Business of another company, purchase of. Proviso. to exceed, at any time, twenty per cent in the aggregate of its capital in the capital stock of any other similar co-operative company or companies with which it desires to co-operate or affiliate. SEC. 8. Whenever such corporation shall purchase the business of another company, person or persons, it may pay for the same in whole or in part by issuing to the selling association, person or persons, shares of its capital stock to an amount which, at par value, would equal the fair market value of the business so purchased, and in such case the transfer to the association of such business of such valuation shall be equivalent to payment in cash for the shares of stock so issued: Provided, That suitable provision be made in the by-laws of such corporation for admitting the vendors to such membership. Earnings, distribution of. Surplus earnings. Contracts and agreements. Subdivision 2.-Distribution of Earnings. SEC. 9. The stockholders of every such corporation shall provide in the by-laws what per cent upon the paid-up capital stock of such corporation, not exceeding seven per cent per annum, shall be first paid and distributed to the holders of such paid-up capital stock as dividends before dividing the surplus earnings or profits, as herein provided, and whether or not such dividends shall be cumulative. Said by-laws shall further provide what amount or percentage of the annual profit and earnings of the business, over and above such dividends to stockholders, shall be retained and kept in the treasury of the corporation as a reserve fund, and in what manner, method and proportion the surplus annual earnings and profits of the business of such corporation, in excess of such dividends and reserve fund, shall be divided up and distributed as a co-operative dividend, under the co-operative plan or principle adopted by such corporation among members doing business with the corporation; and may also provide for co-operative dividends to non-members. SEC. 10. The surplus earnings and profits of every such corporation shall be distributed to those entitled thereto at such times as the by-laws may provide, which shall be as often as once in each year. If any such corporation shall fail for five consecutive years to pay the dividend upon its paid-up capital stock in accordance with the provisions of its by-laws, a majority of the stockholders may petition the circuit court in chancery, in the county in which the principal office of such corporation is located, for the dissolution of the corporation; and if, upon the hearing, the court finds the allegations of the petition are substantially true, the corporation may be dissolved, its business wound up and its property distributed as the court may order and decree. SEC. 11. Every such corporation engaged in buying, handling, selling or dealing in farm produce or other agricultural products, canned goods, or by-products of any such goods, wares, merchandises or commodities, may enter into any and all necessary contracts respecting the terms of such transaction, and may deal in such commodities upon commission or brokerage basis, by agency agreements, or upon a warehouse storage plan, and in so dealing in such commodities such corporation may make its contracts and agreements upon a co-operative basis, if deemed advisable. In any such co-operative contract the special co-operative agreements shall be stated as subject to priorities in favor of stockholders and others as provided for in the by-laws of the corporation, Subdivision 3.-Elective Features. provisions. SEC. 12. Any co-operative corporation may at its option, Elective in its articles, adopt the provisions of this subdivision as governing its mode of operation, and in such case it shall make specific reference to such subdivision, chapter and part of this act. The adoption of this subdivision shall not exempt such corporation from the other provisions of this chapter excepting as to provisions therein inconsistent with this subdivision. rectors, SEC. 13. Every such association shall be managed by a Board of diboard of not less than five directors. The directors shall be number, etc. elected by and from the stockholders of the association at such time and for such term of office as the by-laws may prescribe, and shall hold office for the time for which they were elected and until their successors are elected and shall enter upon the discharge of their duties; but a majority of the stockholders shall have the power at any regular or special stockholders' meeting legally called, to remove any director or officer for cause, and fill the vacancy, and thereupon the director, or officer so removed shall cease to be a director of said association. The officers of every such asso- Officers. ciation shall be a president, one or more vice-presidents, a secretary and a treasurer, who shall be elected annually by the directors, and each of said officers must be a director of the association. The office of secretary and treasurer may be combined, and when so combined the person filling the office shall be secretary-treasurer. SEC. 14. The association may amend its articles by a ma- Articles, may jority vote of its stockholders at any regular stockholders' amend. meeting, or at any special stockholders' meeting called for that purpose, on ten days' notice to the stockholders. Said power to amend shall include the power to increase or di minish the amount of capital stock and the number of shares: Provided, That the amount of the capital stock shall not be Proviso. diminished below the amount of paid-up capital at the time when the amendment is adopted. SEC. 15. Any association adopting this subdivision shall May conduct have power to conduct any agricultural, dairy, mercantile, etc., business. agricultural, Profits, etc., distribution. Voting by mail. Proviso. Earnings, apportionment of. Voting, etc., power of mining, manufacturing or mechanical business, on the cooperative plan and may buy, sell and deal in the products of any other similar co-operative company, heretofore organized or hereafter organized under or becoming subject to the provisions of this act. SEC. 16. The profits or net earnings of such association shall be distributed to those entitled thereto, at such time as the by-laws shall prescribe, which shall be as often as once in twelve months, but no person or corporation from whom purchases of goods or materials incident only to the carrying on of the business of the association are made, or to whom produce in wholesale quantities is sold, shall in any case be included in the distribution of said profits. SEC. 17. At any regularly called general or special meeting of the stockholders a written vote received by mail from any absent stockholder and signed by him may be read in such meeting and shall be equivalent to a vote of each of the stockholders so signing: Provided, He has been previously notified in writing of the exact motion or resolution upon which such vote is taken and a copy of same is forwarded with and attached to the vote so mailed by him. SEC. 18. The directors, subject to revision by the association at