Illinois Cooperative Act

This research has been provided by Bill Covey, Daniel Hall, and Courtney Kahle of Grpowmark,

Inc., 1701 Towanda Avenue, P.O. Box 2500, Bloomington, IL 61702, 309-557-6294,

bcovey@growmark.com, dhall@growmark.com, CKahle@growmark.com.

This research is intended to provide detailed information on specific provisions of the Illinois

Cooperative Act. The table of contents provides a list of provision topics addressed. The

descriptions of the statute provisions include legal citations to the specific part of the statute

where the topic is addressed so users can easily look at the statute language. A URL for the

statute is also provided.

This research has been provided by private individuals and does not represent official policy of

the U.S. Department of Agriculture or any other government agency. The research is presented

only to provide summary information to persons interested in the state statutory treatment of

Illinois cooperatives. Individuals considering organizing a cooperative are advised to seek

professional advice from an expert on cooperative law who is familiar with the specifics of the

individual’s situation.

Table of Contents

Illinois Cooperative Act ................................................................................................................... 1

1. Cooperative Statute: Policy, Purposes, Powers ........................................................... 8

1.1. State and Statute Title. ........................................................................................................ 8

1.2. Statute Nickname, Legal Citation, and URL. ........................................................................ 8

1.3. Application of General Law. ................................................................................................. 8

1.4. Conflict of Laws. ................................................................................................................... 8

1.5. Construction of Law. ............................................................................................................ 8

1.6. Declaration of Statutory Policy. ........................................................................................... 8

1.7. Statutory Qualification as a Cooperative. ............................................................................ 9

1.8. Cooperative Operational Description. ................................................................................. 9

1.9. "Nonprofit" Nature of Cooperative. .................................................................................... 9

1.10. Cooperative Purpose. ........................................................................................................ 9

1.11. Perpetual Duration and Succession. .................................................................................. 9

1.12. General Powers. ................................................................................................................. 9

1.13. Specific Powers. ................................................................................................................. 9

1.14. Inter-Association Agreements. ........................................................................................ 10

1.15. Prohibited Powers. ........................................................................................................... 10

1.16. Prohibited Lines of Business. ........................................................................................... 10

1.17. Emergency Powers. .......................................................................................................... 10

1.18. Ultra Vires. ....................................................................................................................... 10

1.19. Quo Warranto Proceeding. .............................................................................................. 10

1.20. Miscellaneous. ................................................................................................................. 10

2. Cooperative Association Formation .............................................................................. 11

2.1. Specific Cooperative Forms. .............................................................................................. 11

2.2. Number of Organizers. ....................................................................................................... 11

2.3. Requirements for Organizers. ............................................................................................ 11

2.4. Promoter Activities, Expenses. .......................................................................................... 11

2.5. State Filing Requirements. ................................................................................................. 11

2.6. State Fees. .......................................................................................................................... 11

2.7. Start of Legal Existence. ..................................................................................................... 12

2.8. Cooperative Name. ............................................................................................................ 12

2.9. Additional Name Requirements. ....................................................................................... 12

2.10. Permitted Businesses. ...................................................................................................... 12

2.11. Nonstock Cooperatives. ................................................................................................... 12

2.12. Stock Cooperatives. ......................................................................................................... 12

2.13. Prerequisites to Formation. ............................................................................................. 13

2.14. Annual Renewal. .............................................................................................................. 13

2.15. Annual Report. ................................................................................................................. 13

2.16. Annual Report Content. ................................................................................................... 13

2.17. Failure to File.................................................................................................................... 13

2.18. State Assistance. .............................................................................................................. 13

2.19. Foreign Cooperatives ....................................................................................................... 13

2.20. Domestic Cooperatives .................................................................................................... 14

2.21. Miscellaneous. ................................................................................................................. 14

3. Cooperative Articles of Association .............................................................................. 14

3.1. Signatures and Acknowledgment. ..................................................................................... 14

3.2. Cooperative Name. ............................................................................................................ 14

3.3. Cooperative Purpose. ........................................................................................................ 14

3.4. Place of Business. ............................................................................................................... 15

3.5. Term of Existence. .............................................................................................................. 15

3.6. Incorporators, Subscribers. ................................................................................................ 15

3.7. Please Number of Directors. .............................................................................................. 15

3.8. Director Term. .................................................................................................................... 15

3.9. Registered Agent ................................................................................................................ 15

3.10. Limitations of Power. ....................................................................................................... 15

3.11. Limitations of Liability. ..................................................................................................... 16

3.12. Membership Definition. ................................................................................................... 16

