Chap. 329.—An ACT relating to and providing for the incorporation of
co-operative associations. (S. B. 486.)

Approved March 27, 1914.

1. Be it enacted by the general assembly of Virginia, That
any number of persons not less than five, by executing, filing and
recording a certificate as hereinafter, in sections two and three of
this chapter set forth, may associate themselves as a co-operative
association, society, company or exchange, for the purpose of con-
ducting any agricultural, dairy, mercantile, manufacturing, -or
mechanical business on the co-operative plan. For the purposes
of this act, the words “association,” “company,” “corporation,”
“exchange,” “society” or “union” shall be construed to mean the
same.

Sec. 2. What certificate to set forth—Such certificate of in-
corporation shall set forth:

(a) The name of the corporation, which name shall contain
the word “co-operative” and the word “corporation” or “incor-
porated,” and shall be such as to distinguish it from any other cor-
poration engaged in a similar business, or promoting or carrying
on similar objects or purposes in this State.

_ (b) The name of the county (and the postoffice therein), city.
or town, wherein its principal office in this State is to be located.

(c) The purposes for which it is formed.

(d) The maximum and minimum amount of capital stock of
the corporation, and its division: and if there be more than one
class of stock created by the certificate of incorporation, a descrip-
tion of the different classes thereof, with the terms on which such
different classes are created.

(e) The period, if any, limited for the duration of the cor-
poration.

(f) The names and residences of the officers and directors who,
unless sooner changed by the stockholders, are for the first year to
manage the affairs of the corporation.

(g) The amount of real estate to which its holdings at ‘any
time are to be limited.

(h) The certificate of incorporation may also contain any pro-
-visions which the incorporators may insert for the regulation of
the business, and for the conduct of the affairs of the corporation:
and any provision creating, defining, limiting, or regulating the
powers of the corporation, of the directors, or of the stockholders.
or of any class or classes of stockholders; provided, such provision
be not inconsistent with this act.

Sec. 3. How certificate executed and acknowledged; judges
certificate; fee; duties of the commission and the secretary of Com-
monwealth; recordation; certificate to be endorsed and preserved:
vesting of corporate powers.—Such certificates shall be signed by
at least five persons; shall be acknowledged by them before an
officer authorized by the laws of this State to take acknowledge-
ments of deeds and shall be presented in term time, or in vacation,
to the judge of the circuit court of the county, or of the circuit, cor-
poration or chancery court of the city wherein the principal office
of the corporation is to be located. Such judge shall thereupon
certify thereon whether in his opinion, such certificate is signed
and acknowledged in accordance with the requirements of this act.
and if not, in what respects it is faulty. As soon as the certificate
is so endorsed by the judge, and the fee and tax, if any, required
by law to be paid to the State upon the charter shall have been
duly paid, it, together with the receipt for such payment, and
separate certified checks or bank drafts, postal note or money
order, one payable to the secretary of the Commonwealth and one
payable to the clerk of the proper court for the amounts of the
proper fees for recording such charter, may be presented to the
State corporation commission, which shall ascertain and declare
whether the applicants have, by complying with the requirements
of the law, entitled themselves to the charter and shall issue or
‘refuse the same accordingly. When so issued, the certificate, with
all endorsements, together with the order therecn of the State cor-
poration commission, shall be certified by the said commission, as
required by law, to the secretary of the Commonwealth and by the
last named officer recorded in the charter records of his office, who
shall thereupon certify the same to the clerk of the circuit court of
the county, or to the corporation court of the city wherein the
principal office of such corporation is to be located, or to the clerk
of the chancery court of the city of Richmond, when such principal
office is to be located in said city, who shall likewise record the
same in a book to be provided and kept for the purpose in his
office, and when so recorded the fact of such recordation shall be
endorsed upon the said certificate, and the said certificate, with all
endorsements thereon, shall be returned by the said clerk to the
State corporation commission and lodged and preserved in the
office of its clerk. As soon as the charter shall have been lodged for
recordation in the office of the secretary of the Commonwealth,
the persons who signed and acknowledged said certificate, and
their successors, and such other persons as may be associated with
them according to the provisions of law, or of their charter, shall
be a body, politic and corporate, by the name set forth in the said
certificate, with the powers and upon the terms set forth therein,
so far as not in conflict with this act; and in addition shall have
all the general powers and be subject to all general restrictions
and liabilities conferred and imposed by this act and by the
general laws of this State applicable thereto, not in conflict
with this act, or with said charter, as hereinbefore provided. Any
failure on the part of such clerk to comply with the provisions of
this section shall subject him to a fine of not less than ten dollars
nor more than one hundred dollars to be imposed by the State
corporation commission.

