EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
Italics indicate opposite chamber/conference committee amendments.
*sb0144*
SENATE BILL 144
C1 (5lr1226)
ENROLLED BILL
— Judicial Proceedings/Economic Matters —
Introduced by Senator M. Washington
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
President.
CHAPTER ______
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
2 SENATE BILL 144
BY repealing and reenacting, with amendments, 1
Article – Corporations and Associations 2
Section 1–101(p), 1–203(b)(3) through (5) and (8), 1–401, 1–404, and 1–503(a) 3
Annotated Code of Maryland 4
(2014 Replacement Volume and 2024 Supplement) 5
BY adding to 6
Article – Corporations and Associations 7
Section 1–502(g); and 4A–12A–01 through 4A–12A–22 to be under the new subtitle 8
“Subtitle 12A. Maryland Limited Worker Cooperative Association Act” 9
Annotated Code of Maryland 10
(2014 Replacement Volume and 2024 Supplement) 11
BY repealing and reenacting, with amendments, 12
Article – Insurance 13
Section 2–108 14
Annotated Code of Maryland 15
(2017 Replacement Volume and 2024 Supplement) 16
BY repealing and reenacting, with amendments, 17
Article – Tax – General 18
Section 4–301(c), 9–314(f), 10–906(d), and 11–601(d) 19
Annotated Code of Maryland 20
(2022 Replacement Volume and 2024 Supplement) 21
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That the Laws of Maryland read as follows: 23
Article – Corporations and Associations 24
1–101. 25
(a) In this article, unless the context clearly requires otherwise, the following 26
words have the meanings indicated. 27
(p) “Governing document” means: 28
(1) The charter and the bylaws of a Maryland corporation or a foreign 29
corporation; 30
(2) The articles of organization or certificate of formation and the operating 31
agreement or limited liability company agreement of a domestic limited liability company 32
or a foreign limited liability company; 33
(3) The partnership agreement of an other entity that is a partnership or 34
limited partnership, any statement of partnership authority of a partnership, the certificate 35 SENATE BILL 144 3
of limited partnership of a limited partnership, and the certificate of limited liability 1
partnership of a limited liability partnership; 2
(4) The declaration of trust or governing instrument of a business trust or 3
a real estate investment trust; [or] 4
(5) THE ARTICLES OF ORGAN IZATION AND THE COOP ERATIVE 5
AGREEMENT OF A LIMIT ED WORKER COOPERATIV E ASSOCIATION; OR 6
[(5)] (6) A similar governing document or instrument of any other type of 7
entity. 8
1–203. 9
(a) In addition to any organization and capitalization fee required under § 1–204 10
of this subtitle, subject to subsection (c) of this section, the Department shall collect the fees 11
specified in subsection (b) of this section. 12
(b) (3) (i) For each of the following documents which are filed but not 13
recorded, the nonrefundable processing fee is as indicated: 14
Reservation of a corporate, limited partnership, limited liability partnership [or], 15
limited liability company, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N 16
name......................................................................................................................................$25 17
Original registration of name of a foreign corporation to end of calendar 18
year…………………………………………………………………………………………………. $100 19
Renewal of registration of name of a foreign corporation for 1 calendar 20
year……...............................................................................................................................$100 21
Documents in connection with the qualification of a foreign corporation to do 22
intrastate business in this State………………………………………………………………... $100 23
Application for registration of a foreign limited partnership, a foreign limited 24
liability partnership, or a foreign limited liability 25
company……………………… …………………………………………………... …………….. ...$100 26
Other documents…………………………………………… ………………………………..$ 6 27
(ii) Except as provided in paragraph (13) of this subsection, for each 28
of the following documents which are filed but not recorded, the filing fee is as indicated: 29
Annual report of a Maryland corporation, except a charitable or benevolent 30
institution, nonstock corporation, savings and loan corporation, credit union, family farm, 31
and banking institution .................................................................................................... $300 32 4 SENATE BILL 144
Annual report of a foreign corporation subject to the jurisdiction of this State, except 1
a national banking association, savings and loan association, credit union, nonstock 2
corporation, and charitable and benevolent institution…………………………………….. $300 3
Annual report of a Maryland savings and loan association, banking institution, or 4
credit union or of a foreign savings and loan association, national banking association, or 5
credit union that is subject to the jurisdiction of this State……………………………….. $300 6
Annual report of a Maryland limited liability company, limited liability partnership, 7
limited partnership, OR LIMITED WORKER CO OPERATIVE ASSOCIATION , or of a foreign 8
limited liability company, foreign limited liability partnership, or foreign limited 9
partnership, except a family farm……………………………………………………………… $300 10
