prior statutes and which have attempted so to organize and do business, shall have the benefit of all provisions of this law and be bound thereby on filing with the secretary of state a written declaration, signed and sworn to by the president and secretary, to the effect that such cooperative company or association has, by a majority vote of its shareholders, decided to accept the benefits of and to be bound by the provisions of this law. (R. S. 1919, § 10258.) § 12762. Dissolution proceedings, how taken.-Whenever 80 percent of the stockholders of a corporation, engaged in agricultural or mercantile business vote for a dissolution of said corporation for the purpase of reincorporating under the "cooperative plan" as provided for in article 29, of chapter 87, R. S. 1929, the stockholders shall by motion direct the secretary of said corporation to transmit a certified copy of the dissolution proceedings to the secretary of state and said certified copy shall be taken as prima facie evidence of a voluntary dissolution of the corporation: Provided, however, That said dissolution shall not become effective until all the provisions as hereinafter stated shall have been complied with. Upon receipt of the order asking for dissolution the secretary of state shall issue a permit granting said corporation the privilege of dissolution from and after the time that all acts of incorporation under the cooperative plan have been complied with: Provided however, .That only 80 percent of the shareholders of said corporation shall be required to sign the articles of association or agreement. The board shall have power to purchase at its book value, all stock in excess of 10 percent of the capital stock held by any share holder. The president and secretary of the corporation seeking dissolution shall execute and acknowledge in the name and in behalf of such former corporation, a conveyance of all property, real and personal, and assets of every description of the said former corporation conveying the same to the new cooperative association so incorporated, and such conveyance shall have the effect to vest in such new cooperative association all the right, title, and interest in such property, real and personal, and assets of any description, which were at any time possessed by said former corporation. The new cooperative association shall be liable for all debts and claims against said former corporation. (L. 1923, p. 316.)

§ 12763. Use of the name "cooperative" prohibited. No corporation or association hereafter organized shall be entitled to use the word "cooperative" as part of its corporate or other business name or title, unless it has complied with the provisions of this article or a law providing for the incorporation of associations upon a cooperative plan, and any corporation or association violating this provision of this article may be enjoined from doing business under such name in a suit by any association legally organized under the provisions of this article.1 (R. S. 1919, § 10259; L. 1921, p. 270.)

1

The language in the second paragraph of section 12694 of the cooperative marketing act (Rev. Stat. 1929, art. 24) might be interpreted to prohibit use of the designation "nonprofit cooperative" by any organization existing at the time of the passage of the marketing act. See the annotation to section 883d-9 of Kentucky statute herein, and twelfth annotation to section 7834 of Minnesota statute.

§ 12764. Funds, how used. None of the funds of any association organized under the provisions of this article shall be used in the payment of any expenses for promotion of any such organization, such, for instance, as commissions, salaries or expenses of any kind, character, or nature whatsoever. (R. S. 1919, § 10260.)

§ 12765. Private property exempt. The private property of shareholders shall be exempt from execution for the debts of any such association. (R. S. 1919, § 10261.)

§ 12766. Permitting agricultural or mercantile business to be conducted on cooperative basis. Any part or all of the common stock of any corporation organized for the purpose of conducting any agricultural or mercantile business on the cooperative plan as provided for by article 29,1 chapter 87, R. S. 1929, may be legally purchased and owned in all respects as if purchased and owned by a natural person, by any other corporation incorporated under the laws of Missouri on the cooperative plan, including any other corporation organized under article 29, chapter 87, R. S. 1929. (L. 1921, p. 270.) 1 1 See the annotation to section 12750.