Sec. 4. Signers of certificate of incorporation to have charge
until minimum amount of stock is subscribed; notice of initial
meeting; when subscriptions, et cetera, void.—Until such amount of
stock as the incorporation may determine, not less than the mini-
mum fixed by the certificate of incorporation, shall have been sub-
scribed, and such terms in respect thereto as they, in. the contract
of subscription, may impose, shall have been complied with, the
signers of the certificate of incorporation shall have direction of
the affairs and of the organization of the corporation, and may,
in person or by proxy, take such steps as they may deem proper,
not inconsistent with this act, to obtain the necessary subscription
to the stock, and may determine the form and terms of the stock
subscription agreement; what notice, if any, shall be given of the
opening of the subscription books; they shall give ten days’ notice
of the initial or organization meeting of the subscribers to the
capital stock, unless all subscribers are present, or represented,
or notice is waived in writing by such as are absent; and generally
may take all such steps as may be necessary or convenient for the
purpose of perfecting the organization of the corporation; but if
the stock, subscription, agreement, or contract of subscription shall
vary substantially from the charter or certificate of incorporation,
as to the nature, object or powers of the corporation, all sub-
scriptions or contracts or agreements therefor shall be void.

Sec. 5. Amendment of original certificate before fixed amount
of stock is subscribed; previous subscriptions void.—At any time
before the amount of stock so fixed by the incorporators shall have
been subscribed, any amendment or alteration of the original cer-
tificate, not inconsistent with this act, may if accompanied by a
receipt showing the payment of the proper fee, if any, be made
by a supplemental certificate, made, signed, and acknowledged by
the incorpcrators, and certified, issued and recorded, and lodged
in the office of the State corporation commission, in the same man-
ner, as is provided in reference to the original certificate, but in
that event, all subscriptions theretofore made to the capital stock
shall be void.

Sec. 6. Amendment, et cetera, of original certificate after sub-
scriptions completed.—At any time after such subscriptions shall
have been completed, the subscribers to the capital stock may,
until the corporation is duly organized, apply to the State cor-
poration commission for any amendment or alteration to the orig-
inal certificate, and to that end may present to the State corpora-
tion commission a supplemental certificate, made, signed, and
acknowledged by them in the manner hereinbefore provided as
to the making, signing, and acknowledging of the original cer-
tificate, certified by a judge as hereinbefore provided as to the
original certificate, and, in the event such amendment or alteration
is one upon which the law imposes the payment of a fee to the
State, then such supplemental certificate, when presented to the
said commission, must be accompanied by the receipt for such
payment, and thereupon the State corporation commission shall
act thereon in the same manner hereinbefore provided as to the
original certificate; and if the amendment or alteration be issued,
then such supplemental certificate, together with all endorsements
and the order of the commission thereon, shall be recorded, and
lodged in the office of the State corporation commission, as is pro-
vided in reference to the original certificate, and when lodged for
record in the office of the secretary of the Commonwealth, the
original charter shall be deemed to be altered or amended accord-
ingly.

