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2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7527 - Voting by proxy or mail

§ 7527. Voting by proxy or mail.
(a) General rule.--
Unless otherwise provided in the bylaws, no member may vote by proxy or by mail. No unrevoked proxy shall be valid more than 11 months from the date of its execution. If voting by mail is permitted, absent members may, under rules prescribed by the bylaws, be permitted to vote on specific questions by written ballot prepared by the association and sent by mail to or deposited with the secretary or other designated officer of the association.
(b) Action on marketing programs.--
Except for day-to-day operating decisions relating to existing programs, no association shall vote for its members on any new programs or substantially modified proposals other than those regulated by Federal or State agencies affecting existing marketing or marketing development programs or amendments thereto unless it has either first obtained approval of the delegates or conducted a mail poll of its membership, and in such later event apprised the members of their rights to cast a vote and method of voting under the program and notified its membership of the results and its intentions at least five days prior to casting its vote. If proxy voting is allowed by the bylaws of the association, the proxy shall be valid only for the particular date and the specific issue for which the vote is called.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7529 - Fundamental changes

§ 7529. Fundamental changes.
(a) General rule.--
An association, by action of its members or delegates, may amend its articles of incorporation in the manner provided by the applicable provisions of this part except that:
(1) No amendment shall be adopted without the affirmative vote of two-thirds of the members or delegates voting thereon.
(2) No amendment affecting the priority or preferential rights of any outstanding stock shall be adopted without the affirmative vote of two-thirds of the holders of the outstanding stock affected.
(3) Any association not having capital stock may convert into an association with capital stock by amending its articles to set forth a description of the shares of each class which are to be issued and a statement of the voting rights, preferences, limitations and relative rights granted to or imposed upon the shares of each class but only if the conversion is proposed by three-fourths of the board of directors.
(b) Procedure.--
Written notice shall, not less than 15 days before the meeting of members or delegates called for the purpose of considering the proposed amendment or any other fundamental change, be given to each member or shareholder of record. A notice of an amendment under subsection (a)(3) shall set forth, in addition to the information otherwise required by the appropriate provisions of this part, a complete description of the shares proposed to be issued upon the conversion and the manner of carrying the conversion into effect.
(c) Post-approval report.--
Whenever an amendment of the articles of an association is approved, the association shall notify each member within 30 days after the filing of articles of amendment by sending to each member a copy of the filed amendment and, in the case of a conversion, a complete description of the shares issued by the association.
Cross References.
Section 7529 is referred to in section 7524 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7530 - Bylaws

§ 7530. Bylaws.
(a) General rule.--
The bylaws may provide for the following matters:
(1) The time, place and manner of calling and conducting meetings of the members or delegates and the number of members or delegates (which may be less than a majority) that shall constitute a quorum.
(2) The manner of voting and the conditions upon which members or delegates may vote at general and special meetings.
(3) Subject to any provision thereon in the articles of association and in this chapter, the number, qualifications, eligibility requirements, manner of nomination, duties and terms of office of directors and officers, the time of their election and mode and manner of giving notice thereof.
(4) The time, place and manner for calling and holding meetings of the directors and any executive committee and the number that shall constitute a quorum.
(5) Rules consistent with law and the articles of association for the management of the association, the establishment of any election districts, the making of contracts, the issuance, redemption and transfer of shares, the relative rights, duties, interests and preferences of members and shareholders and the mode, manner and effect of expulsion of a member.
(6) Any other provisions deemed necessary or proper to carry out the purposes of the association.
(7) Penalties for violations of the bylaws.
(b) Procedure.--
Bylaws authorized to be made by the board of directors may be amended or repealed and new bylaws may be adopted by the members or delegates. Delegates may prescribe that any bylaw made by them shall not be amended or repealed by the directors, and members may provide that any bylaw made by them shall not be amended or repealed by either the directors or the delegates. The association shall notify each member of a proposed change in the bylaws by sending to each member, at least 15 days prior to any vote on the proposed change, a copy of the proposed bylaw along with the time, date, place and manner of voting for the proposed changes. Members may amend or repeal bylaws adopted by the directors or the delegates by filing with the secretary of the association a petition signed by 25% of the voting membership and setting forth the text of the proposed change. The secretary shall call a special meeting or special vote of the association within 30 days of the receipt of the petition. When a special meeting is called, at least 10% of the voting membership shall be present to change the bylaws. Whenever a proposed bylaw change is approved, the association shall mail each member a copy of the approved bylaw within 30 days of the approval.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7532 - Removal of directors

