Chap. 398.-An ACT to amend and re-enact sections 1, 2, 6, 7, 8, 9, 14, 21,
22, 24, 30 and 31 of chapter 48 of the acts of assembly of 1922, entitled an
act to encourage the co-operative marketing of farm products in Virginia,
to provide for and authorize the incorporation of co-operative marketing
associations or exchanges and the licensing to do business in Virginia of
similar corporations created in other states under similar laws; to enlarge
the same so as to include co-operative purchasing; and to add a new section
thereto, to be designated as section 29-a, and to prescribe penalties.

[fH B 188]
Approved March 25, 1930

1. Be it enacted by the general assembly of Virginia, That sections
one, two, six, seven, eight, nine, fourteen, twenty-one, twenty-two,
twenty-four, thirty and thirty-one of chapter forty-eight of the acts of
assembly of nineteen hundred and twenty-two, be amended, and that
there be added to said act a new section to follow immediately after
section twenty-nine and be designated as section twenty-nine-a, all of
which shall read as follows:

Section 1. In order to promote, foster and encourage the intelli-
gent and orderly marketing of agricultural products through co-opera-
tion; and to eliminate speculation and waste; and to make the distribu-
tion of agricultural products between producer and consumer as direct
as can be efficiently done; and to stabilize the marketing of agricultural
products; and to obtain these said benefits in the distribution of sup
plies purchased by agricultural producers, this act is passed.

section 2. (a) The term “agricultural products” shall includ
horticultural, viticultural, forestry, dairy, live stock, poultry, bee, an
any other farm products; and the term “supplies” shall include seed
feed, fertilizer, equipment and other products used in the productior
of crops and livestock and in the operation of farms and farm houses

(b) The term “member” shall include actual members of asso
ciations without capital stock and holders of voting stock and/or o'
certificates with voting rights in associations organized with capita
stock ; |

(c) The term “association” means any corporation organized un-
der this act, or that may adopt the provisions hereof ; and

(d) The term “person” shall include individuals, firms, partner-
ships, corporations, and associations.

Associations, as herein defined, shall be deemed non-profit, inas-
much as they are not organized to make profits for themselves, as
such, or for their members, as such, but only for their members as
producers, or consumers.

This act shall be referred to as the “co-operative marketing act.”

Section 6. Each association under this act shall have the following
powers:

(a) To engage in any activity in connection with the marketing,
selling, harvesting, preserving, drying, processing, canning, packing,
storing, handling, or utilization of any agricultural products produced
or delivered to it by its members; or the manufacturing or marketing
of the by-products thereof or in connection with the manufacturing,
purchase, hiring, or use by its members of supplies, machinery or
equipment; or in the financing of any such activities; or in any one
or more of the activities specified in this section.

(b) To borrow money and to make advances to members.

(c) To act as the agent or representative of any member or mem-
bers in any of the above mentioned activities.

(d) To purchase or otherwise acquire, and to hold, own, and
exercise all rights or ownership in, and to sell, transfer, or pledge
shares of the capital stock or bonds of any corporation or association
engaged in any related activity or in the handling or marketing of any
of the products handled by the association.

(e) To establish reserves and to invest the funds thereof in bonds
or such other property as may be provided in the by-laws.

(f) To buy, hold, and exercise all privileges of ownership, over
such real or personal property as may be necessary or convenient for
he conducting and operation of any of the business of the association,
or incidental thereto.

(g) To do each and everything necessary, suitable, or proper for
he accomplishment of any one of the purposes or the attainment of
iny one or more of the objects herein enumerated: or conducive to or
-xpedient for the interests or benefit of the association: and to con-
tract accordingly, and in addition, to exercise and possess all powers,
rights, and privileges necessary or incidental to the purposes for which
the association is organized or to the activities in which it is engaged;
and in addition, any other rights, powers, and privileges granted by
the laws of this State to ordinary corporations, except such as are in-
consistent with the express provisions of this act; and to do any such
thing anywhere.

(h) The power to transact a limited amount of business for non-
members shall not be denied, but the following powers are specifically
denied; no association shall deal in the products of non-members to an
amount greater in value than such as are handled by it for members;
no association shall purchase supplies for non-members in excess of
the total value of supplies purchased for members, provided the value
of the purchases made for persons who are neither members nor pro-
ducers shall not exceed fifteen per centum of the value of all its pur-
chases; and no association shall pay dividends on stock or membership
capital in excess of eight per centum per annum.

Section 7. (a) Under the terms and conditions prescribed in its
by-laws, an association may admit as members only persons engaged
in the production of the agricultural products, or producers of agri-
cultural products engaged in the use or consumption of the supplies,
handled or to be handled by or through the association; the terms “per-
sons engaged in the production of agricultural products” and “pro-
ducers of agricultural products” shall include the lessees and tenants
of land used for production of agricultural products, and any lessors
and landlords who receive as rent part of crops raised on the leased
premises; provided, however, the limitation contained in this sub-
section shall not apply to any corporation, organized under the laws ot
Virginia prior to the first day of March, nineteen hundred and thirty,
and engaged in the co-operative marketing of agricultural products
and/or the co-operative purchasing of farm supplies, on a non-profit
basis, that does not pay dividends on capital stock or membership capi-
tal, in excess of eight per centum per annum, and that adopts the pro-
visions of this act.