3.13. Member Classes ............................................................................................................... 16

3.14. Member Property Rights ................................................................................................. 16

3.15. Member Voting Rights. .................................................................................................... 16

3.16. Membership Certificates. ................................................................................................ 16

3.17. Capital Stock. .................................................................................................................... 16

3.18. Amount of Capital Stock. ................................................................................................. 17

3.19. Par Value .......................................................................................................................... 17

3.20. Authorized Classes of Stock. ............................................................................................ 17

3.21. Par Value of Authorized Classes of Stock. ....................................................................... 17

3.22. Acquire or Recall Stock. ................................................................................................... 17

3.23. Voting Rules. .................................................................................................................... 17

3.24. Distributions or Apportionments. .................................................................................... 17

3.25. Capital Accounts. ............................................................................................................. 18

3.26. Asset Distribution on Liquidation. ................................................................................... 18

3.27. Miscellaneous Provisions. ................................................................................................ 18

3.28. Amendment Initiation. ..................................................................................................... 18

3.29. Notice of Amendment. .................................................................................................... 18

3.30. When Amendments Occur............................................................................................... 18

3.31. Quorum Requirements. ................................................................................................... 18

3.32. Margin Required for Approval. ........................................................................................ 19

3.33. Voting Members. ............................................................................................................. 19

3.34. Board Authority. .............................................................................................................. 19

3.35. Filing of Amendment. ...................................................................................................... 19

3.36. Restrictions on Amendment. ........................................................................................... 19

3.37. Miscellaneous Rules. ........................................................................................................ 19

4. Cooperative Definitions .................................................................................................... 20

4.1. Cooperatives Defined in Statute. ....................................................................................... 20

4.2. Agricultural Cooperative Definition. .................................................................................. 20

4.3. Worker Cooperative Definition. ......................................................................................... 20

4.4. Other Cooperative Definitions. .......................................................................................... 20

4.5. Agricultural Products Definitions. ...................................................................................... 20

4.6. Other Definitions................................................................................................................ 20

5. Cooperative Bylaws ............................................................................................................ 21

5.1. Bylaw Requirement. ........................................................................................................... 21

5.2. Adoption Time Requirements. ........................................................................................... 21

5.3. Adoption Approval. ............................................................................................................ 21

5.4. Who May Adopt Bylaws. .................................................................................................... 21

5.5. Filing Bylaws. ...................................................................................................................... 21

5.6. Bylaw Purposes. ................................................................................................................. 21

5.7. Bylaw Contents. ................................................................................................................. 22

5.8. Member Admission. ........................................................................................................... 22

5.9. Membership Rights. ........................................................................................................... 22

5.10. Fees, Service Charges. ...................................................................................................... 22

5.11. Membership Suspension or Cessation. ........................................................................... 22

5.12. Membership Termination Interests. ................................................................................ 22

5.13. Meeting Requirements. ................................................................................................... 22

5.14. Annual Meetings. ............................................................................................................. 23

5.15. Special Meetings. ............................................................................................................. 23

5.16. Meeting Location. ............................................................................................................ 23

5.17. Quorum. ........................................................................................................................... 23

5.18. Mailing and Proxies. ......................................................................................................... 23

5.19. Videoconferences. ........................................................................................................... 23

5.20. District Elections. ............................................................................................................. 23

5.21. Director Qualifications. .................................................................................................... 24

5.22. Special Interest Directors. ................................................................................................ 24

5.23. Director Duties. ................................................................................................................ 24

5.24. Term of Office. ................................................................................................................. 24

5.25. Director's Quorum. .......................................................................................................... 24

5.26. Board Committees. .......................................................................................................... 24

5.27. Officer Qualifications, Duties. .......................................................................................... 24

5.28. Service Charges. ............................................................................................................... 25

5.29. Marketing Contracts. ....................................................................................................... 25

5.30. Net Margin Distributions. ................................................................................................ 25

5.31. Reserves. .......................................................................................................................... 25

5.32. Stock Ownership Limits. ................................................................................................... 25

5.33. Stock or Membership Restrictions. .................................................................................. 25

5.34. Stock Dividends. ............................................................................................................... 26

5.36. Membership Suspension. ................................................................................................ 26

5.37. Interests at Termination. ................................................................................................. 26

5.38. Bylaw Amendments. ........................................................................................................ 26

5.39. Bylaw Violations. .............................................................................................................. 26

5.40. Other Bylaw Terms. ......................................................................................................... 26

6. Cooperative Members ....................................................................................................... 27

