HB5905 99TH GENERAL ASSEMBLY

LRB099 18402 JLS 42778 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB5905

Introduced , by Rep. Will Guzzardi

SYNOPSIS AS INTRODUCED:

New Act
805 ILCS 310/Act rep.

Creates the Illinois Cooperative Act. Repeals the Co-operative Act on January 1, 2020. Provides for the organization, operation, and regulation of cooperatives. Sets forth requirements for articles of incorporation, amendments, number of incorporators, and voting rights. Provides for regulation by the Secretary of State. Sets forth requirements for directors. Defines terms. Provides for liquidation, consolidation, and dissolution of cooperatives.

A BILL FOR

AN ACT concerning business.

WHEREAS, The purpose of this Act is to promote the growth and development of cooperative enterprises in the State of Illinois; and

WHEREAS, The General Assembly acknowledges that such democratically owned and controlled enterprises are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity, believes that those values deserve the support of our statutes, and therefore seeks to modernize the laws governing cooperatives so that enterprises operating in this manner may more easily form, expand, create jobs, and strengthen our economy; therefore

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Illinois Cooperative Act.

Section 5. Definitions. In this Act:

"Association" means any corporation organized under this Act.

"Board" means the board of directors of an association.

"Cooperative" means a domestic association or a foreign association organized under this Act.

"Entity", except as otherwise provided, means a foreign association, a foreign or domestic corporation other than a cooperative, a foreign or domestic limited liability company, a foreign or domestic limited liability partnership, a foreign or domestic limited partnership, or any other entity.

"Foreign association" means a corporation organized under the cooperative laws of another state or the District of Columbia or a foreign corporation that operates on a cooperative basis that is organized under the corporation laws of another state, the District of Columbia, or the United States.

"Marketing agreement" means an agreement, contract, or other arrangement between a cooperative and a member in which the member agrees to market all or a part of the products or produce produced by the member, or agrees to purchase all or a part of the member's requirements for inputs, services, or supplies.

"Member" means a patron of a cooperative who has been qualified and accepted into membership in a cooperative.

"Membership stock" means any class of stock or other equity interest in a cooperative, continuous ownership of which is required for membership in the cooperative.

"Patron" means a person with whom a cooperative conducts business and has made an enforceable agreement to allocate and distribute a patronage dividend or per-unit retain allocation, in accordance with federal income tax law.

"Patronage stock" means any stock or other equity interest in a cooperative that was originally issued by the cooperative with respect to patronage transactions.

"Person" includes a natural person, partnership, corporation, cooperative, or other entity.

"Producer" means a person engaged in the production of agricultural products for the market.

Section 10. Purposes.

(a) An association may be organized under this Act for any lawful purpose permitted to corporations by the laws of this State, except any such purpose that is inconsistent with the provisions of this Act. This Section does not authorize any professional services otherwise prohibited by law.

(b) Associations are organized for the primary purpose of providing services to their members, under such members' democratic ownership and control.

(c) A municipal power agency organized under the Illinois Municipal Code is not an association for the purposes of this Act.

Section 15. Powers of an association. An association incorporated under this Act shall have the following powers:

(1) It may make contracts, incur liabilities, and borrow money; issue capital stock and other equity interests and issue certificates therefor; acquire property; and dispose of, mortgage, pledge, lease, or otherwise use in any manner, any of its property, or any interest in its property, wherever situated.

(2) It may invest its funds, lend money for its purposes, and hold any property as security for repayment.

(3) It may act as the agent or representative of any members or other patrons in any activities authorized by this Act.

(4) It may conduct its business and affairs, have offices, and exercise its power in the United States or in any foreign country.

(5) It may establish reserves and invest these funds.

(6) It may buy, hold, and exercise all privileges of ownership over such real or personal property as is necessary, convenient, or incidental to the conduct of any authorized business of the association.

(7) It may establish, secure, own, and develop patents, trademarks, copyrights, service marks, and other intellectual property.

(8) Notwithstanding the provisions of the Uniform Disposition of Unclaimed Property Act, it may effectuate the forfeiture of any unclaimed stock or other equity interests, dividends, and patronage allocations, for which the owner cannot be found after a period of 3 years. Notice of the existence of unclaimed stock or other equity interests and a request for written acknowledgment from the owner to the association shall be evidence of a bona fide attempt to deliver the unclaimed stock or other equity interests to the owner. If the notice is not acknowledged within 30 days after the notice is sent or within the period specified in the notice, if longer, all such unclaimed stock or other equity interests specified in the notice are forfeited and become the property of the association.

(9) It may make donations for charitable, scientific, educational, community development, or religious purposes, and may use all or part of the funds forfeited to the association under item (8) for these purposes.

(10) It may do everything necessary, suitable, or proper for the accomplishment of any of the purposes enumerated in this Section.

In addition it may 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 any other powers, rights, and privileges granted to corporations by the laws of this State, except as are inconsistent with the provisions of this Act.

Section 20. Use of words in name; prohibition.

(a) The name of any association organized under this Act shall include the word or abbreviation "cooperative," "coop," "co-operative", "co-op", "association", or "assn.".

(b) No corporation or other person organized or applying to do business in this State shall use the word or abbreviation "cooperative," "coop," "co-operative," or "co-op" as a part of its corporate or other business name or title, unless at least one of the following applies:

(1) It is organized under this Act or has converted to an association under this Act.

(2) It is organized and operating on a cooperative basis under the General Not For Profit Corporation Act of 1986 or the Agricultural Co-Operative Act, or it is a corporation organized and operating under the Business Corporation Act of 1983 for the purpose of ownership or administration of residential property on a cooperative basis.

(3) It is a foreign corporation that is organized and operating on a cooperative basis as permitted by the laws under which it is organized that has complied with the provisions of this Act.

(4) It is organized and operating in accordance with the cooperative laws of another state, the District of Columbia, or the United States and has complied with the provisions of this Act.

(5) It is a state or federally chartered credit union.

Section 21. Association name.

(a) The name of an association organized, existing, or subject to the provisions of this Act shall be distinguishable upon the records in the Office of the Secretary of State from the name or assumed name of any domestic association or limited liability company organized under the Limited Liability Company Act, whether for profit or not for profit, existing under any Act of this State, or of the name or assumed name of any foreign association or foreign limited liability company registered under the Limited Liability Company Act, whether for profit or not for profit, authorized to transact business in this State, or a name the exclusive right to which is, at the time, reserved or registered in the manner provided in Section 4.10 or 4.25 of the Business Corporation Act of 1983 or Section 1-15 of the Limited Liability Company Act, except that, subject to the discretion of the Secretary of State, a foreign association that has a name prohibited by this subsection may be issued a certificate of authority to transact business in this State, if the foreign association:

(i) elects to adopt an assumed corporate name or names in accordance with Section 4.15 of the Business Corporation Act of 1983; and

(ii) agrees in its application for a certificate of authority to transact business in this State only under such assumed association name or names.

(b) The Secretary of State shall determine whether a name is "distinguishable" from another name for purposes of this Act. Without excluding other names which may not constitute distinguishable names in this State, a name is not considered distinguishable, for purposes of this Act, solely because it contains one or more of the following:

(1) the word "cooperative", "coop", "co-operative", "co-op", "association," or "assn."; or

(2) articles, conjunctions, contractions, abbreviations, different tenses or number of the same word.

(c) Nothing in this Section shall:

(1) Require any domestic association existing or any foreign entity having a certificate of authority on the effective date of this Act to modify or otherwise change its name or assumed name, if any.

(2) Abrogate or limit the common law or statutory law of unfair competition or unfair trade practices, nor derogate from the common law or principles of equity or the statutes of this State or of the United States with respect to the right to acquire and protect copyrights, trade names, trademarks, service names, service marks, or any other right to the exclusive use of names or symbols.

Section 22. Powers of Secretary of State. The Secretary of State shall have the power and authority reasonably necessary to administer this Act efficiently and to perform the duties therein imposed. The Secretary of State shall have the power to promulgate, amend, or repeal rules and regulations deemed necessary to efficiently administer this Act. The rules adopted by the Secretary of State under this Act shall be effective in the manner provided for in the Illinois Administrative Procedure Act.

Section 23. List of associations; exchange of information. The Secretary of State shall publish annual and daily lists of associations formed under this Act in the same manner as is provided in Section 1.25 of the Business Corporation Act of 1983.

Section 25. Number of incorporators; registered agent.

(a) Two or more individuals may form an association under this Act.

(b) An association shall have and maintain a registered agent upon whom any process, notice, or demand against the association may be served. The agent shall be one of the following:

(1) A natural person who is a resident of this State.

(2) A domestic or foreign corporation, limited liability company, limited partnership, limited liability partnership, or association authorized to transact business or exercise privileges in this State that is authorized by its statement of purpose to act as such agent, having a business office identical with such registered office.

(c) An association shall change its registered agent if the office of registered agent shall become vacant for any reason or if its registered agent becomes disqualified or incapacitated to act or if the association revokes the appointment of its registered agent.

(d) An association may change its registered agent by executing and filing with the Secretary of State a statement setting forth:

(1) The name of the association.

(2) The address, including street and number, or rural route number, of its then registered office.

(3) If the address of its registered office is to be changed, the address, including street and number, or rural route number, to which the registered office is to be changed.

(4) The name of its then registered agent.

(5) If its registered agent is to be changed, the name of its successor registered agent.

(6) That the address of its registered office and the address of the business office of its registered agent, as changed, will be identical.

(7) That such change was authorized by resolution duly adopted by the board of directors.

(e) The change of registered agent shall become effective upon the filing of such statement by the Secretary of State.

Section 30. Articles of incorporation.

(a) The articles of incorporation of an association shall set forth all of the following:

(1) The name of the association and the address of its principal place of business.

(2) The association's purposes, as permitted by this Act. It is sufficient to state in the articles that the association may engage in any activity within the purposes for which associations may be organized under this Act.

(3) The address, including street and number, of the association's initial registered office in this State and the name of its initial registered agent at that office.

(4) The names and addresses of the incorporators.