Sec. 7. Changes of business, capital stock, location, et cetera,
by amendment.—At any time after organization, any such cor-
poration may change the nature of its bsuiness, change its name,
decrease its capital stock, change the par value of the shares of its
capital stock, change the location of its principal office in this
State, extend its corporate existence, create one or more classes
of preferred stock, and make such other amendments, changes or
alterations as may be desired, in manner following, except that no
increase of capital stock shall be made otherwise than in the man-
ner prescribed in section nine of this act. The board of directors
shall pass a resolution declaring that such amendment, change, or
alteration is advisable, and calling a meeting of the stockholders
to take action thereon, the meeting to be held upon notice by publi-
cation at least six times a week for two successive weeks prior to
such meeting, in some newspaper published in or near the place
where its principal office is located, or notice in writing to each of
the stockholders, to be served on him personally, or by mailing
the same to him to his last known postoffice address, at least ten
days prior to such meeting; such notice must state the time and
place of the meeting and its object. If two-thirds in interest of
each class of the stockholders having voting power shall vote in
favor of such amendment, change, or alteration, a certificate
thereof shall be made by the president, or by one of the vice-presi-
dents, under the seal of the corporation, attested by the secretary,
and acknowledged by them before an officer authorized by the laws
of this State to take acknowledgements of deeds. Such certificate,
and if the amendment or alteration be one in respect to which the
payment of a fee to the State is imposed by law, a receipt for such
payment shall be presented to the State corporation commission
which shall ascertain and declare whether the said applicant, by
complying with the requirements of the law, is entitled to the
amendment, alteration or extension set forth in said certificate, and
shall issue or refuse the same accordingly. If the same is issued,
the said certificate, with the endorsements thereon, together with
the order thereon of the commission, shall be forthwith certified
as required by law to the secretary of the Commonwealth, to be
recorded by the last named officer as provided in reference to orig-
inal certificates, and shall be certified by him to the clerk of the
circuit court of the county, or the circuit, corporation or chancery
court of the city, in which the original certificate of incorporation
is recorded, and the clerk of such court shall thereupon record the
same in his office in a book provided and kept for the recordation
of charters, and shall endorse the fact of such recordation upon
the said certificate, and return the same to the State corporation
commission to be lodged and preserved in the office of its clerk.
As soon as the said certificate is lodged for recordation in the office
of the secretary of the Commonwealth, the original certificate of
incorporation shall be deemed to be amended accordingly; pro-
vided, however, that such certificate of amendment, change or
alteration shall contain only such provisions as it would be lawful
.and proper to insert in an original certificate of incorporation,
made at the time of making such amendment, or alteration; pro-
vided, that no amendment, change or addition substantially chang-
ing the object for which said corporation was chartered or extend-
ing the duration of its corporate existence, shall be made, except
by unanimous consent of all the stockholders of said corporation.
Sec. 8. How capital stock may be increased by amendment to
charter—In case the capital stock of any corporation organized
under this chapter, or under any charter heretofore granted by any
court, or by the general assembly of this State, for any purpose
permitted under section one of this chapter, is found to be in-
sufficient for its purpose, such corporation may increase its capital
stock from time to time to any amount that it may deem requisite,
such increase to be sanctioned by a vote in person or by proxy of
two-thirds in amount of all the stockholders who shall be present,
or represented, and voting at a meeting of the stockholders, which
two-thirds shall amount to at least a majority of the capital stock
of the corporation called by the directors for that purpose by a
notice by publication at least six times a week, for two successive
weeks prior to such meeting, in some newspaper published in or
near the place where its principal office is located, or notice in
writing to each of the stockholders, to be served on him personally,
or by mailing the same to him to his last known postoflice address,
at least ten days prior to such meeting; such notice must state the
time and place of the meeting, and its general object, and the
amount to which it is proposed to increase the capital stock. The
proceedings of said meeting must be entered on the minutes of the
proceedings of the stockholders; and if two-thirds in amount of
such stockholders vote in favor of such increase, a certificate thereof
shall be made by the president, or by one of the vice-presidents,
under the seal of the corporation, attested by the secretary, and
shall be acknowledged by said officers signing the same before any
officer authorized by the laws of this State to take acknowledgements
of deeds, and when so acknowledged, it, together with the receipt
for the payment of any fee to the State which may be imposed by
law for such increase of capital, may be presented to the State
corporation commission, which shall ascertain and declare whether
the said corporation has, by complying with the requirements of
the law, entitled itself to make such increase of the capital stock
of said corporation, and accordingly shall issue or refuse a certif-
cate for said increase of capital. If the amendment to the charter
of such corporation allowing such increase of capital be issued, it
shall be certified by the commission as required by law to the secre-
tary of the Commonwealth, and recorded by the last named officer
in the charter records of his office, and by him certified to the clerk
of the court of the county or city in which the original certificate
of incorporation is recorded, who shall likewise record the same in
his office, and endorse upon such certificate the fact of such recorda-
tion, and return the same to the State corporation commission, to
be lodged and preserved in the office of its clerk. As soon as the
said certificate is lodged for recordation in the office of the secre-
tary of the Commonwealth the charter of said corporation shall
stand so amended and the increase of capital stock shall become
effective, and from time to time the board of directors may proceed
to dispose of the capital stock, as so increased, upon such terms and
conditions and for such considerations as they may deem for the
best interest of the said corporation, but not until after full com-
pliance with the requirements in that regard of section one hundred
and sixty-seven of the Constitution of the State.