§ 7532. Removal of directors.
A director may be removed from office by the affirmative vote of not less than a majority of the members present and voting at any regular or special meeting called for that purpose or, where the bylaws provide for the election of directors by districts, by the affirmative vote of not less than a majority of the members or delegates residing in or representing the district from which he was elected. The bylaws shall provide for the filing of charges, the giving of notice thereof, an opportunity to be heard and the procedures under which a director may be removed.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7533 - Officers

§ 7533. Officers.
The board shall elect a president, a secretary and a treasurer and may elect one or more vice presidents and any other officers as may be authorized in the bylaws. The president and at least one of the vice presidents must be members. Any two of the offices of vice president, secretary and treasurer may be combined in one person.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7535 - Patronage distributions

§ 7535. Patronage distributions.
(a) General rule.--
The net proceeds or savings of an association shall be apportioned, distributed and paid periodically on the basis of patronage to those persons entitled to receive them, at such times and in such manner as the bylaws shall provide. The bylaws may provide that the net proceeds or savings may be restricted to members or may be made at the same or a different rate for member and nonmember patrons. The bylaws may contain any reasonable provisions for the apportionment and charging of net losses except that no member shall thereby become liable for the debts of the association beyond any money or other property delivered by the member to the association. The bylaws may provide that any distribution to a nonmember eligible for membership may be credited to the nonmember until the amount thereof equals the value of a membership certificate or a common share of an association.
(b) Method of disbursement.--
The apportionment, distribution and payment of net proceeds or savings required by subsection (a) may be in cash, credits, capital shares, certificates of indebtedness, revolving fund certificates, letters of advice or other securities or certificates issued by an association or by any affiliated domestic or foreign association. Apportionment and distribution of its net proceeds or savings or losses may be separately determined for, and be based upon the patronage of, single or multiple pools or particular departments of an association, or as to particular commodities, supplies or services, or such apportionment and distribution may be based upon classification of patronage according to the type thereof.
(c) Minimum participation.--
An association may provide in its bylaws the minimum amount of any single annual patronage transaction which shall be taken into account for the purpose of participation in allocation and distribution of net proceeds or savings or net losses under this section.
(d) Method of accounting.--
For the purposes of this section, net proceeds or savings or net losses shall be computed in accordance with generally accepted accounting principles applicable to cooperative associations, and after deducting from gross proceeds or savings all costs and expenses of operation and any dividends paid upon capital stock and interest paid upon certificates or other evidence of equity in any fund, capital investment or other assets of an association.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7537 - Contract assignments to association

§ 7537. Contract assignments to association.
If any contract authorized by a cooperative contains an assignment to the association of any part or all of funds due or to become due the member during the life of the contract for any product produced or to be produced by him or for any services performed or to be performed in producing any product, any person who accepts or receives the product from the member is bound by the assignment after receiving written notice from the association and the member of the amount and duration of the assignment. However, as to any seasonal crop, if no funds are paid or become payable by any person under such an assignment for a period of two consecutive years during the life of the contract, thereafter the assignment shall not be binding upon any person who receives or accepts the product from the member until the assignment is reaffirmed by the member in writing and written notice thereof is given by the association or the member. Any such reaffirmation shall continue to be effective during the life of the contract until another lapse of two consecutive years occurs.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 75 - Cooperative Agricultural Associations › Section 7538 - Exemption from tax on capital stock and indebtedness

§ 7538. Exemption from tax on capital stock and indebtedness.
No State or local tax shall be levied or placed upon the capital stock of an association or upon any scrip, bonds, certificates or other evidences of indebtedness issued by such association. The association shall not be required to file in the Department of Revenue, or with any other State or local official of this Commonwealth, the reports relative to such taxes as are or may be required of corporations not exempt from the payment of such taxes.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Extra - Chapter Notes

