Section 5-632 - Dissolution - Cooperatives that have begun doing business.
§ 5-632. Dissolution - Cooperatives that have begun doing business.
(a) In general.- A cooperative that has begun doing business may be dissolved as provided in this section.
(b) Approval by members.- A proposed dissolution shall be approved by the affirmative vote of not less than two-thirds of the members voting on the matter at an annual or special meeting of the members.
(c) Certificate of election to dissolve.-
(1) On approval of the proposed dissolution by the members of the cooperative as provided in subsection (b) of this section:
(i) A certificate of election to dissolve shall be signed and acknowledged for the cooperative by its chairman or vice-chairman and attested by its secretary; and
(ii) The seal of the cooperative shall be affixed to the certificate.
(2) The certificate shall state:
(i) The name of the cooperative and the address of its principal office; and
(ii) That the members of the cooperative have approved the dissolution in accordance with subsection (b) of this section.
(3) The chairman or vice-chairman who signs the certificate for the cooperative shall make and attach to the certificate an affidavit stating that the statements made in the certificate are true.
(4) The certificate and affidavit shall be filed for record with the Department.
(d) Cessation of business of cooperative and winding up of its affairs.-
(1) (i) On the Department's acceptance for record of the certificate of election to dissolve and affidavit, the cooperative shall cease doing business except to the extent necessary to wind up its business and affairs.
(ii) The corporate existence of the cooperative shall continue until articles of dissolution have been accepted for record by the Department.
(2) The board of directors immediately shall cause notice of the dissolution proceedings to be:
(i) Mailed to each known creditor of and claimant against the cooperative; and
(ii) Published once a week for 2 successive weeks in a newspaper of general circulation published in the county in which the principal office of the cooperative is located.
(3) The board shall collect money owing to the cooperative, liquidate its assets, discharge its debts, obligations, and liabilities, and do all other acts required to wind up the business and affairs of the cooperative.
(4) (i) After discharging, or adequately providing for the discharge of, all of the debts, obligations, and liabilities of the cooperative, the board shall distribute any remaining money among the current and former members of the cooperative.
(ii) The money shall be distributed in proportion to the patronage of each current or former member:
1. During the 7-year period immediately preceding the date on which the certificate of election to dissolve is accepted for record by the Department; or
2. If the cooperative has been in existence for less than 7 years, during the period of its existence.
(e) Execution of articles of dissolution.-
(1) After winding up the business and affairs of the cooperative as provided in subsection (d) of this section, the board of directors shall authorize the execution of articles of dissolution.
(2) The articles of dissolution shall be signed and acknowledged for the cooperative by its chairman or vice-chairman and attested by its secretary, and the seal of the cooperative shall be affixed to the articles.
(f) Contents of articles of dissolution.- The articles of dissolution shall state:
(1) The name of the cooperative and the address of its principal office;
(2) The date on which the certificate of election to dissolve was accepted for record by the Department;
(3) That there are no actions pending against the cooperative;
(4) That all debts, obligations, and liabilities of the cooperative have been discharged, or that adequate provision has been made for their discharge;
(5) That the articles are executed in accordance with this subtitle; and
(6) That the provisions of this section have been complied with.
(g) Affidavit that statements are true.- The chairman or vice-chairman who signs the articles of dissolution for the cooperative shall make and attach to the articles an affidavit stating that the statements made in the articles are true.
[2002, ch. 135, § 3; 2004, ch. 25.]