Sec. 9. How capital stock may be decreased; creditors not to
be affected thereby.—Whenever the actually issued and outstand-
ing capital stock of any corporation organized under this chapter
or under any charter heretofore granted by any court or by the
general assembly of this State for any purposes permitted under
section one of this chapter, shall be found to be more than suftlicient
for its purposes, it may, with the concurrence of two-thirds in
amount of all its stockholders, given as hereinafter provided, de-
crease its capital stock from time to time to any amount, not less
than the minimum fixed in its charter, or some amendment thereof.
Such decrease must be sanctioned by a vote, in person or by proxy,
of two-thirds in amount of the stockholders of the corporation at a
meeting of such stockholders, called by the board of directors for
that purpose, of which meeting notice by publication, at least six
times a week for two successive weeks prior to such meeting, in
some newspaper published in or near the place where its principal
office is located, or notice in writing must be given to each stock-
holder of record, by serving the same on him personally or by
mailing it to him addressed to the postoffice nearest his place of
residence, as it appears upon the stock books of the corporation, at
least ten days prior to such meeting, and in such notice must be
stated the time and place of the meeting, its object, and the amount
to which it is proposed to decrease the capital stock. If at such
meeting two-thirds in amount of all the stockholders vote in favor
of decreasing the capital stock to an amount not less than the
amount mentioned in such notice, which shall not be less than the
minimum amount of authorized capital of the corporation, a copy
of the proceedings so far as they relate to this subject, entered upon
the records of the corporation, may be certified by the president, or
by one of the vice-presidents, under the seal of the corporation,
attested by its secretary and acknowledged by them before an
officer authorized by the laws of this State to take acknowledge-
ments of deeds. A copy thus certified may be presented to the
State corporation commission, which shall ascertain whether the
applicants have, by complying with the requirements of the law, |
entitled themselves to make such decrease of the capital stock, and
accordingly shall issue or refuse a certificate permitting the same,
which certificate shall be certified to the secretary of the Common-
wealth, to be recorded by the last named officer as provided with
reference to original certificates, and shall be certified by him to
the clerk of the circuit court of the county, or the circuit, corpora-
tion or chancery court of the city, in which the original certificate
of incorporation is recorded, and the clerk of such court shall
thereupon record the same in his office in a book provided and
kept for the recordation of charters and shall endorse the fact of
such recordation upon the said certificate and return the same to
the State corporation commission to be lodged and preserved in
the office of its clerk. When so recorded in the office of the secre-
tary of the Commonwealth, the power of the said corporation to
make such decrease, subject to the provisions of section one hun-
dred and sixty-seven of the Constitution, so far as applicable
thereto, shall be complete.

The capital stock may thereupon be decreased in the manner
following, that is to say; by retiring or reducing any class of
stock, or by the surrender of every stockholder of his shares, and
the issue to him in lieu thereof of a decreased number of shares,
or by the purchase at the fair market value not exceeding par, of
certain shares for retirement, or by retiring shares owned by the cor-
poration, or by reducing the par value of shares, and when any
corporation shall decrease the amount of its capital stock, as here-
inbefore provided, the certificate decreasing the same shall be pub-
lished for three weeks successively, at least once a week, in a news-
paper published in the county or city in which the principal office
of the corporation is located, and if no newspaper be published
therein, then in a newspaper published in a county or city con-
venient thereto, the first publication to be made within fifteen days
after the filing of such certificate; provided, however, that no such
decrease in capital stcck shall affect the right of any creditor of the
said corporation existing at the time of such decrease.