Enactment.
Chapter 57 was added as Chapter 77 November 15, 1972, P.L.1063, No.271, effective
            in 90 days. Chapter 77 was renumbered to Chapter 57 December 21, 1988, P.L.1444, No.177,
            effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7701 - Short title of chapter

§ 7701. Short title of chapter.
This chapter shall be known and may be cited as the Workers' Cooperative Corporation Law of 1988.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.)
1990 Amendment.
Act 198 renumbered section 7701 to section 7702 and added a new section 7701, retroactive to June 19, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7702 - Definitions

§ 7702. Definitions.
The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Bureau."
(Deleted by amendment).
"Corporation."
A corporation for profit which has elected to be governed by this chapter.
"Member."
An individual who patronizes a corporation by the contribution of labor and who has been accepted for membership in and owns a membership share issued by the corporation.
"Patronage."
The number of hours of work performed as a member of a corporation.
"Patronage allocation."
The share of net earnings or losses with respect to a period of time paid or credited to a member on the basis of the ratio which the member's patronage during the period involved bears to total patronage by all members during that period.
"Written notice of allocation."
A written instrument which discloses to a member the stated dollar amount of the member's patronage allocation and the terms of payment of that amount by the corporation.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
2014
Amendment.
Act 172 amended the def. of "corporation" and deleted the def. of "bureau."
1990 Amendment.
Act 198 renumbered section 7701 to section 7702 and renumbered former section 7702 to section 7703, retroactive to June 19, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7703 - Corporations

§ 7703. Corporations.
(a) Members and purpose.--
Corporations, productive and distributive, may be incorporated under this chapter, upon compliance with its requirements, by five or more farmers, mechanics, laborers or other persons who have incorporated themselves together by written articles under section 7704 (relating to articles of incorporation) for the purpose of carrying on agricultural, horticultural, mining, quarrying, building, mechanical, manufacturing or commercial business; for the purpose of manufacturing, cultivating, raising, trading or dealing in goods, wares, merchandise, chattels, grains, vegetables, roots, fruits and other produce or animals; or for the purpose of buying, selling, holding, leasing or improving lands, tenements or buildings.
(b) Name.--
(1) The name of the corporation must comply with section 202 (relating to requirements for names generally).
(2) The two last words of the name shall be "cooperative corporation," but it shall be unlawful to use in the name either the words "society" or "company." A violation of this paragraph by a corporation formed under this chapter renders each member personally liable for all debts of the corporation.
(c) Business office.--
A corporation must have a regular business office.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
2014 Amendment.
Act 172 amended subsec. (b)(1).
1990 Amendment.
Act 198 renumbered section 7702 to section 7703 and renumbered former section 7703 to section 7704 and amended subsec. (a), retroactive to June 19, 1989.
Cross References. Section 7703 is referred to in section 7720 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7706 - Internal capital accounts and net worth

§ 7706. Internal capital accounts and net worth.
(a) Purpose of accounts.--
A corporation shall establish through its bylaws a system of internal capital accounts to reflect the book value of the corporation and to determine the redemption price of membership shares and written notices of allocation.
(b) Types of accounts.--
Internal capital accounts shall be of two types: individual internal capital accounts, one for each member, and a nonindividuated, collective internal capital account, which shall be called the collective reserve account.
(c) Net worth.--
The net worth of the corporation shall be reflected in:
(1) The internal capital accounts.
(2) The sum of the par value of all outstanding stock with par value, other than membership shares.
(3) The stated value of evidences of equity in a fund, capital investment or other asset of the corporation.
(d) Procedure.--
A corporation shall credit the paid-in membership fee and additional paid-in capital of a member to the member's individual internal capital account and shall also record the apportionment of retained net earnings or net losses to the member's account in accordance with patronage, by appropriately crediting or debiting the member's account. The collective reserve account shall reflect paid-in capital, retained net earnings and net losses not allocated to the capital accounts or members or not attributable to funds under subsection (c)(1) and (3).
(e) Adjustment of balance.--
The balances in all of the individual internal capital accounts and the collective reserve account, if any, shall be adjusted at the end of each accounting period so that the sum of these balances and of the amounts under subsection (c)(2) and (3) is equal to the net worth of the corporation.
(f) Use of funds.--
Moneys allocated to the internal capital accounts may be used for corporate purposes as determined by the board of directors.
Cross References.
Section 7706 is referred to in section 7705 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7708 - Acceptance and termination of membership