Annual report of a business trust………………………………………………………. $300 11
Annual report of a real estate investment trust or foreign statutory trust doing 12
business in this State…………………………………………………………………………….. $300 13
Annual report of a family farm…………………………………………………………. $100 14
(4) For each of the following documents recorded or filed the nonrefundable 15
processing fee is $100: 16
(i) Certificate of limited partnership, certificate of limited liability 17
partnership, articles of organization of a limited liability company, ARTICLES OF 18
ORGANIZATION OF A LI MITED WORKER COOPERA TIVE ASSOCIATION , certificate of 19
trust of a business trust, including certificates of amendment, certificates of reinstatement, 20
and articles of reinstatement; and 21
(ii) Any statement filed by a partnership under Title 9A of this 22
article. 23
(5) For issuing each of the following certificates, the nonrefundable 24
processing fee is as indicated: 25
Type of Instrument Special Fee 26
Certificate of status of a corporation, partnership, limited partnership, limited 27
liability partnership, [or] limited liability company, OR LIMITED WORKER COOPE RATIVE 28
ASSOCIATION of this State or of a foreign corporation, foreign partnership, foreign limited 29
partnership, foreign limited liability partnership, or foreign limited liability company....$20 30
Certified list of the charter papers of a corporation of this State or any certificates of 31
a limited partnership, limited liability partnership, [or a] limited liability company, OR 32 SENATE BILL 144 5
LIMITED WORKER COOPE RATIVE ASSOCIATION of this State recorded or filed with the 1
Department...........................................................................................................................$20 2
Certificate of compliance by a foreign corporation, foreign limited partnership, 3
foreign limited liability partnership, or foreign limited liability company with requirements 4
of law in respect of qualification or registration………………………………………………. $20 5
Certificate of withdrawal of registration or qualification……………………………. $20 6
Certificate of any paper recorded or filed in the Department’s office………………. $20 7
(8) Subject to § 1–203.2(c) of this subtitle, for processing each of the 8
following documents on an expedited basis, the additional fee is as indicated: 9
Recording any document, including financing statements, or submitting for 10
preclearance any document listed in paragraph (1) or (4) of this subsection, if processing 11
under § 1–203.2(b)(1) of this subtitle is requested............................................................. $425 12
Recording any document, including financing statements, or submitting for 13
preclearance any document listed in paragraph (1) or (4) of this subsection, if processing 14
under § 1–203.2(b)(1) of this subtitle is not requested………………………………………… $50 15
Certificate of status of a corporation, partnership, limited partnership, limited 16
liability partnership, [or] limited liability company, OR LIMITED WORKER CO OPERATIVE 17
ASSOCIATION, or a name reservation………………………………………………………….. $20 18
Certified list of the charter documents of a Maryland corporation or any certificate 19
of a Maryland limited partnership, limited liability partnership, [or] limited liability 20
company, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N recorded or filed with the 21
Department…………………………………………………………………………………………. $20 22
A copy of any document recorded or filed with the Department, or a corporate 23
abstract..................................................................................................................................$20 24
Application for a ground rent redemption or a ground rent extinguishment, or 25
payment of a redemption or extinguishment amount to the former owner of the ground 26
rent.........................................................................................................................................$50 27
1–401. 28
(a) Service of process on the resident agent of a corporation, partnership, limited 29
partnership, limited liability partnership, limited liability company, LIMITED WORKER 30
COOPERATIVE ASSOCIAT ION, or real estate investment trust, or any other person 31
constitutes effective service of process under the Maryland Rules on the corporation, 32
partnership, limited partnership, limited liability partnership, limited liability company, 33
LIMITED WORKER COOPE RATIVE ASSOCIATION , or real estate investment trust, or other 34 6 SENATE BILL 144
person in any action, suit, or proceeding which is pending, filed, or instituted against it 1
under the provisions of this article. 2
(b) (1) Any notice required by law to be served by personal service on a 3
resident agent or other agent or officer of any Maryland or foreign corporation, partnership, 4
limited partnership, limited liability partnership, limited liability company, LIMITED 5
WORKER COOPERATIVE A SSOCIATION, or real estate investment trust required by 6
statute to have a resident agent in this State may be served on the corporation, partnership, 7
limited partnership, limited liability partnership, limited liability company, LIMITED 8
WORKER COOPERATIVE A SSOCIATION, or real estate investment trust in the manner 9
provided by the Maryland Rules relating to the service of process on corporations. 10