(5) The number of directors to be elected at the first meeting of shareholders.

(6) Whether the association is organized with or without capital stock and:

(A) if the association is organized without capital stock, the articles shall set forth the rules by which the property rights and interests of each member are to be determined; and

(B) if the association is organized with capital stock, the total amount of the stock which the association is authorized to issue, the number and par value of the shares, and dividend rights, if any; if there is more than one class of stock, the articles shall set forth a statement of the number of shares in each class and a statement of the designations, preferences, qualifications, limitations, restrictions, and special or relative rights of the shares in each class.

(7) If the association may issue shares of any preferred or special class in series, the designation of each series and a statement of the variations in the relative rights and preferences of the different series, if the same are fixed in the articles of incorporation, or a statement of the authority vested in the board of directors to establish series and determine the variations in the relative rights and preferences of the different series.

(b) The articles may include additional provisions, consistent with law, including provisions that are required or permitted to be set forth in the bylaws. The articles may also contain provisions relating to any Sections of this Act that give discretion to the association to modify default rules or to prohibit or permit certain actions, if and only if such provisions are included in the articles, including, but not limited to, subsection (e) of Section 40, subsection (g) of Section 95, paragraph (b)(2) of Section 170, and subsection (e) of Section 180.

(c) The articles shall be signed by the incorporators and filed with the Secretary of State in accordance with Section 55. The legal existence of an association begins upon the filing of the articles and, unless the articles provide otherwise, its period of existence is perpetual.

Section 35. Amendment or restatement of articles.

(a) The articles of incorporation of an association may be altered or amended at any annual meeting of the association or at any special meeting called for that purpose, provided that the text of the proposed change, or a general description of the change, is contained in the notice of the meeting. An amendment shall first be approved by two-thirds of the directors and shall then be adopted by an affirmative vote of 60% of the member votes cast on the amendment or, if the articles or bylaws provide or permit, by the affirmative vote of a greater majority or by the affirmative vote of a simple majority of all member votes eligible to be cast on the amendment. Any association controlled directly and equally by members, without a board of directors, shall vote as members and need not first vote as directors.

(b) Amendments to the articles of incorporation, when so adopted, shall be filed in accordance with Section 55.

(c) The board of an association may adopt a restatement of the articles without a member vote if the restatement merely incorporates amendments previously approved by the board and adopted by the members. An association may, by action taken in the manner required for an amendment, adopt restated articles that contain amendments made at the time of the restatement. Restated articles shall state that they are restated, or restated and amended, if amendments are adopted with the restatement, and shall supersede the existing articles and amendments. Restated articles shall meet the requirements of Section 30, except that the names and addresses of the incorporators and initial directors may be omitted.

Restated articles shall set forth:

(1) the text of the articles as restated;

(2) the original date of incorporation, the original name under which the association was incorporated, subsequent names, if any, that the association adopted pursuant to amendment of its articles of incorporation, and the effective date of any such amendments;

(3) the address of the registered office and the name of the registered agent on the date of filing the restated articles; and

(4) the number of shares of each class issued on the date of filing the restated articles and the amount of paid-in capital as of such date, or a statement that the association does not have stock.

A restatement of the articles shall be filed in the manner prescribed for an amendment of the articles.

(d) Except as provided in the articles of incorporation or bylaws, the board may adopt an amendment to the articles of incorporation without a member vote in any of the following cases:

(1) to change the principal place of business of the association;

(2) to designate and determine the rights and restrictions of a series within a class of capital stock, if permitted by the articles;

(3) to reduce the authorized number of shares of any class or series of capital stock to any number down to and including the number of the shares issued and outstanding, and to assign the authorization for the number of shares so reduced to another class or classes of capital stock previously authorized;

(4) after a merger, consolidation, conversion, division, or occurrence of any other contingent event referred to in the articles of incorporation, to eliminate from the articles any statement or provision pertaining exclusively to the merger, consolidation, conversion, division, or occurrence, and to make other changes required by such elimination, but only after the deleted item has been superseded in accordance with the articles of incorporation or otherwise is no longer in effect.

Section 40. Voting on amendment.

(a)(1) Unless the board provides that division (a)(3) of this Section applies to an amendment to the articles of incorporation, a holder of stock other than membership stock or patronage stock who is affected by a proposed amendment to the articles shall be entitled to cast one vote on the amendment regardless of the par or stated value of the stock, the number of shares, or the number of affected classes of stock held.

(2) A member holding stock affected by a proposed amendment may vote only as a member and shall not be entitled to vote or demand fair cash value as an affected stockholder.

(3) The board may provide that a stockholder otherwise entitled to vote under division (a)(1) of this Section shall instead be entitled to payment of fair cash value of the affected stock held by such stockholder in accordance with Section 170.

(b) For purposes of this Section, a holder of stock is affected as to any class of stock owned by the holder only if an amendment would expressly do any of the following:

(1) decrease the dividends to which that class may be entitled or change the method by which the dividend rate on that class is fixed;

(2) further restrict rights to transfer that class;

(3) give to another existing or any new class of stock or equity interest not previously entitled thereto any preference, as to dividends or upon dissolution, that is higher than preferences of that class;

(4) change the par value of shares of that class or of any other class having the same or higher preferences as to dividends or upon dissolution;

(5) increase the number of authorized shares of any class having a higher preference as to dividends or upon dissolution; or

(6) require or permit an exchange of shares of any class with lower preferences as to dividends or upon dissolution for shares of any other class with higher preferences.

(c) If any proposed amendment will alter or change the powers, preferences, or special rights of one or more series of any class so as to affect them adversely, but shall not so affect the entire class, then only the shares of the series so affected by the amendment shall be considered a separate class for the purposes of subsection (b) of this Section.

(d) If stockholders are entitled to vote on an amendment, the amendment is adopted only if all of the following conditions are met:

(1) notice of the meeting, an exact copy of the proposed amendment, and a ballot on the amendment have been sent to each affected stockholder;

(2) approval by the members under Section 35; and

(3) approval by a simple majority of the affected stockholders present and voting at a meeting of the stockholders.

(e) This Section does not apply to stock issued prior to the effective date of this Act, unless the association adopts an amendment to its articles of incorporation making the stock subject to this Section.

Section 45. Evidence of incorporation.

(a) A copy of the association's articles of incorporation or restated articles filed in the office of the Secretary of State, and certified by the Secretary of State, is conclusive evidence, except as against the State, that the association has been incorporated under the laws of this State; and a copy certified by the Secretary of State of any certificate of amendment or other certificate is prima-facie evidence of such amendment or of the facts stated in the certificate, and of the observance and performance of all antecedent conditions necessary to the action that the certificate purports to evidence.

(b) A copy of restated articles filed in the office of the Secretary of State, and certified by the Secretary of State, shall be accepted in this State and other jurisdictions in lieu of the original articles, amendments to the articles, and prior amended articles.

(c) The original or a copy of the record of minutes of the proceedings of the incorporators of an association, or of the proceedings or meetings of the members or any class of stockholders, or of the directors, or of any committee thereof, including any written consent, waiver, release, or agreement entered in such record or minutes, or the original or a copy of a statement that no specified proceeding was had or that no specified consent, waiver, release, or agreement exists, shall, when certified to be true by the secretary or an assistant secretary of an association, be received in the courts as prima-facie evidence of the facts stated therein. Every meeting referred to in the certified original or copy is considered duly called and held, and all motions and resolutions adopted and proceedings had at the meeting are considered duly adopted and had, and all elections of directors and all elections or appointments of officers chosen at the meeting are considered valid, until the contrary is proved; and whenever a person who is not a member, patron, or stockholder of an association has acted in good faith in reliance upon any such certified original or copy, it is conclusive in that person's favor.

Section 50. Reinstatement of association.

(a) An association that has been dissolved in a manner other than for a voluntary dissolution as provided in Section 180, or a judicial dissolution, may be reinstated by filing, on a form prescribed by the Secretary of State for the administration of this Act, an application for reinstatement, and by filing all reports and paying all fees, franchise taxes, penalties, and interest then due and theretofore becoming due. The application for reinstatement shall be executed and filed in accordance with Section 55 of this Act and shall set forth:

(1) The name of the association at the time of the issuance of the certificate of dissolution.

(2) If such name is not available for use as determined by the Secretary of State at the time of filing the application for reinstatement, the name of the association shall be deemed changed provided that any change of name is properly effected pursuant to Section 35 of this Act.

(3) The date of the issuance of the certificate of dissolution.

(4) The name and address, including street and number, or rural route number of the registered office of the association upon reinstatement, and the name of its registered agent at such address upon the reinstatement of the association provided that any change from the registered agent at the time of dissolution is properly reported pursuant to Section 25 of this Act.

(b) Upon reinstatement of an association's articles of incorporation, the rights, privileges, and franchises, including all real or personal property rights and credits and all contract and other rights, of the association existing at the time that the dissolution became effective shall continue in effect as if the dissolution had not occurred; and the association shall again be entitled to exercise the rights, privileges, and franchises authorized by its articles.

Section 55. Filing articles; fees; annual reports.

(a) For filing articles of incorporation or articles of amendment, merger, consolidation, division, dissolution, or reinstatement, an association organized under this Act shall pay to the Secretary of State the same fees required of corporations organized under the Business Corporation Act of 1983. In the case of an article of division, the filing fee shall be the same as for an article of merger or consolidation.

(b) Associations shall file the same annual reports and pay the same fees, franchise taxes, penalties, and interest required of corporations under Article 15 of the Business Corporation Act of 1983, except that if the association is organized without capital stock, the association shall report its paid-in capital as the total of its membership interests.

(c) When the articles of incorporation or articles of amendment, merger, consolidation, conversion, division, or dissolution are filed with the Secretary of State, the Secretary of State shall, if the articles comply with this Act, endorse approval thereon, the date of filing, a file number, and make a legible copy thereof by any authorized method.

(d) All persons shall have the opportunity to acquire a copy of the articles filed in the office of the Secretary of State, but no person dealing with the association shall be charged with constructive notice of the contents of any such articles by reason of the filing.

