The organic rules shall establish the amount, manner, or method of determining any contribution requirements for members or shall authorize the board of directors to establish the amount, manner, or other method of determining any contribution requirements for members.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1001 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) Unless the organic rules otherwise provide, the contributions of a member to a limited cooperative association may consist of tangible or intangible property or other benefit to the association, including money, labor or other services performed or to be performed, promissory notes, other agreements to contribute money or property, and contracts to be performed.
(b) The receipt and acceptance of contributions and the valuation of contributions shall be reflected in a limited cooperative association's records.
(c) Unless the organic rules otherwise provide, the board of directors shall determine the value of a member's contributions received or to be received and the determination by the board of directors of valuation shall be conclusive for purposes of determining whether the member's contribution obligation has been met.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1002 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) Except as otherwise provided in the agreement, the following rules shall apply to an agreement made by a person before formation of a limited cooperative association to make a contribution to the association:
(1) The agreement shall be irrevocable for 6 months after the agreement is signed by the person unless all parties to the agreement consent to the revocation.
(2) If a person does not make a required contribution:
(A) The person shall be obligated, at the option of the association, once formed, to contribute money equal to the value of that part of the contribution that has not been made, and the obligation may be enforced as a debt to the association; or
(B) The association, once formed, may rescind the agreement if the debt remains unpaid more than 20 days after the association demands payment from the person, and, upon rescission, the person shall have no further rights or obligations with respect to the association.
(b) Unless the organic rules or an agreement to make a contribution to a limited cooperative association otherwise provide, if a person does not make a required contribution to an association, the person or the person's estate shall be obligated, at the option of the association, to contribute money equal to the value of the part of the contribution which has not been made.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1003 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) The organic rules may provide for allocating profits of a limited cooperative association among members, among persons that are not members but conduct business with the association, to an unallocated account, or to any combination thereof. Unless the organic rules otherwise provide, losses of the association shall be allocated in the same proportion as profits.
(b) Unless the organic rules otherwise provide, all profits and losses of a limited cooperative association shall be allocated to patron members.
(c) If a limited cooperative association has investor members, the organic rules shall not reduce the allocation to patron members to less than 50% of profits. For purposes of this subsection, the following rules shall apply:
(1) Amounts paid or due on contracts for the delivery to the association by patron members of products, goods, or services shall not be considered amounts allocated to patron members.
(2) Amounts paid, due, or allocated to investor members as a stated fixed return on equity shall not be considered amounts allocated to investor members.
(d) Unless prohibited by the organic rules, in determining the profits for allocation under subsections (a), (b), and (c) of this section, the board of directors may first deduct and set aside a part of the profits to create or accumulate:
(1) An unallocated capital reserve; and
(2) Reasonable unallocated reserves for specific purposes, including:
(A) Expansion and replacement of capital assets;
(B) Education, training, and cooperative development;
(C) Creation and distribution of information concerning principles of cooperation; and
(D) Community responsibility.
(e) Subject to subsections (b) and (f) of this section and the organic rules, the board of directors shall allocate the amount remaining after any deduction or setting aside of profits for unallocated reserves under subsection (d) of this section to:
(1) Patron members in the ratio of each member's patronage to the total patronage of all patron members during the period for which allocations are to be made; and
(2) Investor members, if any, in the ratio of each investor member's contributions to the total contributions of all investor members.
(f) For purposes of allocation of profits and losses or specific items of profits or losses of a limited cooperative association to members, the organic rules may establish allocation units or methods based on separate classes of members or, for patron members, on class, function, division, district, department, allocation units, pooling arrangements, members' contributions, or other equitable methods.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1004 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) Unless the organic rules otherwise provide and subject to § 29-1010.07, the board of directors may authorize, and the limited cooperative association may make, distributions to members.
(b) Unless the organic rules otherwise provide, distributions to members may be made in any form, including money, capital credits, allocated patronage equities, revolving fund certificates, and the limited cooperative association's own or other securities.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1005 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
Property distributed to a member by a limited cooperative association, other than money, maybe redeemed or repurchased as provided in the organic rules, but a redemption or repurchase shall not be made without authorization by the board of directors. The board may withhold authorization for any reason in its sole discretion. A redemption or repurchase shall be treated as a distribution for purposes of § 29-1010.07.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1006 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) A limited cooperative association shall not make a distribution if, after the distribution:
(1) The association would not be able to pay its debts as they become due in the ordinary course of the association's activities; or
(2) The association's assets would be less than the sum of its total liabilities.
(b) A limited cooperative association may base a determination that a distribution is not prohibited under subsection (a) of this section on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
(c) Except as otherwise provided in subsection (d) of this section, the effect of a distribution allowed under subsection (b) of this section shall be measured:
(1) In the case of distribution by purchase, redemption, or other acquisition of financial rights in the limited cooperative association, as of the date money or other property is transferred or debt is incurred by the association; and
(2) In all other cases, as of the date:
(A) The distribution is authorized, if the payment occurs not later than 120 days after that date; or
(B) The payment is made, if payment occurs more than 120 days after the distribution is authorized.
(d) If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness shall treated as a distribution, the effect of which is measured on the date the payment is made.
(e) For purposes of this section, the term "distribution" shall not include reasonable amounts paid to a member in the ordinary course of business as payment or compensation for commodities, goods, past or present services, or reasonable payments made in the ordinary course of business under a bona fide retirement or other benefits program.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1007 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) A director who consents to a distribution that violates § 29-1010.07 shall be personally liable to the limited cooperative association for the amount of the distribution which exceeds the amount that could have been distributed without the violation if it is established that, in consenting to the distribution, the director failed to comply with § 29-1008.18 or § 29-1008.19.
(b) A member or transferee of financial rights which received a distribution knowing that the distribution was made in violation of § 29-1010.07 shall be personally liable to the limited cooperative association to the extent the distribution exceeded the amount that could have been properly paid.
(c) A director against whom an action is commenced under subsection (a) of this section may implead in the action any:
(1) Other director who is liable under subsection (a) of this section and implead in the action any compel contribution from the person; and
(2) Person that is liable under subsection (b) of this section and compel contribution from the person in the amount the person received as described in subsection (b) of this section.
(d) An action under this section shall be barred if it is commenced later than 2 years after the distribution.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 1008 of the Uniform Limited Cooperative Association Act . See Vol. 6A , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