any general or special meeting, shall apportion the earnings by first paying dividends on the paid-up capital stock not exceeding six per cent per annum, then setting aside not less than ten per cent of the net profits for a reserve fund until an amount has accumulated in said reserve fund equal to thirty per cent of the paid-up capital stock and the remainder of said net profits by uniform dividend upon the amount of purchases of shareholders, and to non-shareholders on the amount of their purchases at a per cent one-half as great as that paid to shareholders, which may be credited to the account of such non-shareholders on account of capital stock of the association; but in productive associations such as creameries, canneries, elevators, factories, and the like, dividends shall be on raw material delivered instead of on goods purchased. In case the association is both a selling and a productive concern, the dividends may be on both raw material delivered and on goods purchased by patrons. SEC. 19. No stockholder in any such association shall own stockholders. shares of a greater par value than one thousand dollars, or be permitted to vote by proxy, or be entitled to more than one vote. Certificates of stock shall not be issued to any subscriber until fully paid, but the by-laws of the association may allow subscribers to vote as stockholders after fifty per cent of the stock subscribed for has been paid in cash. PART III. Corporations Not for Pecuniary Profit. CHAPTER 1. Corporations Not for Pecuniary Profit.-General Provisions. SECTION 1. Corporations whose purposes do not include How governed. the transaction of commercial or other business for a direct pecuniary profit to the members or stockholders, shall be governed by the provisions of this chapter in addition to such other provisions of this act as may be applicable thereto : Provided, That such corporations may transact business Proviso. upon the co-operative plan, as provided in chapter four of part two of this act, if done without direct pecuniary profit to the members or stockholders. Such corporations may be organized upon either a stock share basis or upon a nonstock basis, and the membership therein may be limited either as to number or qualifications as fixed in the articles or bylaws. nomination of. solution of SEC. 2. If organized upon a stock share plan the shares Shares, deof such corporations shall be of denominations of ten dollars, or a multiple of ten dollars, but shall not exceed one hundred dollars. No dividends shall be directly paid on any such shares nor shall the stockholders be entitled to any portion of the earnings of such corporation derived through increment of value upon its property or otherwise incidentally made: Provided, however, That upon dissolution of any Proviso, dissuch corporation, the stockholders shall be entitled to an corporation. aliquot portion of the assets thereof after the payment of all debts and the liquidation of all liabilities of such corporation, based upon their several holdings therein as represented by the shares of stock standing in the name of such stockholders at the time of dissolution. Such shares of stock shall not be transferable by assignment or sale, nor be transferred to legal heirs or devisees, upon the death of the owner thereof, unless the by-laws of such corporation make express provision therefor. Such stock corporations shall have power to exclude from further membership any stockholder who fails to comply with the reasonable and lawful requirements of the laws, rules and regulations duly made by such corporation for the government of its members, and may cancel the stock of any such offending member without liability for an accounting, excepting as may be provided for in the articles or by-laws. SEC. 3. In all corporations governed by the provisions of Membership, this chapter, membership therein shall be governed by such how governed. rules of admission, retention and dismissal, as the articles or by-laws shall prescribe, provided that all such rules shall Property, how held, etc. By-laws, enactment of. Members, dismissal, etc. Limit of capital stock. Power of securities commission. Proviso. be reasonable, germane to the purposes of the corporation, and equally enforced as to all members. SEC. 4. The property and lawful business of such corporations shall be held and managed by a board of trustees or directors, with such powers and authority as shall be necessary to the complete execution of the purposes of each such corporation, as limited by the articles, or by-laws duly made and published. No such board shall be less than three in number, and each such trustee or director shall be a member or stockholder of such corporation as the case may be. The by-laws of all such corporations shall be enacted by the stockholders or members assembled at any first or annual or special meeting of the members called in accordance with the provisions of this act or as provided in the articles of association; but the members may at any such meeting authorize the directors or trustees to enact and amend the by-laws not inconsistent with the articles. SEC. 5. If the membership in any such corporation be limited to persons who are members in good standing in other incorporated associations, lodges, churches, clubs, or soci eties, the articles of association shall in each case define such limitations, and in such case it may be further provided that failure on the part of any such member to keep himself or herself in such good standing in such other corporation or association shall be sufficient cause for expelling or dismissing such member from the corporation requiring such eligibility, subject to such regulations as may be enacted in the by-laws as to the nature and formalities of evidence that shall be prima facie sufficient to justify such dismissal or expulsion. SEC. 6. No corporation organized for non-profit shall be capitalized for an amount in excess of the sum of money necessary to carry out its purposes, including the purchase or leasing of such property as may be required for its offices or in its lawful business affairs, the payment of salaries and expenses of its officers for a period not exceeding five years from the time of incorporation, and the estimated expense of conducting and consummating its purposes aside from annual or other periodical contributions from sources other than the revenue derived from annual membership fees, and no such corporation shall hereafter be capitalized at more than five hundred thousand dollars without the consent and approval of the Michigan Securities Commission created by act number forty-six of the Public Acts of nineteen hundred fifteen, after a hearing upon the merits and necessities therefor. The Michigan Securities Commission shall have full power and authority in the premises to permit and regulate the use of such further capital as may be shown to be necessary and beneficial to the purposes of such corporation: Provided, That the limitation of capital prescribed herein shall in no case apply to corporations organized to carry out the provisions of any trust deed, or instrument, or of any will |