§ 113. Effect of organic rules

(a) The relations between a mutual benefit enterprise and its members are consensual. Unless required, limited, or prohibited by this title, the organic rules may provide for any matter concerning the relations among the members of the enterprise and between the members and the enterprise, the activities of the enterprise, and the conduct of its activities.

(b) The matters referred to in subdivisions (1) through (12) of this subsection may be varied only in the articles of organization. The articles may:

(1) state a term of existence for the enterprise under subsection 105(c) of this title;

(2) limit or eliminate the acceptance of new or additional members by the initial board of directors under subsection 303(b) of this title;

(3) vary the limitations on the obligations and liability of members for enterprise obligations under section 504 of this title;

(4) require a notice of an annual members’ meeting to state a purpose of the meeting under subsection 508(b) of this title;

(5) vary the board of directors meeting quorum under subsection 815(a) of this title;

(6) vary the matters the board of directors may consider in making a decision under section 820 of this title;

(7) specify causes of dissolution under subdivision 1202(1) of this title;

(8) delegate amendment of the bylaws to the board of directors pursuant to subsection 405(f) of this title;

(9) provide for member approval of asset dispositions under section 1501 of this title;

(10) subject to section 820 of this title, provide for the elimination or limitation of liability of a director to the enterprise or its members for money damages pursuant to section 818 of this title;

(11) provide for permitting or making obligatory indemnification under subsection 901(a) of this title; and

(12) provide for any matters that may be contained in the organic rules, including those under subsection (c) of this section.

(c) The matters referred to in subdivisions (1) through (25) of this subsection may be varied only in the organic rules. The organic rules may:

(1) require more information to be maintained under section 114 of this title or provided to members under subsection 505(k) of this title;

(2) provide restrictions on transactions between a member and an enterprise under section 115 of this title;

(3) provide for the percentage and manner of voting on amendments to the organic rules by district, class, or voting group under subsection 404(a) of this title;

(4) provide for the percentage vote required to amend the bylaws concerning the admission of new members under subdivision 405(e)(5) of this title;

(5) provide for terms and conditions to become a member under section 502 of this title;

(6) restrict the manner of conducting members’ meetings under subsections 506(c) and 507(e) of this title;

(7) designate the presiding officer of members’ meetings under subsections 506(e) and 507(g) of this title;

(8) require a statement of purpose in the annual meeting notice under subsection 508(b) of this title;

(9) increase quorum requirements for members’ meetings under section 510 of this title and board of directors meetings under section 815 of this title;

(10) allocate voting power among members, including patron members and investor members, and provide for the manner of member voting and action as permitted by sections 511 through 517 of this title;

(11) authorize investor members and expand or restrict the transferability of members’ interests to the extent provided in sections 602 through 604 of this title;

(12) provide for enforcement of a marketing contract under subsection 704(a) of this title;

(13) provide for qualification, election, terms, removal, filling vacancies, and member approval for compensation of directors in accordance with sections 803 through 805, 807, 809, and 810 of this title;

(14) restrict the manner of conducting board meetings and taking action without a meeting under sections 811 and 812 of this title;

(15) provide for frequency, location, notice, and waivers of notice for board meetings under sections 813 and 814 of this title;

(16) increase the percentage of votes necessary for board action under subsection 816(b) of this title;

(17) provide for the creation of committees of the board of directors and matters related to the committees in accordance with section 817 of this title;

(18) provide for officers and their appointment, designation, and authority under section 822 of this title;

(19) provide for forms and values of contributions under section 1002 of this title;

(20) provide for remedies for failure to make a contribution under subsection 1003(b) of this title;

(21) provide for the allocation of profits and losses of the enterprise, distributions, and the redemption or repurchase of distributed property other than money in accordance with sections 1004 through 1007 of this title;

(22) specify when a member’s dissociation is wrongful and the liability incurred by the dissociating member for damage to the enterprise under subsections 1101(b) and (c) of this title;

(23) provide the personal representative or other legal representative of a deceased member or a member adjudged incompetent with additional rights under section 1103 of this title;

(24) increase the percentage of votes required for board of director approval of:

(A) a resolution to dissolve under subdivision 1205(a)(1) of this title;

(B) a proposed amendment to the organic rules under subdivision 402(a)(1) of this title;

(C) a plan of conversion under subsection 1603(a) of this title;

(D) a plan of merger under subsection 1607(a) of this title; and

(E) a proposed disposition of assets under subsection 1503(1) of this title; and

(25) vary the percentage of votes required for members’ approval of:

(A) a resolution to dissolve under section 1205 of this title;

(B) an amendment to the organic rules under section 405 of this title;

(C) a plan of conversion under section 1603 of this title;

(D) a plan of merger under section 1608 of this title; and

(E) a disposition of assets under section 1504 of this title.

(d) The organic rules shall address members’ contributions pursuant to section 1001 of this title. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)