(2) Service under the Maryland Rules is equivalent to personal service on 11
a resident agent or other agent or officer of a corporation, partnership, limited partnership, 12
limited liability partnership, limited liability company, LIMITED WORKER COOPE RATIVE 13
ASSOCIATION, or real estate investment trust mentioned in paragraph (1) of this 14
subsection. 15
1–404. 16
(a) Any person who owns, operates, or directs an unincorporated organization, 17
firm, association, or other entity which includes in its name the word “corporation”, 18
“incorporated”, or, except as provided in subsection (b) of this section, “limited” or an 19
abbreviation of any of these words or which holds itself out to the public as a corporation is 20
guilty of a misdemeanor and on conviction is subject to a fine not exceeding $500. 21
(b) This section does not prohibit: 22
(1) A limited partnership from using the term “limited partnership” in its 23
name; 24
(2) A limited liability company from using the terms “limited liability 25
company” or “L.L.C.” in its name; [or] 26
(3) A limited liability partnership from using the terms “limited liability 27
partnership” or “L.L.P.” in its name; OR 28
(4) A LIMITED WORKER COOPE RATIVE ASSOCIATION F ROM USING 29
THE TERMS “LIMITED WORKER COOPE RATIVE ASSOCIATION ” OR “L.W.C.A.” IN ITS 30
NAME. 31
1–502. 32
(G) THE NAME OF A LIMITED WORKER COOPERATIVE A SSOCIATION MUST 33
INCLUDE: 34
SENATE BILL 144 7
(1) THE WORDS “LIMITED WORKER COOPE RATIVE ASSOCIATION ”; 1
(2) L.W.C.A.; OR 2
(3) LWCA. 3
1–503. 4
(a) An entity name may not contain language stating or implying that the entity 5
is organized for a purpose other than that allowed by the entity’s: 6
(1) Articles of incorporation, if the entity is a corporation; 7
(2) Articles of organization, if the entity is a limited liability company OR 8
LIMITED WORKER COOPE RATIVE ASSOCIATION; 9
(3) Certificate of limited liability partnership, if the entity is a limited 10
liability partnership; 11
(4) Certificate of limited partnership, if the entity is a limited partnership; 12
or 13
(5) Articles of incorporation, if the entity is a professional corporation. 14
SUBTITLE 12A. MARYLAND LIMITED WORKER COOPERATIVE ASSOCIATION ACT. 15
4A–12A–01. 16
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 17
INDICATED. 18
(B) “ASSEMBLY” MEANS ALL MEMBERS OF A LIMITED WORKER 19
COOPERATIVE ASSOCIAT ION WHO HAVE VOTING RIGH TS UNDER THIS SUBTIT LE AND 20
THE LIMITED WORKER C OOPERATIVE ASSOCIATI ON’S COOPERATIVE AGREEM ENT. 21
(C) “COLLECTIVE WORKER COO PERATIVE” MEANS A LIMITED WORK ER 22
COOPERATIVE ASSOCIAT ION THAT HAS ONLY ON E CLASS OF MEMBERS C ONSISTING 23
OF WORKER MEMBERS WHO MANAGE A LL OF THE AFFAIRS OF THE ASSOCIATION . 24
(D) “COOPERATIVE AGREEMENT ” MEANS THE OPERATING AGREEMENT OF 25
A LIMITED WORKER COO PERATIVE ASSOCIATION . 26
(E) “FOREIGN WORKER COOPER ATIVE” MEANS AN ENTITY FORM ED UNDER 27
THE LAWS OF A STATE OTHER THA N THIS STATE THAT IS SIMILAR TO AN ENTITY 28
FORMED UNDER THIS SU BTITLE. 29 8 SENATE BILL 144
(F) “INVESTOR MEMBER ” MEANS A MEMBER OF A LIMITED WORKER 1
COOPERATIVE ASSOCIAT ION WHO IS NOT REQUI RED OR PERMITTED TO CONDUCT 2
PATRONAGE WITH THE A SSOCIATION IN THE ME MBER’S CAPACITY AS AN INVESTOR 3
MEMBER IN ORDER TO RECEIVE OR RETAIN THE MEMBER ’S INTEREST IN THE 4
ASSOCIATION. 5
(G) “LIMITED WORKER COOPER ATIVE ASSOCIATION ” MEANS A MARYLAND 6
LIMITED LIABILITY CO MPANY THAT ELECTS TO BE A LIMITED WORKER 7
COOPERATIVE ASSOCIAT ION IN ACCORDANCE WI TH THIS SUBTITLE . 8
(H) “PATRON MEMBER ” MEANS A MEMBER OF A LIMITED WORKER 9
COOPERATIVE ASSOCIAT ION WHO IS REQUIRED OR PERMITTED TO COND UCT 10
PATRONAGE WITH THE A SSOCIATION. 11
(I) “PATRONAGE” MEANS BUSINESS TRANS ACTIONS BETWEEN A LI MITED 12
WORKER COOPERATIVE A SSOCIATION AND A PERS ON THAT ENTITLES THE PERSON 13
TO RECEIVE FINANCIAL RIGHTS BASED ON THE VALUE OR QUANTITY OF BUSINESS 14
BETWEEN THE ASSOCIAT ION AND THE PERSON . 15
(J) “REPRESENTATIVE ” MEANS A PERSON SERVI NG ON THE BOARD OF 16
REPRESENTATIVES OF A LIMITED WORKER COOPERATIVE ASSOCIAT ION. 17
(K) “VOTING POWER ” MEANS THE PROPORTION OF TOTAL VOTES ENTIT LED 18
TO BE CAST ON A MATT ER THAT ARE HELD BY A PARTICULAR MEMBER OR A GROUP 19
OR CLASS OF MEMBERS . 20
(L) “WORKER MEMBER ” MEANS A PATRON MEMBE R OF A LIMITED WORKE R 21
COOPERATIVE ASSOCIAT ION WHO IS A NATURAL PERSON AND WHOSE PAT RONAGE 22
CONSISTS OF OR INCLU DES LABOR CONTRIBUTE D TO OR FOR THE ASSO CIATION. 23
4A–12A–02. 24
(A) THE PROVISIONS OF THI S SUBTITLE APPLY TO LIMITED WORKER 25
COOPERATIVE ASSOCIAT IONS EXCEPT TO THE E XTENT THAT: 26
(1) THE CONTEXT OF A PROV ISION CLEARLY REQUIR ES OTHERWISE ; 27
OR 28
(2) A SPECIFIC PROVISION O F THIS TITLE PROVIDE S OTHERWISE. 29
(B) THIS SUBTITLE APPLIES ONLY TO A LIMITED WO RKER COOPERATIVE 30
ASSOCIATION. 31
SENATE BILL 144 9
(C) (1) THE EXISTENCE OF THIS SUBTITLE DOE S NOT OF ITSELF CREA TE 1
ANY IMPLICATION THAT A CONTRARY OR DIFFER ENT RULE OF LAW IS O R WOULD BE 2
APPLICABLE TO A LIMI TED LIABILITY COMPAN Y THAT IS NOT A LIMI TED WORKER 3
COOPERATIVE ASSOCIAT ION. 4
(2) THIS SUBTITLE DOES NO T AFFECT ANY STATUTE OR RULE OF LAW 5
AS IT APPLIES TO A LIMITED LIABILITY COMP ANY THAT IS NOT A LI MITED WORKER 6
COOPERATIVE ASSOCIAT ION. 7
(D) A PROVISION OF THE ART ICLES OF ORGANIZATIO N OR COOPERATIVE 8
AGREEMENT OF A LIMIT ED WORKER COOPERATIV E ASSOCIATION MAY NO T BE 9
