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Substitute House Bill No. 5431
Public Act No. 26-59
AN ACT CONCERNING COOPERATIVE CORPORATIONS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 33 -183 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
Three or more persons of lawful age [and inhabitants of this state,
may, by written articles of association, associate themselves together ]
may act as incorporators of a cooperative corporation by delivering a
certificate of incorporation to the Secretary of the State for filing. A
corporation may be formed under this chapter for the purposes of trade
or for carrying on any lawful mercantile, mechanical, manufacturing or
agricultural business . [within this state, and, when such articles of
association have been executed and filed in the office of the Secretary of
the State, the franchise tax provided by section 33-187 paid to, and such
articles of association approved by, said secretary, such persons shall
become a ] The corporation [and] shall enjoy all the powers and
privileges and be subject to all the duties, restrictions and liabilities of
other corporations, except so far as such duties, restrictions and
liabilities may be limited or enlarged by this chapter.
Sec. 2. Section 33 -184 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
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The objects for which such [association] corporation is established,
and the place within which its business is to be carried on, shall be
distinctly set forth in its [articles of association] certificate of
incorporation or bylaws, and it shall not do business in any other place
or places than those [mentioned in its articles] stated in its certificate of
incorporation or bylaws.
Sec. 3. Section 33 -185 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
[(a) Prior to October 1, 2019, the business of the association shall be
managed by not fewer than seven members, who shall be styled a board
of managers, shall be chosen annually by the stockholders and shall
hold their offices until others are chosen and have qualified in their
stead, except that when the bylaws of such association so prescribe, the
board of managers may be divided into not more than three classes, each
class to hold office for not m ore than three years, one of which classes
shall be elected annually. Such association shall have such other officers
appointed as its bylaws prescribe. The terms of the members of the
board serving on June 26, 2019, shall expire on September 30, 2019.]
[(b) On and after October 1, 2019, the business of the association] The
business of the corporation shall be managed by a board of directors
consisting of not fewer than three members of the [association]
corporation. The board of directors shall be elected annually by the
[member shareholders] members and shall hold office for one year and
until a successor has been elected, except [, when] that the bylaws of
such [association so prescribe, the board of directors may be divided
into not more than three cla sses, one of which classes shall be elected
annually, with each class to hold office for not more than six years. Such
association may adopt bylaws concerning the appointment of other
officers of the association and to implement the provisions of this
section] corporation may provide for staggering the terms of directors
by dividing the total number of directors into not more than five groups,
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with each group containing approximately the same percentage of the
total, as near as may be. In that event, the terms of directors in the first
group expire at the first annual members' meeting after their election,
the terms of the second group expire at the second annual members'
meeting after their election, the terms of the third group, if any, expire
at the third annual members' meeting after their election, the terms of
the fourth group, if any, expire at the fourth annual members' meeting
after their election and the terms of the fifth group, if any, expire at the
fifth annual members' meeting after their election. At each annual
members' meeting held thereafter, directors shall be chosen for a term
of two years, three years, four years or five years, as the case may be, to
succeed those whose terms expire.
Sec. 4. Section 33 -186 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
[Any two of the persons associated may call the first meeting of such
association, at such time and place as they may appoint, by notice in any
newspaper published in the county in which such association is to be
established, at least fifteen days before th e time appointed; but such
notice may be waived by a writing signed by all of the persons so
associated, specifying the time and place for said meeting, and recorded
at length upon the records of the association. Such association may make
its own bylaws.] A majority of incorporators shall call an organizational
meeting of the corporation at such time and place as they may appoint
to (1) elect directors and complete the organization of the corporation,
or (2) elect a board of directors who shall complete the organization of
the corporation. Any action required or permitted to be taken by
incorporators at an organizational meeting under this chapter may be
taken without a meeting if the action taken is evidenced by one or more
written consents describing the action taken and signed by each
incorporator.
Sec. 5. Section 33 -190 of the general statutes is repealed and the
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following is substituted in lieu thereof (Effective October 1, 2026):
(a) No member of any such cooperative [association] corporation
shall be entitled to more than one vote upon any subject, at any meeting
of [such association ] the members. The rights and qualifications of
members of the corporation shall be set forth in the bylaws, which
qualifications shall include holdings or subscribing for at least one share
of capital stock. If the bylaws of the corporation do not provide for
members, the shareholders shall be the members. Except as may be
provided in the certificate o f incorporation with respect to classes or
series of stock, all rights of shareholders shall be exercised by the
members.
