35-18-405. Dissolution and winding up of cooperative that has commenced business. A cooperative that has commenced business may dissolve voluntarily and wind up its affairs in the following manner:

(1) The board of trustees shall first recommend that the cooperative be dissolved voluntarily, and then the proposition that the cooperative be dissolved must be submitted to the members of the cooperative at any annual or special meeting, the notice of which must set forth the proposition. The proposed voluntary dissolution must be considered to be approved upon the affirmative vote of not less than two-thirds of all of the members of the cooperative.

(2) Upon approval, a certificate of election to dissolve, designated the "certificate", must be executed on behalf of the cooperative by its president or vice president and its corporate seal must be affixed to the certificate and attested by its secretary or assistant secretary. The certificate must state the name of the cooperative, the address of its principal office, the names and addresses of its trustees, and the total number of members who voted for and against the voluntary dissolution of the cooperative. The president or vice president executing the certificate shall also make and attach to the certificate an affidavit stating that the provisions of this subsection were complied with. The certificate and affidavit must be submitted to the secretary of state for filing as provided in this chapter.

(3) Upon the filing of the certificate and affidavit by the secretary of state, the cooperative must cease to carry on its business except to the extent necessary for the winding up of the cooperative, but its corporate existence continues until articles of dissolution have been filed by the secretary of state.

(4) After the filing of the certificate and affidavit by the secretary of state, the board of trustees shall immediately cause notice of the winding up proceedings to be mailed to each known creditor and claimant and to be published once a week for 2 successive weeks in a newspaper of general circulation in the county in which the principal office of the cooperative is located.

(5) The board of trustees has full power to wind up and settle the affairs of the cooperative and shall proceed to collect the debts owing to the cooperative, convey and dispose of its property and assets, pay, satisfy, and discharge its debts, obligations, and liabilities, and do all other things required to liquidate its business and affairs and after paying or adequately providing for the payment of all its debts, obligations, and liabilities shall distribute the remainder of its property and assets among its members in proportion to the aggregate patronage of each member during the 7 years preceding the date of filing of the certificate or, if the cooperative has not been in existence for 7 years, during the period of its existence.

(6) When all debts, liabilities, and obligations of the cooperative have been paid and discharged or adequate provision has been made for payment or discharge and all of the remaining property and assets of the cooperative have been distributed to the members pursuant to the provisions of this section, the board of trustees shall authorize the execution of articles of dissolution, which must be executed on behalf of the cooperative by its president or vice president and its corporate seal must be affixed to the articles and attested by its secretary. The articles of dissolution must recite in the caption that they are executed pursuant to this chapter and must state:

(a) the name of the cooperative;

(b) the address of the principal office of the cooperative;

(c) that the cooperative has previously delivered to the secretary of state a certificate of election to dissolve and the date on which the certificate was filed by the secretary of state in the records of that office;

(d) that all debts, obligations, and liabilities of the cooperative have been paid and discharged or that adequate provision has been made for payment or discharge;

(e) that all the remaining property and assets of the cooperative have been distributed among the members in accordance with the provisions of this section; and

(f) that there are no actions or suits pending against the cooperative. The president or vice president executing the articles of dissolution shall also make and attach to the articles an affidavit stating that the provisions of this subsection (6) were complied with. The articles of dissolution and affidavit, accompanied by proof of the publication required in this subsection (6), must be submitted to the secretary of state for filing as provided in this chapter.

History: En. Sec. 18, Ch. 172, L. 1939; R.C.M. 1947, 14-518(b); amd. Sec. 47, Ch. 174, L. 1983; amd. Sec. 2, Ch. 289, L. 1987; amd. Sec. 1339, Ch. 56, L. 2009.