§ 7708. Acceptance and termination of membership.
The articles of incorporation shall establish qualifications and the method of acceptance and termination of members. No person may be accepted as a member unless employed by the corporation on a full-time or part-time basis.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7711 - Corporate powers

§ 7711. Corporate powers.
Each corporation has the following powers:
(1) To exist for the period of time set forth in its articles of incorporation unless sooner dissolved by operation of law or under this chapter.
(2) To maintain and defend judicial proceedings by the name specified in the articles of incorporation.
(3) To adopt and use a common seal and alter the same.
(4) To hold, purchase, lease and transfer real and personal property as necessary or proper to effect the purposes of the corporation.
(5) To elect a board of directors, which has the power to appoint officers, agents and employees as necessary; to prescribe their duties; to require bonds of them; and to dismiss them in accordance with the bylaws.
(6) To make bylaws.
(7) To make contracts and to assist or join with persons to effect the activities authorized by its articles of incorporation and conducive to or expedient for the interest or benefit of the corporation and to exercise powers necessary or proper for the accomplishment of the purposes of the corporation.
(8) To borrow money necessary to the conduct of its operations; to issue notes, bonds and other evidence of indebtedness; and to give security in the form of mortgage or otherwise.
(9) In furtherance of corporation purposes, to make loans or advances to its members and patrons or to subsidiary and affiliated persons or their members and to purchase or acquire, endorse, discount or sell evidence of debt, obligation or security.
(10) To establish and accumulate a collective reserve account, surplus of capital and other funds authorized by the articles of incorporation or the bylaws.
(11) To foster membership in the corporation and to solicit patrons by advertising or by educational or other means.
(12) To issue and to sell common and preferred stock.
(13) To own shares of the capital stock of, to hold membership in and to hold bonds or other obligations of other workers' corporations and to exercise all the rights of ownership, including the right to vote.
(14) To pay pensions and to establish pension plans, pension trusts and other incentive plans for its directors, officers and employees.
(15) To indemnify, under section 7718 (relating to indemnity), a director or officer or former director or officer of the corporation or a person who may have served at its request as a director or officer of another corporation in which it holds membership or owns shares of capital stock or of which it is a creditor.
(16) To make contributions and donations for the public welfare or for religious, charitable, scientific or educational purposes.
(17) To merge or consolidate with other workers' cooperative corporations.
(18) To dissolve and wind up.
(19) To exercise incidental powers as necessary or proper in the conduct of its operations.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7712 - Investment of capital stock in other corporations

§ 7712. Investment of capital stock in other corporations.
If the articles permit, a corporation may, by a majority vote of its members at a meeting specially convened, authorize the directors to invest, in the name of the corporation, an amount of its internal capital accounts, including both individual capital accounts and the collective reserve accounts, in the capital stock of any other domestic, foreign or alien workers' cooperative corporations. The corporation may, by a majority vote of its members at a meeting specially convened, permit an investment in the nonvoting preferred stock of the corporation by any other domestic, foreign or alien workers' cooperative corporation.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7713 - Meetings

§ 7713. Meetings.
After the organization of a corporation, the incorporators shall hold an organizational meeting at a time and place fixed by the board of directors and shall adopt a set of bylaws. Not less than ten days' written notice of the meeting shall be given to each incorporator. Thereafter, there shall be at least one meeting of members each year. Annual and special membership meetings shall be governed by the corporation's bylaws. The bylaws shall provide for the giving of notice to members of each meeting of the corporation. For all meetings of the corporation, notice as provided in this section need not be given to members or other stockholders to whom the notice may be required by this chapter if a written waiver of the notice is executed before or after the meeting by each individual and is filed with the records of the meeting.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7715 - Audit