INCONSISTENT WITH AN Y PROVISION OF THIS SUBTITLE . 10
4A–12A–03. 11
UNLESS OTHERWISE PROV IDED IN THIS SUBTITL E, THE POLICY OF THIS 12
SUBTITLE IS TO GIVE MAXIMUM EFFECT TO TH E PRINCIPLE OF DEMOC RATIC 13
SELF–MANAGEMENT OF A LIMI TED WORKER COOPERATI VE ASSOCIATION BY IT S 14
WORKER MEMBERS . 15
4A–12A–04. 16
(A) A LIMITED LIABILITY CO MPANY MAY ELECT TO B E A LIMITED WORKER 17
COOPERATIVE ASSOCIAT ION UNDER THIS SUBTI TLE BY INCLUDING IN ITS ARTICLES 18
OF ORGANIZATION A ST ATEMENT THAT THE LIM ITED LIABILITY COMPA NY IS A 19
LIMITED WORKER COOPE RATIVE ASSOCIATION . 20
(B) A LIMITED LIABILITY CO MPANY THAT HAS ELECT ED TO BE A LIMITED 21
WORKER COOPERATIVE A SSOCIATION MAY FURTH ER ELECT TO BE A COL LECTIVE 22
WORKER COOPERATIVE B Y INCLUDING IN ITS A RTICLES OF ORGANIZAT ION A 23
STATEMENT THAT IT IS A COLLECTIVE WORKER COOPERATIVE . 24
(C) UNLESS THE LIMITED WO RKER COOPERATIVE ASS OCIATION HAS 25
ELECTED TO BE A COLL ECTIVE WORKER COOPER ATIVE, THE ARTICLES OF 26
ORGANIZATION OF A LI MITED WORKER COOPERA TIVE ASSOCIATION SHA LL INCLUDE 27
THE NAMES OF THOSE I NDIVIDUALS WHO WILL SERVE AS REPRESENTAT IVES UNTIL 28
THEIR SUCCESSORS ARE ELECTED AND QUALIFY . 29
(D) THE NAME OF A LIMITED WORKER COOPERATIVE A SSOCIATION SHALL 30
COMPLY WITH THE REQU IREMENTS OF TITLE 1, SUBTITLE 5 OF THIS ARTICLE. 31
4A–12A–05. 32
10 SENATE BILL 144
(A) THIS SECTION DOES NOT APPLY TO A COLLECTIV E WORKER 1
COOPERATIVE . 2
(B) AFTER A LIMITED WORKE R COOPERATIVE ASSOCI ATION IS FORMED : 3
(1) IF INITIAL REPRESENTA TIVES ARE NAMED IN THE ART ICLES OF 4
ORGANIZATION , THE INITIAL REPRESEN TATIVES SHALL HOLD AN ORGANI ZATIONAL 5
MEETING TO ADOPT THE COOPERATIVE AGREEMEN T AND CARRY ON ANY OTHER 6
BUSINESS NECESSARY O R PROPER TO COMPLETE THE ORGANIZATION OF THE 7
ASSOCIATION; OR 8
(2) IF INITIAL REPRESENTA TIVES ARE NOT NAMED IN THE ARTICLES 9
OF ORGANIZATION , THE PERSON WHO HAS C AUSED THE ARTICLES T O BE EXECUTED 10
AND FILED FOR RECOR D SHALL DESIGNATE TH E INITIAL REPRESENTA TIVES AND 11
CALL A MEETING OF TH E INITIAL REPRESENTA TIVES TO ADOPT AN INITIAL 12
COOPERATIVE AGREEMEN T AND CARRY OUT ANY OTHER BUSINESS NECES SARY AND 13
PROPER TO COMPLETE T HE ORGANIZATION OF T HE ASSOCIATION . 14
(C) UNLESS PROVIDED OTHERWISE IN THE ARTICLES OF ORGA NIZATION, 15
THE INITIAL REPRESEN TATIVES MAY CAUSE THE LIMITE D WORKER COOPERATIVE 16
ASSOCIATION TO ACCEP T MEMBERS. 17
(D) INITIAL REPRESENTATIV ES OF A LIMITED WORKER COOPERATIVE 18
ASSOCIATION NEED NOT BE MEMBERS OF THE AS SOCIATION. 19
(E) AN INITIAL REPRESENTA TIVE SERVES UNTIL: 20
(1) A SUCCESSOR IS ELECTED AND QUALIFIES AT AN ASSEMBLY 21
MEETING; OR 22
(2) THE REPRESENTATIVE IS REMOVED. 23
4A–12A–06. 24
AFTER A COLLECTIVE WO RKER COOPERATIVE IS FORMED, THE INITIAL 25
WORKER MEMBERS SHALL HOLD AN ORGANI ZATIONAL MEETING TO ADOPT THE 26
COOPERATIVE AGREEMEN T AND CONDUCT ANY OT HER BUSINESS NECESSA RY OR 27
PROPER TO COMPLETE T HE ORGANIZATION OF T HE COLLECTIVE WORKER 28
COOPERATIVE . 29
4A–12A–07. 30
CLEAR REFERENCE TO TH E FACT THAT A LIMITE D LIABILITY COMPANY IS A 31
LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL APPEAR PROMINEN TLY: 32 SENATE BILL 144 11
(1) AT THE HEAD OF THE AR TICLES OF ORGANIZATI ON OR AN 1
AMENDMENT MADE TO TH E ARTICLES OF ORGANI ZATION IN WHICH THE ELECTION 2
TO BE A LIMITED WORK ER COOPERATIVE ASSOC IATION IS MADE; 3
(2) AT THE HEAD OF EACH S UBSEQUENT ARTICLES O F ORGANIZATION 4
OF THE LIMITED WORKE R COOPERATIVE ASSOCI ATION; AND 5
(3) ON EACH CERTIFICATE R EPRESENTING OUTSTAND ING 6
MEMBERSHIP INTERESTS IN THE LIMITED WORKE R COOPERATIVE ASSOCI ATION. 7
4A–12A–08. 8
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , A LIMITED WORKER 9
COOPERATIVE ASSOCIAT ION MAY TERMINATE IT S STATUS AS A LIMITE D WORKER 10
COOPERATIVE ASSOCIAT ION BY AMENDING ITS ARTICLES OF ORGANIZA TION TO 11
DELETE THE STATEMENT S REQUIRED BY § 4A–12A–04 OF THIS SUBTITLE. 12
(B) ANY TERMINATION OF A LIMITED WORKER COOPE RATIVE 13
ASSOCIATION’S STATUS SHALL BE SU BJECT TO THE APPROVA L OF TWO–THIRDS OF 14
THE VOTING POWER OF WORKER MEMBERS AND T WO–THIRDS OF ALL MEMBERS 15
ENTITLED TO VOTE ON THE MATTER. 16
4A–12A–09. 17
(A) THE COOPER ATIVE AGREEMENT OF A LIMITED WORKER COOPE RATIVE 18
ASSOCIATION SHALL IN CLUDE: 19
(1) A STATEMENT OF THE CAP ITAL STRUCTURE OF TH E ASSOCIATION; 20
(2) THE CLASSES OR OTHER TYPES OF MEMBERSHIP INTERESTS AND 21
RELATIVE RIGHTS , PREFERENCES , AND RESTRICTIONS GRA NTED TO OR IMPOSED 22
ON EACH CLASS OR OTH ER TYPE OF MEMBERSHI P INTEREST, INCLUDING: 23
(I) A STATEMENT CONCERNING : 24
1. THE MANNER IN WHICH P ROFITS AND LOSSES AR E 25
ALLOCATED AND DISTRI BUTIONS ARE MADE AMO NG MEMBERS ; AND 26
2. IF INVESTOR MEMBERS A RE AUTHORIZED , THE 27
MANNER IN WHICH PROF ITS AND LOSSES ARE A LLOCATED AND DISTRIB UTIONS ARE 28
MADE AMONG INVESTOR MEMBERS; AND 29
12 SENATE BILL 144
(II) A STATEMENT DESIGNATIN G VOTING AND OTHER 1
GOVERNANCE RIGHTS OF EACH CLASS OR OTHER TYPE OF MEMBERSHIP I NTEREST, 2
INCLUDING WHICH MEMBERS HAVE VOTING POWER AND ANY RESTRI CTIONS ON 3
VOTING POWER ; 4
(3) A STATEMENT OF THE MET HOD OF ADMISSION OF MEMBERS; 5
(4) A STATEMENT THAT A MEM BERSHIP INTEREST IS TRANSFERABLE , 6
IF IT IS TO BE TRANS FERABLE, AND A STATEMENT OF T HE CONDITIONS UNDER 7
WHICH IT MAY BE TRANSF ERRED; 8
(5) A STATEMENT CONCERNING WHETHER AND HOW PERS ONS THAT 9
ARE NOT MEMBERS BUT CONDUCT BUSINESS WIT H THE ASSOCIATION MA Y BE 10
