EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0015*
HOUSE BILL 15
C1 5lr1228
(PRE–FILED) CF SB 144
By: Delegates Qi and Charkoudian
Requested: October 16, 2024
Introduced and read first time: January 8, 2025
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Corporations and Associations – Limited Worker Cooperative Associations – 2
Authorization 3
(Maryland Limited Worker Cooperative Association Act) 4
FOR the purpose of authorizing the formation of limited worker cooperative associations; 5
establishing rules and procedures for the formation, governance, conversion, and 6
dissolution of limited worker cooperative associations; and generally relating to 7
limited worker cooperative associations. 8
BY repealing and reenacting, without amendments, 9
Article – Corporations and Associations 10
Section 1–101(a) and 1–203(a) 11
Annotated Code of Maryland 12
(2014 Replacement Volume and 2024 Supplement) 13
BY repealing and reenacting, with amendments, 14
Article – Corporations and Associations 15
Section 1–101(p), 1–203(b)(3) through (5) and (8), 1–401, 1–404, and 1–503(a) 16
Annotated Code of Maryland 17
(2014 Replacement Volume and 2024 Supplement) 18
BY adding to 19
Article – Corporations and Associations 20
Section 1–502(g); and 4A–12A–01 through 4A–12A–22 to be under the new subtitle 21
“Subtitle 12A. Maryland Limited Worker Cooperative Association Act” 22
Annotated Code of Maryland 23
(2014 Replacement Volume and 2024 Supplement) 24
BY repealing and reenacting, with amendments, 25
Article – Tax – General 26 2 HOUSE BILL 15
Section 4–301(c), 9–314(f), 10–906(d), and 11–601(d) 1
Annotated Code of Maryland 2
(2022 Replacement Volume and 2024 Supplement) 3
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
That the Laws of Maryland read as follows: 5
Article – Corporations and Associations 6
1–101. 7
(a) In this article, unless the context clearly requires otherwise, the following 8
words have the meanings indicated. 9
(p) “Governing document” means: 10
(1) The charter and the bylaws of a Maryland corporation or a foreign 11
corporation; 12
(2) The articles of organization or certificate of formation and the operating 13
agreement or limited liability company agreement of a domestic limited liability company 14
or a foreign limited liability company; 15
(3) The partnership agreement of an other entity that is a partnership or 16
limited partnership, any statement of partnership authority of a partnership, the certificate 17
of limited partnership of a limited partnership, and the certificate of limited liability 18
partnership of a limited liability partnership; 19
(4) The declaration of trust or governing instrument of a business trust or 20
a real estate investment trust; [or] 21
(5) THE ARTICLES OF ORGAN IZATION AND THE COOP ERATIVE 22
AGREEMENT OF A LIMIT ED WORKER COOPERAT IVE ASSOCIATION; OR 23
[(5)] (6) A similar governing document or instrument of any other type of 24
entity. 25
1–203. 26
(a) In addition to any organization and capitalization fee required under § 1–204 27
of this subtitle, subject to subsection (c) of this section, the Department shall collect the fees 28
specified in subsection (b) of this section. 29
(b) (3) (i) For each of the following documents which are filed but not 30
recorded, the nonrefundable processing fee is as indicated: 31
HOUSE BILL 15 3
Reservation of a corporate, limited partnership, limited liability partnership [or], 1
limited liability company, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N 2
name......................................................................................................................................$25 3
Original registration of name of a foreign corporation to end of calendar year…$100 4
Renewal of registration of name of a foreign corporation for 1 calendar year…..$100 5
Documents in connection with the qualification of a foreign corporation to do 6
intrastate business in this State………………………………………………………………. .$100 7
Application for registration of a foreign limited partnership, a foreign limited 8
liability partnership, or a foreign limited liability company…………………………….…. $100 9
Other documents…………………………………………………………………………….. $6 10
(ii) Except as provided in paragraph (13) of this subsection, for each 11
of the following documents which are filed but not recorded, the filing fee is as indicated: 12
Annual report of a Maryland corporation, except a charitable or benevolent 13
institution, nonstock corporation, savings and loan corporation, credit union, family farm, 14
and banking institution…………………………………………………………………………. $300 15
Annual report of a foreign corporation subject to the jurisdiction of this State, except 16
a national banking association, savings and loan association, credit union, nonstock 17
corporation, and charitable and benevolent institution……………………………………. $300 18
Annual report of a Maryland savings and loan association, banking institution, or 19
credit union or of a foreign savings and loan association, national banking association, or 20
credit union that is subject to the jurisdiction of this State……………………………….. $300 21
Annual report of a Maryland limited liability company, limited liability partnership, 22
limited partnership, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N, or of a foreign 23