Section 60. Dividends; stock; security interest.

(a) An association may pay dividends annually on its capital stock at a rate not exceeding 8% of its par value for any year, but dividends may be cumulative. The realized net earnings of the cooperative, to the extent attributable to business done with or for its patrons, shall be allocated and distributed among patrons in proportion to their patronage and in such manner and at such time as to constitute patronage dividends or per-unit retain allocations within the meaning of federal income tax law.

(b) Notwithstanding subsection (a), the articles or bylaws may provide for any of the following:

(1) that eligibility for patronage dividends is limited to members or to members in good standing;

(2) that the net earnings of the cooperative shall be retained for the capital and development needs of the cooperative and the improvement and extension of its services;

(3) that the number of allocation units of the cooperative shall be limited in any reasonable and equitable manner; or

(4) that patronage-sourced net operating losses of the cooperative shall not be allocated to patrons but shall be carried forward to offset patronage-sourced net earnings of subsequent years.

(c) An association, at any time, may purchase its own common stock at par or book value as determined by the board.

(d) An association shall have a continued perfected security interest in its membership stock and patronage stock to secure payment of any indebtedness or other obligation of the holder or owner to the association. Notwithstanding Articles 8 and 9 of the Uniform Commercial Code, the security interest shall have priority over all other perfected security interests. Unless otherwise provided in the association's articles of incorporation or bylaws, or by contract, a member or other patron has no right to compel an association to offset its membership stock or patronage stock against any indebtedness or obligation owed to the association.

Section 62. Membership stock certificates; disclosure document.

(a) An association may issue, but is not required to issue, membership stock certificates, if it is organized with membership stock. In the event that such certificates are issued, the certificates shall state the information required to be contained in the disclosure document described in subsection (c).

(b) If an association does not issue certificates, it shall issue a receipt or written advice of purchase to anyone purchasing a membership or membership share, or receiving a patronage share. No disclosure document need be provided to an existing member prior to the purchase of additional memberships or membership shares, or to a patron receiving patronage shares, if that member or patron has previously been provided with a disclosure document which is accurate and correct as of the date of the membership or share transaction.

(c) Except as provided in subsection (e), prior to issuing a membership or membership stock, an association shall provide the purchaser with a disclosure document. The disclosure document may be a prospectus, offering circular, brochure, specimen copy of the membership certificate, or similar document. The disclosure document shall contain the following information:

(1) A statement that the association is a cooperative corporation.

(2) A statement that a copy of the association's articles and bylaws are available at a specified internet website, if the association has made them electronically available, and that such documents will be furnished without charge to a member or prospective member upon written request, and the address to which such a written request is to be directed.

(3) A statement of the purchase price of a membership or membership share, and if such purchase price is subject to change, a statement of the process for making such change.

(4) If there are restrictions imposed by the association upon the transfer of membership, a statement to that effect and the restrictions imposed on transfer.

(5) If the association may levy dues, assessments, additional share purchases, or membership or transfer fees, a statement to that effect and the conditions under which the association may make such a levy.

(6) If the member is required to contribute services to the association, a statement to that effect and the amount and nature of the services to be contributed to the association.

(7) Whether the membership is redeemable and the conditions under which the membership may be redeemed at the option of the association or the member.

(8) If the voting power or the proprietary interests of the members is unequal, a statement to that effect and the rule or rules by which the voting power and proprietary rights are to be determined.

(9) In lieu of specifying verbatim in the disclosure document the restrictions on the transfer of a membership, conditions of levy, amount and nature of services to be contributed, conditions under which memberships are redeemable, or the rules by which the voting power and proprietary rights of members are to be determined, the disclosure document may contain a statement that such information will be provided free of charge to a member or prospective member who requests it in writing. If the disclosure document contains such a statement it shall also set forth the address to which such a request is to be directed.

(d) If the articles or bylaws are amended so that any statement required by subsection (a) on outstanding membership stock certificates is no longer accurate, the board may cancel the outstanding certificates and issue in their place new certificates conforming to the articles or bylaws as amended.

(e) When new membership stock certificates are issued in accordance with subsection (d), the board may order holders of outstanding certificates to surrender and exchange them for new certificates within a reasonable time fixed by the board. The board may further provide that the holder of the certificate to be surrendered shall not be entitled to exercise any of the rights of membership until the certificate is surrendered, but such rights shall be suspended only after notice of the order is given to the holder of the certificate and only until the certificate is surrendered.

(f) If a transferee of a membership stock certificate has not previously been provided with a disclosure statement which is accurate and correct as of the date of registration of the transfer, then the association shall provide a disclosure document to the transferee upon registration with the association of the transfer of the certificate.

Section 65. Bylaws. An association shall adopt bylaws that are not inconsistent with this Act or the association's articles of incorporation. The bylaws may provide for any of the following:

(1) The time, place, and manner of calling and conducting the association's meetings.

(2) The number of members constituting a quorum. If voting by any method other than personal appearance is used, members represented by a ballot may be counted in computing a quorum only on those matters for which the ballots were submitted.

(3) The right of members to vote by ballot delivered in person, by mail, by electronic or telephonic transmittal, or any combination of these, and the conditions, manner, form, and effect of such votes.

(4) Subject to the provisions of Section 75, a method of voting by members or delegates, and any limitations on voting rights of any group or class of members or delegates.

(5) The number of directors constituting a quorum.

(6) The number, qualifications, compensation, duties, and terms of office of directors and officers, and the time of their election and the manner of giving notice of the election.

(7) Penalties for violation of the bylaws.

(8) The amounts of entrance, organization, and membership fees, if any, the manner of collecting them, and the purposes for which they may be used, or the par value and number of shares required for membership, if any.

(9) Any amount that each member is required to pay annually or from time to time to carry on the business of the association; any charge to be paid by each member for services rendered by the association, and the time of payment and the manner of collection of such charge; and any marketing contract between the association and its members that members may be required to sign.

(10) The number and qualifications of members of the association and the conditions of membership or for ownership of membership stock in the association.

(11) The time and manner of permitting members to withdraw or the holders of membership stock to transfer their stock; and the manner of assignment and transfer of membership stock.

(12) The conditions upon which, and the time when, the membership of any member ceases; and the suspension of the rights of a member who ceases to be eligible for membership in the association.

(13) The manner and effect of the expulsion of a member.

(14) In the event of the death or withdrawal of a member or upon the expulsion of a member or the forfeiture of membership, any of the following:

(A) the manner of determining the value of a member's interest;

(B) provision for the purchase of a member's interest by the association; or

(C) at the option of the association, provision for such purchase at a price fixed by appraisal by the board of directors of the association.

(15) Any other provision for any matter relative to the control, regulation, operation, management, or government of the association.

Section 70. Adoption, amendment, or repeal of bylaws.

(a) The initial bylaws may be adopted by the association's directors who are to serve until the first member meeting. After the initial bylaws are adopted, bylaws may be adopted and amended only by the members unless the articles or bylaws provide that the board, by a two-thirds vote of the entire board, may adopt or amend the bylaws or any specified bylaw.

(b) Any bylaw adopted or amended by the board shall be reported at the next member meeting. Any bylaw adopted or amended by the board shall not conflict with the association's articles of incorporation or with this Act. Any bylaw is subject to amendment or repeal by the members at any time.

(c) Unless the bylaws provide otherwise, any bylaw may be adopted, amended, or repealed by a majority of the member votes cast on the adoption, amendment, or repeal.

Section 75. Members or delegates entitled to vote.

(a) A member entitled to vote shall have one vote, except that the articles or bylaws of the association may permit the following:

(1) voting by members in accordance with the amount of business done with or through the association;

(2) voting by delegates, including a voting system that provides any one or a combination of the following:

(A) that a delegate may cast only one vote;

(B) that a delegate may cast one vote for each member represented by the delegate; or

(C) that another form of delegate voting may be used.

(3) Voting by delegates or certain members on matters that are to be submitted to a member vote.

(4) Voting by any combination of the methods set forth in this subsection or any other method of voting set forth in the bylaws, provided the association is controlled by the members.

(b) If the articles or bylaws provide that only delegates or certain members are entitled to vote on matters to be submitted to a member vote, "member" or "members", as used in this Act with respect to the right of a member to vote, voting procedure, the required proportion of member votes, actions that are required or permitted to be taken by members, and the number of members required for a quorum, means the delegates or other members entitled to vote. When voting is based on the amount of business done, provisions of this Act requiring a vote of the members are met if the required membership vote is satisfied based on the voting power of the members.

Section 80. Members; meetings.

(a) An association shall have 2 or more members. However, an association may have one member if that member is a cooperative that has 2 or more members.

(b) An association shall hold an annual meeting of its members. The board may call a special meeting of the members at any time. Any meeting of the members may be held at one time or in a series of meetings at one or more locations.

(c) Twenty per cent of the members entitled to vote may file with the board a petition stating any proper business to be brought before the association and demanding a special meeting at any time for consideration of such business. Upon compliance with this Section, the meeting shall be called by the board.

(d) Notice of every meeting, together with a statement of the purpose of the meeting, shall be sent to each member who is entitled to vote at the meeting and any affected stockholder at the member's or stockholder's current address, as shown in the records of the association, at least 10 days prior to the meeting, in accordance with Section 85. The bylaws may provide that the notice be given by publication in a newspaper or newspapers of general circulation in the trade area of the association if notice to individual members and affected shareholders is impracticable.

Section 85. Methods of giving notice; waiver.

(a) Whenever notice is required by this Act to be given to any person, the notice may be given personally, by mail, or by electronic or telephonic transmittal. If mailed, the notice is given when it is deposited in the United States mail, with postage prepaid, addressed to the person at the person's address as it appears on the records of the association. If notice is sent by electronic or telephonic transmittal, notice is given when an electronic or telephonic confirmation of delivery is received by the association.

(b) A signed waiver is equivalent to personal notice to the person signing. The waiver may be signed at any time.

Section 90. Board of directors.