6.1. Member Identified. ............................................................................................................ 27

6.2. Farmer Membership. ......................................................................................................... 27

6.3. Tenant Member. ................................................................................................................ 27

6.4. Worker Member. ............................................................................................................... 27

6.5. Non-Patron Members. ....................................................................................................... 27

6.6. Nonmember Interests. ....................................................................................................... 28

6.7. Other Membership Definitions. ......................................................................................... 28

6.8. Fostering Membership. ...................................................................................................... 28

6.9. Membership Fee. ............................................................................................................... 28

6.10. New Members.................................................................................................................. 28

6.11. Membership Limitations. ................................................................................................. 28

6.12. Membership Transfers. .................................................................................................... 28

6.13. Membership Contribution. .............................................................................................. 28

6.14. Member Distribution Rights. ........................................................................................... 29

6.15. Stock or Membership Certificates. .................................................................................. 29

6.16. Certificate Information. ................................................................................................... 29

6.17. Member Property or Equity Rights. ................................................................................. 29

6.18. Non-Patron Equity. .......................................................................................................... 29

6.19. Voting. .............................................................................................................................. 29

6.20. Patronage Voting. ............................................................................................................ 30

6.21. Director Elections. ............................................................................................................ 30

6.22. Investor Members. ........................................................................................................... 30

6.23. Patronage Dividends. ....................................................................................................... 30

6.24. Retained Allocations. ....................................................................................................... 30

6.25. Nonmember Rights. ......................................................................................................... 31

6.26. Nonmember Limitations. ................................................................................................. 31

6.27. Allocations. ....................................................................................................................... 31

6.28. Derivative Suit. ................................................................................................................. 31

6.29. Liability Limitation. ........................................................................................................... 31

6.30. Records Inspection. .......................................................................................................... 31

6.31. Membership Suspension. ................................................................................................ 31

6.32. Membership Termination. ............................................................................................... 32

6.33. Termination Procedure. ................................................................................................... 32

6.34. Member Termination Rights. ........................................................................................... 32

6.35. Membership Valuation. ................................................................................................... 32

6.36. Miscellaneous. ................................................................................................................. 32

1. Cooperative Statute: Policy, Purposes, Powers

1.1. State and Statute Title. Please name the state and the title of the cooperative

organization law. Provide a nickname for the cooperative law using the state abbreviation

hyphenated with a brief statute descriptor.

Illinois CO-Operative Act; Il-Gen

1.2. Statute Nickname, Legal Citation, and URL. Please provide a full legal citation to

the statute and, if available, a uniform resource locator (URL) address where the statute may be

accessed for free.

805 Ill. Comp. Stat. 310/1-310/27;

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2295&ChapterID=65

1.3. Application of General Law. Briefly describe whether general corporate law or

general limited liability company law applies to cooperatives organized under the statute.

Il-Gen: NA.

1.4. Conflict of Laws. Briefly describe any provisions addressing any conflict between the

cooperative statute and general corporate or general limited liability company law.

Il-Gen: NA.

1.5. Construction of Law. Briefly describe any reference to how the statute should be

construed.

Il-Gen: NA.

1.6. Declaration of Statutory Policy. Briefly state any broad declaration of statutory

policy (i.e., description of conditions in agriculture or in the economy prompting the enactment

of the cooperative statute).

Il-Gen: NA.

1.7. Statutory Qualification as a Cooperative. Briefly describe any statement indicating

that a cooperative is an entity that qualifies under this particular statute.

Il-Gen 805 ILCS 310/1: Cooperative associations may be organized for a number of

purposes.

1.8. Cooperative Operational Description. Briefly describe any provision that gives a

general, operational description of a cooperative.

Il-Gen: NA.

1.9. "Nonprofit" Nature of Cooperative. Briefly describe any reference to the

"nonprofit" nature of the cooperative inasmuch as it is organized to pass margins to users

rather than to make profit for itself.

Il-Gen: NA.

1.10. Cooperative Purpose. List any specific purpose(s) of the cooperative.

Il-Gen 805 ILCS 310/1: Selling or manufacturing merchandise, or cultivating and raising

vegetables, fruits, other products or animals for food.

1.11. Perpetual Duration and Succession. Does a cooperative have perpetual duration

and succession?

Il-Gen 805 ILCS 310/1: Cooperative may have perpetual duration and succession.

1.12. General Powers. State briefly any general power mentioned (e.g., the power to do all

things necessary or convenient to carry out the cooperative's business).

Il-Gen: NA.

