§ 5. Applicability of business corporation law to cooperative corporations. 1. The business corporation law applies to every corporation heretofore or hereafter formed under this chapter, or under any other statute or special act of this state, or under laws other than the statutes of this state, which has as its purpose or among its purposes the cooperative rendering of mutual help and service to its members and which, if formed under laws other than the statutes of this state, would, if it were to be formed currently under the laws of this state, be formed under this chapter except a membership cooperative as defined in section three of this chapter, to which the not-for-profit corporation law shall apply. Any corporation to which the business corporation law is made applicable by this section shall be treated as a "corporation," "domestic corporation," or "foreign corporation," as such terms are used in the business corporation law; provided, however, that neither the purposes for which any such corporation may be formed under this chapter nor its classification as a non-profit corporation shall thereby be extended or affected. Any corporation to which the not-for-profit corporation law is made applicable by this section shall be a type D not-for-profit corporation.

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

(a) If any provision of the business corporation law conflicts with any provision of this chapter, the provision of this chapter shall prevail, and the conflicting provision of the business corporation law shall not apply in such case. If any provision of this chapter relates to a matter embraced in the business corporation law but is not in conflict therewith, both provisions shall apply.

(b) The following provisions of the business corporation law shall not apply to cooperative corporations: section two hundred one (a), section four hundred three, the final clause of section five hundred one (a) which reads "and no limitation or definition of dividend or liquidation rights shall be effective unless at the time one or more classes of outstanding shares, singly or in the aggregate, are entitled to unlimited dividend and liquidation rights", section five hundred five, section five hundred eighteen (c), section six hundred eight (a) and (b), section six hundred nine, section six hundred fourteen (a), section six hundred eighteen, section six hundred twenty-one, section six hundred twenty-two, section six hundred thirty (a) (except as provided in section forty-seven of this chapter), section seven hundred three (a), section seven hundred four, and section eight hundred three (a).

(c) In applying the business corporation law to non-stock cooperative corporations, unless the context requires otherwise, the terms "shareholder" and "holder of shares" shall mean "member," and the terms "shareholders" and "holders of shares" shall mean "members".

(d) In applying the business corporation law to corporations subject to this chapter, unless the context requires otherwise, references to the holders of a stated percentage or fraction of "all outstanding shares," "all outstanding shares entitled to vote thereon," "the shares entitled to vote," and "the outstanding shares, whether or not entitled to vote," shall mean the stated percentage or fraction of the members or delegates present and voting; provided, however, that this paragraph shall not apply to shares of stock not evidencing membership.

2. For the purpose of this section and elsewhere in this chapter, the effective date of the business corporation law shall be September first, nineteen hundred sixty-seven.

3. Sections five hundred eight and five hundred fifteen of the not-for-profit corporation law notwithstanding, a membership cooperative shall be permitted to distribute any portion or all of its net retained proceeds to its members pro rata on the basis of their patronage.