become a corporation and enjoy all the powers and
25		-	privileges and be subject to all the duties, restrictions and liabilities of
26		-	other corporations, except so far as [the same] such duties, restrictions
27		-	and liabilities may be limited or enlarged by this chapter.
28		-	Sec. 2. Section 33-184 of the general statutes is repealed and the
29		-	following is substituted in lieu thereof (Effective October 1, 2019):
30		-	The objects for which such association is established, and the place Substitute Senate Bill No. 138
	19	+	Section 1. Section 33-183 of the general statutes is repealed and the 1
	20	+	following is substituted in lieu thereof (Effective October 1, 2019): 2
	21	+	[Seven] Three or more persons of lawful age [,] and inhabitants of 3
	22	+	this state, may, by written articles of [agreement] association, associate 4
	23	+	themselves together for the purposes of trade or for carrying on any 5
	24	+	lawful mercantile, mechanical, manufacturing or agricultural business 6
	25	+	within this state, and, when such articles of association have been 7
	26	+	executed and filed in the office of the Secretary of the State, the 8
	27	+	franchise tax provided by section 33-187, as amended by this act, paid 9
	28	+	to, and such articles of association approved by, said secretary, such 10
	29	+	persons shall become a corporation and enjoy all the powers and 11
	30	+	privileges and be subject to all the duties, restrictions and liabilities of 12
	31	+	other corporations, except so far as [the same] such duties, restrictions 13
	32	+	and liabilities may be limited or enlarged by this chapter. 14
	33	+	Sec. 2. Section 33-184 of the general statutes is repealed and the 15
	34	+	following is substituted in lieu thereof (Effective October 1, 2019): 16
	35	+	The objects for which such association is established, and the place 17
	36	+	within which its business is to be carried on, shall be distinctly set forth 18 Substitute Bill No. 138
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32		-	Public Act No. 19-65 2 of 5
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34		-	within which its business is to be carried on, shall be distinctly set forth
35		-	in its articles of [agreement] association, and it shall not do business in
36		-	any other place or places than those mentioned in its articles.
37		-	Sec. 3. Section 33-185 of the general statutes is repealed and the
38		-	following is substituted in lieu thereof (Effective from passage):
39		-	[The] (a) Prior to October 1, 2019, the business of the association
40		-	shall be managed by not fewer than seven members, who shall be
41		-	styled a board of managers, shall be chosen annually by the
42		-	stockholders and shall hold their offices until others are chosen and
43		-	have qualified in their stead, except that when the bylaws of such
44		-	association so prescribe, the board of managers may be divided into
45		-	not more than three classes, each class to hold office for not more than
46		-	three years, one of which classes shall be elected annually. Such
47		-	association shall have such other officers appointed as its bylaws
48		-	prescribe. The terms of the members of the board serving on the
49		-	effective date of this section shall expire on September 30, 2019.
50		-	(b) On and after October 1, 2019, the business of the association shall
51		-	be managed by a board of directors consisting of not fewer than three
52		-	members of the association. The board of directors shall be elected
53		-	annually by the member shareholders and shall hold office until a
54		-	successor has been elected, except, when the bylaws of such
55		-	association so prescribe, the board of directors may be divided into not
56		-	more than three classes, one of which classes shall be elected annually,
57		-	with each class to hold office for not more than six years. Such
58		-	association may adopt bylaws concerning the appointment of other
59		-	officers of the association and to implement the provisions of this
60		-	section.
61		-	Sec. 4. Section 33-187 of the general statutes is repealed and the
62		-	following is substituted in lieu thereof (Effective October 1, 2019): Substitute Senate Bill No. 138
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	43	+	in its articles of [agreement] association, and it shall not do business in 19
	44	+	any other place or places than those mentioned in its articles. 20
	45	+	Sec. 3. Section 33-185 of the general statutes is repealed and the 21
	46	+	following is substituted in lieu thereof (Effective from passage): 22
	47	+	[The] (a) Prior to October 1, 2019, the business of the association 23
	48	+	shall be managed by not fewer than seven members, who shall be 24
	49	+	styled a board of managers, shall be chosen annually by the 25
	50	+	stockholders and shall hold their offices until others are chosen and 26
	51	+	have qualified in their stead, except that when the bylaws of such 27
	52	+	association so prescribe, the board of managers may be divided into 28
	53	+	not more than three classes, each class to hold office for not more than 29
	54	+	three years, one of which classes shall be elected annually. Such 30