Sec. 10. How corporations may be dissolved.—Whenever, in
the judgment of the board of directors, it shall be deemed advis-
able, and for the benefit of such corporation that it shall be dis-
solved, the board within ten days after the adoption of a resolu-
tion to that effect by a majority of the whole board, at any meet-
ing called for that purpose, of which meeting notice, by publica-
tion at least six times a week, for two successive weeks prior to
such meeting, in some newspaper published in or near the place
where its principal office is located, or notice shall be given in per-
son or shall be mailed to every director, at least three days prior to
such meeting, shall cause notice of the adoption of such resolution
to be mailed to each stockholder of record; and also, beginning
within the said ten days, cause a like notice to be published in the
county or city wherein the corporation shall have its principal
office; but if there be no such newspaper published in said county
or city, then in a newspaper published in a county or city conven-
ient to the county or city in which said principal office is located,
at least once a week for four successive weeks next preceding the
time appointed for the same, of a meeting of the stockholders to
be held at the principal office of the corporation, to take action
upon the resolution so adopted by the board of directors, which
meeting shall convene between the hours of ten o’clock in the fore-
noon and three o’clock in the afternoon of the day so named, and
which meeting may, on the day so appointed, by consent of the
majority in interest of the stockholders present, be adjourned from
time to time; and if, at any such meeting, or adjourned meeting,
two-thirds in interest of the stockholders shall consent that u dis-
solution shall take place, and signify their consent in writing, given
either in person or by proxy, such consent, together with a list of
the names and residences of the directors and officers, certified by
the president, secretary, and treasurer, shall be filed in the office
of the clerk of the State corporation commission, and the commis-
sion, upon being satisfied by due proof that the requirements of
this act have been complied with, shall issue a certificate that such
consent has been filed, and thereupon the said corporation shall
stand dissolved, and the board shall proceed to settle up and adjust
its business and affairs. Whenever all the stockholders shall con-
sent to the dissolution, no meeting or notice thereof shall be neces-
sary, but on filing the said consent in the office of the State cor-
poration commission, the said commission shall issue a certificate
of dissolution, and the said corporation shall thereupon stand dis-
solved, and the said board shall proceed to settle up and adjust the
business and affairs of the said corporation; provided, however,
that no such dissolution shall affect the rights of any creditor of
the said corporation existing at the time of such dissolution.

Sec. 11. Dissolution before payment of capital—The incor-
porators named in any certificate of incorporation, before the pay-
ment of any part of the capital, and before beginning the business
for which the corporation was created, may surrender all their
corporate rights and franchises, by filing in the clerk’s office of the
State corporation commission a certificate, verified by oath, that no
part of the capital has been paid and such business has not been
begun, and surrendering all rights and franchises; and thereupon
the said corporation shall stand dissolved.

Sec. 12. Management to be vested in a board of directors; their
number; quorum; executive committee; powers of.—The business
of every corporation organized under the provisions of this chapter
shall be managed by a board of directors of such number, not less
than three, as may be prescribed by the certificate of incorporation
or the by-laws of the corporation elected by and from the stock-
holders cf the association. They shall hold office, unless sooner
removed by the stockholders, for the terms fixed by the certificate
of incorporation cr by-laws, and until their successors are respec-
tively elected and qualified, and a majority of them shall constitute
a querum for the transaction of business. The board of directors
may, if autherized by the stockholders, or by the by-laws, by a reso-
lution passed by a majority of the whole board, designate two or
more of their number to constitute an executive committee who, to
the extent provided in said resclution cr in the by-laws of said cor-
poration, shall have and exercise the power of the board of directors
in the management of the business and affairs of the corporation,
and may have power to authorize the seal of the company to be
affixed to all papers which may require it. The officers of every
such association shall be a president, one or more vice-presidents.
a secretary and a treasurer, who shall be elected annually by the
stockholders, and‘ each of said cflicers may be a director of the
association. The office of secretary and treasurer may be combined.