1.13. Specific Powers. Please list any specific powers mentioned (e.g. buy, sell, or produce,

process products, handle byproducts, make purchases for members, manufacture, enter

contracts, act as agent, own property, sue and be sued, develop and own patents, trademarks,

and copyrights, borrow and lend money, invest, etc.).

Il-Gen 805 ILCS 310/3, 310/6 and 310/7: May sue and be sued, may have a common

seal, may own, possess, enjoy and sell real and personal property, elect directors and

officers, borrow money, and obtain right of first refusal to acquire its stock.

1.14. Inter-Association Agreements. Briefly describe any provision that permits activities

between or among two or more cooperatives.

Il-Gen805 ILCS 310/10, 310/11 and 310/20: May own stock in other cooperatives and

acquire other associations with the cooperative's stock.

1.15. Prohibited Powers. State briefly (list) powers denied to the cooperative.

Il-Gen: NA.

1.16. Prohibited Lines of Business. State briefly (list) prohibited lines of business.

Il-Gen: NA.

1.17. Emergency Powers. State briefly any emergency powers.

Il-Gen: NA.

1.18. Ultra Vires. Briefly describe any provision addressing when a cooperative exceeds its

legal purpose.

Il-Gen: NA.

1.19. Quo Warranto Proceeding. Describe briefly any provision addressing any inquiry

into the legitimacy of an association's operation as a cooperative.

Il-Gen: NA.

1.20. Miscellaneous. Describe any other provision(s) that address cooperative powers or

their limits.

Il-Gen: NA.

2. Cooperative Association Formation

2.1. Specific Cooperative Forms. Name any specific cooperative forms mentioned by the

statute (e.g., worker cooperative, agricultural cooperative, value-added producer cooperative,

etc.).

Il-Gen 805 ILCS 310/1: Marketing cooperative in general terms.

2.2. Number of Organizers. Is a minimum number of organizers required?

Il-Gen 805 ILCS 310/1: 5 or more subscribers.

2.3. Requirements for Organizers. Are there any other requirements for organizers (e.g.

an organizer must be a "person," a "natural person," an "association," must be a state resident,

must be a certain age, must produce agricultural products, etc.)?

Il-Gen: NA.

2.4. Promoter Activities, Expenses. Briefly describe any provisions that address the

activities and or expenses of individuals ("promoters") engaged in assisting in the organization

of the cooperative.

Il-Gen 805 ILCS 310/2: Cannot charge a commission for selling stock in the cooperative.

2.5. State Filing Requirements. Briefly state where and how to file the articles of

incorporation or organization.

Il-Gen 805 ILCS 310/4 File duplicate articles of incorporation with the Secretary of State.

2.6. State Fees. State the fee amount for starting a cooperative.

Il-Gen: Amount not stated in statute, but currently, the amount is $175.

2.7. Start of Legal Existence. When does the cooperative's legal existence begin?

Il-Gen 805 ILCS 310/4: Upon filing of the articles of incorporation by the Secretary of

State.

2.8. Cooperative Name. Is "cooperative" or another term of art required as part of the

association's name?

Il-Gen: NA, but pursuant to 805 ILCS 310/22, no association or corporation can use "Co-

operative" as part of its name without complying with this statute except a corporation

organized under the Business Corporation Act of 1983 for the purpose of owing

residential property on a cooperative basis, or a cooperative corporation organized

under the General Not For Profit Corporation Act of 1986.

2.9. Additional Name Requirements. Is the cooperative's name required to be unique?

Il-Gen: NA.

2.10. Permitted Businesses. Are there restrictions on types of business entities that can be

called a cooperative?

Il-Gen 805 ILCS 310/22: No association or corporation can use "Co-operative" as part of

its name without complying with this statute except a corporation organized under the

Business Corporation Act of 1983 for the purpose of owing residential property on a

cooperative basis, or a cooperative corporation organized under the General Not For

Profit Corporation Act of 1986.

2.11. Nonstock Cooperatives. Are nonstock cooperatives permitted?

Il-Gen: There is no reference to nonstock cooperatives and several references to stock

and shares.

2.12. Stock Cooperatives. Are stock cooperatives permitted?

Il-Gen 805 ILCS 310/1, 310/2: Yes, these provisions reference shares of stock. Several

other sections refer to stock.

2.13. Prerequisites to Formation. State briefly any special prerequisites to forming a

cooperative (e.g. requirement of certain percentage of capital paid prior to organization or

incorporation or requirement that a permit be obtained).

Il-Gen: NA.