	55	+	association shall have such other officers appointed as its bylaws 31
	56	+	prescribe. The terms of the members of the board serving on the 32
	57	+	effective date of this act shall expire on September 30, 2019. 33
	58	+	(b) On and after October 1, 2019, the business of the association shall 34
	59	+	be managed by a board of directors consisting of not fewer than three 35
	60	+	members of the association. The board of directors shall be elected 36
	61	+	annually by the member shareholders and shall hold office until a 37
	62	+	successor has been elected, except, when the bylaws of such 38
	63	+	association so prescribe, the board of directors may be divided into not 39
	64	+	more than three classes, one of which classes shall be elected annually, 40
	65	+	with each class to hold office for not more than six years. Such 41
	66	+	association may adopt bylaws concerning the appointment of other 42
	67	+	officers of the association and to implement the provisions of this 43
	68	+	section. 44
	69	+	Sec. 4. Section 33-187 of the general statutes is repealed and the 45
	70	+	following is substituted in lieu thereof (Effective October 1, 2019): 46
	71	+	The amount of capital stock of any cooperative association 47
	72	+	organized under the provisions of this chapter shall be fixed by its 48
	73	+	articles of association at a sum not exceeding [five] fifty million dollars 49 Substitute Bill No. 138
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66		-	The amount of capital stock of any cooperative association
67		-	organized under the provisions of this chapter shall be fixed by its
68		-	articles of association at a sum not exceeding [five] fifty million dollars
69		-	par value, and shall be subject to the same franchise tax as the capital
70		-	stock of other corporations organized under the general [law] laws,
71		-	which tax shall be paid to the Secretary of the State. The association
72		-	may increase or diminish the amount and number of shares of such
73		-	stock at any meeting of the [stockholders] member shareholders
74		-	specially called for such purpose, but no shares shall be issued at less
75		-	than their par value. [Within] Not later than five days after the passage
76		-	of any vote increasing or diminishing such stock, such association shall
77		-	cause a certificate setting forth such vote, signed by a majority of the
78		-	board of [managers] directors, to be recorded in the office of the
79		-	Secretary of the State.
80		-	Sec. 5. Section 33-188 of the general statutes is repealed and the
81		-	following is substituted in lieu thereof (Effective October 1, 2019):
82		-	Not later than thirty days after the first meeting of the association,
83		-	the board of [managers] directors shall prepare a report, setting forth
84		-	the name of the association, the principal office of the association, the
85		-	names of the respective business and residence addresses of the board
86		-	of [managers] directors and officers of the association, the amount of
87		-	capital stock, the par value of the shares, and the number of shares
88		-	issued, together with a statement that such shares are fully paid or, if
89		-	not fully paid, a statement of the amount payable in respect thereof,
90		-	which report shall be filed and recorded in the office of the Secretary of
91		-	the State. On or before the tenth day of March [in each year] annually
92		-	thereafter, the board of [managers] directors shall prepare a [like]
93		-	report of the [same] facts as they existed on the first day of [such]
94		-	March and [the same] such report shall be filed and recorded in the
95		-	office of the Secretary of the State. [All the statements] Any statement
96		-	provided for in this section shall be signed and sworn to by a majority Substitute Senate Bill No. 138
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100		-	of the board of [managers] directors.
101		-	Sec. 6. Section 33-191 of the general statutes is repealed and the
102		-	following is substituted in lieu thereof (Effective October 1, 2019):
103		-	No certificate of shares shall be issued to any person until the full
104		-	amount thereof has been paid in cash, and no shareholder shall receive
105		-	less than the par value of any share when disposing of the same to the
106		-	board of [managers] directors. No person shall be allowed to become a
107		-	shareholder in such association except by the consent of the
108		-	[managers] directors.
109		-	Sec. 7. Section 33-192 of the general statutes is repealed and the
110		-	following is substituted in lieu thereof (Effective October 1, 2019):
111		-	[If the board of managers fails to make any return required by this
112		-	chapter or makes an untrue return, the members thereof shall be
113		-	jointly and severally liable for all debts existing at the date of such
114		-	return or at the time when the return should have been made, and
115		-	such association shall forfeit to the state fifty dollars for each failure.] If
116		-	the association fails to file the annual report required by section 33-188,
117		-	as amended by this act, or makes an untrue report, the association
118		-	shall pay to the Secretary of the State fifty dollars for each such failure.