limited liability company, foreign limited liability partnership, or foreign limited 24
partnership, except a family farm……………………………………………………………… $300 25
Annual report of a business trust………………………………………………………. $300 26
Annual report of a real estate investment trust or foreign statutory trust doing 27
business in this State…………………………………………………………………………….. $300 28
Annual report of a family farm…………………………………………………………. $100 29
(4) For each of the following documents recorded or filed the nonrefundable 30
processing fee is $100: 31
4 HOUSE BILL 15
(i) Certificate of limited partnership, certificate of limited liability 1
partnership, articles of organization of a limited liability company, ARTICLES OF 2
ORGANIZATION OF A LI MITED WORKER COOPERA TIVE ASSOCIATION , certificate of 3
trust of a business trust, including certificates of amendment, certificates of reinstatement, 4
and articles of reinstatement; and 5
(ii) Any statement filed by a partnership under Title 9A of this 6
article. 7
(5) For issuing each of the following certificates, the nonrefundable 8
processing fee is as indicated: 9
Type of Instrument Special Fee 10
Certificate of status of a corporation, partnership, limited partnership, limited 11
liability partnership, [or] limited liability company, OR LIMITED WORKER CO OPERATIVE 12
ASSOCIATION of this State or of a foreign corporation, foreign partnership, foreign limited 13
partnership, foreign limited liability partnership, or foreign limited liability company....$20 14
Certified list of the charter papers of a corporation of this State or any certificates of 15
a limited partnership, limited liability partnership, [or a] limited liability company, OR 16
LIMITED WORKER COOPE RATIVE ASSOCIATION of this State recorded or filed with the 17
Department…………………………………………………………………………………………. $20 18
Certificate of compliance by a foreign corporation, foreign limited partnership, 19
foreign limited liability partnership, or foreign limited liability company with requirements 20
of law in respect of qualification or registration………………………………………………. $20 21
Certificate of withdrawal of registration or qualification……………………………. $20 22
Certificate of any paper recorded or filed in the Department’s office………………. $20 23
(8) Subject to § 1–203.2(c) of this subtitle, for processing each of the 24
following documents on an expedited basis, the additional fee is as indicated: 25
Recording any document, including financing statements, or submitting for 26
preclearance any document listed in paragraph (1) or (4) of this subsection, if processing 27
under § 1–203.2(b)(1) of this subtitle is requested............................................................. $425 28
Recording any document, including financing statements, or submitting for 29
preclearance any document listed in paragraph (1) or (4) of this subsection, if processing 30
under § 1–203.2(b)(1) of this subtitle is not requested……………………………………….. $50 31
Certificate of status of a corporation, partnership, limited partnership, limited 32
liability partnership, [or] limited liability company, OR LIMITED WORKER CO OPERATIVE 33
ASSOCIATION, or a name reservation………………………………………………………….. $20 34 HOUSE BILL 15 5
Certified list of the charter documents of a Maryland corporation or any certificate 1
of a Maryland limited partnership, limited liability partnership, [or] limited liability 2
company, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N recorded or filed with the 3
Department........................................................................................................................... $20 4
A copy of any document recorded or filed with the Department, or a corporate 5
abstract……………………………………………………………………………………………… $20 6
Application for a ground rent redemption or a ground rent extinguishment, or 7
payment of a redemption or extinguishment amount to the former owner of the ground 8
rent.........................................................................................................................................$50 9
1–401. 10
(a) Service of process on the resident agent of a corporation, partnership, limited 11
partnership, limited liability partnership, limited liability company, LIMITED WORKER 12
COOPERATIVE ASSOCIAT ION, or real estate investment trust, or any other person 13
constitutes effective service of process under the Maryland Rules on the corporation, 14
partnership, limited partnership, limited liability partnership, limited liability company, 15
LIMITED WORKER COOPE RATIVE ASSOCIATION , or real estate investment trust, or other 16
person in any action, suit, or proceeding which is pending, filed, or instituted against it 17
under the provisions of this article. 18
(b) (1) Any notice required by law to be served by personal service on a 19
resident agent or other agent or officer of any Maryland or foreign corporation, partnership, 20
limited partnership, limited liability partnership, limited liability company, LIMITED 21
WORKER COOPERATIVE A SSOCIATION, or real estate investment trust required by 22
statute to have a resident agent in this State may be served on the corporation, partnership, 23
limited partnership, limited liability partnership, limited liability company, LIMITED 24