(b) Ifa member of a non-stock association be other than a natural
person, stich member may be represented by any individual, associate,
officer or member thereof, duly authorized in writing.

(c) One association organized hereunder may become a member
or stockholder of any other association or associations, organized here-
under.

Section 8. Any five or more persons engaged in the production of
agricultural products may form a non-profit, co-operative association,
with or without capital stock, under the provisions of this act. Such
certificate of incorporation shall set forth:

(a) The name of the association, which name shall be such as
to distinguish it from any other corporation or association authorized
for similar purposes.
(b) The name of the county (and post office address 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 of stock of the corporation
and its division into shares; and if there be more than one class o
stock created by the certificate of incorporation, a description of th
different classes thereof, with the terms on which such different classe:
are created, and if the corporation is to issue in series any class 0:
stock which is preferred as to dividends, assets or otherwise over stocl
of any other class or classes, there shall be set forth in the certificate
of incorporation the limits, if any, of variation between each series o!
each class, as to the rate of dividend payable thereon, the price anc
terms upon which the same may be redeemed and as to the amount
which shall be paid to the holders thereof in case of dissolution or any
distribution of assets and as to the terms or amount of any sinking
fund provided for the purchase or redemption thereof. ,

(e) The maximum number of directors, not less than five, whc
are to manage the affairs of the same, and if a non-stock association.
how vacancies in such number are to be filled.

(f) The names and residences of the officers and directors, who,
unless sooner changed by the members, are for the first year to man-
age the affairs of the association.

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

(h) If organized without capital stock, whether the property
rights and interests of each member shall be equal or unequal; and if
unequal, the articles shall set forth the general rule or rules applicable
0 all members by which the property rights and interests, respectively,
»f each member may and shall be determined and fixed: and this asso-
iation shall have the power to admit new members who shall be en-
itled to share in the property of the association with the old members,
n accordance with such general rule or rules. This provision of the
irticles of incorporation shall not be altered, amended, or repealed
‘xcept by the written consent or the vote of two-thirds of the members.

(1) The period, if any, limited for the duration of the association.

(j) The certificate of incorporation may also contain any pro-
sion not contrary to law which the incorporators may choose to insert
or the regulation of its business and for the conduct of the affairs
ft the association; and any provision creating, defining, limiting or
egulating the powers of the association, its directors, members, stock-
olders, or any class or classes of members or stockholders.

Such certificate shall be subscribed by at least five persons and
cknowledged by them before an officer authorized by the law of this
tate to take and certify acknowledgment of deeds and conveyances ;
f organized without capital stock no judge’s certificate shall be re-
uired; and shall be filed in accordance with the provisions of section
hirty-eight hundred and fifty-one of the Code of Virginia, as amended ;
nd when so filed the said articles of incorporation. or certified conjes
thereof, shall be received in all the courts of this State, and other
places, as prima facie evidence of the facts contained therein, and of
the due incorporation of such association. A certified copy of the
articles of incorporation and by-laws, and amendments, shall also be
Fled with the director of the division of markets, of the State depart-
ment of agriculture, and the director of extension division of the
State agricultural college.

Section 9. The articles or certificate of incorporation or the char-
ter of any association may be altered or amended under and in accord-
ance with the provisions of the general corporation law of the State,
according to whether the association be a stock or non-stock corpora-
tion, respectively, except as herein otherwise set forth; any amendment
required by law to be approved by a two-thirds vote of the stockholders
or members, shall require, in the case of an association, the approval
of only a majority of the members of such association, except as other-
wise expressly provided by this act.

Section 14. (a) When a member of an association established
without capital stock has paid his membership fee in full, he shall re-
ceive a certificate of membership.

(b) No association shall issue voting stock to a member until
it has been fully paid for. The promissory notes of the members may
be accepted by the association as full or partial payment. The associa-
tion shall hold the stock as security for the payment of the note, but
such retention as security shall not affect the member’s right to vote.

(c) Except for debts lawfully contracted between him and the
association, no member shall be liable for the debts of the association
to an amount exceeding the sum remaining unpaid on his membership
fee or his subscription to the capital stock, including any unpaid balance
on any promissory notes given in payment thereof.

(d) No stockholder of an association shall own more than one-
tenth of the issued and outstanding voting stock of the association ;
and an association, in its by-laws, may limit the amount of voting stock
which one member may own to any amount less than one-tenth of the
issued and outstanding voting stock.

(e) No member shall be allowed more than one vote; provided,
however, the limitation contained in this subsection shall not apply tc
any corporation, organized under the laws of Virginia prior to the
first day of March, nineteen hundred and thirty, and engaged in the
co-operative marketing of agricultural products and/or the co-operative
purchasing of farm supplies on a non-profit basis, that does not pay
dividends on capital stock or membership capital in excess of eight
per centum per annum, and that adopts the provisions of this act.

