2023 Laws of Puerto Rico › TITLE FOURTEEN - Private Corporations (§§ 1 — 4084) › Subtitle 5 - General Corporations Act (2009) › Chapter 236 - Special Employee-Owned Corporations (§§ 3871 — 3881) › § 3877 - Internal capital accounts; redemption, purchase and withdrawal price of the certificates of membership; collective reserve account and social fund; interest

(a) The special corporation organized under the provisions of this chapter shall establish a system of internal capital accounts through which the book value of the capital assets of the corporation, the redemption, purchase, and withdrawal price of the certificates of membership and the corporate capital shares and the value accumulated by each member in the notices of productivity, patronage and capital credits may be determined in a prompt and economical manner.
(b) The bylaws shall indicate the way the corporation shall establish and credit the productivity credit notices to regular members, the patronage credit notices to special members, and the capital credit notices to corporate members. The manner to determine the productivity of regular members shall be established in the corporation’s bylaws taking into consideration the members’ contribution to its goodwill. This contribution to the goodwill may be established by considering the quality of the duties and functions of the member, his/her salary or any other method that will adequately reflect his/her productivity and contribution to the corporation’s assets. In no case shall the productivity credit assigned to a regular member exceed six (6) times the productivity credit assigned to another regular member who is employed on a fulltime basis by the corporation. The assembly of members may waive compliance of this requirement in specific exceptional cases with the affirmative vote of two-thirds (⅔) of the total number of votes cast by all the members at the assembly. The manner to establish productivity credits shall be determined uniformly for all regular members. Patronage credits shall be established taking into consideration the support that special members give the special corporation’s activities as established in its bylaws. The amount and manner of the payment of capital credits shall be established in the certificate of incorporation of the subsidiary of the special corporation taking into consideration the capital contribution of the parent corporation to the subsidiary, and shall not exceed twenty-five percent (25%) of the subsidiary’s profits.
(c) Productivity, patronage, and capital credit notices are established as a means of distributing the profits of the special corporation or as an advance of earnings, and replace the payment of dividends in the membership certificates. The board of directors of the corporation shall determine when the productivity, patronage, and capital credits are to be made to the regular, special and corporate members, respectively, and shall issue the corresponding productivity, patronage and capital credit notices in which each member shall be notified of the periodically accrued value of productivity, patronage and capital and the manner and term that the payment of this credit shall be made or if it will be capitalized.
(d) The certificate of incorporation or the bylaws of the corporation may authorize the redemption, purchase or periodic or regular withdrawal of the productivity, patronage, and capital credit notices and the shares of capital stock issued and shall provide for the redemption, purchase or withdrawal of the membership certificates once the members cease or end that relationship with the corporation. No amount shall be paid for the redemption, purchase or withdrawal of membership certificates, shares or productivity, patronage or capital credit notices if by so doing or authorizing it, the directors of the corporation incur civil liability pursuant to the provisions of §§ 3601 and 3602 of this title.
(e) The bylaws of the corporation may authorize the payment of interest on unpaid productivity, patronage or capital credit notices or for other distributions credited and not paid to the members as seen in the individual internal capital accounts of each member.
(f) The corporation shall have the above mentioned internal capital accounts, a collective reserve account and a social account or fund. The net profits and losses shall be distributed among those accounts and not any other. Ninety percent (90%) of the membership fee of regular and corporate members and the membership fee of special members and any additional capital contributed by the member whether through the purchase of shares, bonds or loans by the member from the corporation, shall be credited to the individual internal capital account, and the crediting, distribution, and payment of net profits and losses attributed to the member whether through productivity, patronage credit notices or capital contributions, or any other means, shall also be registered therein, as well as any other interest accrued, if authorized. Whenever the corporation does not have sufficient resources to pay dividends to the stockholders and interest to the bondholders, the board of directors shall not authorize any payment whatsoever to the members of the corporation nor shall it make credits to the internal capital accounts, except to members who are stock or bond holders, while said situation persists, and if there is a positive balance in the internal capital accounts, it shall be transferred to pay said obligations with priority. The balance kept in the internal capital accounts shall be for the benefit of the members. Ten percent (10%) of the regular and corporate membership fees, all donations received by the corporation, borrowings, proceeds from the sale of corporate bonds to nonmembers, contributions to corporate capital by nonmembers for the sale of stocks or any other manner, and the net profits and losses that have not been appropriated to the internal capital accounts or social fund shall be credited in the collective reserve account. No less than twenty percent (20%) of the net profits of the corporation shall be credited in the collective reserve account. The losses shall be credited to said account in the same proportion as the net profits, and the remaining balance shall be credited to the internal capital account of each member. The balance of the collective reserve account shall be used for the construction of capital improvements, acquisition of machinery and equipment, and for the payment of loans whose proceeds have been used for the payment of loans whose proceeds have been used for the above. The collective reserve account shall not be distributed among members nor shall it be for their benefit even when the corporation ceases to exist. No less than ten percent (10%) of the net profits of the corporation shall be credited to the social fund. The balance of the social fund shall be used for social interest activities as determined by the board of directors which will be available to all natural persons residing in the municipality in which the corporation has its main office. For the purposes of what is provided herein, contributions for social interest purposes shall be understood to:
(1) Establish or collaborate with a program to finance housing for low-income families.
(2) Grant scholarships or financial assistance for university or vocational studies for students of low-income families.
(3) Make gifts for emergency community help in case of a disaster or for charity.
(4) Make donations to groups of low-income persons so that they may establish employee-owned enterprises.
(5) Create, acquire, and capitalize an employee owned financing enterprise directed mainly to financing employee-owned enterprises organized under this chapter, regardless of the municipality in which their registered office is established.
(6) Publish information of general interest that does not constitute publicity for specific properties or enterprises.
(7) Create and capitalize special employee-owned corporations organized under this chapter regardless of the municipality in which their registered office is established.
(8) Establish or collaborate with a program to develop adequate technology and research applied to the production process of employee-owned corporations, regardless of the municipality in which their registered office is established.
For the purposes of what is provided herein, the terms “family” and “low-income persons” shall be those defined in the affordable housing programs of the Commonwealth.
In case the corporation ceases to exist, the collective reserve account shall be transferred to another special corporation or corporations organized pursuant to the provisions of this chapter, or to one (1) or several credit unions as determined by the assembly of members, and the social fund shall be destined to one (1) or several special employee-owned corporations or nonprofit entities selected by the assembly. The balances in all internal capital accounts, including the internal individual capital accounts, collective reserve accounts, and social fund shall be adjusted at the end of each accounting period so that the sum of said balances is equal to the net value in the corporate books.
History —Dec. 16, 2009, No. 164, § 16.07.