WORKER COOPERATIVE A SSOCIATION, or real estate investment trust in the manner 25
provided by the Maryland Rules relating to the service of process on corporations. 26
(2) Service under the Maryland Rules is equivalent to personal service on 27
a resident agent or other agent or officer of a corporation, partnership, limited partnership, 28
limited liability partnership, limited liability company, LIMITED WORKER COOPE RATIVE 29
ASSOCIATION, or real estate investment trust mentioned in paragraph (1) of this 30
subsection. 31
1–404. 32
(a) Any person who owns, operates, or directs an unincorporated organization, 33
firm, association, or other entity which includes in its name the word “corporation”, 34
“incorporated”, or, except as provided in subsection (b) of this section, “limited” or an 35
abbreviation of any of these words or which holds itself out to the public as a corporation is 36
guilty of a misdemeanor and on conviction is subject to a fine not exceeding $500. 37 6 HOUSE BILL 15
(b) This section does not prohibit: 1
(1) A limited partnership from using the term “limited partnership” in its 2
name; 3
(2) A limited liability company from using the terms “limited liability 4
company” or “L.L.C.” in its name; [or] 5
(3) A limited liability partnership from using the terms “limited liability 6
partnership” or “L.L.P.” in its name; OR 7
(4) A LIMITED WORKER COOPE RATIVE ASSOCIATION F ROM USING 8
THE TERMS “LIMITED WORKER COOPE RATIVE ASSOCIATION ” OR “L.W.C.A.” IN ITS 9
NAME. 10
1–502. 11
(G) THE NAME OF A LIMITED WORKER COOPERATIVE A SSOCIATION MUST 12
INCLUDE: 13
(1) THE WORDS “LIMITED WORKER COOPE RATIVE ASSOCIATION ”; 14
(2) L.W.C.A.; OR 15
(3) LWCA. 16
1–503. 17
(a) An entity name may not contain language stating or implying that the entity 18
is organized for a purpose other than that allowed by the entity’s: 19
(1) Articles of incorporation, if the entity is a corporation; 20
(2) Articles of organization, if the entity is a limited liability company OR 21
LIMITED WORKER COOPE RATIVE ASSOCIATION ; 22
(3) Certificate of limited liability partnership, if the entity is a limited 23
liability partnership; 24
(4) Certificate of limited partnership, if the entity is a limited partnership; 25
or 26
(5) Articles of incorporation, if the entity is a professional corporation. 27
SUBTITLE 12A. MARYLAND LIMITED WORKER COOPERATIVE ASSOCIATION ACT. 28 HOUSE BILL 15 7
4A–12A–01. 1
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 2
INDICATED. 3
(B) “ASSEMBLY” MEANS ALL MEMBERS OF A LIMITED WORKER 4
COOPERATIVE ASSOCIAT ION WHO HAVE VOTING RIGHTS UNDER THIS SU BTITLE AND 5
THE LIMITED WORKER C OOPERATIVE ASSOCIATI ON’S COOPERATIVE AGREEM ENT. 6
(C) “COLLECTIVE WORKER COO PERATIVE” MEANS A LIMITED WORK ER 7
COOPERATIVE ASSOCIAT ION THAT HAS ONLY ON E CLASS OF MEMBERS C ONSISTING 8
OF WORKER MEMBERS WH O MANAGE ALL OF THE AFFAIRS OF THE ASSOC IATION. 9
(D) “COOPERATIVE AGREEMENT ” MEANS THE OPERATING AGREEMENT OF 10
A LIMITED WORKER COO PERATIVE ASS OCIATION. 11
(E) “FOREIGN WORKER COOPER ATIVE” MEANS AN ENTITY FORM ED UNDER 12
THE LAWS OF A STATE OTHER THAN THIS STATE THAT IS SIMILAR TO AN ENTITY 13
FORMED UNDER THIS SU BTITLE. 14
(F) “INVESTOR MEMBER ” MEANS A MEMBER OF A LIMITED WORKER 15
COOPERATIVE ASSOCIAT ION WHO IS NOT REQUIRED OR PERMITTED TO COND UCT 16
PATRONAGE WITH THE A SSOCIATION IN THE ME MBER’S CAPACITY AS AN INV ESTOR 17
MEMBER IN ORDER TO RECEIVE OR RETAIN THE MEMBER ’S INTEREST IN THE 18
ASSOCIATION. 19
(G) “LIMITED WORKER COOPER ATIVE ASSOCIATION ” MEANS A MARYLAND 20
LIMITED LIABILITY CO MPANY THAT ELECTS TO BE A LIMITED WORKER 21
COOPERATIVE ASSOCIAT ION IN ACCORDANCE WI TH THIS SUBTITLE . 22
(H) “PATRON MEMBER ” MEANS A MEMBER OF A LIMITED WORKER 23
COOPERATIVE ASSOCIAT ION WHO IS REQUIRED OR PERMITTED TO COND UCT 24
PATRONAGE WITH THE ASSOCIATION . 25
(I) “PATRONAGE” MEANS BUSINESS TRANS ACTIONS BETWEEN A LI MITED 26
WORKER COOPERATIVE A SSOCIATION AND A PER SON THAT ENTITLES TH E PERSON 27
TO RECEIVE FINANCIAL RIGHTS BASED ON THE VALUE OR QUANTITY OF BUSINESS 28
BETWEEN THE ASSOCIAT ION AND THE PE RSON. 29
(J) “REPRESENTATIVE ” MEANS A PERSON SERVI NG ON THE BOARD OF 30
REPRESENTATIVES OF A LIMITED WORKER COOPE RATIVE ASSOCIATION . 31
8 HOUSE BILL 15
(K) “VOTING POWER ” MEANS THE PROPORTION OF TOTAL VOTES ENTIT LED 1
TO BE CAST ON A MATT ER THAT ARE HELD BY A PARTICULAR MEMBER OR A GROUP 2
OR CLASS OF MEMBERS . 3
(L) “WORKER MEMBER ” MEANS A PATRON MEMBE R OF A LIMITED WORKE R 4
COOPERATIVE ASSOCIAT ION WHO IS A NATURAL PERSON AND WHOSE PAT RONAGE 5
CONSISTS OF OR INCLU DES LABOR CONTRIBUTE D TO OR FOR THE ASSO CIATION. 6
4A–12A–02. 7
(A) THE PROVISIONS OF THIS S UBTITLE APPLY TO LIM ITED WORKER 8
COOPERATIVE ASSOCIAT IONS EXCEPT TO THE E XTENT THAT: 9
(1) THE CONTEXT OF A PROV ISION CLEARLY REQUIR ES OTHERWISE ; 10
OR 11
(2) A SPECIFIC PROVISION O F THIS TITLE PROVIDE S OTHERWISE. 12
(B) THIS SUBTITLE APPLI ES ONLY TO A LIMITED WORKER COOPERATIVE 13
ASSOCIATION. 14
(C) (1) THE EXISTENCE OF THIS SUBTITLE DOES NOT OF ITSELF CREATE 15
ANY IMPLICATION THAT A CONTRARY OR DIFFER ENT RULE OF LAW IS O R WOULD BE 16
APPLICABLE TO A LIMI TED LIABILITY COMPAN Y THAT IS NOT A LIMI TED WORKER 17
COOPERATIVE ASSOCIAT ION. 18