Sec. 13. List of officers to be certified to clerk of court of city
er ccunty wherein is located its principal office; non-resident
officers, et cetera, to appoint attorneys at law upon whom process
may ke served; penalty for failure—Every corporation incort
perated under the provisions of this act shall, after each annual
meeting of its stockholders, certify to the clerk of the circuit court
of the county, or the clerk of the circuit, corporation or chancery
court of the city, wherein is located its principal office, a list of
the officers and directors of such corporation elected at said annual
meeting, and it shall be the duty of the clerk of the circuit court
of said county, or of the clerk of the circuit, corporation, or chancery
court cf said city, to keep a file of such certificates, which shall be
open to public inspection; and the clerk of such court shall be en-
titled to a fee of twenty-five cents for filing such certificate, to be
paid by the said corporation; and every such corporation, all of
the officers and directors of which are non-residents of the city or
county in which its principal offices are located, shall, before com-
mencing to do business, by written power of attorney, appoint some
practicing attorney at law residing in the city or county wherein
the principal office of said corporation is located, its attorney or
agent upon whom all legal process against the corporation may be
served, and who shall be authorized to enter an appearance in its
behalf. Such power of attorney shall be recorded in the clerk’s
office of the circuit court of the county, or of the clerk’s office of the
circuit. corporation, or chancery court of the city wherein the prin-
cipal office of the said corporation is located. Such power of at-
torney shall remain effective until lawfully revoked, and when law-
fully revoked shall be immediately re-executed and recorded. A
duplicate of such power of attorney shall be filed with the clerk of

‘) the State corporation commission. Written notice of the resigna-
#y; tion or voluntary revccation of such power of attorney by the
vs corporation shall be forthwith filed in the clerk’s office wherein it is
;»» Tecorded, and the clerk shall note such resignation or revocation
- onthe margin cf the page of the book wherein the power of attorney
is recorded, and be entitled to a fee of twenty-five cents therefor,
and until this is done such revocation shall be ineffective and the
original power of attorney shall remain effective. If there be no
.. such attorney in fact in office residing in such county or ctiy then
v, al legal process against such corporation may be served upon the
.. Clerk or the court of such county or city, wherein is such principal
+ Office, having jurisdiction of the suit, action or proceeding. Any
» such corporation failing to comply with the provisions of this sec-
,, lon within sixty days after its annual meeting shall be fined not
... less than fifty dollars nor more than one hundred dollars, and each
, day’s continuance of such failure may be construed to be a separate
offense under this section, such fine to be imposed and enforced

_ by the State corporation commission, with right of appeal to the
“supreme court of appeals; and if any such corporation shall be in
“\", default for more than six months in complying with the provisions
_, of this section, the State may proceed against such corporation
| by writ of quo warranto, or information in the nature of a writ of
“’ quo warranto, for the vacation and forfeiture of its charter, and
upon judgment in such proceedings against any such corporation,
“its charter shall thereafter be vacated and forfeited. Such pro-
‘ceedings shall be instituted and prosecuted by the attorney general
"at the request of the State corporation commission.
See. 15. An association created under this act shall have power

to conduct any agricultural, dairy, mercantile, manufacturing or
~ mechanical business on the co-operative plan, and may buy, sell
wv and deal in the products of any other co-operative company thereto-
~~ fore or thereafter organized under the provisions of this act.
“ — Sec. 16. No stockholder in any such association shall own
° shares of a greater par value than one thousand dollars, except as
“hereinafter provided, or be entitled to more than one vote.
‘See. 17. At any regular meeting, or any regularly called special
-* meeting at which at least a majority of all its stockholders shall be
wl’ present, or represented, an association organized under this act
ai. May by a majority vote of the stockholders present or represented,
/ subseribe for shares and invest its reserve fund, but not to exceed
4. twenty-five per cent. of its capital, in the capital stock of any co-
vb Operative association.

Sec. 18. Whenever an association created under this act shall
purchase the business of another association, persen, or persons, it
may pay for the same in whole or in part by issuing to the selling
association or person, shares of its capital stock to an amount.
« Which at par value would equal the fair market value of the busi-

ness so purchased, and in such case the transfer to the association
of such business at such valuation shall be equivalent to payment
in cash for the shares of stock so issued.