ALLOWED TO SHARE IN ALLOCATIONS OF PROFI TS AND LOSSES AND RE CEIVE 11
DISTRIBUTIONS ; 12
(6) A STATEMENT OF TH E NUMBER AND TERMS O F 13
REPRESENTATIVES OR THE METHOD BY WHI CH THE NUMBER AND TE RMS ARE 14
DETERMINED ; 15
(7) A STATEMENT ADDRESSING MEMBERS’ CONTRIBUTIONS ; AND 16
(8) A STATEMENT ON WHETHER THE LIMITED WORKER C OOPERATIVE 17
ASSOCIATION WILL ELE CT TO BE TAXED AS A PARTNERSHIP OR A C ORPORATION FOR 18
FEDERAL AND STATE INCOME TAX PURP OSES THAT INCLUDES A N EXPLANATION OF 19
THE TAX IMPLICATIONS OF THE ELECTION FOR THE WORKER MEMBERS . 20
(B) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 21
ASSOCIATION MAY CONT AIN ANY PROVISION FOR MANA GING AND REGULATING THE 22
AFFAIRS OF THE ASSOC IATION NOT INCONSIST ENT WITH ITS ARTICLE S OF 23
ORGANIZATION OR THIS TITLE. 24
(C) A PERSON THAT BECOMES A MEMBER OF A LIMITE D WORKER 25
COOPERATIVE ASSOCIAT ION IS DEEMED TO ASS ENT TO THE COOPERATI VE 26
AGREEMENT OF THE ASS OCIATION. 27
(D) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 28
ASSOCIATION MAY BE E NTERED INTO BEFORE , AFTER, OR AT THE TIME OF FI LING 29
OF ARTICLES OF ORGAN IZATION AND MAY BE M ADE EFFECTIVE AS OF : 30
(1) THE TIME OF FORMATION OF THE ASSOCIATION ; OR 31
(2) THE TIME OR DATE PROV IDED IN THE COOPERAT IVE AGREEMENT . 32
SENATE BILL 144 13
4A–12A–10. 1
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY INCLUDE 2
MULTIPLE CLASSES OF MEMBERS WHOSE RIGHTS AND MEMBERSHIP INTER ESTS 3
SHALL BE DETERMINED BY THE COOPERATIVE AGREEMEN T. 4
(B) TO BEGIN BUSINESS , A LIMITED WORKER COO PERATIVE ASSOCIATION 5
MUST HAVE AT LEAST T HREE WORKER MEMBERS UNLESS THE SOLE MEMB ER IS A 6
LIMITED WORKER COOPE RATIVE ASSOCIATION . 7
(C) A PERSON BECOMES A MEM BER OF A LIMITED WOR KER COOPERA TIVE 8
ASSOCIATION: 9
(1) AS PROVIDED IN THE AR TICLES OF ORGANIZATI ON OR 10
COOPERATIVE AGREEMEN T; 11
(2) AS THE RESULT OF A ME RGER UNDER SUBTITLE 7 OF THIS TITLE; 12
(3) AS A RESULT OF A CONV ERSION UNDER THIS AR TICLE, IN WHICH 13
ANOTHER ENTITY ELECT S TO BE A LIMITED WORKER COOPERA TIVE ASSOCIATION 14
UNDER THIS SUBTITLE ; OR 15
(4) WITH THE CONSENT OF A LL OF THE WORKER MEM BERS. 16
(D) A MEMBER MAY NOT ACT F OR OR BIND THE LIMIT ED WORKER 17
COOPERATIVE ASSOCIAT ION SOLELY BY REASON OF BEING A MEMBER . 18
(E) UNLESS THE ARTICL ES OF ORGANIZATION P ROVIDE OTHERWISE , A 19
DEBT, AN OBLIGATION , OR ANY OTHER LIABILI TY OF A LIMITED WORK ER 20
COOPERATIVE ASSOCIAT ION IS SOLELY THAT O F THE ASSOCIATION AN D IS NOT THE 21
DEBT, OBLIGATION, OR LIABILITY OF A ME MBER. 22
(F) (1) THE ORGANIZATION OF A LIMITED WORKER COOPERAT IVE 23
ASSOCIATION UNDER TH IS SUBTITLE DOES NOT CREATE A PRESUMPTION THAT 24
WORKER MEMBERS ARE E MPLOYEES OF THE ASSO CIATION FOR ANY PURP OSE. 25
(2) IF A LIMITED WORKER C OOPERATIVE ASSOCIATI ON IS TAXED AS A 26
PARTNERSHIP FOR FEDE RAL AND STATE INCOME TAX PURPOSES , THAT FACT MAY 27
NOT BE CONSTRUED TO REQUIRE THAT A WORKE R MEMBER BE CONSIDER ED AN 28
EMPLOYEE UNDER ANY STATE LAW. 29
4A–12A–11. 30
14 SENATE BILL 144
(A) IN THIS SECTION , “ACTUAL PAYROLL VALUE ” MEANS THE TOTAL 1
AMOUNT OF MONEY PAID TO AN EMPLOYEE AFTER TAXES AND DEDUCTIONS AND 2
INCLUDES THE BASE SA LARY, BONUSES, OVERTIME, LEAVE BENEFITS , 3
COMMISSIONS , AND TIPS. 4
(A) (B) AN INSURER, AS DEFINED IN § 1–101 OF THE INSURANCE 5
ARTICLE, THAT PROVIDES WORKER S’ COMPENSATION INSURAN CE TO MEMBERS OF 6
A LIMITED WORKER COO PERATIVE ASSOCIATION FORME D UNDER THIS SUBTITL E 7
SHALL CALCULATE PREM IUMS FOR MEMBERS WHO ARE COVERED EMPLOYEE S: 8
(1) IN ACCORDANCE WITH TITLE 11, SUBTITLE 3 AND TITLE 19, 9
SUBTITLE 4 OF THE INSURANCE ARTICLE; AND 10
(2) BASED ON THE COVERED EMPLOYEE’S ACTUAL PAYROLL VALUE . 11
(B) (C) (1) THE MARYLAND INSURANCE COMMISSIONER MAY SHALL 12
ENFORCE THIS SECTION . 13
(2) ALL HEARINGS , ORDERS, AND APPEALS ARISING UNDER THIS 14
SECTION SHALL BE GOV ERNED BY TITLE 11, SUBTITLE 5 OF THE INSURANCE 15
ARTICLE. 16
(D) THIS SECTION MAY NOT BE CONSTRUED TO PROHIBIT A LIMITED 17
WORKER COOPERATIVE A SSOCIATION FROM ACQU IRING OTHER FORMS OF 18
INSURANCE. 19
4A–12A–12. 20
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL HAVE AN 21
ASSEMBLY AS CONSTITU TED BY THE BODY OF A LL VOTING MEMBERS . 22
(B) AN INDIVIDUAL IS NOT AN AG ENT OF A LIMITED WOR KER COOPERATIVE 23
ASSOCIATION SOLELY B Y BEING A MEMBER OF THE ASSEMBLY . 24
(C) A DEBT, AN OBLIGATION , OR ANY OTHER LIABILI TY OF A LIMITED 25
WORKER COOPERATIVE A SSOCIATION IS SOLELY THAT OF THE ASSOCIAT ION AND IS 26
NOT A DEBT, AN OBLIGATION , OR A LIABILITY OF A MEMBER OF THE ASSEMB LY 27
SOLELY BY REASON OF BEING A VOTING MEMBE R. 28
4A–12A–13. 29
(A) THE ASSEMBLY SHALL ME ET ANNUALLY AT A TIM E: 30
SENATE BILL 144 15
(1) PROVIDED IN THE ARTIC LES OF ORGANIZATION OR COOPERATIVE 1
AGREEMENT ; OR 2
(2) SET BY THE BOARD OF REPRESE NTATIVES THAT IS CONSISTENT 3
WITH THE ARTICLES OF ORGANIZATION OR COOP ERATIVE AGREEMENT . 4
(B) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 5
MEMBERS MAY ATTEND O R CONDUCT THE ANNUAL ASSEMBLY MEETING THR OUGH 6
ANY MEANS OF COMMUNICATION IF ALL MEMBERS ATTENDING TH E MEETING ARE 7
ABLE TO COMMUNICATE WITH EACH OTHER DURI NG THE MEETING . 8
(C) THE BOARD OF REPRESEN TATIVES SHALL REPORT , OR CAUSE TO BE 9
REPORTED, AT THE ANNUAL ASSEMB LY MEETING THE ASSOC IATION’S BUSINESS 10
AND FINANCIAL CONDITION AS OF THE CLOSE OF THE MOST RE CENT FISCAL YEAR . 11