2.14. Annual Renewal. Is an annual renewal of the organization or incorporation required?

Il-Gen 805 ILCS 310/5, 805 ILCS 310/16: Yes, file an annual report and file same fees as

Business Corporation.

2.15. Annual Report. Is an annual report required?

Il-Gen 805 ILCS 310/16: Yes.

2.16. Annual Report Content. Briefly describe any provisions stating the required content

in the annual report.

Il-Gen 805 ILCS 310/16: Name of the company, its principal place of business, generally a

statement as to its business, showing the total amount of business transacted, amount

of capital stock subscribed for and paid in, number of shareholders, total expenses of

operation, amount of indebtedness or liabilities, and its profits and losses.

2.17. Failure to File. Briefly describe any provision that addresses consequences for failure

to file an annual report.

Il-Gen: NA.

2.18. State Assistance. Briefly describe any provision that allows for state assistance to

individuals contemplating forming a cooperative.

Il-Gen: NA.

2.19. Foreign Cooperatives. Briefly describe any provisions on permission for an out-of-

state cooperative to do business in the state.

Il-Gen: NA.

2.20. Domestic Cooperatives. Briefly describe any provision allowing a domestic

cooperative to do business in another state.

Il-Gen: NA.

2.21. Miscellaneous. Briefly describe any other provision addressing the start of a

cooperative that was not addressed by the previous questions.

Il-Gen 805 ILCS 310/1: Total consideration for shares to be issued cannot be less than

$1,000.

Il-Gen 805 ILCS 310/2 and 805 ILCS 310/9: No person can own or control more than ten

shares of capital stock. The shares of stock shall not be less than $5 per share or more

than $1,000 per share.

3. Cooperative Articles of Association

3.1. Signatures and Acknowledgment. Briefly describe any provision that requires that

the articles be signed, subscribed, acknowledged, or notarized.

Il-Gen 805 ILCS 310/1: Become incorporated by making a statement under the

subscribers' signatures and duly acknowledged before an officer authorized to take

acknowledgements.

3.2. Cooperative Name. Do the organizing documents or articles of incorporation require

the cooperative's name?

Il-Gen 805 ILCS 310/1: Yes.

3.3. Cooperative Purpose. Are the organizing documents or articles required to state a

purpose for the cooperative?

Il-Gen 805 ILCS 310/1: Yes.

3.4. Place of Business. Is the place of business required?

Il-Gen 805 ILCS 310/1: No, only the registered office.

3.5. Term of Existence. Briefly describe any provision requiring that the term of existence of

the organization be required in the articles.

Il-Gen 805 ILCS 310/1: Yes. Period of duration may be perpetual.

3.6. Incorporators, Subscribers. Briefly describe any provision that requires that the

names and addresses of incorporators and or subscribers be identified in the articles.

Il-Gen 805 ILCS 310/1: Yes, name and address of each incorporator required.

3.7. Number of Directors. Briefly describe any provision requiring a statement in the

articles of the number and of directors.

Il-Gen 805 ILCS 310/7: At least 5 directors required.

Il-Gen 805 ILCS 310/1: Section requires the number of directors to be elected at the first

meeting.

3.8. Director Term. Briefly describe any provision requiring that the term of the directors be

specified in the articles.

Il-Gen: NA.

3.9. Registered Agent. Is the name of a registered agent required?

Il-Gen 805 ILCS 310/1: Yes.

3.10. Limitations of Power. Briefly describe any required or permitted provisions in the

organizing document limiting the powers of the cooperative, its board, and or its members.

Il-Gen: NA.

3.11. Limitations of Liability. Briefly describe any required or permitted organizing

document provision(s) regarding limitation of liability with respect to the organizers or

incorporators, officers, members, and or shareholders.

Il-Gen: NA.

3.12. Membership Definition. Briefly describe any statutory reference to defining

membership in the organizing document.

Il-Gen: NA. The statute does not reference membership.

3.13. Member Classes. Is a description of member classes required or permitted?

Il-Gen: NA.

3.14. Member Property Rights. Is a description required or permitted regarding member

property rights?

Il-Gen: NA.

3.15. Member Voting Rights. Is a description required or permitted regarding member

voting rights?

Il-Gen: NA.

3.16. Membership Certificates. Is a statement required or permitted on whether the

cooperative is organized with membership certificates?

Il-Gen: NA.

3.17. Capital Stock. Is a statement required or permitted that the cooperative is organized

with capital stock?

Il-Gen 805 ILCS 310/1: Yes, section suggests the corporation will be organized with

capital stock. The statute only references stock.

3.18. Amount of Capital Stock. Is a description of the amount of capital stock required or

permitted?