138958°-37- -7

MONTANA

Revised Codes, 1935

§ 6375. Incorporation of cooperative associations.-Whenever any number of persons, not less than three, nor more than seven, may desire to become incorporated as a cooperative association for the purpose of trade, or of prosecuting any branch of industry, or the purchase and distribution of commodities for consumption, or in the borrowing or lending of money among members for industrial purposes, they shall make a statement to that effect under their hands, duly acknowledged by a notary public, in the manner provided for the acknowledgment of deeds, setting forth the name of the proposed corporation, its capital stock, its location, and duration of the association, and the particular branch or branches of industry which they intend to prosecute, which statement shall be filed in the office of the secretary of state. The secretary of state shall thereupon issue to such persons a license as commissioners to open books for subscription to the capital stock of such corporation, at such time and place as they may determine, for which he shall receive the fee of $5. (C. C. 1895, § 870; R. C. 1907, § 4210; R. C. M. 1921, § 6375; Cal. Civ. C. § 653b.)

§ 6376. Limit on amount of common stock person may hold.-No person shall be permitted to subscribe for or control or own more or less than one share of the common stock of such association. (C. C. 1895, § 871; R. C. 1907, § 4211; R. C. M. 1921, § 6376; L. 1933, ch. 135, § 1.) § 6377. First meeting. As soon as 10 or more shares of the capital stock shall be subscribed, the commissioners shall convene a meeting of the subscribers for the purpose of electing directors, adopting bylaws, and transacting such other business as shall properly come before them. Notice thereof shall be given by depositing same in the postoffice, properly addressed, to each subscriber, at least 10 days before the time fixed, stating the object, time, and place of said meeting. Directors of associations organized under this act shall be elected by the stockholders, and hold their office for such period of time as shall be provided in the articles of association or bylaws. (C. C. 1895, § 872; R. C. 1907, §4212; R. C. M. 1921, § 6377.)

§ 6378. Certificate of incorporation. The commissioners shall make a full report of their proceedings, including therein a copy of the notice provided for in the preceding section, a copy of the subscription list, a copy of the bylaws adopted by the association, and the names of the directors elected and their respective terms of office, which report shall be sworn to by at least a majority of the commissioners, and shall be filed in the office of the secretary of state. The secretary of state shall thereupon issue a certificate of the complete organization of the association, making a part thereof a copy of all papers filed in his office, in and about the organization, and duly authenticated, under his hand and seal of the State, for which he

shall receive the sum of $5, and thereupon a certified copy of said certificates shall be filed in the office of the county clerk in which the principal office of the association is located. Upon the filing of said certified copy, the association shall be deemed to be fully organized and may proceed to business. (C. C. 1895, § 873; R. C. 1907, § 4213; R. C. M., 1921, § 6378.)

§ 6379. Powers of such associations.-Associations formed under this act shall be bodies corporate and politic for the period for which they are organized, not exceeding 40 years; may sue and be sued; may have a common seal, which they may alter or renew at pleasure; may own, possess, and enjoy so much real and personal property as shall be necessary for the transaction of their business, and may sell and dispose of the same. They may borrow money and may pledge their property, both real and personal, to secure the payment thereof, and they shall have and exercise all powers necessary and requisite to carry into effect the objects for which they may be formed, and such as are usually exercised by cooperative associations, subject to all duties, restrictions, and liabilities set forth in the general laws in relation to similar corporations, except so far as the same may be limited or enlarged by this act. (C. C. 1895, § 874; R. C. 1907, § 4214; R. C. M. 1921, § 6379; Cal. Civ. C. § 653b.)

1 Cooperatives organized under this statute are subject to section 6003 of the general corporation law (Rev. Code, 1921), which provides that directors or trustees of any corporation having capital stock, other than banks, trust companies, and building and loan associations, who fail to file an annual report of its condition with the county clerk and recorder of deeds in the county of its principal place of business, shall be jointly and severally liable for all corporation debts and judgments until such report is filed. (Anderson v. Equity Coop. Assoc., 67 Mont. 291, 215 Pac. 802 (1923).)

Contrary to the opinion of a former attorney general (Op. Atty. Gen. 1926– 1928, p. 22) cooperatives organized under this statute are subject to filing fees provided in the general corporation law, where the matter is not covered by the Cooperative Act. (Op. Atty. Gen. (1932-34) 314.)

In computing the corporation license tax based on net income, patronage dividends should be deducted as an expense. (Op. Atty. Gen. (1923) 184.)