(2) THIS SUBTITLE DOES NO T AFFECT ANY STATUTE OR RULE OF LAW 19
AS IT APPLIES TO A L IMITED LIABILITY COM PANY THAT IS NOT A L IMITED WORKER 20
COOPERATIVE ASSOCIAT ION. 21
(D) A PROVISION OF THE ART ICLES OF ORGANIZATIO N OR COOPERAT IVE 22
AGREEMENT OF A LIMIT ED WORKER COOPERATIV E ASSOCIATION MAY NO T BE 23
INCONSISTENT WITH AN Y PROVISION OF THIS SUBTITLE. 24
4A–12A–03. 25
UNLESS OTHERWISE PROV IDED IN THIS SUBTITL E, THE POLICY OF THIS 26
SUBTITLE IS TO GIVE MAXIMUM EFFECT TO TH E PRINCIPLE OF DEMOC RATIC 27
SELF–MANAGEMENT OF A LIMI TED WORKER COOPERATI VE ASSOCIATION BY IT S 28
WORKER MEMBERS . 29
4A–12A–04. 30
HOUSE BILL 15 9
(A) A LIMITED LIABILITY CO MPANY MAY ELECT TO B E A LIMITED WORKER 1
COOPERATIVE ASSOCIAT ION UNDER THIS SUBTI TLE BY INCLUDING IN ITS ARTICLES 2
OF ORGANIZATION A STATE MENT THAT THE LIMITE D LIABILITY COMPANY IS A 3
LIMITED WORKER COOPE RATIVE ASSOCIATION . 4
(B) A LIMITED LIABILITY CO MPANY THAT HAS ELECT ED TO BE A LIMITED 5
WORKER COOPERATIVE A SSOCIATION MAY FURTH ER ELECT TO BE A COL LECTIVE 6
WORKER COOPERATI VE BY INCLUDING IN I TS ARTICLES OF ORGAN IZATION A 7
STATEMENT THAT IT IS A COLLECTIVE WORKER COOPERATIVE . 8
(C) UNLESS THE LIMITED WO RKER COOPERATIVE ASS OCIATION HAS 9
ELECTED TO BE A COLL ECTIVE WORKER COOPER ATIVE, THE ARTICLES OF 10
ORGANIZATION OF A LI MITED WOR KER COOPERATIVE ASSO CIATION SHALL INCLUD E 11
THE NAMES OF THOSE I NDIVIDUALS WHO WILL SERVE AS REPRESENTAT IVES UNTIL 12
THEIR SUCCESSORS ARE ELECTED AND QUALIFY . 13
(D) THE NAME OF A LIMITED WORKER COOPERATIVE A SSOCIATION SHALL 14
COMPLY WITH THE REQU IREMENTS OF TITLE 1, SUBTITLE 5 OF THIS ARTICLE. 15
4A–12A–05. 16
(A) THIS SECTION DOES NOT APPLY TO A COLLECTIV E WORKER 17
COOPERATIVE . 18
(B) AFTER A LIMITED WORKE R COOPERATIVE ASSOCI ATION IS FORMED : 19
(1) IF INITIAL REPRESENTA TIVES ARE NAMED IN THE ART ICLES OF 20
ORGANIZATION , THE INITIAL REPRESEN TATIVES SHALL HOLD AN ORGANI ZATIONAL 21
MEETING TO ADOPT THE COOPERATIVE AGREEMEN T AND CARRY ON ANY O THER 22
BUSINESS NECESSARY O R PROPER TO COMPLETE THE ORGANIZATION OF THE 23
ASSOCIATION; OR 24
(2) IF INITIAL REPRESENTA TIVES ARE NOT NAMED IN T HE ARTICLES 25
OF ORGANIZATION , THE PERSON WHO HAS C AUSED THE ARTICLES T O BE EXECUTED 26
AND FILED FOR RECORD SHALL DESIGNATE THE INITIAL REPRESENTATI VES AND 27
CALL A MEETING OF TH E INITIAL REPRESENTA TIVES TO ADOPT AN INITIAL 28
COOPERATIVE AGREEMEN T AND CARRY OUT AN Y OTHER BUSINESS NEC ESSARY AND 29
PROPER TO COMPLETE T HE ORGANIZATION OF T HE ASSOCIATION . 30
(C) UNLESS PROVIDED OTHER WISE IN THE ARTICLES OF ORGANIZATION , 31
THE INITIAL REPRESEN TATIVES MAY CAUSE THE LIMITE D WORKER COOPERATIVE 32
ASSOCIATION TO ACCEP T MEMBERS. 33
10 HOUSE BILL 15
(D) INITIAL REPRESENTATIV ES OF A LIMITED WORKER COOPERATIVE 1
ASSOCIATION NEED NOT BE MEMBERS OF THE AS SOCIATION. 2
(E) AN INITIAL REPRESENTA TIVE SERVES UNTIL: 3
(1) A SUCCESSOR IS ELECTED AND QUALIFIES AT AN ASSEMBLY 4
MEETING; OR 5
(2) THE REPRESENTATIVE IS REMOVED. 6
4A–12A–06. 7
AFTER A COLLECTIVE WO RKER COOPERATIVE IS FORMED, THE INITIAL 8
WORKER MEMBERS SHALL HOLD AN ORGANIZATION AL MEETING TO ADOPT THE 9
COOPERATIVE AGREEMEN T AND CONDUCT ANY OT HER BUSINESS NECESSA RY OR 10
PROPER TO COMPLETE T HE ORGANIZATION OF THE COLLECTIVE WORKE R 11
COOPERATIVE . 12
4A–12A–07. 13
CLEAR REFERENCE TO TH E FACT THAT A LIMITE D LIABILITY COMPANY IS A 14
LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL APPEAR PROMINEN TLY: 15
(1) AT THE HEAD OF THE AR TICLES OF ORGANIZATI ON OR AN 16
AMENDMENT MADE TO THE ARTICLES OF ORGA NIZATION IN WHICH TH E ELECTION 17
TO BE A LIMITED WORK ER COOPERATIVE ASSOC IATION IS MADE; 18
(2) AT THE HEAD OF EACH S UBSEQUENT ARTICLES O F ORGANIZATION 19
OF THE LIMITED WORKE R COOPERATIVE ASSOCI ATION; AND 20
(3) ON EACH CERTIFICATE R EPRESENTING OUTSTANDING 21
MEMBERSHIP INTERESTS IN THE LIMITED WORKE R COOPERATIVE ASSOCI ATION. 22
4A–12A–08. 23
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , A LIMITED WORKER 24
COOPERATIVE ASSOCIAT ION MAY TERMINATE IT S STATUS AS A LIMITE D WORKER 25
COOPERATIVE ASSOCIAT ION BY AMENDING ITS ARTI CLES OF ORGANIZATION TO 26
DELETE THE STATEMENT S REQUIRED BY § 4A–12A–04 OF THIS SUBTITLE. 27
(B) ANY TERMINATION OF A LIMITED WORKER COOPE RATIVE 28
ASSOCIATION’S STATUS SHALL BE SU BJECT TO THE APPROVA L OF TWO–THIRDS OF 29
THE VOTING POWER OF WORKER MEMBERS AND TWO –THIRDS OF ALL MEMBERS 30
ENTITLED TO VOTE ON THE MATTER. 31 HOUSE BILL 15 11
4A–12A–09. 1
(A) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 2
ASSOCIATION SHALL IN CLUDE: 3
(1) A STATEMENT OF THE CAP ITAL STRUCTURE OF TH E ASSOCIATION; 4
(2) THE CLASSES OR OTHER TYP ES OF MEMBERSHIP INT ERESTS AND 5
RELATIVE RIGHTS , PREFERENCES , AND RESTRICTIONS GRA NTED TO OR IMPOSED 6
ON EACH CLASS OR OTH ER TYPE OF MEMBERSHI P INTEREST, INCLUDING: 7
(I) A STATEMENT CONCERNING : 8
1. THE MANNER IN WHICH P ROFITS AND L OSSES ARE 9
ALLOCATED AND DISTRI BUTIONS ARE MADE AMO NG MEMBERS ; AND 10
2. IF INVESTOR MEMBERS A RE AUTHORIZED , THE 11
MANNER IN WHICH PROF ITS AND LOSSES ARE A LLOCATED AND DISTRIB UTIONS ARE 12
MADE AMONG INVESTOR MEMBERS; AND 13
(II) A STATEMENT DESIGNATIN G VOTIN G AND OTHER 14
GOVERNANCE RIGHTS OF EACH CLASS OR OTHER TYPE OF MEMBERSHIP I NTEREST, 15