Il-Gen 805 ILCS 310/1: Yes.

3.19. Par Value. Is a statement of par value required or permitted?

Il-Gen 805 ILCS 310/1: Yes.

3.20. Authorized Classes of Stock. Is a description of other authorized classes of stock

required or permitted?

Il-Gen 805 ILCS 310/1: Yes.

3.21. Par Value of Authorized Classes of Stock. Is a statement of par value required or

permitted for other authorized classes of stock?

Il-Gen 805 ILCS 310/1: Yes.

3.22. Acquire or Recall Stock. Is a statement of a reservation of right for the cooperative to

acquire or recall stock required or permitted?

Il-Gen: NA.

3.23. Voting Rules. State briefly if a description of voting rules is required or permitted.

Il-Gen: NA.

3.24. Distributions or Apportionments. Is a description of distributional apportionment

of dividends, earnings, and losses required/permitted?

Il-Gen 805 ILCS 310/15, 805 ILCS 310/19: Bylaws required to address distribution of

profits.

3.25. Capital Accounts. Is a description of a cooperative's capital account(s) required or

permitted?

Il-Gen 805 ILCS 310/1: Description only required for classes of listed stock in section.

3.26. Asset Distribution on Liquidation. Is a statement on distribution of assets on

liquidation required or permitted?

Il-Gen: NA.

3.27. Miscellaneous Provisions. Briefly describe any additional important provisions.

Il-Gen: NA.

3.28. Amendment Initiation. Briefly describe the initiation of an amendment to the

organizing document.

Il-Gen 805 ILCS 310/8: Shareholders can amend the articles of incorporation at any

regular or special meeting.

3.29. Notice of Amendment. Briefly describe notice requirements regarding an

amendment to the organizing document.

Il-Gen 805 ILCS 310/8: At any regular shareholders' meeting called for that purpose, or

ten days' notice of a special meeting.

3.30. When Amendments Occur. Briefly describe any requirement regarding when the

amendments must be made (e.g. during the annual membership meeting).

Il-Gen 805 ILCS 310/8: At any regular shareholders' meeting called for that purpose, or

ten days' notice of a special meeting.

3.31. Quorum Requirements. Briefly describe any quorum requirements for an

amendment.

Il-Gen: NA.

3.32. Margin Required for Approval. State briefly whether a majority or supermajority is

required for approval of an amendment and state amount (e.g., 51 percent, 2/3 majority, etc.).

Il-Gen 805 ILCS 310/8: Two thirds of all shareholders.

3.33. Voting Members. List types of members who can vote on the amendment.

Il-Gen 805 ILCS 310/8: All shareholders.

3.34. Board Authority. Describe briefly any authority of the board of directors to make

amendments.

Il-Gen: NA.

3.35. Filing of Amendment. Describe briefly how an amendment is executed and filed.

Il-Gen 805 ILCS 310/8: Within 30 days after the adoption of an amendment to its articles

of incorporation the association shall cause a certified copy of such amendment to be

recorded in the office of the Secretary of State and of the recorder in the county where

the principal place of business is located.

3.36. Restrictions on Amendment. Describe briefly any restrictions on changes to the

articles of organization or incorporation other than supermajority requirements.

Il-Gen 805 ILCS 310/8: The power to amend the articles of incorporation shall include

the power to increase or diminish the amount of capital stock and the number and par

value of shares, the par value, however, not to be reduced below that provided for in

this act; provided, however, that the amount of the capital stock shall not be diminished

below the amount of paid up capital at the time the amendment is adopted, unless

there be, at that time, in the treasury sufficient undivided profits over and above all

legal debts or other like obligations to off-set the capital so returned to shareholders.

3.37. Miscellaneous Rules. Describe briefly any miscellaneous rules regarding amendments

to the articles of organization.

Il-Gen: NA.

4. Cooperative Definitions

4.1. Cooperatives Defined in Statute. Please list specific types of cooperatives defined in

the statute (e.g., worker cooperative, consumer cooperative, producer cooperative).

Il-Gen 805 ILCS 310/1: Marketing cooperative in general terms. No specific types are

defined.

4.2. Agricultural Cooperative Definition. Please provide a brief summary of any

definition of an agricultural cooperative.

Il-Gen: NA.

4.3. Worker Cooperative Definition. Please describe briefly any worker cooperative

definition.

Il-Gen: NA.

4.4. Other Cooperative Definitions. Please describe briefly any other definitions of types

of cooperatives.

Il-Gen: NA.

