7706 - Internal capital accounts and net worth.

     § 7706.  Internal capital accounts and net worth.        (a)  Purpose of accounts.--A corporation shall establish     through its bylaws a system of internal capital accounts to     reflect the book value of the corporation and to determine the     redemption price of membership shares and written notices of     allocation.        (b)  Types of accounts.--Internal capital accounts shall be     of two types: individual internal capital accounts, one for each     member, and a nonindividuated, collective internal capital     account, which shall be called the collective reserve account.        (c)  Net worth.--The net worth of the corporation shall be     reflected in:            (1)  The internal capital accounts.            (2)  The sum of the par value of all outstanding stock        with par value, other than membership shares.            (3)  The stated value of evidences of equity in a fund,        capital investment or other asset of the corporation.        (d)  Procedure.--A corporation shall credit the paid-in     membership fee and additional paid-in capital of a member to the     member's individual internal capital account and shall also     record the apportionment of retained net earnings or net losses     to the member's account in accordance with patronage, by     appropriately crediting or debiting the member's account. The     collective reserve account shall reflect paid-in capital,     retained net earnings and net losses not allocated to the     capital accounts or members or not attributable to funds under     subsection (c)(1) and (3).        (e)  Adjustment of balance.--The balances in all of the     individual internal capital accounts and the collective reserve     account, if any, shall be adjusted at the end of each accounting     period so that the sum of these balances and of the amounts     under subsection (c)(2) and (3) is equal to the net worth of the     corporation.        (f)  Use of funds.--Moneys allocated to the internal capital     accounts may be used for corporate purposes as determined by the     board of directors.        Cross References.  Section 7706 is referred to in section     7705 of this title.