Sec. 19. In case the cash value of such purchased business ex-
ceeds one thousand dollars, the directors of the association are
authorized to hold the shares in excess of one thousand dollars in
trust for the vendor and dispose of the same to such persons, and
within such time, as may be mutually satisfactory to the parties in
interest, and to pay the proceeds thereof as currently received to
the former owner of said business. Certificates of stock shall not
be issued to any subscriber until fully paid, but the by-laws of the
association may allow subscribers to vote as stockholders; provided,
part of the stock subscribed for has been paid in cash.

Sec. 20. At any regularly called general or special meeting of
the stockholders, a written vote received by mail from an absent
stockholder, and signed by him, may be read in such meeting, and
shall be equivalent to a vote of each of the stockholders so signing;
provided, he has been previously notified in writing of the exact
motion or resolution upon which such vote is taken, and a copy of
same is forwarded with and attached to the vote so mailed by him.

Sec. 21. Diviston of profits—The directors, subject to revision
by the association at any general or special meeting, shall apporticn
the earnings by first paying dividends on the paid up capital stock
not exceeding six per cent. per annum, and by then setting aside
not less than ten per cent. of the net profits for a reserve fund until
an amount has accumulated in said reserve fund equal to thirty
per cent. of the paid up capital stock, and five per cent. thereof
for an educational fund to be used in teaching co-operation; and
shall apportion the remainder of said net profits by uniform
dividends to its shareholders upon the amount of purchases of
said association from its shareholders, and sales by the association
to its shareholders or for their account, and upon the wages and
salaries of employees, and one-half of such uniform dividend to
co-operating non-shareholders, unless otherwise provided by the
- by-laws of said association as follows:

(1) If the association be engaged in the mercantile business.
then to the extent the business is so conducted, dividends, except
as hereinafter otherwise provided, shall be paid to the co-operative
non-shareholders, and upon the amount of their purchases, and not,
upon the purchases made by the said association.

(2) If the association be engaged to any extent in the purchase
and sale of the products of farm or orchard, or as selling agent of
such products, or if the association be a productive association.
such as a creamery, cannery, or factory, and the like. dividends to
such extent shall be paid to the persons so furnishing such pro-
ducts, and upon the amounts so furnished, and not upon sales by
the association.
Sec. 22. The profits or net earnings of said association shall
be so distributed to those entitled thereto, at such times as the
by-laws shall prescribe, which shall be as often as once in twelve
months. If such association for three consecutive years shall fail
to declare a dividend upon the shares of its paid-up capital, five
or more stockholders, by petition setting forth such fact, may
apply to the circuit court of the county wherein is situated its
principal place of business in this State for its dissolution. If
upon hearing the allegations of the petition are found to be true,
the court may adjudge a dissolution of the association.

Sec. 23. No corporation or association hereafter organized or
doing business for profit in this State shall be entitled to use the
term “co-operative” as part of its corporate or other business name
or title, unless it has complied with the provisions of this act; and
any corporation or association violating the provisions of this sec-
tion may be enjoined from doing business under such name at the
instance of any stockholder of any association legally organized
hereunder. ~

Sec. 24. Whenever the principal purpose for which such cor-
poration was formed has failed, or the management of the corpora-
tion has been abandoned by its officers and directors, or when
operations under the charter have been suspended or abandoned for
a period of three years, or the corporation has become insolvent, it
shall be lawful for the circuit court of the county, or the circuit
court of the city or other court having chancery jurisdiction in the
city, wherein the principal office of such corporation is located,
sitting in chancery, to wind up and dissolve such corporation, and
after requiring payment of all taxes, fees and penalties due by it,
make such disposition of its assets as may be just and equitable,
in a suit brought by a stockholder or stockholders holding at I-ast
one-fourth of the capital stock of the corporation. Within thirty
days from such dissolution, the clerk of the court entering such
decree of dissolution shall certify that fact, together with the style
of the case and the date of the decree of the State corporation com-
mission. Any failure of such: clerk so to do shall subject him to a
fine of not less than ten dollars nor more than one hundred dollars
to be imposed by the State corporation commission.

Sec. 25. The provisions of chapter 5 of “an act concerning cor-
porations” which became a law May twenty-first, nineteen hun-
dred and three, and amendments thereto shall be construed to apply
to all corporations created under this act, except to the extent the
same may be expressly in conflict with this act.