4.5. Agricultural Products Definitions. Please list any agricultural products defined.

Il-Gen No products are defined, but vegetables, fruits, other products, animals for food,

general or special agricultural or horticultural, orchard, garden, nursery or dairy produce

are listed.

4.6. Other Definitions. Please describe briefly any unique or unusual definitions unlikely to

be addressed in other parts of the surveys.

Il-Gen: NA.

5. Cooperative Bylaws

5.1. Bylaw Requirement. Briefly describe any provisions addressing whether a cooperative

is required to adopt bylaws.

Il-Gen 805 IlCS 310/24: Provision says shareholders may adopt bylaws not inconsistent

with the statute.

Il-Gen 805 ILCS 310/3; 310/7; 310/12; 310/15; and 310/1: Provisions suggests the

cooperative will have bylaws.

5.2. Adoption Time Requirements. Describe any time requirements regarding adoption of

the bylaws.

Il-Gen: NA.

5.3. Adoption Approval. Briefly describe any provisions addressing the approval of the

bylaws by vote or written assent including the margin of approval required.

Il-Gen: NA.

5.4. Who May Adopt Bylaws. Briefly describe who may adopt the bylaws (e.g., members,

stockholders, organizing members).

Il-Gen 805 IlCS 310/24: Shareholders.

5.5. Filing Bylaws. Briefly describe any requirements regarding filing and or where bylaws

must be kept.

Il-Gen: NA.

5.6. Bylaw Purposes. Briefly describe any statutory statements regarding the purpose of the

bylaws.

Il-Gen: NA.

5.7. Bylaw Contents. Briefly describe any general statutory statement regarding the

contents of the bylaws.

Il-Gen: NA.

5.8. Member Admission. Briefly describe permitted or mandated bylaw provisions

regarding conditions for member admission.

Il-Gen: NA.

5.9. Membership Rights. Briefly describe permitted or mandated bylaw provisions

regarding a description of membership rights.

Il-Gen: NA.

5.10. Fees, Service Charges. Briefly describe permitted or mandated bylaw provisions

regarding fees and service charges by the cooperative.

Il-Gen: NA.

5.11. Membership Suspension or Cessation. Describe any provisions in the bylaws

regarding suspension or cessation of membership.

Il-Gen: NA.

5.12. Membership Termination Interests. Please describe any bylaw requirements

regarding membership interests at termination.

Il-Gen: NA.

5.13. Meeting Requirements. Briefly describe whether the bylaws are required to state

meeting requirements.

Il-Gen: NA.

5.14. Annual Meetings. Briefly describe whether the bylaws are required to provide for

annual meetings.

Il-Gen: NA.

5.15. Special Meetings. Briefly describe whether the bylaws are required to provide for

special meetings.

Il-Gen: NA.

5.16. Meeting Location. Describe briefly whether a meeting location is required to be

stated in the bylaws.

Il-Gen: NA.

5.17. Quorum. Describe briefly bylaw provisions permitted or mandated regarding quorum

requirements.

Il-Gen: NA.

5.18. Mailing and Proxies. Describe briefly bylaw provisions permitted or mandated

regarding mailing and proxies, including any rules regarding electronic delivery of proxies.

Il-Gen 805 ILCS 310/14: Shareholders may vote by mail if the shareholder has written

notice of the motion and the vote is forwarded with the proposed motion or resolution.

805 ILCS 310/21: Shareholders may vote by proxy.

5.19. Videoconferences. Describe briefly bylaw provisions that permit or mandate

electronic options for meetings (e.g., videoconferences).

Il-Gen: NA.

5.20. District Elections. Describe briefly bylaw provisions permitting or mandating director

election by district.

Il-Gen: NA.

5.21. Director Qualifications. Briefly list required or mandated bylaw provisions regarding

directors' qualifications.

Il-Gen 805 ILCS 310/7: Directors must be a shareholder.

5.22. Special Interest Directors. Briefly describe permitted or mandatory bylaw provisions

regarding the appointment of directors that represent special interests or expertise (e.g., the

interests of the general public, "investor members," or a specific area of expertise).

Il-Gen: NA.

5.23. Director Duties. Briefly list director duties required or permitted to be described in the

bylaws.

Il-Gen: NA.

5.24. Term of Office. Briefly describe permitted or mandated bylaw provisions on a

director's term of office.

Il-Gen 805 ILCS 310/7: Such term of office as the bylaws may prescribe.

5.25. Director's Quorum. Briefly describe permitted or mandated bylaw provisions on what

constitutes a directors' quorum.

Il-Gen: NA.

