Ohio Code 1729.13 – Dividends – stock – security interest
(A) An association may pay dividends annually on its capital stock. All its other net income from business with or for members and other eligible patrons, less reserves which shall be provided for in the bylaws or other written agreements, shall be distributed to its members and other eligible patrons on the basis of patronage as provided in the bylaws or other written agreements. Any receipts or dividends from subsidiary corporations, or from stock or other securities owned by the association, may be included in the ordinary receipts of the association, and may be distributed accordingly.
Terms Used In Ohio Code 1729.13
- Association: means any corporation organized under this chapter. See Ohio Code 1729.01
- Board: means the board of directors of an association. See Ohio Code 1729.01
- Contract: A legal written agreement that becomes binding when signed.
- Member: means a person who has been qualified and accepted into membership in a cooperative. See Ohio Code 1729.01
- members: as used in this chapter with respect to the right of a member to vote, voting procedure, the required proportion of member votes, actions that are required or permitted to be taken by members, and the number of members required for a quorum, means the delegates or other members entitled to vote. See Ohio Code 1729.17
- Membership stock: means any class of stock or other equity interest in a cooperative, continuous ownership of which is required for membership in the cooperative. See Ohio Code 1729.01
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Patron: means a person with which a cooperative has made an enforceable agreement to allocate and distribute a per unit retain, patronage dividend, or patronage refund with respect to business conducted by the cooperative with or for the person. See Ohio Code 1729.01
- Patronage stock: means any stock or other equity interest in a cooperative that was originally issued by the cooperative with respect to patronage transactions. See Ohio Code 1729.01
(B) An association, at any time, may purchase its own common stock at par or book value as determined by the board.
(C) An association shall have a continued perfected security interest in its membership stock and patronage stock to secure payment of any indebtedness or other obligation of the holder or owner to the association. Notwithstanding Chapters 1308. and 1309. of the Revised Code, the security interest shall have priority over all other perfected security interests. Unless otherwise provided in the association’s articles of incorporation or bylaws, or by contract, a member or other patron has no right to compel an association to offset its membership stock or patronage stock against any indebtedness or obligation owed to the association.