Read More »" /> Preserving the Cooperative into the Future | National Cooperative Law Center - Part 2

Preserving the Cooperative into the Future

Amending the bylaws is one option. Here, you can mandate that any future decision to change the cooperative character of the corporation requires a supernumerary vote of the membership. You can choice the percent – between majority vote and unanimous vote. You can also specify that it be by the membership of record – or just those which constitute a quorum. Obviously, if you want to make it very difficult to change from cooperative, you will want to specify a very high percentage of those members of record. This change will need be approved by the membership under the current bylaw requirements for quorum and voting for amendments.

Another option is to place a supernumerary vote requirement in the articles of incorporation. The same issues associated with the bylaw amendment are applicable here. This change will usually require a vote of the membership. A thorough search of bylaws and articles is necessary to make this determination. The benefit of placing the limitation here is that articles are public documents, and open for inspection by all – unlike the bylaws, which is not recorded un the public registry.

Variations to the supernumerary vote requirement may be considered. For example, you may amend either the bylaws or the articles to not only require a higher membership vote, but also mandate that the board also approve it – so there would be two separate requirements. And the board approval can be a simple majority of those present at a meeting with quorum, or some variation thereof – such as unanimous approval of all board members.

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