INCLUDING WHICH MEMB ERS HAVE VOTING POWE R AND ANY RESTRICTIO NS ON 16
VOTING POWER ; 17
(3) A STATEMENT OF THE MET HOD OF ADMISSION OF MEMBERS; 18
(4) A STATEMENT THAT A MEM BERSHIP INTEREST IS TRANSFER ABLE, 19
IF IT IS TO BE TRANS FERABLE, AND A STATEMENT OF T HE CONDITIONS UNDER 20
WHICH IT MAY BE TRAN SFERRED; 21
(5) A STATEMENT CONCERNING WHETHER AND HOW PERS ONS THAT 22
ARE NOT MEMBERS BUT CONDUCT BUSINESS WIT H THE ASSOCIATION MA Y BE 23
ALLOWED TO SHARE IN ALLOCATI ONS OF PROFITS AND L OSSES AND RECEIVE 24
DISTRIBUTIONS ; 25
(6) A STATEMENT OF THE NUM BER AND TERMS OF 26
REPRESENTATIVES OR THE METHOD BY WHI CH THE NUMBER AND TE RMS ARE 27
DETERMINED ; 28
(7) A STATEMENT ADDRESSING MEMBERS’ CONTRIBUTIONS ; AND 29
12 HOUSE BILL 15
(8) A STATEMENT ON WHETHER THE LIMITED WORKER C OOPERATIVE 1
ASSOCIATION WILL ELE CT TO BE TAXED AS A PARTNERSHIP OR A COR PORATION FOR 2
FEDERAL AND STATE INCOME TAX PURP OSES THAT INCLUDES A N EXPLANATION OF 3
THE TAX IMPLICATIONS OF THE ELECTION FOR THE WORKER ME MBERS. 4
(B) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 5
ASSOCIATION MAY CONT AIN ANY PROVISION FO R MANAGING AND REGUL ATING THE 6
AFFAIRS OF THE ASSOC IATION NOT INCONSIST ENT WITH ITS ARTICLE S OF 7
ORGANIZATION OR THIS TITLE. 8
(C) A PERSON THAT BE COMES A MEMBER OF A LIMITED WORKER 9
COOPERATIVE ASSOCIAT ION IS DEEMED TO ASS ENT TO THE COOPERATI VE 10
AGREEMENT OF THE ASS OCIATION. 11
(D) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 12
ASSOCIATION MAY BE E NTERED INTO BEFORE , AFTER, OR AT THE TIME OF FILING 13
OF ARTICLES OF ORGAN IZATION AND MAY BE M ADE EFFECTIVE AS OF : 14
(1) THE TIME OF FORMATION OF THE ASSOCIATION ; OR 15
(2) THE TIME OR DATE PROV IDED IN THE COOPERAT IVE AGREEMENT . 16
4A–12A–10. 17
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY INCLUDE 18
MULTIPLE CLASSES OF MEMBERS WHOSE RIGHTS AND MEMBERSHIP INTER ESTS 19
SHALL BE DETERMINED BY THE COOPERATIVE A GREEMENT. 20
(B) TO BEGIN BUSINESS , A LIMITED WORKER COO PERATIVE ASSOCIATION 21
MUST HAVE AT LEAST T HREE WORKER MEMBERS UNLESS THE SOLE MEMB ER IS A 22
LIMITED WORKER COOPERATIVE ASSOCIATION. 23
(C) A PERSON BECOMES A MEM BER OF A LIMITED WOR KER COOPERATIVE 24
ASSOCIATION: 25
(1) AS PROVIDED IN THE AR TICLES OF ORGANIZATI ON OR 26
COOPERATIVE AGREEMEN T; 27
(2) AS THE RESULT OF A ME RGER UNDER SUBTITLE 7 OF THIS TITLE; 28
(3) AS A RESULT OF A CONV ERSION UNDER THIS AR TICLE, IN WHICH 29
ANOTHER ENTITY ELECT S TO BE A LIMITED WO RKER COOPERATIVE ASS OCIATION 30
UNDER THIS SUBTITLE ; OR 31
HOUSE BILL 15 13
(4) WITH THE CONSENT OF A LL OF THE WORKER MEM BERS. 1
(D) A MEMBER MAY NOT ACT F OR OR BIND THE LIMIT ED WORKER 2
COOPERATIVE ASSOCIAT ION SOLELY BY REASON OF BEING A MEMBER . 3
(E) UNLESS THE ARTICLES O F ORGANIZATION PROVI DE OTHERWISE , A 4
DEBT, AN OBLIGATION , OR ANY OTHER LIABILI TY OF A LIMITED WORK ER 5
COOPERATIVE ASSOCIAT ION IS SOLELY THAT O F THE ASSOCIATION A ND IS NOT THE 6
DEBT, OBLIGATION, OR LIABILITY OF A ME MBER. 7
(F) (1) THE ORGANIZATION OF A LIMITED WORKER COOPE RATIVE 8
ASSOCIATION UNDER TH IS SUBTITLE DOES NOT CREATE A PRESUMPTION THAT 9
WORKER MEMBERS ARE E MPLOYEES OF THE ASSO CIATION FOR ANY PURP OSE. 10
(2) IF A LIMITED WORKER C OOPERATIVE ASSOCIATI ON IS TAXED AS A 11
PARTNERSHIP FOR FEDE RAL AND STATE INCOME TAX PURP OSES, THAT FACT MAY 12
NOT BE CONSTRUED TO REQUIRE THAT A WORKE R MEMBER BE CONSIDER ED AN 13
EMPLOYEE UNDER ANY STATE LAW. 14
4A–12A–11. 15
(A) AN INSURER, AS DEFINED IN § 1–101 OF THE INSURANCE ARTICLE, 16
THAT PROVIDES WORKER S’ COMPENSATION INSURAN CE TO MEMBERS OF A L IMITED 17
WORKER COOPERATIVE A SSOCIATION FORMED UN DER THIS SUBTITLE SH ALL 18
CALCULATE PREMIUMS F OR MEMBERS WHO ARE C OVERED EMPLOYEES : 19
(1) IN ACCORDANC E WITH TITLE 11, SUBTITLE 3 AND TITLE 19, 20
SUBTITLE 4 OF THE INSURANCE ARTICLE; AND 21
(2) BASED ON THE COVERED EMPLOYEE’S ACTUAL PAYROLL VAL UE. 22
(B) (1) THE MARYLAND INSURANCE COMMISSIONER MAY ENFO RCE THIS 23
SECTION. 24
(2) ALL HEARINGS , ORDERS, AND APPEALS ARISING UNDER THIS 25
SECTION SHALL BE GOV ERNED BY TITLE 11, SUBTITLE 5 OF THE INSURANCE 26
ARTICLE. 27
4A–12A–12. 28
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL HAVE AN 29
ASSEMBLY AS CONSTITU TED BY THE BODY OF A LL VOTING MEMBERS . 30
14 HOUSE BILL 15
(B) AN INDIVIDUAL IS NOT AN AGENT OF A LIMITE D WORKER COOPERATIVE 1
ASSOCIATION SOLELY B Y BEING A MEMBER OF THE ASSEMBLY . 2
(C) A DEBT, AN OBLIGATION , OR ANY OTHER LIABILI TY OF A LIMITED 3
WORKER COOPERATIVE A SSOCIATION IS SOLELY THAT OF THE ASSOCIAT ION AND IS 4
NOT A DEBT, AN OBLIGATIO N, OR A LIABILITY OF A MEMBER OF THE ASSEMB LY 5
SOLELY BY REASON OF BEING A VOTING MEMBE R. 6
4A–12A–13. 7
(A) THE ASSEMBLY SHALL ME ET ANNUALLY AT A TIM E: 8
(1) PROVIDED IN THE ARTIC LES OF ORGANIZATION OR COOPERATIVE 9
AGREEMENT ; OR 10
(2) SET BY THE BOARD OF REPRESENTATIVES THAT IS CONSISTENT 11
WITH THE ARTICLES OF ORGANIZATION OR COOP ERATIVE AGREEMENT . 12
(B) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 13
MEMBERS MAY ATTEND O R CONDUCT THE ANNUAL ASSEMBLY MEETING THR OUGH 14
ANY MEANS OF COMMUNI CATION IF ALL MEMBERS ATTENDIN G THE MEETING ARE 15
ABLE TO COMMUNICATE WITH EACH OTHER DURI NG THE MEETING . 16
(C) THE BOARD OF REPRESEN TATIVES SHALL REPORT , OR CAUSE TO BE 17