§ 7715. Audit.
(a) Procedure.--
At the close of each fiscal year, a complete certified audit of the operations of the corporation shall be made by a qualified certified public accountant employed by the board of directors, a written report of which shall include the balance sheet, operating statement, commissions, salaries and other remunerations of directors, officers and employees and other proper information. The audit shall be submitted to the members at the next regular meeting. The annual audit of a corporation with annual gross sales of $100,000 or less may be performed by an audit committee of three or more members of the corporation appointed by the board of directors; however, one of the three members must be a member of the board of directors. The members of the committee need not be certified public accountants or public accountants.
(b) Withdrawal of audit and improper audits.--
A certified audit may not be withdrawn without approval of the board of directors. The board of directors may seek legal recourse if the audit is conducted improperly.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7717 - Patronage distributions

§ 7717. Patronage distributions.
(a) Procedure.--
Net earnings of a corporation may be apportioned, distributed and paid periodically on the basis of patronage to those persons entitled to receive them, at a time and in a manner as the bylaws provide. The distributions shall be designated as patronage allocations.
(b) Method of payment.--
The apportionment, distribution and payment of net earnings under subsection (a) may be in cash or written notices of allocation issued by the corporation.
(c) Minimum transaction amount.--
A corporation may provide in its bylaws the minimum amount of a single patronage transaction, which shall be taken into account for the purpose of participation in allocation and distribution of net earnings under this section.
(d) Periodic redemption.--
The bylaws of a workers' cooperative corporation shall provide for periodic redemption of written notices of allocation.
(e) Interest.--
The bylaws may provide for the corporation to pay or credit interest on the balance of each member's internal capital account.
(f) Termination redemption.--
The articles of incorporation shall provide for the recall and redemption of the membership share upon the voluntary or involuntary termination of membership in the corporation. The price of the redemption shall be equal to the sum of the membership fee and any other capital paid in by the member, adjusted by the amount of interest accrued and by distributions of net earnings as provided in the bylaws. No redemption may be made which would render the corporation insolvent.
(g) Net earnings.--
For purposes of this section, net earnings shall be computed in accordance with generally accepted accounting principles.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7718 - Indemnity

§ 7718. Indemnity.
(a) Mandatory.--
A corporation shall indemnify a person acting as a director, officer, employee or agent of the corporation or acting at the request of the corporation as a director, officer, employee or agent of another person against legal expenses, including attorney fees, reasonably incurred in a civil or criminal action in which the person to be indemnified is successful.
(b) Discretionary.--
A corporation may indemnify a person acting as a director, officer, employee or agent of the corporation or acting at the request of the corporation as a director, officer, employee or agent of another person against liability and legal expenses, including attorney fees, judgments, fines and settlements, reasonably incurred in a civil or criminal action if the person to be indemnified was unsuccessful but acted in good faith and in a manner that the person reasonably believed to be in or not opposed to the best interests of the corporation and, in a criminal action, had no reasonable cause to believe the conduct was unlawful. The adverse determination of an action does not, of itself, create a presumption that the person to be indemnified did not act in good faith, did not act in a manner that the person reasonably believed to be in or not opposed to the best interest of the corporation or had reasonable cause to believe the conduct was unlawful.
(c) Interest of corporation.--
This section applies even if the action is on behalf of or inures to the benefit of the corporation unless the liability for which indemnification is sought is based on negligence in the performance of a duty owed to the corporation.
Cross References.
Section 7718 is referred to in section 7711 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7719 - Unlawful dividends

§ 7719. Unlawful dividends.
(a) Insolvency.--
For shares of the corporation other than membership shares, the board of directors may declare and the corporation may pay dividends on its outstanding shares except when the corporation is insolvent or the payment would render the corporation insolvent. If a dividend is paid, the directors under whose administration the payment was made, except those who have caused their dissent to be entered on the minutes of the meeting at which the action was authorized and those who, being absent at the time, have promptly filed their written objection with the secretary of the corporation upon learning of the action, shall be jointly and severally liable to the corporation in an amount equal to the amount of the unlawful dividend.
(b) Reliance on financial statements.--
A director is not liable under this section if the director relied and acted in good faith upon financial statements of the corporation represented to be correct by the president of the corporation or by the officer having charge of the corporation's books of account or upon written reports, issued by an independent public or certified public accountant, which fairly purports to reflect the financial condition of the corporation.
(c) Liability to corporation.--
If an unlawful dividend is paid, each stockholder is liable to the corporation in an amount equal to the amount of the unlawful dividend to the stockholder. An action to enforce this liability must be brought within two years from the date of the receipt of the dividend.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7721 - Bylaws