(a) Except where this Act or an association's articles of incorporation or bylaws require that action be otherwise authorized or taken, all of the authority of an association shall be exercised by or under the direction of the board. The board shall consist of not less than 5 directors, elected by and from the members, unless (i) the number of members is less than 5, in which case, the number of directors may equal the number of members or (ii) the articles provide that members directly and equally control the association and that all director rights, responsibilities, and other requirements under this Act are assigned to each member, in which case there may be no elected board and all references to a board or directors in this Act apply instead to all members.

(b) The bylaws may provide that the membership of an association be divided into districts or other groupings and that the directors shall be elected according to such districts or groupings. In that case, the bylaws shall specify the number of directors to be elected and the manner of reapportioning or redistricting the membership.

(c) The bylaws may provide that one or more directors may be appointed by the other directors. The appointed directors need not be members of the association, but shall have the same powers, rights, and responsibilities as other directors. The appointed directors shall not number more than 20% of the entire number of directors.

(d) The bylaws may provide for an executive committee and may allot to the executive committee any of the functions and powers of the board, subject to the general direction and control of the board.

(e) The association may provide a fair remuneration for the time actually spent by its officers and directors in its service, and for the services of the members of its executive committee.

(f) Unless the bylaws provide otherwise, when a vacancy on the board occurs other than by expiration of term, the remaining directors on the board, by a majority vote, may elect a director to fill the vacancy. If the bylaws provide for an election of directors by the members in a district or other grouping, the board may call a special meeting of the members in that district or group to fill the vacancy.

(g) A director may resign at any time by giving written notice to the board of directors, its chairman, or to the president or secretary of the association. A resignation is effective when the notice is given unless the notice specifies a future date. The pending vacancy may be filled before the effective date, but the successor shall not take office until the effective date.

Section 92. Officers.

(a) The officers of an association shall consist of a president, a secretary, a treasurer, and, if desired, a chairperson and one or more vice-chairpersons of the board, one or more vice-presidents, and other officers and assistant officers as necessary. The officers shall be elected by the board. The chairperson and any vice-chairperson of the board shall be a director. Unless the association's articles of incorporation or bylaws provide otherwise, none of the other officers need be a director. Any 2 or more offices may be held by the same person, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if the instrument is required by law or by the articles or bylaws to be executed, acknowledged, or verified by 2 or more officers. Unless the articles or the bylaws provide otherwise, all officers shall be elected annually.

(b) All officers have the authority to perform, and shall perform, the duties as the bylaws provide, or as the board may determine in accordance with the bylaws.

Section 93. Removal of officers or directors.

(a) Unless the bylaws provide otherwise, a director may be removed, with or without cause, by a majority vote of all members at an annual or special meeting.

(b) If the bylaws provide for election of directors by the members in a district or other grouping, then the members residing in that district or belonging to the group may, by a majority vote at an annual or special meeting, remove the director representing such district or group.

(c) Any director or officer facing possible removal shall be given fair notice of the proposed action in writing prior to a meeting and shall have an opportunity at the meeting to be heard in person or in writing.

Section 95. Indemnification.

(a) Subject to subsections (b) and (c) of this Section, an association may indemnify or agree to indemnify any person that was or is a party, or is threatened to be made a party, to any threatened, pending, or completed civil, criminal, administrative, or investigative action, suit, or proceeding, other than an action or suit by or in the right of the association, because the person is or was a director, officer, employee, agent, or volunteer of the association or is or was serving at the request of the association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise. The indemnification described in this subsection shall be for expenses, including attorney's fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit, or proceeding described in this subsection.

(b) With respect to any noncriminal action or proceeding, the indemnification described in subsection (a) of this Section shall only be made if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association as described in subsection (d) of Section 100.

(c) With respect to any criminal action or proceeding, the indemnification described in subsection (a) of this Section shall only be made if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association as described in subsection (d) of Section 100, and the person had no reasonable cause to believe the conduct was unlawful.

(d) For purposes of subsections (b) and (c) of this Section, the termination of any action, suit, or proceeding by judgment, order, settlement, or conviction or a plea of nolo contendere or its equivalent does not create, of itself, a presumption that the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association or that the person had reasonable cause to believe that the conduct was unlawful.

(e) Subject to subsection (f) of this Section and provided the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the association, an association may indemnify or agree to indemnify any person that was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action or suit by or in the right of the association to procure a judgment in its favor, because the person is or was a director, officer, employee, agent, or volunteer of the association or is or was serving at the request of the association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise. The indemnification described in this subsection shall be for expenses, including attorney's fees, actually and reasonably incurred by the person in connection with the defense or settlement of an action or suit described in this subsection.

(f) If a person is adjudged to be liable for negligence or misconduct in the performance of a duty to the association, the indemnification described in subsection (e) of this Section shall not exceed, for any claim, issue, or matter, the amount that the court in which the action or suit was brought determines, upon application, that despite the adjudication of liability and in view of all the circumstances of the case, the person fairly and reasonably is entitled to indemnity for expenses that the court in which the action or suit was brought considers proper.

(g) Notwithstanding subsections (a), (b), (c), (d), (e), and (f) of this Section, unless limited in the articles of incorporation, to the extent that a person has been successful on the merits in defense of any action, suit, or proceeding described in subsection (a), (b), (c), (d), (e), or (f) of this Section, the person shall be indemnified against expenses, including attorney's fees, actually and reasonably incurred in connection with that action, suit, or proceeding.

(h) Unless ordered by a court or unless subsection (g) of this Section applies, the association shall make any indemnification under subsections (a), (b), (c), (d), (e), and (f) of this Section only as authorized in the specific case, upon a determination that indemnification of the person is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a), (b), (c), (d), (e), and (f) of this Section. This determination shall be made in any of the following manners:

(1) by a majority vote of a quorum consisting of directors of the indemnifying association that were not and are not parties to or threatened with the action, suit, or proceeding described in subsections (a), (b), (c), (d), (e), and (f) of this Section;

(2) whether or not a quorum as described in paragraph (1) of this subsection is obtainable, and if a majority of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney or a firm of attorneys associated with that attorney, that within the past 5 years has been retained by or has performed services for the association or has performed services for any person to be indemnified; or

(3) by the members.

(i) The association shall pay the expenses, including attorney's fees, incurred by the person in defending the action, suit, or proceeding described in subsection (a), (b), (c), (d), (e), or (f) of this Section, unless either of the following applies:

(1) At the time of a person's act or omission that is the subject of an action, suit, or proceeding described in subsection (a), (b), (c), (d), (e), or (f) of this Section, the articles or bylaws of the association state, by specific reference to subsections (a), (b), (c), (d), (e), and (f) of this Section, that subsections (a), (b), (c), (d), (e), and (f) of this Section do not apply to the association.

(2) The only liability asserted against a person in an action, suit, or proceeding described in subsection (a), (b), (c), (d), (e), or (f) of this Section is pursuant to Section 110. Upon receipt of a request from a person, the association may pay expenses, including attorney's fees, incurred by a person in defending any action, suit, or proceeding described in subsection (a), (b), (c), (d), (e), or (f) of this Section as the expenses are incurred in advance of the final disposition of the action, suit, or proceeding, if the board authorizes this payment in the specific case and upon receipt of an undertaking by or on behalf of the person to repay the amount if it ultimately is determined that the person is not entitled to be indemnified by the association.

(j) Both of the following apply to the indemnification authorized by this Section:

(1) It is not exclusive of and is in addition to any other rights granted to a person seeking indemnification pursuant to the articles or bylaws of the association, any agreement, a vote of members or disinterested directors of the association, or otherwise, for action taken in the person's official capacity and action taken in another capacity while holding their office or position.

(2) It continues as to a person that has ceased to be a director, officer, employee, member, manager, agent, or volunteer and inures to the benefit of the heirs, executors, and administrators of that person.

(k) As used in this Section, "association" includes all constituent associations and entities in a consolidation or merger and the new or surviving association or entity. Any person that is or was a director, officer, employee, agent, or volunteer of a constituent association or is or was serving at the request of a constituent association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise stands in the same position under this Section with respect to the new or surviving association or entity as the person would if the person had served the new or surviving association or entity in the same capacity.

(l) An association may purchase and maintain insurance or furnish similar protection, including, but not limited to, trust funds, letters of credit, or self-insurance, for or on behalf of any person that is or was a director, officer, employee, agent, or volunteer of the association or is or was serving at the request of the association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise. The insurance or similar protection described in this subsection shall be against any liability asserted against the person and incurred by the person in any such capacity, whether or not the association would have the power to indemnify the person against that liability under this Section.

Insurance described in this subsection may be purchased from or maintained with a person in which the association has a financial interest.

Section 100. Standard of care for directors.

(a) A director shall perform the duties of a director, including duties as a member of any committee of the directors upon which the director serves, in good faith, in a manner the director reasonably believes to be in or not opposed to the best interests of the association, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In performing these duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, that are prepared or presented by any of the following:

(1) one or more directors, officers, or employees of the association whom the director reasonably believes are reliable and competent in the matters prepared or presented;

(2) counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person's professional or expert competence;

(3) a committee of the directors upon which the director does not serve, established in accordance with the association's articles of incorporation or bylaws, as to matters within its designated authority, provided the director reasonably believes the committee merits confidence.

(b) For purposes of subsection (a) of this Section:

(1) A director shall not be found to have failed to perform the duties in accordance with subsection (a) of this Section, unless it is proved, by clear and convincing evidence, in an action brought against the director that the director has not acted in good faith, in a manner reasonably believed to be in or not opposed to the best interests of the association, or with the care that an ordinarily prudent person in a like position would use under similar circumstances. Such an action includes, but is not limited to, an action that involves or affects any of the following:

(A) a change or potential change in control of the association;

(B) a termination or potential termination of the director's service to the association as a director;

(C) service in any other position or relationship with the association.

(2) A director shall not be considered to be acting in good faith if the director has knowledge concerning the matter in question that would cause reliance on information, opinions, reports, or statements that are prepared or presented by the persons described in subsections (a)(1) through (a)(3) of this Section to be unwarranted.