REPORTED, AT THE ANNUAL ASSEMB LY MEETING THE ASSOC IATION’S BUSINESS 18
AND FINANCIAL CONDIT ION AS OF THE CLOSE OF THE MOS T RECENT FISCAL YEAR . 19
(D) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 20
THE BOARD OF REPRESE NTATIVES SHALL DESIGNATE THE PRESIDING OFFICER OF 21
THE ANNUAL ASSEMBLY MEETING. 22
(E) FAILURE TO HOLD AN AN NUAL ASSEMBLY MEETIN G DOES NOT AFFECT 23
THE VALIDITY OF ANY ACTION TAKEN BY THE LIMITED WORKER COOPE RATIVE 24
ASSOCIATION. 25
(F) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , A LIMITED 26
WORKER COOPERATIVE A SSOCIATION SHALL NOT IFY EACH MEMBER OF T HE TIME, 27
DATE, AND PLACE OF A MEETI NG OF THE MEMBERS AT LEAST 10 AND NOT MORE 28
THAN 60 DAYS BEFORE THE ANNU AL ASSEMBLY MEETING . 29
(2) IF THE NOTICE IS OF A MEETING OF THE MEMBE RS IN ONE OR 30
MORE CLASSES OF MEMB ERS, THE NOTICE SHALL BE GIVEN ONLY TO MEMBER S IN 31
THOSE CLASSES . 32
HOUSE BILL 15 15
4A–12A–14. 1
(A) (1) A SPECIAL MEETING OF T HE ASSEMBLY MAY BE C ALLED ONLY: 2
(I) AS PROVIDED FOR IN TH E COOPERATIVE AGREEM ENT; 3
(II) BY A MAJORITY OF VOTE S OF THE BOARD OF 4
REPRESENTATIVES ON A PROPOSAL STATIN G THE PURPOSE OF THE SPECIAL 5
MEETING; OR 6
(III) BY DEMAND IN A RECORD SIGNED B Y MEMBERS HOLDING 7
AT LEAST 20% OF THE VOTING POWER OF THE PERSONS ENTIT LED TO VOTE ON THE 8
MATTER THAT IS THE P URPOSE OF THE SPECIA L MEETING. 9
(2) A DEMAND UNDER PARAGRA PH (1)(III) OF THIS SUBSECTION 10
SHALL BE SUBMITTED T O: 11
(I) THE OFFICER OF THE LIMIT ED WORKER COOPERATIV E 12
ASSOCIATION CHARGED WITH KEEPING THE REC ORDS OF THE ASSOCIAT ION; OR 13
(II) IF NO OFFICER HAS BEE N CHARGED WITH KEEPI NG THE 14
RECORDS OF THE ASSOC IATION, A REPRESENTATIVE . 15
(3) ANY VOTING MEMBER MAY WITHDRAW THE MEMBER’S DEMAND 16
UNDER PARAGRAPH (1)(III) OF THIS SUBSECTION B EFORE RECEIPT BY THE LIMITED 17
WORKER COOPERATIVE A SSOCIATION OF DEMAND S SUFFICIENT TO REQU IRE A 18
SPECIAL MEETING OF T HE ASSEMBLY. 19
(B) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 20
MEMBERS MAY ATTEND OR CONDUCT THE SPECIAL ASSEMBLY MEETING THR OUGH 21
ANY MEANS OF COMMUNI CATION IF ALL MEMBER S ATTENDING THE MEET ING ARE 22
ABLE TO COMMUNICATE WITH EACH OTHER DURI NG THE MEETING . 23
(C) ONLY BUSINESS WITHIN THE PURPOSES STATED IN THE NOTICE OF 24
SPECIAL MEETING MAY BE CONDUCTED AT THE MEE TING. 25
(D) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 26
THE PRESIDING OFFICE R OF A SPECIAL MEETI NG SHALL BE DESIGNAT ED BY THE 27
BOARD OF REPRESENTAT IVES. 28
4A–12A–15. 29
16 HOUSE BILL 15
(A) THE ARTICLES OF ORGAN IZATION OR COOPERATIVE AGREEMEN T MAY 1
ALLOCATE VOTING POWE R AMONG MEMBERS ON T HE BASIS OF ONE OR M ORE OF 2
THE FOLLOWING : 3
(1) ONE MEMBER, ONE VOTE; 4
(2) IF A MEMBER IS A COOP ERATIVE, THE NUMBER OF ITS ME MBERS; 5
OR 6
(3) SUBJECT TO SUBSECTION (B) OF THIS SECTION , USE OR 7
PATRONAGE . 8
(B) IF VOTING POWER IS AL LOCATED ON THE BASIS OF USE OR PATRONAGE 9
AND A WORKER MEMBER WOULD BE DENIED A VO TE BECAUSE THE WORKE R 10
MEMBER DID NOT USE T HE LIMITED WORKER CO OPERATIVE ASSOCIATIO N OR 11
CONDUCT PATRONAGE WI TH IT, THE WORKER MEMBER SHALL BE ALLOCATED A 12
VOTE EQUAL TO AT LEA ST THE MINIMUM VOTIN G POWER ALLOCATED TO WORKER 13
MEMBERS WHO USED THE ASSOCIATION OR CONDU CTED PATRONAGE WITH IT. 14
(C) THE ARTICLES OF ORGAN IZATION OR COOPERATI VE AGREEMENT MAY 15
PROVIDE FOR THE ALLO CATION OF MEMBER VOTING POWER BY CLAS S. 16
(D) INVESTOR MEMBERS ARE NOT ENTITLED TO VOTE UNLESS THE 17
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT PROVIDES O THERWISE. 18
(E) (1) THIS SUBSECTION DOES NOT APPLY WHERE THIS TITLE OR THE 19
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT REQUIRE A HIGHER 20
VOTING THRESHOLD THA N IS REQUIRED BY PAR AGRAPH (2) OF THIS SUBSECTION . 21
(2) NOTWITHSTANDING ANY P ROVISION OF THE ARTI CLES OF 22
ORGANIZATION OR COOP ERATIVE AGREEMENT , ALL REPRESENTATIVES SHALL BE 23
ELECTED AND ALL OTHE R DECISIONS W ITHIN THE AUTHORITY OF THE ASSEMBLY 24
SHALL BE MADE BY A M AJORITY VOTE OF : 25
(I) THE WORKER MEMBERS OF THE ASSOCIATION ; AND 26
(II) THE VOTING POWER OF M EMBERS ENTITLED TO V OTE ON 27
THE ELECTION OR DECI SION. 28
4A–12A–16. 29
(A) THIS SECTION DOES NOT APPLY TO A COLLECTIVE WORKER 30
COOPERATIVE . 31
HOUSE BILL 15 17
(B) A LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL HAVE A BOARD 1
OF REPRESENTATIVES CONSISTING OF AT LEA ST THREE INDIVIDUALS . 2
(C) (1) THE AFFAIRS OF A LIMI TED WORKER COOPERATI VE ASSOCIATION 3
SHALL BE MANAGED BY THE BOARD OF REPRESENTATIVES OR INDIVIDUALS TO 4
WHOM THE BOARD DELEG ATES SUCH DUTIES . 5
(2) THE BOARD OF REPRESEN TATIVES MAY ADOPT POLICIES A ND 6
PROCEDURES CONSISTEN T WITH THE ARTICLES OF ORGANIZATION , THE 7
COOPERATIVE AGREEMEN T, OR THIS TITLE. 8
(D) AN INDIVIDUAL IS NOT AN AGENT OF A LI MITED WORKER COOPERA TIVE 9
ASSOCIATION SOLELY B Y BEING A REPRESENTA TIVE. 10
(E) A DEBT, AN OBLIGATION , OR ANY OTHER LIABILI TY OF A LIMITED 11
WORKER COOPERATIVE A SSOCIATION IS SOLELY THAT OF THE ASSOCIAT ION AND IS 12
NOT A DEBT, AN OBLIGATION , OR A LIABILITY OF A R EPRESENTATIVE SOLELY BY 13
REASON OF BEING A RE PRESENTATIVE . 14
(F) REPRESENTATIVES SHALL BE ELECTED FOR TERMS DETERMINED BY 15
THE COOPERATIVE AGRE EMENT. 16
4A–12A–17. 17