§ 7721. Bylaws.
(a) Adoption, amendment and repeal.--
The corporation, before commencing business, shall adopt bylaws not inconsistent with law or its articles of incorporation. The bylaws may be amended in the manner provided by law, the articles of incorporation and the bylaws. The power to amend or repeal the bylaws of a corporation is in the members only, except to the extent that the articles of incorporation require that both the members and the board of directors approve a change. The corporation shall notify each member of a proposed change in the bylaws by sending to each member, at least 15 days prior to a vote on the proposed change, a copy of the proposed change along with the time, date, place and manner of voting for the proposed changes. If a proposed bylaw change is approved, the corporation shall mail each member a copy of the approved change within 30 days of the approval.
(b) Content.--
The bylaws may provide for the following matters:
(1) The time, place and manner of calling and conducting meetings of the members and the number of members that constitute a quorum.
(2) The manner of voting and the conditions upon which members may vote at general or special meetings.
(3) Subject to provision in the articles of incorporation and in this chapter, the number, qualifications, eligibility requirements, manner of nomination, duties and terms of office of directors and officers; the time of their election; and mode and manner of giving notice of election.
(4) The time, place and manner for calling and holding meetings of the directors and executive committees and the number that constitutes a quorum.
(5) Rules consistent with law and the articles of incorporation for the management of the corporation; the making of contracts; the issuance, redemption and transfer of stock; the relative rights, duties, interests and preferences of members and stockholders; and the mode, manner and effect of termination of a member.
(6) Any other provisions deemed necessary or proper to carry out the purposes of the corporation.
(7) Penalties for violations of the bylaws.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.)
1990 Amendment.
Act 198 amended subsec. (b), retroactive to June 19, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7722 - Benefits bestowed on associations by compliance with this chapter

§ 7722. Benefits bestowed on associations by compliance with this chapter.
A cooperative association, whether incorporated or unincorporated, shall be entitled to all the benefits of this chapter by complying with its provisions; may, by a vote of the majority of the members of the cooperative association taken according to its existing articles of association or bylaws, determine to avail itself of the provisions of this chapter and to assume a corporate name and the powers under a corporate name; and may, by a like vote, transfer to the corporation formed under this chapter all its property. Upon transfer of the property, the corporation to which the property is transferred shall take it in the same manner, to the same extent and with the same effect as the property was previously owned and held by the corporation transferring the property and may, in its corporate name, sue for and collect debts, subscriptions and other benefits belonging to the original association. A corporation taking property under this section shall take it subject to liens and trusts, legal and equitable, to which the property was subject before transfer and shall be liable for all obligations of the previous association to the extent of the value of the property at the time of taking.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7723 - Dissolution

§ 7723. Dissolution.
(a) General rule.--
A corporation may dissolve and wind up; may merge with other corporations; and may sell to, lease to or exchange with other corporations all or substantially all of its property and assets. Except as otherwise provided in this chapter, these actions are governed by Chapter 3 (relating to entity transactions) and Subchapter C of Chapter 19 (relating to merger liabilities and sale of assets). A workers' cooperative corporation which has not revoked its election to be governed by this chapter may not merge with one or more corporations organized under any law other than this chapter. If a member objects to a corporation's merger, the member may terminate membership in the corporation. The price of redemption of the member's interest shall be the amount in the member's individual capital account on terms and conditions as the law, the articles of incorporation and the bylaws provide.
(b) Distribution of assets.--
Upon dissolution, the assets of a corporation shall be distributed in accordance with the articles of incorporation or bylaws. The recipients of the distributed assets shall be limited to the following:
(1) Each individual who is or was a member of the corporation or the individual's estate on the basis of the ratio of the member's patronage to the total patronage of all members during the existence of the corporation.
(2) Holders of shares of stock in the corporation other than membership shares.
(3) Other corporations which are incorporated under this chapter or which meet the requirements of incorporation under this chapter.
(4) Charitable institutions in support of the cooperative movement.
(c) Security interests and indebtedness.--
A mortgage, pledge or creation of a security interest is not a sale within the meaning of this section. Unless otherwise provided in the articles of incorporation or bylaws, a corporation may create or increase its indebtedness in the manner, to the extent, for the purpose, upon terms and conditions and upon security as authorized by resolution adopted by its board of directors. In this case no authorization or consent of the members is required.
(Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
2014
Amendment.
Act 172 amended subsec. (a).
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7724 - Conversion to a corporation governed by the Business Corporation Law