(c)(1) Subject to subsections (c)(2) and (c)(3) of this Section, a director is liable in damages for any act that the director takes or fails to take as director only if it is proved, by clear and convincing evidence, in an action brought against the director that the act or omission of the director was undertaken with a deliberate intent to cause injury to the association or was undertaken with a reckless disregard for the best interests of the association.

(2) Subsection (c)(1) of this Section does not affect the liability of a director under Section 110.

(3) Subject to subsection (c)(2) of this Section, subsection (c)(1) of this Section does not apply if, and only to the extent that, at the time of an act or omission of the director, the association's articles of incorporation or bylaws state, by specific reference to subsection (c)(1) of this Section, that its provisions do not apply to the association.

(d) For purposes of this Section and Section 95, in determining what is reasonably believed to be in or not opposed to the best interests of the association, a director shall consider the purposes of the association and may consider any of the following:

(1) the interests of the employees, suppliers, creditors, and customers of the association;

(2) the economy of this State and of the United States;

(3) community, and societal, and environmental matters;

(4) the long-term and short-term best interests of the association;

(5) the interests of the members as patrons of the association.

(e) Subsections (b) and (c) of this Section do not affect the duties of a director who acts in any capacity other than as a director.

Section 105. Effect of self-dealing.

(a) Unless otherwise provided in an association's articles of incorporation or bylaws:

(1) No contract or transaction between an association and one or more of its directors or officers, or between the association and any other person in which one or more of the association's directors or officers are directors or officers, or have a financial or personal interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee that authorizes the contract or transaction, or solely because the director's or officer's votes are counted for such purpose, if the contract or transaction is fair to the association at the time it is authorized or approved, and such authorization or approval is granted in either of the following manners:

(A) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the board or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even if the disinterested directors constitute less than a quorum of the board or the committee; or

(B) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the members entitled to vote on the contract or transaction, and the contract or transaction is specifically approved at a meeting of the members.

(2) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board, or of a committee that authorizes the contract or transaction.

(b) Items (1) and (2) of subsection (a) do not limit or otherwise affect the liability of directors under Section 110.

(c) For purposes of subsection (a), a director is not an interested director solely because the subject of a contract or transaction may involve or effect a change in control of the association or continuation in office as a director of the association.

Section 110. Liability of members, directors, and officers.

(a) No member, director, or officer of an association shall be personally liable for any obligation 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.

(b) Directors who vote for or assent to any of the following are jointly and severally liable to the association in accordance with this subsection:

(1) a distribution of assets to members, stockholders, or patrons contrary to law, the association's articles of incorporation, or bylaws;

(2) a distribution of assets to persons other than creditors during the winding up of the affairs of the association, on dissolution or otherwise, without the payment of all known obligations of the association, or without making adequate provision for the payment of the obligations; or

(3) the making of loans, other than in the usual conduct of the association's affairs or in accordance with the association's articles or bylaws, to an officer, director, or member of the association.

In cases under item (1) of this subsection, directors are liable up to the amount of the distribution in excess of the amount that could have been distributed without violation of law, the articles of incorporation, or bylaws, but not in excess of the amount that would inure to the benefit of the creditors of the association if it was insolvent at the time of the distribution or there was reasonable ground to believe that by such vote or assent it would be rendered insolvent, or to the benefit of the members or stockholders other than members or stockholders of the class in respect of which the distribution was made.

In cases under item (2) of this subsection, directors are liable to the extent that the obligations, not otherwise barred by statute, are not paid, or for the payment of which adequate provision has not been made.

In cases under item (3) of this subsection, directors are liable for the amount of the loan with interest thereon at the rate of 6% per year until the amount has been paid.

A director is not liable under item (1) or (2) of this subsection if, in determining the amount available for any such distribution, the director in good faith relied on a financial statement of the association prepared by an officer or employee of the association in charge of its accounts or by a certified public accountant or firm of certified public accountants, or in good faith considered the assets to be of their book value, or followed what the director believed to be sound accounting and business practice.

(c) A director who is present at a meeting of the board or a committee of the board at which action on any matter is authorized or taken and who has not voted for or against such action shall be presumed to have voted for the action unless the director dissents from the action during the meeting and the dissent is noted in the minutes of the proceedings of the meeting, or a written dissent is filed either during the meeting or within a reasonable time after the adjournment of the meeting.

(d) A member, stockholder, or patron who receives any distribution made contrary to law, the association's articles of incorporation, or bylaws is liable to the association for the amount received that is in excess of the amount that could have been distributed.

(e) A director against whom a claim is asserted under or pursuant to this Section and who is held liable on the claim is entitled to contribution, on equitable principles, from other directors who also are liable. In addition, any director against whom a claim is asserted under or pursuant to this Section, or who is held liable, has a right of contribution from the member, stockholder, or patron who received any distribution made contrary to law, the articles of incorporation, or bylaws, and such persons as among themselves also are entitled to contribution in proportion to the amounts received by them respectively.

(f) No action shall be brought by or on behalf of an association, upon any cause of action arising under item (1) or (2) of subsection (b), at any time after 2 years from the day on which the violation occurs; provided that no such action is barred by this subsection if it is commenced prior to the effective date of this Act.

Section 120. Surety bonds. If required by the association's bylaws, every officer, employee, and agent handling funds, negotiable instruments, or other property of or for an association shall execute and deliver adequate bonds for the faithful performance of the officer's, employee's, or agent's duties and obligations.

Section 130. Books and records; examination by member.

(a) An association shall keep correct and complete books and records of account, and shall also keep minutes of the proceedings of meetings of its members, board, and delegates. The association shall keep at its principal office records of the names and addresses of all members and stockholders with the amount of ownership interests and stock held by each.

(b) At any reasonable time, any member, upon written notice that states, with specificity, a proper purpose for an examination of books and records and that is delivered or sent to the association at least one week in advance, may examine those books and records pertinent to the purpose in the notice. The board may deny a request of a member to examine the books and records if the purpose is not proper because the purpose is not directly related to the person's interest as a member and is contrary to the best interests of the association.

(c) At any reasonable time, a stockholder who is not a member, upon written notice that states, with specificity, a proper purpose for an examination of books and records and that is delivered or sent to the association at least one week in advance, may examine those books and records that are pertinent to the purpose in the notice. The board may deny a request of a stockholder to examine the books and records if the purpose is not proper because the purpose is not directly related to the person's interest as a stockholder and is contrary to the best interest of the association.

Section 132. Interrogatories to be propounded by Secretary of State. The Secretary of State may propound to any association subject to the provisions of this Act, and to any officer or director thereof, such interrogatories as may be reasonably necessary and proper to enable the Secretary to ascertain whether such association has complied with all the provisions of this Act applicable to such association. Such interrogatories shall be answered within 30 days after the mailing thereof, or within such additional time as shall be fixed by the Secretary of State, and the answers thereto shall be full and complete and shall be made in writing and under oath. If such interrogatories be directed to an individual they shall be answered by him or her, and if directed to an association they shall be answered by the president, vice-president, or secretary thereof. The Secretary of State need not file any document to which such interrogatories relate until such interrogatories be answered as herein provided, and not then if the answers thereto disclose that such document is not in conformity with the provisions of this Act. The Secretary of State shall certify to the Attorney General, for such action as the Attorney General may deem appropriate, all interrogatories and answers thereto which disclose a violation of any of the provisions of this Act.

Section 133. Information disclosed by interrogatories. Interrogatories propounded by the Secretary of State and the answers thereto shall not be open to public inspection nor shall the Secretary of State disclose any facts or information obtained therefrom except insofar as official duty may require the same to be made public or in the event such interrogatories or the answers thereto are required for evidence in any criminal proceeding or in any other action by the State.

Section 135. Merger or consolidation with associations.

(a) An association may merge or consolidate with one or more associations under this Act. Before an association may merge or consolidate with any other association, a written plan of merger or consolidation shall be approved by the board of each constituent association and by the members of each constituent association. The plan shall set forth the terms of the merger or consolidation, including any provisions for amendment or abandonment of the plan. In the case of a consolidation, the plan also shall contain the articles of incorporation of the new association.

(b) If the plan of merger or consolidation provides that a holder of stock other than membership stock or patronage stock in a constituent association will be affected, all of the following apply:

(1) Unless the board of the constituent association provides that item (2) of this subsection applies, the affected stockholder shall be entitled to cast one vote on the plan regardless of the par or stated value, the number of shares, or the number of affected classes of the stock held.

(2) The board of a constituent association may provide that a stockholder otherwise entitled to vote under item (1) of this subsection shall instead be entitled to payment of fair cash value of the affected stock held by the stockholder in accordance with Section 170.

(3) A member holding stock affected by a proposed plan of merger or consolidation may vote only as a member and shall not be entitled to vote or demand fair cash value as an affected stockholder.

(c) For purposes of this Section, a holder of stock is affected as to any class of stock owned by the holder only if the agreement of merger or consolidation does any of the following:

(1) decreases the dividends to which that class may be entitled or changes the method by which the dividend rate on that class is fixed;

(2) provides for additional restriction of rights to transfer shares of that class;

(3) gives to another existing or any new class of stock or equity interest not previously entitled thereto any preference, as to dividends or upon dissolution, that is higher than preferences of that class;

(4) changes the par value of shares of that class or of any other class having the same or higher preferences as to dividends or upon dissolution;

(5) increases the number of authorized shares of any other class having the same or higher preferences as to dividends or upon dissolution beyond the aggregate authorizations for such classes in the constituent associations; or

(6) requires or permits an exchange of shares of any class with lower preferences as to dividends or upon dissolution for shares of any other class with higher preferences.

(d) The plan is approved if both of the following conditions are met with respect to each constituent association:

(1) notice of the meeting to vote on the plan, the plan of merger or consolidation, and a description of the method of voting have been sent to all members, and to all affected stockholders entitled either to vote on the plan or to receive payment of fair cash value under subsection (b);

(2) 60% of the member votes cast approve the plan, and a simple majority of the votes cast by the affected stockholders entitled to vote under subsection (b) approve the plan.