(D) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 12
THE BOARD OF REPRESE NTATIVES SHALL DESIGNATE THE PRESIDING OFFICER OF 13
THE ANNUAL ASSEMBLY MEETING. 14
(E) FAILURE TO HOLD AN AN NUAL ASSEMBLY MEETING DOES NOT AFFECT 15
THE VALIDITY OF ANY ACTION TAKEN BY THE LIMITED WORKER COOPE RATIVE 16
ASSOCIATION. 17
(F) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , A LIMITED 18
WORKER COOPERATIVE A SSOCIATION SHALL NOT IFY EACH MEMBER OF T HE TIME, 19
DATE, AND PLACE OF A MEETING O F THE MEMBERS AT LEA ST 10 AND NOT MORE 20
THAN 60 DAYS BEFORE THE ANNU AL ASSEMBLY MEETING . 21
(2) IF THE NOTICE IS OF A MEETING OF THE MEMBE RS IN ONE OR 22
MORE CLASSES OF MEMB ERS, THE NOTICE SHALL BE GIVEN ONLY TO MEMBER S IN 23
THOSE CLASSES . 24
4A–12A–14. 25
(A) (1) A SPECIAL MEETING OF T HE ASSEMBLY MAY BE C ALLED ONLY: 26
(I) AS PROVIDED FOR IN TH E COOPERATIVE AGREEM ENT; 27
(II) BY A MAJORITY OF VOTE S OF THE BOARD OF 28
REPRESENTATIVES ON A PROPOSAL STATIN G THE PURPOSE OF THE SPECIAL 29
MEETING; OR 30
16 SENATE BILL 144
(III) BY DEMAND IN A RECORD SIGNED BY MEMBERS HO LDING 1
AT LEAST 20% OF THE VOTING POWER OF THE PERSONS ENTIT LED TO VOTE ON THE 2
MATTER THAT IS THE P URPOSE OF THE SPECIA L MEETING. 3
(2) A DEMAND UNDER PARAGRA PH (1)(III) OF THIS SUBSECTION 4
SHALL BE SUBMITTE D TO: 5
(I) THE OFFICER OF THE LI MITED WORKER COOPERA TIVE 6
ASSOCIATION CHARGED WITH KEEPING THE REC ORDS OF THE ASSOCIAT ION; OR 7
(II) IF NO OFFICER HAS BEE N CHARGED WITH KEEPI NG THE 8
RECORDS OF THE ASSOC IATION, A REPRESENTATIVE . 9
(3) ANY VOTING MEMBER MAY WITHDRAW THE MEM BER’S DEMAND 10
UNDER PARAGRAPH (1)(III) OF THIS SUBSECTION B EFORE RECEIPT BY THE LIMITED 11
WORKER COOPERATIVE A SSOCIATION OF DEMAND S SUFFICIENT TO REQU IRE A 12
SPECIAL MEETING OF T HE ASSEMBLY. 13
(B) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 14
MEMBERS MAY ATTEND O R CONDUCT THE SPECIA L ASSEMBLY MEETING T HROUGH 15
ANY MEANS OF COMMUNI CATION IF ALL MEMBER S ATTENDING THE MEET ING ARE 16
ABLE TO COMMUNICATE WITH EACH OTHER DURI NG THE MEETING . 17
(C) ONLY BUSINESS WITHIN THE PURPOSES STATED IN THE NOTICE OF 18
SPECIAL MEETING MAY BE CONDUCTED AT THE MEETING. 19
(D) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 20
THE PRESIDING OFFICE R OF A SPECIAL MEETI NG SHALL BE DESIGNAT ED BY THE 21
BOARD OF REPRESENTAT IVES. 22
4A–12A–15. 23
(A) THE ARTICLES O F ORGANIZATION OR CO OPERATIVE AGREEMENT MAY 24
ALLOCATE VOTING POWE R AMONG MEMBERS ON T HE BASIS OF ONE OR M ORE OF 25
THE FOLLOWING : 26
(1) ONE MEMBER, ONE VOTE; 27
(2) IF A MEMBER IS A COOP ERATIVE, THE NUMBER OF ITS ME MBERS; 28
OR 29
(3) SUBJECT TO SUBSECTION (B) OF THIS SECTION , USE OR 30
PATRONAGE . 31
SENATE BILL 144 17
(B) IF VOTING POWER IS AL LOCATED ON THE BASIS OF USE OR PATRONAGE 1
AND A WORKER MEMBER WOULD BE DENIED A VO TE BECAUSE THE WORKE R 2
MEMBER DID NOT USE T HE LIMITED WORKER CO OPERATIVE ASSOCIATIO N OR 3
CONDUCT PATRONAGE WI TH IT, THE WORKER MEMBER SHALL BE ALLO CATED A 4
VOTE EQUAL TO AT LEA ST THE MINIMUM VOTIN G POWER ALLOCATED TO WORKER 5
MEMBERS WHO USED THE ASSOCIATION OR CONDU CTED PATRONAGE WITH IT. 6
(C) THE ARTICLES OF ORGAN IZATION OR COOPERATI VE AGREEMENT MAY 7
PROVIDE FOR THE ALLO CATION OF MEMBER VOT ING POWER BY CLASS . 8
(D) INVESTOR MEMBERS ARE NOT ENTITLED TO VOTE UNLESS THE 9
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT PROVIDES O THERWISE. 10
(E) (1) THIS SUBSECTION DOES NOT APPLY WHERE THIS TITLE OR THE 11
ARTICLES OF ORGANIZA TION OR COOPERATIVE AG REEMENT REQUIRE A HIGHER 12
VOTING THRESHOLD THA N IS REQUIRED BY PAR AGRAPH (2) OF THIS SUBSECTION . 13
(2) NOTWITHSTANDING ANY P ROVISION OF THE ARTI CLES OF 14
ORGANIZATION OR COOP ERATIVE AGREEMENT , ALL REPRESENTATIVES SHALL BE 15
ELECTED AND ALL OTHER DECISIONS WITH IN THE AUTHORITY OF THE ASSEMBLY 16
SHALL BE MADE BY A M AJORITY VOTE OF : 17
(I) THE WORKER MEMBERS OF THE ASSOCIATION ; AND 18
(II) THE VOTING POWER OF M EMBERS ENTITLED TO V OTE ON 19
THE ELECTION OR DECI SION. 20
4A–12A–16. 21
(A) THIS SECTION D OES NOT APPLY TO A C OLLECTIVE WORKER 22
COOPERATIVE . 23
(B) A LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL HAVE A BOARD 24
OF REPRESENTATIVES CONSISTING OF AT LEA ST THREE INDIVIDUALS . 25
(C) (1) THE AFFAIRS OF A LIMI TED WORKER COOPERATI VE ASSOCIATION 26
SHALL BE MANA GED BY THE BOARD OF REPRESENTATIVES OR INDIVIDUALS TO 27
WHOM THE BOARD DELEG ATES SUCH DUTIES . 28
(2) THE BOARD OF REPRESEN TATIVES MAY ADOPT PO LICIES AND 29
PROCEDURES CONSISTEN T WITH THE ARTICLES OF ORGANIZATION , THE 30
COOPERATIVE AGREEMEN T, OR THIS TITLE. 31
18 SENATE BILL 144
(D) AN INDIVIDUAL IS NOT AN AGENT OF A LIMITE D WORKER COOPERATIVE 1
ASSOCIATION SOLELY B Y BEING A REPRESENTA TIVE. 2
(E) 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 OBLIGATION , OR A LIABILITY OF A REPRESENTATIVE SOLELY BY 5
REASON OF BEING A RE PRESENTATIVE . 6
(F) REPRESENTATIVES SHALL BE ELECTED FOR TERMS DETERMINED BY 7
THE COOPERATIVE AGRE EMENT. 8
4A–12A–17. 9
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION I S DISSOLVED AND 10
SHALL COMMENCE THE W INDING UP OF ITS AFF AIRS ON THE FIRST TO OCCUR OF 11
THE FOLLOWING : 12
(1) AT THE TIME OR ON THE HAPPENING OF THE EVE NTS SPECIFIED 13
IN THE ARTICLES OF O RGANIZATION OR THE C OOPERATIVE AGREEMENT ; 14
(2) UNLESS A HIGHER THRES HOLD IS STATED IN THE COOPER ATIVE 15
AGREEMENT , AT THE TIME SPECIFIE D BY: 16