Cooperatives may amend articles of incorporation in accordance with the general corporation law, there being no provision in the cooperative act for such amendment. (Op. Atty. Gen. (1914-16) 340.)

§ 6380. Board of directors.-The officers of the association shall consist of a board of directors, who shall exercise the corporate powers invested in such association, the number of which, not less than three, shall be fixed by the bylaws of the association; a president, vice president, secretary, and treasurer, to be elected by the stockholders as provided by the bylaws. All bylaws shall be adopted by the stockholders of the association. (C. C. 1895, § 875; R. C. 1907, § 4215; R. C. M. 1921, § 6380.)

§ 6381. Classes of stock; powers of preferred and common stock; forfeiture for nonpayment of installments.-The shares of stock shall not be less than $10 nor more than $5,000 per share, and may be made payable in installments. Every cooperative association may divide its shares of stock into preferred and common stock. The holders of preferred stock shall have no voting power and shall not participate in the management and affairs of the association, and the owners thereof shall share in the profits of the association to the extent of not exceeding 6 percent per annum on the par value thereof. The com

mon stock may be divided into classes of different values, and the owners thereof shall share in the profits of the association in proportion to the par value of their shares: Provided, however, That the owners of said common stock in the different classes shall have the same power and vote in the association. Forfeiture of the stock for nonpayment of instalments may be provided for in the bylaws and whenever a share of stock is forfeited, such share shall become the property of the association, and may be reissued to any person already a holder of common stock; but any proceeds received from such reissue, over and above the amount due on said share, by the association, shall be paid to the delinquent shareholder. The stock heretofore issued in classes of different par values by any cooperative association is hereby legalized and made valid. (C. C. 1895, § 876; R. C. 1907, § 4216; L. 1909, ch. 3, § 1; R. C. M. 1921, § 6381; L. 1933, ch. 135, § 2.)

§ 6382. Assignment of stock.-No assignment of stock shall be made to any person who already owns a share, and in no event except by the consent of a majority of the stockholders, but stock may be assigned to the association at any time with the consent of the directors. On no question shall a stockholder have more than one vote.1 Every assignment of stock on which there remains any portion unpaid shall be recorded in the books of the association, and each stockholder shall be jointly and severally liable with the association for the debts of the association to the extent of the amount which shall be unpaid upon the share held by him. No assignor shall be released from any such indebtedness by reason of any assignment of his share, but shall remain jointly liable therefor with the assignee. (C. C. 1895, § 877; R. C. 1907, § 4217; R. C. M. 1921, § 6382.)

1

See article XV, section 4 of the State Constitution which provides: "The legislative assembly shall provide by law that in all elections for directors or trustees of incorporated companies, every stockholder shall have the right to vote in person or by proxy, the number of shares of stock owned by him for as many persons as there are directors or trustees to be elected, or to cumulate said shares and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock shall equal, or to distribute them, on the same principle, among as many candidates as he shall think fit and such directors or trustees shall not be elected in any other manner."

The business corporation law (sec. 5946, as amended by L. 1931, chap. 40, sec. 1) provides that proxy voting be permitted at all meetings.

§ 6383. Exemptions; shares of decedents.-The share, not exceeding the par value of $500, of each member shall be exempt from seizure on attachment, or sale under execution, and upon his death shall be sold by the association, and the proceeds, after deducting all liabilities to the association, shall be delivered to his heirs. (C. C. 1895, § 878; R. C. 1907, § 4218; L. 1909, ch. 3, § 2; R. C. M. 1921, § 6383.) § 6384. Increase of membership. An association licensed to operate under this act may, by a majority of its stockholders, increase its membership in such manner as may be provided in its bylaws, not inconsistent with any of the provisions of this act. (C. C. 1895, § 879; R. C. 1907, § 4219; R. C. M. 1921, § 6384.)

§ 6385. Reserved power of regulation. The legislative assembly hereby reserves the power to prescribe such regulations and provisions governing any and all associations incorporated under this act as it may deem advisable; and such regulations and provisions shall