(e) Notwithstanding subsection (d), no vote of the members or stockholders of a constituent association shall be necessary to approve a merger of a wholly owned subsidiary association with and into its parent cooperative or a merger or a consolidation of 2 or more subsidiary associations that are wholly owned by a cooperative.

(f) After approval of a plan under this Section, but before the merger or consolidation is effective, the plan may be amended in accordance with any provision for amendment set forth in the plan, provided that an amendment made subsequent to adoption of the plan by the members of any constituent association shall not do any of the following:

(1) change the membership rights, or the amount or kind of stock, securities, cash, property, or other rights to be received, exchanged, or converted in the merger or consolidation;

(2) change the articles of incorporation or bylaws of the surviving or new association as provided for in the plan;

(3) change any provision of the plan with respect to the rights of members or the manner of voting in the surviving or new association.

(g) After approval of a plan under this Section, but before the merger or consolidation is filed with the Secretary of State, the merger or consolidation may be abandoned in accordance with any provision for abandonment set forth in the plan.

(h) The merger or consolidation shall take effect in accordance with Sections 145 and 150.

Section 140. Association; merger or consolidation with foreign associations.

(a) A cooperative may merge or consolidate with one or more foreign associations, if such merger or consolidation is permitted by the laws under which each constituent cooperative exists and the foreign association complies with this Section.

(b) Each constituent cooperative shall comply with Section 135 with respect to form and approval of a plan of merger or consolidation, and each constituent foreign association shall comply with the applicable provisions of the laws under which it exists, except that the plan of merger or consolidation, by whatever name designated, shall comply with subsections (c) and (d) of this Section.

(c) The plan of merger or consolidation shall set forth all of the following:

(1) The names of the states and the laws under which each constituent cooperative exists.

(2) All statements and matters required to be set forth in plans or agreements of merger or consolidation by the laws under which any constituent cooperative exists.

(3) A statement as to whether the surviving or new cooperative is to be an association or a foreign association.

(4) If the surviving or new cooperative is to be a foreign association:

(A) the place where the principal office of the surviving or new foreign association is to be located in the state in which the surviving or new foreign association is to exist;

(B) the consent by the surviving or new foreign association that it may be sued and served with process in this State in any proceeding for the enforcement of any obligation of any constituent association;

(C) the consent by the surviving or new foreign association that: (i) it shall be subject to the provisions applicable to foreign corporations under the Business Corporation Act of 1983, substituting the word "association" for "corporation", and, with respect to the name of a foreign association, substituting references to Section 20 of this Act for references to Section 4.05 of the Business Corporation Act of 1983; and (ii) it shall be subject to all provisions of this Act unless otherwise provided; and

(D) if it is desired that the surviving or new foreign association exercise its corporate privileges in this State as a foreign entity and that the foreign association qualifies under Section 5 of this Act.

(d) The plan also may set forth other provisions permitted by the laws of any state in which any constituent cooperative exists.

(e) If the surviving or new cooperative is a foreign association, the merger or consolidation shall take effect in accordance with the applicable provisions of the laws under which it exists and in accordance with Section 150.

Section 145. Effective date of merger or consolidation.

(a) Unless a later date, which may not be more than 30 days after the date of filing, is specified in the plan, a merger or consolidation under Section 135 is effective when the articles of merger or consolidation and plan of merger or consolidation are filed in accordance with Section 150.

(b) In the case of a merger, the surviving association is the one designated in the plan. In the case of a consolidation, the new association is the one designated in the plan. The separate existence of all constituent associations in the agreement, except the surviving or new association, ceases upon the effective date of the merger or consolidation.

(c) The surviving or new association possesses all the rights and all the property of each constituent association, and is responsible for all their obligations. Title to any property is vested in the surviving or new association with no reversion or impairment of the property caused by the merger or consolidation. A merger or consolidation shall not be considered an assignment. No right of any creditor shall be impaired by the merger or consolidation without the creditor's consent.

Section 150. Articles of merger or consolidation; filing. Upon adoption of a plan of merger or consolidation under Section 135 or Section 140, articles of merger or consolidation, signed by any authorized officer or representative of each constituent association, shall, along with a copy of the plan of merger or consolidation, be filed with the Secretary of State on a form prescribed by the Secretary of State that sets forth the following:

(1) the name and form of each constituent association and the State law under which each constituent association exists;

(2) a statement that each constituent association has adopted the plan of merger or consolidation, the manner of adoption, and that the plan was adopted in compliance with the laws applicable to each constituent association;

(3) the effective date of the merger or consolidation, which date may be on or after the date of filing of the articles;

(4) in the case of a merger, a statement that one or more specified constituent associations will be merged into a specified surviving association or, in the case of a consolidation, a statement that the constituent associations will be consolidated into a new association;

(5) the name and address of the registered agent upon whom any process, notice, or demand against any constituent association, or the surviving or new association, may be served; and

(6) the manner and basis of converting the shares or membership interests of each merging or consolidating association.

In the case of a merger into an association, any amendments to the articles of incorporation or the articles of organization of the surviving association shall be filed with the articles of consolidation.

In the case of a consolidation to form a new domestic association, the articles of incorporation of the new association shall be filed with the articles of consolidation.

If the surviving or new cooperative is a foreign association that desires to transact business in this State as a foreign association, the articles shall be accompanied by an application for authority to transact business in this State pursuant to Section 13.15 of the Business Corporation Act of 1983.

Section 155. Plan of division.

(a) An association may divide itself into 2 or more associations. A written plan of division shall be approved by the association's board. Such plan shall set forth all the terms of the division and the proposed effect of the division on all members and stockholders of the association. The plan also shall contain the articles of incorporation and bylaws of each association resulting from the division, which articles and bylaws shall conform to the requirements for associations organized under this Act.

(b) If the plan of division provides that a holder of stock other than membership stock or patronage stock will be affected, the following apply:

(1) Unless the board provides that item (2) of this subsection applies, the affected stockholder shall be entitled to cast one vote on the plan of division regardless of the par or stated value, the number of shares, or the number of affected classes of the stock held.

(2) The board may provide that a stockholder otherwise entitled to vote under item (1) of this subsection shall instead be entitled to payment of fair cash value of the affected stock held by the stockholder in accordance with Section 170.

(3) A member holding stock affected by a proposed plan of division may vote only as a member and shall not be entitled to vote or demand fair cash value as an affected stockholder.

(c) For purposes of this Section, a holder of stock is affected as to any class of stock owned by the holder only if the plan of division does any of the following:

(1) Decreases the dividends to which that class may be entitled or changes the method by which the dividend rate on that class is fixed.

(2) Provides any additional restriction on rights to transfer shares of that class.

(3) Gives to another existing or any new class of stock or equity interest not previously entitled thereto any preference, as to dividends or upon dissolution, that is higher than preferences of that class in a resulting association.

(4) Changes the par value of shares of that class or of any other class having the same or higher preferences as to dividends or upon dissolution.

(5) Increases the aggregate number of authorized shares of any other class having the same or higher preferences as to dividends or upon dissolution in the resulting associations beyond the authorization for such classes in the original association.

(6) Requires or permits an exchange of shares of any class with lower preferences as to dividends or upon dissolution in the original association for shares of any other class with higher preferences in a resulting association.

(d) The plan of division is approved if both of the following conditions are met:

(1) Notice of the meeting to vote on the plan, the plan of division, and a description of the method of voting have been sent to all members and to all affected stockholders entitled either to vote on the plan or to receive payment of fair cash value under subsection (b);

(2) 60% of the member votes cast approve the plan, and a simple majority of the votes cast by the affected stockholders entitled to vote under subsection (b) approve the plan.

(e) After approval of a plan of division under this Section, but before the division is effective, the plan may be amended or abandoned in accordance with a provision for amendment or abandonment set forth in the plan, provided that an amendment made subsequent to approval of the plan by the members shall not do any of the following:

(1) Change the membership rights, or the amount or kind of stock, securities, cash, property, or other rights to be received, exchanged, or converted in the division.

(2) Change the articles of incorporation or bylaws of the resulting associations as provided for in the plan.

(3) Change any provision of the plan with respect to the rights of members or the manner of voting in the resulting associations.

(f) Upon approval of a plan of division, the articles of division along with the plan of division, but not including the association's bylaws, signed by any authorized officer of the original association, shall be filed with the Secretary of State on a form prescribed by the Secretary of State setting forth the following:

(1) The name of the original association and the name of each resulting association.

(2) A statement that the original association has adopted the plan of division, the manner of adoption, and that the plan was adopted in compliance with this Section.

(3) The effective date of the division, which date may be on or up to 30 days after the date of filing of the articles.

(4) A statement that the original association will be divided into specified resulting associations.

(5) The name and address of the registered agent upon whom any process, notice, or demand against the original association may be served, and the name and address of a registered agent for each resulting association upon whom process, notice, or demand against that resulting association may be served.

(6) The manner and basis of converting the shares or membership interests of each merging or consolidating association.

(g) The articles of incorporation of each of the resulting associations shall be filed with the articles of division.

Section 160. Conversions.

(a) A domestic corporation that is not an association may convert itself into an association by adopting an amendment to its articles of incorporation in which it elects to become subject to this Act, together with any changes in its articles of incorporation and bylaws required by this Act and any other desirable changes permitted by this Act. The amendment shall be adopted and filed in the manner provided by the law under which the corporation exists.

(b) An association may convert itself to a domestic corporation by complying with the provisions of subsection (d) of Section 1.70 of the Business Corporation Act of 1983.

Section 165. Setting aside reorganizations. An action, other than an action initiated by the State, or any other state or federal governmental agency, to set aside a merger, consolidation, division, or conversion of an association, on the ground that any law has not been complied with, shall be brought within 90 days after the effective date of the merger, consolidation, division, or conversion, or such action shall be forever barred unless it is initiated by a state or federal governmental agency.

Section 170. Written demand for payment of fair cash value of stock.