§ 7724. Conversion to a corporation governed by the Business Corporation Law.
(a) Amendment of articles.--
A corporation may revoke its election to be governed by this chapter by filing an adopted amendment to its articles of incorporation with the department.
(b) Conversion of shares and accounts.--
When a corporation revokes its election under subsection (a), the amendment to the articles of incorporation shall provide for the conversion of membership shares and internal capital accounts to securities or other property in a manner consistent with this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7725 - Savings provisions

§ 7725. Savings provisions.
(a) General rule.--
In relation to a corporation existing on the effective date of this chapter, the provisions of this chapter do not impair or affect an act done; offense committed; right accruing or accrued; or liability, penalty, forfeiture or punishment incurred prior to the effective date of this chapter.
(b) Contracts.--
This chapter does not impair or affect a contract entered into by a corporation prior to the effective date of this chapter.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 77 - Workers' Cooperative Corporations › Section 7726 - Applicability

§ 7726. Applicability.
(a) General rule.--
This chapter shall apply to domestic corporations incorporated under this chapter.
(b) Existing corporations.--
This chapter shall apply to existing domestic corporations incorporated under or subject to any prior law of the Commonwealth concerning incorporation and regulation of corporations, whether cooperative or noncooperative, by the filing with the department of a certificate executed under the seal of the corporation, signed by two authorized officers of the corporation and setting forth:
(1) The name of the corporation.
(2) The statute by or under which it was created or formed.
(3) A statement that the members or stockholders of the corporation have elected, by a majority vote of the members or stockholders present at a meeting called for such purpose at which a quorum is present, to accept the provisions of this chapter for the government and regulation of the affairs of the corporation.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.)
1990 Amendment.
Act 198 amended subsec. (a), retroactive to June 19, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 79 - Fundamental Changes (Transferred) › Extra - Chapter Notes

Enactment.
Chapter 59 was added as Chapter 79 November 15, 1972, P.L.1063, No.271, effective
            in 90 days. Chapter 79 was renumbered to Chapter 59 December 21, 1988, P.L.1444, No.177,
            effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 79 - Fundamental Changes (Transferred) › Section 7901 - § 7906 - (Transferred)

Transfer Note.
Chapter 79 was renumbered to Chapter 59 December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
Prior Provisions.
Chapter 79 was added November 15, 1972, P.L.1063, No.271, effective in 90 days.
SUBCHAPTER A
AMENDMENT OF ARTICLES
(Transferred)
Transfer.
Subchapter A (§§ 7901 - 7906) was renumbered to Subchapter A of Chapter 59 December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 79 - Fundamental Changes (Transferred) › Section 7921 - § 7930 - (Transferred)

Transfer.
Subchapter B (§§ 7921 - 7930) was renumbered to Subchapter B of Chapter 59 December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 79 - Fundamental Changes (Transferred) › Section 7941 - § 7946 - (Transferred)

Transfer.
Subchapter C (§§ 7941 - 7946) was renumbered to Subchapter C of Chapter 59 December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 79 - Fundamental Changes (Transferred) › Section 7951 - § 7956 - (Transferred)

Transfer.
Subchapter D (§§ 7951 - 7956) was renumbered to Subchapter D of Chapter 59 December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 79 - Fundamental Changes (Transferred) › Section 7961 - § 7971 - (Transferred)