(I) A TWO–THIRDS VOTE OF THE WORKER MEMBERS ; AND 17
(II) A TWO–THIRDS VOTE OF THE VOTING POWER OF ALL 18
MEMBERS OF THE ASSEM BLY; 19
(3) AT THE TIME OF THE EN TRY OF A DECREE OF J UDICIAL 20
DISSOLUTION UNDER § 4A–903 OF THIS TITLE; OR 21
(4) UNLESS OTHERWISE AGRE ED OR AS PROVIDED IN SUBSECTION 22
(B) OF THIS SECTION , AT THE TIME THE LIMI TED WORKER COOPERATI VE 23
ASSOCIATION HAS HAD NO MEMBERS FOR A PER IOD OF 90 CONSECUTIVE DAYS . 24
(B) (1) A LIMITED WORKER COOPERATIVE A SSOCIATION MAY NOT B E 25
DISSOLVED OR REQUIRE D TO WIND UP ITS AFF AIRS IF WITHIN 90 DAYS AFTER THERE 26
ARE NO REMAINING MEM BERS OF THE LIMITED WORKER COOPERATIVE 27
ASSOCIATION OR WITHI N THE PERIOD OF TIME PROVIDED IN THE COOP ERATIVE 28
AGREEMENT : 29
(I) THE LAST REMAINING ME MBER’S SUCCESSOR OR ASSIG NEE 30
AGREES IN WRITING TO CONTINUE THE LIMITED WORKER COOPERATIVE 31
ASSOCIATION AND TO B E ADMITTED AS A MEMB ER OR TO APPOINT A D ESIGNEE AS A 32 SENATE BILL 144 19
MEMBER TO BE EFFECTI VE AS OF THE TIME TH E LAST REMAINING MEM BER CEASED 1
TO BE A MEMBER ; OR 2
(II) A MEMBER IS ADMITTED T O THE LIMITED WORKER 3
COOPERATIVE ASSOCIAT ION IN THE MANNER SE T FORTH IN THE COOPE RATIVE 4
AGREEMENT TO BE EFFE CTIVE AS OF THE TIME THE LAST REMAINING M EMBER 5
CEASED TO BE A MEMBE R UNDER A PROVISION IN THE COOPERATIVE AGRE EMENT 6
THAT PROVIDES FOR TH E ADMISSION OF A MEM BER AFTER THERE ARE NO 7
REMAINING MEMBERS . 8
(2) IF A NEW MEMBER IS NO T ADMITTED TO THE LI MITED WORKER 9
COOPERATIVE ASSOCIAT ION IN ACCORDANCE WI TH PARAGRAPH (1) OF THIS 10
SUBSECTION, AND THE LAST REMAINING MEMBER CEASED TO BE A MEMBE R UNDER 11
§ 4A–606(5) OF THIS TITLE , THE LAST REMAINING M EMBER’S PERSONAL 12
REPRESENTATIVE OR GU ARDIAN SHALL AUTOMAT ICALLY BE ADMITTED A S A NEW 13
MEMBER OF THE LIMITE D WORKER COOPERATIVE ASSOCIATION, EFFECTIVE 14
IMMEDIATELY ON THE HAPPENING OF THE EVENT DESCRIBED IN § 4A–606(5) OF 15
THIS TITLE, UNLESS WITHIN 90 DAYS AFTER THE PERSO NAL REPRESENTATIVE O R 16
GUARDIAN FIRST HAS K NOWLEDGE OF THE EVEN T, THE PERSONAL 17
REPRESENTATIVE OR GU ARDIAN: 18
(I) RENOUNCES THAT ADMISS ION IN WRITING; OR 19
(II) DESIGNATES A PERSON T O BECOME A NEW MEMBE R, AND 20
THE DESIGNEE ACCEPTS THE DESIGNEE ’S ADMISSION IN WRITI NG OR BY 21
ELECTRONIC COMMUNICA TION TO THE PERSONAL REPRESENTATIVE OR GU ARDIAN. 22
(C) A COOPERATIVE AGREEMEN T MAY PROVIDE THAT T HE LAST REMAIN ING 23
MEMBER’S PERSONAL REPRESENT ATIVE, GUARDIAN, SUCCESSOR, OR ASSIGNEE 24
SHALL BE OBLIGATED T O AGREE IN WRITING T O CONTINUE THE LIMIT ED LIABILITY 25
COMPANY AND TO BE AD MITTED AS A MEMBER O R TO APPOINT A DESIG NEE AS A 26
MEMBER TO BE EFFECTI VE AS OF THE TIME TH E LAST REMAINING MEMBER CEASED 27
TO BE A MEMBER . 28
(D) UNLESS OTHERWISE AGRE ED AND SUBJECT TO TH E PROVISIONS OF 29
SUBSECTIONS (A)(4) AND (B) OF THIS SECTION , THE TERMINATION OF A PERSON’S 30
MEMBERSHIP MAY NOT C AUSE A LIMITED WORKE R COOPERATIVE ASSOCI ATION TO 31
BE DISSOLVED OR TO WIND UP ITS AFFAIRS AND THE LIMITED WORKER 32
COOPERATIVE ASSOCIAT ION SHALL CONTINUE I N EXISTENCE FOLLOWIN G THE 33
TERMINATION OF A PER SON’S MEMBERSHIP . 34
4A–12A–18. 35
20 SENATE BILL 144
IF A MEMBER DIES , THE DECEASED MEMBER ’S PERSONAL REPRESENT ATIVE 1
MAY EXERCISE , FOR THE PURPOSE OF SETTL ING THE ESTATE , THE RIGHTS THE 2
DECEASED MEMBER WAS ENTITLED TO UNDER § 4A–406 OF THIS TITLE. 3
4A–12A–19. 4
(A) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 5
THE PROFITS AND LOSS ES OF A LIMITED WORK ER COOPERATIVE ASSOCIATION 6
SHALL BE APPORTIONED AND DISTRIBUTED IN T HE MANNER SPECIFIED BY THE 7
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT . 8
(2) PROFITS DECLARED AS P ATRONAGE ALLOCATIONS WITH 9
RESPECT TO A PERIOD OF TIME AND PAID OR CREDITED TO PATRON M EMBERS 10
SHALL BE APPORTIONED AMO NG THE PATRON MEMBER S IN ACCORDANCE WITH THE 11
RATIO OF EACH PATRON MEMBER’S PATRONAGE DURING T HE APPLICABLE TIME 12
PERIOD TO THE TOTAL PATRONAGE BY ALL PAT RON MEMBERS DURING T HAT 13
PERIOD. 14
(B) THE APPORTIONMENT , DISTRIBUTION, AND PAYMENT O F NET 15
EARNINGS OF THE LIMI TED WORKER COOPERATI VE ASSOCIATION MAY B E IN CASH, 16
CREDITS, OR WRITTEN NOTICES O F ALLOCATION ISSUED BY THE ASSOCIATION . 17
4A–12A–20. 18
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY ESTABLISH , 19
THROUGH THE ARTICLES OF ORGANIZATION OR COOPERATIVE AGREE MENT, A 20
SYSTEM OF INTERNAL C APITAL ACCOUNTS TO R EFLECT THE BOOK VALU E AND TO 21
DETERMINE THE REDEMP TION PRICE OF MEMBER SHIP INTERESTS AND W RITTEN 22
NOTICES OF ALLOCATIO N. 23
(B) THE ARTICLES OF ORGAN IZATION OR COOPERATI VE AGREEMENT : 24
(1) MAY ALLOW THE PERIODI C REDEMPTION OF WRIT TEN NOTICES 25
OF ALLOCATION ; AND 26
(2) SHALL PROVIDE FOR REC ALL AND REDEMPTION O F MEMBERSHIP 27
INTERESTS ON TERMINA TION OF MEMBERSHIP I N THE LIMITED WORKER 28
COOPERATIVE ASSOCIAT ION. 29
(C) (1) A LIMITED WORKER COOPE RATIVE ASSOCIATION MAY AL LOCATE 30
A PORTION OF RETAINE D NET EARNINGS AND N ET LOSSES TO A COLLE CTIVE 31
RESERVE ACCOUNT . 32
SENATE BILL 144 21
(2) EARNINGS OF A LIMITED WORKER COOPERATIVE A SSOCIATION 1
ASSIGNED TO A COLLEC TIVE RESERVE ACCOUNT MAY BE USED FOR ANY PURPOSE 2
DETERMINED BY : 3
(I) IN THE CASE OF A COLL ECTIVE WORKER COOPER ATIVE, THE 4
MEMBERS; OR 5
(II) IN THE CASE OF A LIMI TED WORKER COOPERATI VE 6
ASSOCIATION OTHER TH AN A COLLECTIVE WORK ER COOPERATIVE , THE BOARD OF 7
REPRESENTATIVES . 8