(a) In order to obtain payment of the fair cash value, a stockholder entitled to payment of the fair cash value of stock under Section 40, 135, 140, or 155 shall deliver a written demand for payment of the fair cash value of the stock to the association no later than 15 days after notice is sent to members and stockholders in accordance with Section 40, 135, 140, or 155, as the case may be. The written demand shall state the name and address of the stockholder, the number and class of the stock for which fair cash value is demanded, and the amount claimed by the stockholder to be the fair cash value of the stock. Delivery of written demand for payment of fair cash value of stock in accordance with this Section is sufficient if delivered to the association or to the surviving or new association or entity resulting from the merger, consolidation, division, or conversion, whether the demand is delivered before, on, or after the effective date of the action. If written demand is not timely delivered in conformity with this Section, the stockholder's right to payment of fair cash value with respect to the amendment to the articles of incorporation, agreement of merger or consolidation, plan of division, or conversion shall be barred.

(b) If a timely demand is delivered in accordance with this Section, fair cash value of the stock shall be determined and paid to the stockholder in accordance with the following procedures:

(1) The association or the surviving, new, or resulting association or entity shall send a written acknowledgment of receipt of the demand for fair cash value to the address specified in the demand no later than 15 days after receipt of the demand. If the board of the association or the surviving, new, or resulting association or entity believes that the demand has failed to comply with the requirements of this Section, the acknowledgment shall state any such defects. The acknowledgment also shall state what the board believes to be the fair cash value of the stock that is the subject of the demand. If the articles of incorporation of the constituent or original association provide a value for the stock upon redemption, the fair cash value of the stock presumptively shall be the lesser of the redemption value or the fair market value of the stock immediately prior to the merger, consolidation, division, or conversion.

(2) The stockholder shall not transfer, encumber, pledge, or otherwise dispose of the stock that is the subject of the demand for fair cash value, or any certificate representing the stock, until the demand is finally resolved by agreement, withdrawal, or final judicial determination.

(3) If the association's articles of incorporation or bylaws provide a reasonable basis for determining and paying the fair cash value of the stock that is the subject of the demand for fair cash value, or if the association or the surviving, new, or resulting cooperative and the demanding stockholder reach an agreement on the fair cash value of the stock within 3 months after delivery of the demand for fair cash value, the fair cash value of the stock shall be determined in accordance with the constituent or original association's articles of incorporation or bylaws or as agreed upon, as the case may be. The association shall thereupon tender payment of the fair cash value so determined to the stockholder within 30 days of delivery of any certificates representing the stock or the stockholder's written waiver and release of claim to all rights to the stock to the association or the surviving, new, or resulting cooperative. Without precluding other possible reasonable bases for determining fair cash value of stock under this Section, a provision in the constituent or original association's articles of incorporation or bylaws that fair cash value shall be determined by mediation or final and binding arbitration, or that fair cash value shall be the lesser of par value, book value, or fair market value, shall be considered a reasonable basis for determining and paying the fair cash value of stock.

(c) The right of a demanding stockholder to receive the fair cash value of stock as to which the stockholder seeks relief and the obligation of the association or the surviving, new, or resulting cooperative to furnish the fair cash value for those interests terminate if any of the following applies:

(1) The demanding stockholder fails to comply with this Section.

(2) The association abandons the amendment of articles, merger, consolidation, division, or conversion or is finally enjoined or prevented from taking such action.

(3) The demanding stockholder withdraws the demand for fair cash value with consent of the association.

(4) The demanding stockholder attempts to sell, transfer, or encumber the stock which is the subject of the demand prior to final determination of its fair cash value under this Section or a final judicial determination.

(5) All of the following apply:

(A) the articles of incorporation or bylaws of the association do not provide a reasonable basis for determining and paying fair cash value to an affected stockholder;

(B) the association and the affected stockholder have not agreed upon the fair cash value of the stock which is the subject of the demand;

(C) the affected stockholder does not file a timely complaint for judicial determination.

(d) The fair cash value that is agreed upon by the affected stockholder and the association, or determined using a reasonable basis for determining and paying fair cash value in the association's articles of incorporation or bylaws, or fixed by a court shall be paid within 30 days as follows:

(1) immediately to the holder of uncertificated stock; or

(2) upon and simultaneously with the surrender of certificates representing certificated stock.

Section 175. Disposing of assets of association.

(a) As used in this Section, "substantially all" means more than two-thirds of the association's assets, measured, in the board's discretion, either by value as recorded in the books and records of the association or by fair market value.

(b) Unless the articles of incorporation or the bylaws of an association otherwise provide, a lease, sale, exchange, transfer, or other disposition of any assets of an association may be made upon terms and for consideration which may consist, in whole or in part, of money or other property, including shares or other securities or promissory obligations of any association or entity, as may be authorized by the board. If a lease, sale, exchange, transfer, or other disposition, or a series of such transactions, would dispose of all or substantially all of the assets of the association, then the disposition may be made only upon a written plan of disposition prepared by the board or by a committee selected by the board for that purpose, and adopted in the same manner as provided for the adoption of a resolution of dissolution in Section 180. A plan of disposition shall set forth a general description or summary of the assets subject to disposition; the method of disposition; the intended transferee of the assets, if known to the board; and a general description of any material effect the board believes the disposition will have on the interests of the members and stockholders. Notice of a meeting of the members at which a plan of disposition will be voted on shall be given to all members, whether or not entitled to vote at the meeting. The notice shall be accompanied by a copy or summary of the plan of disposition and a ballot for those members entitled to vote on the plan.

(c) The association, by its board, may abandon a plan of disposition, subject to the contract rights of other persons, if the power of abandonment is conferred upon the board either by the terms of the transaction or in the plan of disposition.

(d) An action to set aside a disposition of assets by an association, on the ground that any law applicable to the lease, sale, exchange, transfer, or other disposition of all or substantially all the assets of the association has not been complied with, shall be brought within 90 days after such transaction, or the action is forever barred.

Section 176. Grounds for administrative dissolution. The Secretary of State may dissolve any association administratively if:

(1) it has failed to file its annual report as required by this Act;

(2) it has failed to file in the office of the Secretary of State any report after the expiration of the period prescribed in this Act for filing such report;

(3) it has failed to pay any fees, taxes, or charges prescribed by this Act;

(4) it has misrepresented any material matter in any application, report, affidavit, or other document filed by the association pursuant to this Act;

(5) it has failed to appoint and maintain a registered agent in this State;

(6) it has tendered payment to the Secretary of State which is returned due to insufficient funds, a closed account, or for any other reason, and acceptable payment has not been subsequently tendered;

(7) upon the failure of an officer or director to whom interrogatories have been propounded by the Secretary of State as provided in this Act, to answer the same fully and to file such answer in the office of the Secretary of State; or

(8) if the answer to such interrogatories discloses, or if the fact is otherwise ascertained, that the proportion of the sum of the paid-in capital of such association represented in this State is greater than the amount on which such association has theretofore paid fees and franchise taxes, and the deficiency therein is not paid.

Section 177. Procedure for administrative dissolution.

(a) After the Secretary of State determines that one or more grounds exist under Section 176 for the administrative dissolution of an association, he or she shall send by regular mail to each delinquent association a Notice of Delinquency to its registered office, or, if the association has failed to maintain a registered office, then to the president or other principal officer at the last known address of said officer.

(b) If the association does not correct the default described in paragraphs (1) through (5) of Section 176 within 90 days following such notice, the Secretary of State shall thereupon dissolve the association by issuing articles of dissolution that recites the ground or grounds for dissolution and its effective date. If the association does not correct the default described in paragraphs (6) through (8) of Section 176 within 30 days following such notice, the Secretary of State shall thereupon dissolve the association by issuing articles of dissolution as herein prescribed. The Secretary of State shall file the original of the articles in his or her office and mail one copy to the association at its registered office or, if the association has failed to maintain a registered office, then to the president or other principal officer at the last known address of said officer.

(c) The administrative dissolution of an association terminates its corporate existence and such a dissolved association shall not thereafter carry on any business; however, such a dissolved association may take all action authorized under Section 190 that is necessary or appropriate to wind up and liquidate its business and affairs.

Section 178. Administrative dissolution; association name. The Secretary of State shall not allow another association to use the name of an association that has been administratively dissolved until 3 years have elapsed following the date of issuance of the articles of dissolution. If the association that has been administratively dissolved is reinstated within 3 years after the date of issuance of the articles of dissolution, the association shall continue under its previous name without impacting its continuous legal status, unless the association petitions to change its name upon reinstatement.

Section 180. Voluntary dissolution.

(a) An association may be dissolved voluntarily in the manner provided in this Section.

(b) A resolution of dissolution for an association shall state both of the following:

(1) that the association elects to be dissolved; and

(2) any additional provision considered necessary with respect to the proposed dissolution and winding up.

(c) Before subscriptions for membership and any stock or other ownership interest have been received, the incorporators or a majority of the incorporators may adopt, by a writing signed by them, a resolution of dissolution.

(d) The directors may adopt a resolution of dissolution in the following cases:

(1) when the association has been adjudged bankrupt or has made a general assignment for the benefit of creditors;

(2) by leave of the court, when a receiver has been appointed in a general creditors' suit or in any suit in which the affairs of the association are to be wound up;

(3) when substantially all of the assets have been sold at judicial sale or otherwise; or

(4) when the period of existence of the association specified in its articles has expired.

(e) At a meeting held for such purpose, the members may adopt a resolution of dissolution by the affirmative vote of 60% of the member votes cast on the proposal or, if the articles provide or permit, by the affirmative vote of a greater or lesser proportion though not less than a majority, of the voting power, of any particular class as is required by the articles of incorporation. Notice of the meeting of the members shall be given to all members and stockholders whether or not entitled to vote.

(f) Upon the adoption of a resolution of dissolution, articles of dissolution shall be filed with the Secretary of State, on a form prescribed by the Secretary of State.

(g) When a resolution of dissolution has been adopted by incorporators pursuant to subsection (c), articles of dissolution shall be signed by not less than a majority of the incorporators and filed with the Secretary of State on a form prescribed by the Secretary of State.

(h) Upon the filing of articles of dissolution, the association shall be dissolved.