(b) Members entitled to vote on a matter may take action on the
matter at a meeting only if a quorum of those members exists with
respect to that matter. If there are no members entitled to vote as a
separate voting group, unless the certificate of incorpo ration or bylaws
provide otherwise, the members entitled to vote on the matter who are
present at the meeting, either in person or by proxy, constitute a quorum
for action on the matter. If there are members entitled to vote on a matter
as a separate votin g group, the members entitled to vote as a separate
voting group may take action on the matter at a meeting only if a
quorum of that voting group exists with respect to that matter. Unless
the provisions of this chapter, the certificate of incorporation or the
bylaws provide otherwise, the members of a voting group entitled to
vote on the matter who are present at the meeting, either in person or
by proxy, constitute a quorum of that voting group for action on that
matter.
(c) Unless otherwise provided in the certificate of incorporation or
bylaws, directors are elected by a plurality of the votes cast by the
members in the election at a meeting at which a quorum is present.
(d) Any action which, under any provision of this chapter or chapter
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601 may be taken at a meeting of members, may be taken without a
meeting if one or more consents in writing, setting forth the action so
taken or to be taken, signed by all of the persons who would be entitled
to vote upon such action at a meeting, or by t heir duly authorized
attorneys, which action for purposes of this subsection shall be referred
to as "unanimous written consent". The secretary shall file such consent
or consents, or certify the tabulation of such consents and file such
certificate, with the minutes of the meetings of the members. A
unanimous written consent shall have the same force and effect as a vote
of the members at a meeting duly held and may be stated as such in any
certificate or document filed under this chapter or chapter 601.
(e) The certificate of incorporation or bylaws may provide that any
action that may be taken at any meeting of members may be taken
without a meeting if the corporation delivers notice that includes a
ballot to every member entitled to vote on the matter. A ballot shall: (1)
Be in writing; (2) set forth each proposed action; (3) provide an
opportunity to vote for, or withhold a vote for, each candidate for
election as a director, if any; and (4) provide an opportunity to vote for
or against each other proposed action.
(f) Approval by ballot pursuant to this section of action other than
election of directors is valid only when the number of votes cast by
ballot equals or exceeds the quorum required to be present at a meeting
authorizing the action, and the number of appr ovals equals or exceeds
the number of votes that would be required to approve the matter at a
meeting at which the total number of votes cast was the same as the
number of votes cast by ballot. A ballot signed under this section shall
have the same force and effect as a vote of the member who signed it at
a meeting duly held and may be stated as such in any certificate or
document filed under this chapter or chapter 601.
(g) Any solicitation for votes by ballot shall: (1) Indicate the number
of responses needed to meet the quorum requirements, (2) state the
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percentage of approvals necessary to approve each matter other than
election of directors, and (3) specify the time by which a ballot must be
received by the corporation in order to be counted.
(h) Except as otherwise provided in the certificate of incorporation or
bylaws, a ballot may not be revoked.
(i) If not otherwise fixed under sections 33 -665 to 33 -727, inclusive,
the record date for determining members entitled to take action without
a meeting is: (1) The date the first member signs the consent under
subsection (d) of this section, or (2) the date the corporation delivers the
notice under subsection (e) of this section.
Sec. 6. Section 33 -191 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
No certificate of shares shall be issued to any person until the full
amount thereof has been paid in cash, and no shareholder shall receive
less than the par value of any share when disposing of the same to the
[board of directors] corporation. No person shall be allowed to become
a shareholder in such [association] corporation except by the consent of
the directors.
Sec. 7. Section 33 -193 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2026):
There shall be a distribution of the profits or surplus of [an
association] the corporation among the [member shareholders ]
members as is prescribed by the [association's] corporation's bylaws.
The board of directors of [an association] a corporation may declare a
sum of not more than forty per cent of the net profits or surplus to be
appropriated for a contingent or sinking fund, an unallocated reserve
fund or a collective account as may be prescribed in the [association's]
bylaws.
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Sec. 8. Sections 33 -187, 33-188 and 33 -192 of the general statutes are
repealed. (Effective October 1, 2026)