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION I S DISSOLVED AND 18
SHALL COMMENCE THE WINDING UP OF ITS AFFAIRS ON THE FIRST TO OCCUR O F 19
THE FOLLOWING : 20
(1) AT THE TIME OR ON THE HAPPENING OF THE EVE NTS SPECIFIED 21
IN THE ARTICLES OF O RGANIZATION OR THE C OOPERATIVE AGREEMENT ; 22
(2) UNLESS A HIGHER THRES HOLD IS STATED IN TH E COOPERATIVE 23
AGREEMENT , AT THE TIME SPECIFIE D BY: 24
(I) A TWO–THIRDS VOTE OF THE WORKER MEMBERS ; AND 25
(II) A TWO–THIRDS VOTE OF THE VOTING POWER OF ALL 26
MEMBERS OF THE ASSEM BLY; 27
(3) AT THE TIME OF THE EN TRY OF A DECREE OF J UDICIAL 28
DISSOLUTION UNDER § 4A–903 OF THIS TITLE; OR 29
18 HOUSE BILL 15
(4) UNLESS OTHERWISE AGRE ED OR AS PROVIDED IN SUBSECTION 1
(B) OF THIS SECTION , AT THE TIME THE LIMI TED WORKER COOPERATI VE 2
ASSOCIATION HAS HAD NO MEMBERS FOR A PER IOD OF 90 CONSECUTIVE DAYS . 3
(B) (1) A LIMITED WORKER COOPE RATIVE ASSOCIATION MAY NOT B E 4
DISSOLVED OR REQUIRE D TO WIND UP ITS AFF AIRS IF WITHIN 90 DAYS AFTER THERE 5
ARE NO REMAINING MEM BERS OF THE LIMITED WORKER COOPERATIVE 6
ASSOCIATION OR WITHI N THE PERIOD OF TIME PROVIDED IN THE COOP ERATIVE 7
AGREEMENT : 8
(I) THE LAST REM AINING MEMBER ’S SUCCESSOR OR ASSIG NEE 9
AGREES IN WRITING TO CONTINUE THE LIMITED WORKER COOPERATIVE 10
ASSOCIATION AND TO B E ADMITTED AS A MEMB ER OR TO APPOINT A D ESIGNEE AS A 11
MEMBER TO BE EFFECTI VE AS OF THE TIME TH E LAST REMAINING MEM BER CEASED 12
TO BE A MEMBE R; OR 13
(II) A MEMBER IS ADMITTED T O THE LIMITED WORKER 14
COOPERATIVE ASSOCIAT ION IN THE MANNER SE T FORTH IN THE COOPE RATIVE 15
AGREEMENT TO BE EFFE CTIVE AS OF THE TIME THE LAST REMAINING M EMBER 16
CEASED TO BE A MEMBE R UNDER A PROVISION IN THE COOPERATIVE A GREEMENT 17
THAT PROVIDES FOR TH E ADMISSION OF A MEM BER AFTER THERE ARE NO 18
REMAINING MEMBERS . 19
(2) IF A NEW MEMBER IS NO T ADMITTED TO THE LI MITED WORKER 20
COOPERATIVE ASSOCIAT ION IN ACCORDANCE WI TH PARAGRAPH (1) OF THIS 21
SUBSECTION, AND THE LAST REMAINI NG MEMBER CEASED TO BE A MEMBE R UNDER 22
§ 4A–606(5) OF THIS TITLE , THE LAST REMAINING M EMBER’S PERSONAL 23
REPRESENTATIVE OR GU ARDIAN SHALL AUTOMAT ICALLY BE ADMITTED A S A NEW 24
MEMBER OF THE LIMITE D WORKER COOPERATIVE ASSOCIATION, EFFECTIVE 25
IMMEDIATELY ON THE H APPENING OF THE EVENT DESCRIBED IN § 4A–606(5) OF 26
THIS TITLE, UNLESS WITHIN 90 DAYS AFTER THE PERSO NAL REPRESENTATIVE O R 27
GUARDIAN FIRST HAS K NOWLEDGE OF THE EVEN T, THE PERSONAL 28
REPRESENTATIVE OR GU ARDIAN: 29
(I) RENOUNCES THAT ADMISS ION IN WRITING; OR 30
(II) DESIGNATES A PERSON TO BEC OME A NEW MEMBER , AND 31
THE DESIGNEE ACCEPTS THE DESIGNEE ’S ADMISSION IN WRITI NG OR BY 32
ELECTRONIC COMMUNICA TION TO THE PERSONAL REPRESENTATIVE OR GU ARDIAN. 33
(C) A COOPERATIVE AGREEMEN T MAY PROVIDE THAT T HE LAST REMAINING 34
MEMBER’S PERSONA L REPRESENTATIVE , GUARDIAN, SUCCESSOR, OR ASSIGNEE 35
SHALL BE OBLIGATED T O AGREE IN WRITING T O CONTINUE THE LIMIT ED LIABILITY 36
COMPANY AND TO BE AD MITTED AS A MEMBER O R TO APPOINT A DESIG NEE AS A 37 HOUSE BILL 15 19
MEMBER TO BE EFFECTI VE AS OF THE TIME TH E LAST REMAINING MEM BER CEASED 1
TO BE A MEMBER . 2
(D) UNLESS OTHERWISE AGRE ED AND SUBJECT TO TH E PROVISIONS OF 3
SUBSECTIONS (A)(4) AND (B) OF THIS SECTION , THE TERMINATION OF A PERSON’S 4
MEMBERSHIP MAY NOT C AUSE A LIMITED WORKE R COOPERATIVE ASSOCI ATION TO 5
BE DISSOLVED OR TO W IND UP ITS AFFAIRS AND THE LIMITED WORKER 6
COOPERATIVE ASSOCIAT ION SHALL CONTINUE I N EXISTENCE FOLLOWIN G THE 7
TERMINATION OF A PER SON’S MEMBERSHIP . 8
4A–12A–18. 9
IF A MEMBER DIES , THE DECEASED MEMBER ’S PERSONAL REPRESENT ATIVE 10
MAY EXERCISE , FOR THE PURPOSE OF S ETTLING THE ESTATE , THE RIGHTS THE 11
DECEASED MEMBER WAS ENTITLED TO UNDER § 4A–406 OF THIS TITLE. 12
4A–12A–19. 13
(A) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 14
THE PROFITS AND LOSS ES OF A LIMITED WORK ER COOPERATIVE ASSOC IATION 15
SHALL BE APPORTION ED AND DISTRIBUTED I N THE MANNER SPECIFI ED BY THE 16
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT . 17
(2) PROFITS DECLARED AS P ATRONAGE ALLOCATIONS WITH 18
RESPECT TO A PERIOD OF TIME AND PAID OR CREDITED TO PATRON M EMBERS 19
SHALL BE APPORTIONED AMONG THE PAT RON MEMBERS IN ACCOR DANCE WITH THE 20
RATIO OF EACH PATRON MEMBER’S PATRONAGE DURING T HE APPLICABLE TIME 21
PERIOD TO THE TOTAL PATRONAGE BY ALL PAT RON MEMBERS DURING T HAT 22
PERIOD. 23
(B) THE APPORTIONMENT , DISTRIBUTION, AND PAYMENT OF NET 24
EARNINGS OF THE LIMI TED WORKER COOPERATIVE A SSOCIATION MAY BE IN CASH, 25
CREDITS, OR WRITTEN NOTICES O F ALLOCATION ISSUED BY THE ASSOCIATION . 26
4A–12A–20. 27
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY ESTABLISH , 28
THROUGH THE ARTICLES OF ORGANIZATION OR C OOPERATIVE AGREEMENT , A 29
SYSTEM OF INTERNAL CA PITAL ACCOUNTS TO RE FLECT THE BOOK VALUE AND TO 30
DETERMINE THE REDEMP TION PRICE OF MEMBER SHIP INTERESTS AND W RITTEN 31
NOTICES OF ALLOCATIO N. 32
(B) THE ARTICLES OF ORGAN IZATION OR COOPERATI VE AGREEMENT : 33
20 HOUSE BILL 15
(1) MAY ALLOW THE PERIODI C REDEMPT ION OF WRITTEN NOTIC ES 1
OF ALLOCATION ; AND 2
(2) SHALL PROVIDE FOR REC ALL AND REDEMPTION O F MEMBERSHIP 3
INTERESTS ON TERMINA TION OF MEMBERSHIP I N THE LIMITED WORKER 4
COOPERATIVE ASSOCIAT ION. 5
(C) (1) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY ALLOCATE 6