Section 185. Public notice of voluntary dissolution. Following the filing of the articles of dissolution, the directors, members, or incorporators who filed the articles of dissolution, as the case may be, shall cause a notice of voluntary dissolution to be published once a week on the same day of each week for 2 successive weeks, in a newspaper published and of general circulation in the county in which the principal place of business of the association was to be or is located and shall cause written notice of dissolution to be given to all known creditors of, and to all known claimants against, the dissolved association.

Section 190. Action to wind up affairs or obtain reinstatement of articles.

(a) When an association is dissolved administratively or voluntarily, when a final order of a court is made dissolving an association under Section 195, or when the period of existence of the association specified in its articles of incorporation has expired, the association shall cease to carry on business and shall do only such acts as are required to wind up its affairs or to obtain reinstatement if permitted under, and in accordance with, Section 50.

(b) Any claim existing or action or proceeding pending by or against the association or which would have accrued against it may be prosecuted to judgment, with right of appeal as in other cases, but any proceeding, execution, or process, or the satisfaction or performance of any order, judgment, or decree, may be stayed as provided in Section 195.

(c) Any process, notice, or demand against the association may be served by delivering a copy to an officer, director, liquidator, or person having charge of its assets or, if no such person can be found, to the registered agent.

(d) The directors of the association or their successors shall act as the board of directors in accordance with the articles of incorporation and bylaws until the affairs of the association are completely wound up. Subject to the orders of courts of this State having jurisdiction over the association, the directors shall proceed as speedily as is practicable to a complete winding up of the affairs of the association and, to the extent necessary or expedient to that end, shall exercise all the authority of the association. Without limiting the generality of such authority, the directors may fill vacancies; elect officers; carry out contracts of the association; make new contracts; borrow money; mortgage or pledge the property of the association as security; sell its assets at public or private sale; make conveyances in the association's name; lease real estate for any term, including 99 years renewable forever; settle or compromise claims in favor of or against the association; appoint or employ one or more persons as liquidators to wind up the affairs of the association with authority as the directors see fit to grant; cause the title to any of the assets of the association to be conveyed to such liquidators for that purpose; apply assets to the payment of obligations; and, after paying or adequately providing for the payment of all known obligations of the association, distribute the remainder of the assets either in cash or in kind among the members, patrons, and stockholders according to their respective rights and interests. In addition, the directors may perform all other acts necessary or expedient to the winding up of the affairs of the association.

(e) The directors, or any liquidator to whom the directors grant such authority, in the course of winding up the association's affairs, shall apply the assets of the association in the following order:

(1) to expenses incidental to winding up the association's affairs;

(2) to all legally enforceable liabilities and obligations of the association due claimants and creditors;

(3) to the stockholders, members, and patrons of the association as provided in the association's articles of incorporation or bylaws.

(f) Without limiting the authority of the directors, any action within the purview of this Section that is authorized or approved at a meeting of the members by 60% of the member votes cast thereon shall be conclusive for all purposes upon all members, patrons, and stockholders of the association.

(g) All deeds and other instruments of the association shall be in the name of the association and shall be executed, acknowledged, and delivered by the officers appointed by the directors.

(h) At any time during the winding up of its affairs, the association by its directors may make application to the court of the county in this State in which the principal place of business of the association is located to have the winding up continued under supervision of the court, as provided in Section 195. However, if the association has no principal place of business in this State, the application described in this Section may be made to a court in the county in this State where the registered agent resides.

Section 195. Judicial liquidations.

(a) Without limiting the generality of its authority and subject to subsection (b), the court of the county in this State in which is located the principal place of business of a voluntarily dissolved association or whose period of existence has expired, upon the complaint of the association, or a majority of the directors, or 10% of the members or 20 members, whichever is less, and upon such notice to all the directors and other persons interested as the court considers proper, at any time may order and adjudge any of the following matters:

(1) The presentation and proof of all claims and demands against the association and of all rights, interests, or liens in or on any of its property; the fixing of the time and the manner in which such proof shall be made and the person to whom presentation shall be made; and the barring from participation in any distribution of assets of all persons failing to make and present proofs as required by the order of the court.

(2) The stay of the prosecution of any proceeding against the association or involving any of its property; the requirement that the parties to the proceeding present and prove their claims, demands, rights, interests, or liens at the time and in the manner required of creditors or others; or the grant of leave to bring or maintain an independent proceeding to enforce liens.

(3) The settlement or determination of all claims of every nature against the association or any of its property; the determination of the assets required to be retained to pay or provide for the payment of such claims or any claim; the determination of the assets available for distribution among and rights of members, patrons, and stockholders; and the making of new parties to the proceeding so far as the court considers proper for the determination of all matters.

(4) The presentation and filing of intermediate and final accounts of the directors or of the liquidators and hearings on them; the allowance, disallowance, or settlement of the accounts; and the discharge of the directors, the liquidators, or any of them from their duties and liabilities.

(5) The appointment of a special master commissioner to hear and determine any matters with authority as the court considers proper.

(6) The filling of any vacancies in the number of directors or liquidators when the directors are unable to act on the vacancies for want of a quorum or for any other reason.

(7) The appointment of a receiver, in accordance with the usage of a court in equitable matters, to wind up the affairs of the association, to take custody of any of its property, or for any other purpose.

(8) The issuance or entry of any injunction or any other order that the court considers proper in the administration of the trust involved in the winding up of the affairs of the association and the giving of notice of the entry of injunction or order.

(9) The allowance and payment of compensation to the directors or any of them, to liquidators, to a receiver, to the attorney for the complainant, or to any person properly rendering services beneficial to the association or to those interested in it.

(10) The entry of a judgment or decree that, if it so provides, may operate as the deed or other instrument ordered to be executed, or the appointment of a master to execute such deed or instrument in the name of the association with the same effect as if executed by an authorized officer pursuant to authority conferred by the directors or the members, patrons, and stockholders of the association, whenever there is no officer or agent competent to execute such deed or instrument, whenever the association or its officers do not perform or comply with a judgment or decree of court, or whenever the court considers it proper.

(b) If the association has no principal place of business in this State, without limiting the generality of its authority, the court in the county in this State where the registered agent resides may order and adjudge the matters described in subsection (a).

(c) A judicial proceeding under this Section concerning the winding up of the affairs of an association is a special proceeding, and final orders in the proceeding may be vacated, modified, or reversed on appeal pursuant to the Code of Civil Procedure.

Section 200. Receiver; winding up affairs of association.

(a) Whenever, after an association is dissolved voluntarily or the period of existence of an association has expired, a receiver is appointed to wind up the affairs of the association, all the claims, demands, rights, interests, or liens of creditors, claimants, members, patrons, and stockholders shall be determined as of the day on which the receiver was appointed. Unless it is otherwise ordered, such appointment vests in the receiver and successors of the receiver the right to the immediate possession of all the property of the association, which shall, if so ordered, execute and deliver conveyances of such property to the receiver.

(b) Any officer, director, member, or other person, whether a resident of the state or a nonresident and however interested, may be appointed as receiver.

(c) The receiver shall have all the authority vested in the directors and officers of the association, shall exercise such authority subject to such orders as are made by the court, and may be required to qualify by giving bond to the State in such amount as the court fixes, with surety to the satisfaction of the clerk of the court, conditioned for the faithful discharge of duties and for a due accounting for all money or property received.

Section 205. Marketing agreements.

(a) A cooperative and any member may make marketing agreements, whether written separately or contained in the bylaws, in which the member agrees to do any of the following:

(1) sell, market, or deliver all or any specified part of products produced or to be produced either by the member or under the member's control, to or through the cooperative or any facilities furnished by it;

(2) authorize the cooperative or any facilities furnished by it to act for the member in any manner with respect to all or any specified part of products produced or to be produced either by the member or under the member's control and any services to be furnished by the member;

(3) buy or procure all or a specified part of goods or services from or through the cooperative or any facilities furnished by it; or

(4) authorize the cooperative or any facilities furnished by it to act for the member in any manner in the procurement of goods or services for the member.

(b) The term of marketing agreements may not exceed 10 years.

(c) A marketing agreement authorized by subsection (a) may require that liquidated damages be paid by the member in the event of a breach of the marketing agreement. Liquidated damages shall be specific, reasonable sums. Any provisions for liquidated damages shall be enforceable and not regarded as penalties.

(d) If a member breaches or threatens to breach a marketing agreement authorized by this Section, the cooperative shall be entitled to an injunction to prevent the breach or any further breach, and to a decree of specific performance, unless the marketing agreement provides an alternative remedy or damages are more practicable than specific performance under the circumstances.

Section 210. Foreign association.

(a) Any foreign association may carry on any proper activities in this State upon compliance with the provisions applicable to foreign corporations under the Business Corporation Act of 1983, substituting the word "association" for "corporation", and, with respect to the name of a foreign association, substituting references to Section 20 of this Act for references to Section 4.05 of the Business Corporation Act of 1983. Foreign associations desiring to sell memberships or membership stock to residents of this State shall comply with the disclosure requirements under Section 62. All contracts that could be made by any association incorporated under this Act and that are made by or with such foreign associations, shall be enforceable in this State with all of the remedies available at law or in equity.

(b) Except as otherwise provided herein, a foreign cooperative has all the duties of and is entitled to all rights, exemptions and privileges of a cooperative organized under this Act, if it is authorized to do business in this state under Article 13 of the Business Corporation Act of 1983.

Section 215. Membership in other organizations. An association may organize, form, operate, own, control, have an interest in, own stock of, or be a member of any other cooperative, corporation, or other form of organization.

Section 220. Governing law; association organized under the Co-operative Act.

(a) Before January 1, 2020, this Act governs only:

(1) an association formed on or after January 1, 2016; and

(2) an association formed before January 1, 2016 which elects, in the manner provided in its articles of incorporation or by law for amending the articles of incorporation, to be subject to this Act.

(b) On and after January 1, 2019, this Act governs all associations.

(805 ILCS 310/Act rep.)

Section 900. The Co-operative Act is repealed on January 1, 2020.