119		-	Sec. 8. Section 33-193 of the general statutes is repealed and the
120		-	following is substituted in lieu thereof (Effective October 1, 2019):
121		-	There shall be [such] a distribution of the profits or [earnings]
122		-	surplus of [such] an association among the member shareholders as is
123		-	prescribed by the association's bylaws. [; provided no distribution shall
124		-	be declared or paid until a sum equal to ten per cent of the net profits
125		-	is appropriated for a contingent or sinking fund and until there has
126		-	been thereby accumulated a sum equal to twenty per cent of the capital
127		-	stock.] The board of directors of an association may declare a sum of
128		-	not more than forty per cent of the net profits or surplus to be Substitute Senate Bill No. 138
	80	+	par value, and shall be subject to the same franchise tax as the capital 50
	81	+	stock of other corporations organized under the general [law] laws, 51
	82	+	which tax shall be paid to the Secretary of the State. The association 52
	83	+	may increase or diminish the amount and number of shares of such 53
	84	+	stock at any meeting of the [stockholders] member shareholders 54
	85	+	specially called for such purpose, but no shares shall be issued at less 55
	86	+	than their par value. [Within] Not later than five days after the passage 56
	87	+	of any vote increasing or diminishing such stock, such association shall 57
	88	+	cause a certificate setting forth such vote, signed by a majority of the 58
	89	+	board of [managers] directors, to be recorded in the office of the 59
	90	+	Secretary of the State. 60
	91	+	Sec. 5. Section 33-188 of the general statutes is repealed and the 61
	92	+	following is substituted in lieu thereof (Effective October 1, 2019): 62
	93	+	Not later than thirty days after the first meeting of the association, 63
	94	+	the board of [managers] directors shall prepare a report, setting forth 64
	95	+	the name of the association, the principal office of the association, the 65
	96	+	names of the respective business and residence addresses of the board 66
	97	+	of [managers] directors and officers of the association, the amount of 67
	98	+	capital stock, the par value of the shares, and the number of shares 68
	99	+	issued, together with a statement that such shares are fully paid or, if 69
	100	+	not fully paid, a statement of the amount payable in respect thereof, 70
	101	+	which report shall be filed and recorded in the office of the Secretary of 71
	102	+	the State. On or before the tenth day of March [in each year] annually 72
	103	+	thereafter, the board of [managers] directors shall prepare a [like] 73
	104	+	report of the [same] facts as they existed on the first day of [such] 74
	105	+	March and [the same] such report shall be filed and recorded in the 75
	106	+	office of the Secretary of the State. [All the statements] Any statement 76
	107	+	provided for in this section shall be signed and sworn to by a majority 77
	108	+	of the board of [managers] directors. 78
	109	+	Sec. 6. Section 33-191 of the general statutes is repealed and the 79
	110	+	following is substituted in lieu thereof (Effective October 1, 2019): 80
	111	+	No certificate of shares shall be issued to any person until the full 81 Substitute Bill No. 138
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132		-	appropriated for a contingent or sinking fund, an unallocated reserve
133		-	fund or a collective account as may be prescribed in the association's
134		-	bylaws.
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	118	+	amount thereof has been paid in cash, and no shareholder shall receive 82
	119	+	less than the par value of any share when disposing of the same to the 83
	120	+	board of [managers] directors. No person shall be allowed to become a 84
	121	+	shareholder in such association except by the consent of the 85
	122	+	[managers] directors. 86
	123	+	Sec. 7. Section 33-192 of the general statutes is repealed and the 87
	124	+	following is substituted in lieu thereof (Effective October 1, 2019): 88
	125	+	[If the board of managers fails to make any return required by this 89
	126	+	chapter or makes an untrue return, the members thereof shall be 90
	127	+	jointly and severally liable for all debts existing at the date of such 91
	128	+	return or at the time when the return should have been made, and 92
	129	+	such association shall forfeit to the state fifty dollars for each failure.] If 93
	130	+	the association fails to file the annual report required by section 33-188, 94
	131	+	as amended by this act, or makes an untrue report, the association 95
	132	+	shall pay to the Secretary of the State fifty dollars for each such failure. 96
	133	+	Sec. 8. Section 33-193 of the general statutes is repealed and the 97
	134	+	following is substituted in lieu thereof (Effective October 1, 2019): 98
	135	+	There shall be [such] a distribution of the profits or [earnings] 99
	136	+	surplus of [such] an association among the member shareholders as is 100
	137	+	prescribed by the association's bylaws. [; provided no distribution shall 101
	138	+	be declared or paid until a sum equal to ten per cent of the net profits 102
	139	+	is appropriated for a contingent or sinking fund and until there has 103
	140	+	been thereby accumulated a sum equal to twenty per cent of the capital 104
	141	+	stock.] The board of directors of an association may declare a sum of 105
	142	+	not more than forty per cent of the net profits or surplus to be 106
	143	+	appropriated for a contingent or sinking fund, an unallocated reserve 107
	144	+	fund or a collective account as may be prescribed in the association's 108
	145	+	bylaws. 109
	146	+	This act shall take effect as follows and shall amend the following
	147	+	sections:
	148	+
	149	+	Section 1 October 1, 2019 33-183 Substitute Bill No. 138
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	156	+	Sec. 2 October 1, 2019 33-184
	157	+	Sec. 3 from passage 33-185
	158	+	Sec. 4 October 1, 2019 33-187
	159	+	Sec. 5 October 1, 2019 33-188
	160	+	Sec. 6 October 1, 2019 33-191
	161	+	Sec. 7 October 1, 2019 33-192
	162	+	Sec. 8 October 1, 2019 33-193
	163	+
	164	+	Statement of Legislative Commissioners:
	165	+	In Section 3(a), "Prior to September 30, 2019" was changed to "Prior to
	166	+	October 1, 2019" for consistency with other provisions of the bill.
	167	+
	168	+	JUD Joint Favorable Subst.
135	169