A PORTION OF RETAINED N ET EARNINGS AND NET LOSSES TO A COLLECTI VE 7
RESERVE ACCOUNT . 8
(2) EARNINGS OF A LIMITED WORKER COOPERATIVE A SSOCIATION 9
ASSIGNED TO A COLLEC TIVE RESERVE ACCOUNT MAY BE USED FOR ANY PURPOSE 10
DETERMINED BY : 11
(I) IN THE CASE OF A COLLECTIVE WORKER CO OPERATIVE, THE 12
MEMBERS; OR 13
(II) IN THE CASE OF A LIMI TED WORKER COOPERATI VE 14
ASSOCIATION OTHER TH AN A COLLECTIVE WORK ER COOPERATIVE , THE BOARD OF 15
REPRESENTATIVES . 16
4A–12A–21. 17
(A) ANY MEMBERSHIP INTERE ST, PATRONAGE REFUND , PER UNIT RETAIN 18
CERTIFICATE, EQUITY INSTRUMENT , OR EVIDENCE OF MEMBE RSHIP INTEREST 19
ISSUED, OFFERED, OR SOLD BY A LIMITED WORKER COOPERATIVE A SSOCIATION IS 20
EXEMPT FROM THE REGI STRATION REQUIREMENTS OF TITLE 11 OF THIS ARTICLE. 21
(B) ANY MEMBERSHIP INTERE ST, PATRONAG E REFUND, PER UNIT RETAIN 22
CERTIFICATE, EQUITY INSTRUMENT , OR EVIDENCE OF MEMBE RSHIP INTEREST MAY 23
BE LAWFULLY OFFERED AND SOLD BY THE ISSU ER OR ITS MEMBERS , 24
REPRESENTATIVES , OR SALARIED EMPLOYEE S WITHOUT THE NECESS ITY OF BEING 25
REGISTERED AS A BROK ER OR DEALER UNDER TITLE 11 OF THIS ARTICLE. 26
4A–12A–22. 27
A FOREIGN WORKER COOPE RATIVE MAY REGISTER AND DO BUSINESS IN T HE 28
STATE SUBJECT TO AND IN ACCORDANCE WITH T HE PROVISIONS OF SUBTITLE 10 29
OF THIS TITLE. 30
Article – Tax – General 31
4–301. 32 HOUSE BILL 15 21
(c) If a limited liability company, INCLUDING A LIMITED WORKER 1
COOPERATIVE ASSOCIAT ION OR COLLECTIVE WO RKER COOPERATIVE , or limited 2
liability partnership, including a limited partnership registered as a limited liability 3
limited partnership, is required to pay the admissions and amusement tax, personal 4
liability for the tax and interest and penalties on the tax extends to any person who 5
exercises direct control over the fiscal management of the limited liability company or 6
limited liability partnership. 7
9–314. 8
(f) If a limited liability company, INCLUDING A LIMITED WORKER 9
COOPERATIVE ASSOCIAT ION OR COLLECTIVE WO RKER COOPERATIVE , or limited 10
liability partnership, including a limited partnership registered as a limited liability 11
limited partnership, is required to pay the motor fuel tax and interest and penalties on the 12
tax, personal liability for the tax and interest and penalties on the tax extends to any person 13
who exercises direct control over the fiscal management of the limited liability company or 14
limited liability partnership. 15
10–906. 16
(d) If an employer or payor negligently fails to withhold or to pay income tax in 17
accordance with subsection (a) of this section, personal liability for that income tax extends: 18
(1) to the employer or payor; 19
(2) if the employer or payor is a corporation, to: 20
(i) any officer of the corporation who exercises direct control over its 21
fiscal management; or 22
(ii) any agent of the corporation who is required to withhold and pay 23
the income tax; and 24
(3) if the employer or payor is a limited liability company as defined under 25
Title 4A of the Corporations and Associations Article, INCLUDING A LIMITED WORKER 26
COOPERATIVE ASSOCIAT ION OR A COLLECTIVE WORKER COOPERATIVE , or a limited 27
liability partnership as defined under Title 9A of the Corporations and Associations Article, 28
including a limited partnership registered as a limited liability limited partnership, to: 29
(i) any person who exercises direct control over its fiscal 30
management; and 31
(ii) any agent of the limited liability company or limited liability 32
partnership who is required to withhold and pay the income tax. 33
22 HOUSE BILL 15
11–601. 1
(d) If a buyer or vendor liable for the sales and use tax and for the interest and 2
penalties of the tax under subsection (c) of this section is a corporation or limited liability 3
company, INCLUDING A LIMITED WORKER COOPERATIVE A SSOCIATION OR A 4
COLLECTIVE WORKER CO OPERATIVE, or limited liability partnership (including a 5
limited partnership registered as a limited liability limited partnership), personal liability 6
for the sales and use tax and for the interest and penalties of the tax extends to: 7
(1) in the case of a corporation: 8
(i) the president, vice president, or treasurer of the corporation; and 9
(ii) any officer of the corporation who directly or indirectly owns 10
more than 20% of the stock of the corporation; [and] 11
(2) in the case of a limited liability company: 12
(i) if the limited liability company does not have an operating 13
agreement, all members; or 14
(ii) if the limited liability company has an operating agreement, 15
those individuals who manage the business and affairs of the limited liability company; and 16
(3) in the case of a limited liability partnership: 17
(i) if the limited liability partnership does not have a written 18
partnership agreement, all general partners; or 19
(ii) if the limited liability partnership has a written partnership 20
agreement, those individuals who manage the business and affairs of the limited liability 21
partnership. 22
SECTION 2. AND BE IT FURTHER ENACTE D, That a presently existing obligation 23
or contract right may not be impaired in any way by this Act. 24
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 25
October 1, 2026. 26