(f) Any association organized with stock under this act maj
issue preferred stock, with or without the right to vote; such stock
may be redeemable or retirable by the association on such terms anc
conditions as may be provided for by the articles of incorporation anc
printed on thé face of the certificate.

(g) The by-laws of each joint stock association shall prohibit th
transfer of voting stock and certificates with voting rights of the as-
sociation to anyone not eligible to membership in the association, and
such restrictions must be printed upon every certificate subject thereto.

(h) The association may at any time, except when the debts of
the association exceed fifty per centum (50%) of the assets thereof,
buy in or purchase its voting stock at book value thereof as conclusively
determined by the board of directors, and pay for it in cash within one
(1) year thereafter.

Section 21. No person, firm, corporation, or association, unless
it is organized under, or has adopted, the provisions of this act, shall
use as its corporate or trade name or title, or as a part thereof, the
word “co-operative”; neither shall any foreign corporation having as
its corporate or trade name or title, or as a part thereof, the word
“co-operative” be licensed to do business in this State unless such
association is organized under an act of the foreign state, enacted
therein for the purposes similar to those of this act.

This section shall not apply to any person, firm, corporation, or
association having the word “co-operative” as its corporate or trade
name, or title, or as a part thereof, lawfully doing business in this
State prior to the first day of March, nineteen hundred and thirty.
Any one violating the provisions of this section shall be subject to a
fine not exceeding fifty dollars. For the purpose of this act each day’s
violation may be considered a separate offense.

Section 22. An association may organize, form, operate, own, con-
trol, have interest in, own stock of, or be a member of any other cor-
poration or corporations, with or without capital stock, and engaged in
preserving, drying, processing, canning, packing, storing, handling,
shipping, utilizing, manufacturing, marketing, discounting credit in-
struments, handling farm supplies or selling or buying of the agricul-
tural products handled by the association, or the by-products thereof.
If such corporations are warehousing corporations, they may issue
legal warehouse receipts to the association, or to any other person, and
such legal warehouse receipts shall be considered as adequate collateral
to the extent of the current value of the commodity represented there-
by. In case such warehouse is licensed or licensed and bonded under
the laws of this State, or the United States, its warehouse receipt
shall not be challenged or discriminated against because of ownership
or control, wholly or in part, by the association.

Section 24. Any co-operative marketing or purchasing association
or corporation organized under the general corporation laws of this
State, or under previously existing statutes of this State, may be
brought under the provisions of this act and be entitled to all the
benefits thereof, and be subject to all the provisions, restrictions and
limitations thereof, in the following manner:

The board of directors, board of trustees, or other managing body
of such association or corporation shall, at a duly convened meeting,
adopt a resolution finding it advisable that such association or corpora-
tion be brought under the provisions of this act and authorizine the
proper officers of such association or corporation to take the necessary
steps as outlined in this section to adopt the provisions of this act.
A certificate thereof shall be made by the president or 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 acknowledgment of deeds, which certificate, together
with the articles of incorporation, made pursuant to section eight of
this act (except that such articles of incorporation shall be signed by
the president, or one of the vice-presidents, under the seal of the cor-
poration, attested by its secretary, and acknowledged by them before
an officer authorized by the laws of this State to take acknowledgments
of deeds), and the receipt for the payment of any fee to the State that
may be imposed thereon by law, shall be presented to the State cor-
poration commission, which shall ascertain and declare whether the
applicants, by complying with the requirements of the law, have entitled
themselves to the provisions of this act, and shall issue or refuse same
accordingly.

If the same is issued, the certificate and the articles of incorpora-
tion, with the order thereon of the commission, shall be certified and
recorded in the same manner providing for the certification and record-
ation of charters granted under the general corporation laws of this
State; and as soon as the said certificate and the articles of incorpora-
tion are lodged with the secretary of the Commonwealth, the associa-
tion or corporation shall be a corporation organized and existing under
the provisions of this act, and shall be entitled to all the benefits and
subject to all the provisions, limitations and restrictions thereof. The
filing fee, if any, shall be the same as for filing an amendment to
articles of incorporation. :

Section 29-a. Associations incorporated under the provisions of
this act or that have adopted the provisions thereof, shall have the power
to merge or consolidate with any other such associations. Such mer-
ger or consolidation shall be effected in accordance with the general
provisions of law providing for the merger or consolidation of other
corporations in so far as applicable, and where not applicable in a man-
ner analogous, to that set forth in said provisions. In effecting such
merger or consolidation, the members of the association shall take such
action as is required of stockholders. The fair cash value of the stock
or membership of any dissenting member shall be taken to mean the
amount to which said member would be entitled by way of distribution
of assets if said corporation were dissolved.

Section 30. Each association organized hereunder shall pay an
annual license fee of ten dollars, but shall be exempt from all license
taxes, or taxes upon capital stock or reserve funds held by it. |

Section 31. For filing articles of incorporation, an association or-
ganized hereunder with capital stock shall pay such fees as conform
to the general laws governing corporations, but where organized with-
out capital stock shall pay ten dollars; and for filing an amendment
to the articles, two dollars and one-half.