4A–12A–21. 9
(A) ANY MEMBERSHIP INTERE ST, PATRONAGE REFUND , PER UNIT RETAIN 10
CERTIFICATE, EQUITY INSTRUMENT , OR EVIDENCE OF MEMBE RSHIP INTEREST 11
ISSUED, OFFERED, OR SOLD BY A LIMITED WORKER COOPERATIVE A SSOCIATION IS 12
EXEMPT FROM THE REGI STRATION REQUIREMENTS OF TITLE 11 OF THIS ARTICLE. 13
(B) ANY MEMBERSHIP INTEREST , PATRONAGE REFUND , PER UNIT RETAIN 14
CERTIFICATE, EQUITY INSTRUMENT , OR EVIDENCE OF MEMBE RSHIP INTEREST MAY 15
BE LAWFULLY OFFERED AND SOLD BY THE ISSU ER OR ITS MEMBERS , 16
REPRESENTATIVES , OR SALARIED EMPLOYEE S WITHOUT THE NECESS ITY OF BEING 17
REGISTERED AS A BROKE R OR DEALER UNDER TITLE 11 OF THIS ARTICLE. 18
4A–12A–22. 19
A FOREIGN WORKER COOPE RATIVE MAY REGISTER AND DO BUSINESS IN T HE 20
STATE SUBJECT TO AND IN ACCORDANCE WITH T HE PROVISIONS OF SUBTITLE 10 21
OF THIS TITLE. 22
Article – Insurance 23
2–108. 24
In addition to any powers and duties set forth elsewhere by the laws of the State, the 25
Commissioner: 26
(1) has the powers and authority expressly conferred on the Commissioner 27
by or reasonably implied from this article; 28
(2) shall enforce this article; 29
(3) shall perform the duties imposed on the Commissioner by this article; 30
22 SENATE BILL 144
(4) in addition to examinations and investigations expressly authorized, 1
may conduct examinations and investigations of insurance matters as necessary to fulfill 2
the purposes of this article; [and] 3
(5) shall enforce § 15–103(b)(21)(vi) of the Health – General Article; AND 4
(6) SHALL ENFORCE § 4A–12A–11 OF THE CORPORATIONS AND 5
ASSOCIATIONS ARTICLE. 6
Article – Tax – General 7
4–301. 8
(c) 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 admissions and amusement tax, personal 12
liability for the tax and interest and penalties on the tax extends to any person who 13
exercises direct control over the fiscal management of the limited liability company or 14
limited liability partnership. 15
9–314. 16
(f) If a limited liability company, INCLUDING A LIMITED WORKER 17
COOPERATIVE ASSOCIAT ION OR COLLECTIVE WO RKER COOPE RATIVE, or limited 18
liability partnership, including a limited partnership registered as a limited liability 19
limited partnership, is required to pay the motor fuel tax and interest and penalties on the 20
tax, personal liability for the tax and interest and penalties on the tax extends to any person 21
who exercises direct control over the fiscal management of the limited liability company or 22
limited liability partnership. 23
10–906. 24
(d) If an employer or payor negligently fails to withhold or to pay income tax in 25
accordance with subsection (a) of this section, personal liability for that income tax extends: 26
(1) to the employer or payor; 27
(2) if the employer or payor is a corporation, to: 28
(i) any officer of the corporation who exercises direct control over its 29
fiscal management; or 30
(ii) any agent of the corporation who is required to withhold and pay 31
the income tax; and 32
SENATE BILL 144 23
(3) if the employer or payor is a limited liability company as defined under 1
Title 4A of the Corporations and Associations Article, INCLUDING A LIMITED WORKER 2
COOPERATIVE ASSOCIAT ION OR A COLLECTIVE WORKER COOPERATIVE , or a limited 3
liability partnership as defined under Title 9A of the Corporations and Associations Article, 4
including a limited partnership registered as a limited liability limited partnership, to: 5
(i) any person who exercises direct control over its fiscal 6
management; and 7
(ii) any agent of the limited liability company or limited liability 8
partnership who is required to withhold and pay the income tax. 9
11–601. 10
(d) If a buyer or vendor liable for the sales and use tax and for the interest and 11
penalties of the tax under subsection (c) of this section is a corporation or limited liability 12
company, INCLUDING A LIMITED WORKER COOPERATIVE A SSOCIATION OR A 13
COLLECTIVE WORKER COOPERATIVE , or limited liability partnership (including a 14
limited partnership registered as a limited liability limited partnership), personal liability 15
for the sales and use tax and for the interest and penalties of the tax extends to: 16
(1) in the case of a corporation: 17
(i) the president, vice president, or treasurer of the corporation; and 18
(ii) any officer of the corporation who directly or indirectly owns 19
more than 20% of the stock of the corporation; [and] 20
(2) in the case of a limited liability company: 21
(i) if the limited liability company does not have an operating 22
agreement, all members; or 23
(ii) if the limited liability company has an operating agreement, 24
those individuals who manage the business and affairs of the limited liability company; and 25
(3) in the case of a limited liability partnership: 26
(i) if the limited liability partnership does not have a written 27
partnership agreement, all general partners; or 28
(ii) if the limited liability partnership has a written partnership 29
agreement, those individuals who manage the business and affairs of the limited liability 30
partnership. 31
24 SENATE BILL 144
SECTION 2. AND BE IT FURTHER ENACTED, That a presently existing obligation 1
or contract right may not be impaired in any way by this Act. 2
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 3
October 1, 2026. 4
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.