Transfer.
Subchapter E (§§ 7961 - 7971) was renumbered to Subchapter E of Chapter 59 December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 79 - Fundamental Changes (Transferred) › Section 7981 - § 7990 - (Transferred)

Transfer.
Subchapter F (§§ 7981 - 7990) was renumbered to Subchapter F of Chapter 59 December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 81 - General Provisions › Extra - Chapter Notes

Enactment.
Chapter 61 was added as Chapter 81 November 15, 1972, P.L.1063, No.271, effective
            in 90 days. Chapter 81 was renumbered to Chapter 61 December 21, 1988, P.L.1444, No.177,
            effective October 1, 1989.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 81 - General Provisions › Section 8102 - Interchangeability of partnership, limited liability company and corporate forms of organization

§ 8102. Interchangeability of partnership, limited liability company and corporate forms of organization.
(a) General rule.--
Subject to any restrictions on a specific line of business made applicable by section 103 (relating to subordination of title to regulatory laws):
(1) Any business that may be conducted in a corporate form may also be conducted as a partnership or a limited liability company.
(2) A domestic or foreign partnership or limited liability company may exercise any right, power, franchise or privilege that a domestic or foreign corporation engaged in the same line of business might exercise under the laws of this Commonwealth, including powers conferred by section 1511 (relating to additional powers of certain public utility corporations) or other provisions of law granting the right to a duly authorized corporation to take or occupy property and make compensation therefor.
(b) Exceptions.--
Subsection (a) shall not:
(1) Affect any law relating to the taxation of partnerships, limited liability companies or corporations.
(2) Authorize acting as a banking institution, credit union or insurer unless the laws relating thereto or this part expressly permit the conduct of the regulated business in partnership or limited liability company form. See sections 8620(b) (relating to characteristics of limited partnership) and 8818(b) (relating to characteristics of limited liability company).
(3) Except as otherwise provided by law, permit a partnership to provide full limited liability for all of the investors therein or otherwise fail to preserve the intrinsic differences between the partnership and corporate forms.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 7, 1994, P.L.703, No.106, eff. 60 days; Nov. 21, 2016, P.L.1328, No.170, eff. 90 days)
Cross References.
Section 8102 is referred to in sections 8620, 8818, 8819 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 81 - General Provisions › Section 8103 - Continuation of certain limited partnerships and limited liability companies (Repealed)

§ 8103. Continuation of certain limited partnerships and limited liability companies (Repealed).
2001 Repeal.
Section 8103 was repealed June 22, 2001, P.L.418, No.34, effective in 60 days.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 81 - General Provisions › Section 8104 - Reserved power of General Assembly

§ 8104. Reserved power of General Assembly.
All present and future common or statutory law with respect to the formation, organization or regulation of partnerships, limited partnerships, electing partnerships or limited liability companies or prescribing powers, rights, duties or liabilities of such associations or their general or limited partners, members, managers, officers, agents or other representatives may be revoked, amended or repealed.
(Dec. 7, 1994, P.L.703, No.106, eff. 60 days)
1994 Amendment.
Act 106 added section 8104.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 81 - General Provisions › Section 8105 - Ownership of certain professional partnerships and limited liability companies

§ 8105. Ownership of certain professional partnerships and limited liability companies.
(a) General rule.--
Except as otherwise provided by statute, rule or regulation applicable to a particular profession, all of the ultimate beneficial owners of the interests in a general partnership, limited partnership, electing partnership or limited liability company, and all of the governors of the entity, must be licensed persons in the profession the entity practices if the entity renders any of the following professional services:
(1) chiropractic;
(2) dentistry;
(3) law;
(4) medicine and surgery;
(5) optometry;
(6) osteopathic medicine and surgery;
(7) podiatric medicine;
(8) public accounting;
(9) psychology; or
(10) veterinary medicine.
(b) Transitional provision.--
Subsection (a) shall not apply to a person that holds only a transferable interest that was acquired before February 21, 2017.
(Dec. 7, 1994, P.L.703, No.106, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 21, 2016, P.L.1328, No.170, eff. 90 days)
Cross References.
Section 8105 is referred to in section 8834 of this title.