5.26. Board Committees. Briefly describe permitted or mandated bylaw provisions

regarding board committees.

Il-Gen: NA.

5.27. Officer Qualifications, Duties. Briefly describe permitted or mandated bylaw

provisions related to the qualifications and duties of cooperative officers.

Il-Gen: NA.

5.28. Service Charges. Briefly describe permitted or mandated bylaw provisions regarding

service charges.

Il-Gen: NA.

5.29. Marketing Contracts. Briefly describe permitted or mandated bylaw provisions

regarding marketing contracts including provisions allowing liquidated damages for breach.

Il-Gen: NA.

5.30. Net Margin Distributions. Briefly describe permitted or mandated bylaw provisions

regarding net margins distributions.

Il-Gen 805 ILCS 310/15: Profits and earnings are distributed to those entitled thereto by

the cooperative's bylaws.

Il Gen 805 ILCS 310/19: Profits shall be distributed, first-upon stock and to purchasers or

sellers (customers) based upon the percentage of purchases, or sales; or, second-to

purchasers or sellers exclusively, based upon the percentage of purchasers or sale; and

no vested interest shall attach to any of the above methods which shall prevent

changing from and substituting another provision provided herein.

5.31. Reserves. Briefly describe permitted or mandated bylaw provisions regarding

investment of reserves.

Il-Gen: NA.

5.32. Stock Ownership Limits. Describe permitted or mandated bylaw provisions regarding

stock ownership limits.

Il-Gen 805 ILCS 310/2, 810 ILCS 310/9: Cannot own or subscribe for more than ten

shares.

5.33. Stock or Membership Restrictions. Describe permitted or mandated bylaw

provisions regarding stock or membership restrictions.

Il-Gen 805 ILCS 310/3: Cooperative may retain in its bylaws a right of first refusal to buy

any shareholder's stock.

5.34. Stock Dividends. Describe permitted or mandated bylaw provisions regarding stock

dividends.

Il-Gen: NA.

5.35. Membership Cessation. Describe permitted or mandated bylaw provisions regarding

cessation of membership.

Il-Gen: NA.

5.36. Membership Suspension. Describe permitted or mandated bylaw provisions

regarding suspension of membership.

Il-Gen: NA.

5.37. Interests at Termination. Describe permitted or mandated bylaw provisions

regarding member interests at termination of the cooperative.

Il-Gen: NA.

5.38. Bylaw Amendments. Describe how the bylaws may be amended.

Il-Gen: NA.

5.39. Bylaw Violations. Describe mandated or permitted bylaw terms that address

penalties for bylaw violations.

Il-Gen: NA.

5.40. Other Bylaw Terms. Describe any other mandated or permitted bylaw terms.

Il-Gen 805 ILCS 310/12: Certificates of stock shall not be issued to any subscriber until

fully paid, but the bylaws of the association may allow subscribers to vote as

shareholders, provided, part of the stock subscribed has been paid in cash.

Il-Gen 805 ILCS 310/15: Any member failing to keep on deposit with such association the

amount or amounts from time to time required to be kept on deposit by its bylaws shall

share in any such distribution only in the proportion to which he has complied with such

bylaws.

6. Cooperative Members

6.1. Member Identified. List who may be a member (e.g., person, corporation, partnership,

association, trust, executor, administrator, receiver, political subdivision, producer, tenant,

etc.).

Il-Gen: 805 ILCS 310/20: NA, generally, but a cooperative can own stock in another

cooperative.

6.2. Farmer Membership. Describe briefly any provisions defining members as agricultural

producers.

Il-Gen: NA.

6.3. Tenant Member. Briefly describe any provisions defining a member as a tenant of land

used for agricultural production.

Il-Gen: NA.

6.4. Worker Member. Briefly describe any provision defining a member as a worker.

Il-Gen: NA.

6.5. Non-Patron Members. Describe briefly any provisions allowing non-patron members

(e.g., an "investor member," etc.)?

Il-Gen: NA.

6.6. Nonmember Interests. Briefly describe any definition(s) of (a) nonmember(s) who may

hold shares or proprietary interests in the cooperatives.

Il-Gen: NA.

6.7. Other Membership Definitions. Briefly describe any other membership definitions.

Il-Gen: NA.

6.8. Fostering Membership. Describe any provision that allows the cooperative to foster

membership by advertising, education, or other lawful means.

Il-Gen: NA.

6.9. Membership Fee. Briefly describe any provision that addresses the membership fees.

Il-Gen 805 ILCS 310/15: Statute refers to members keeping funds on deposit with the

cooperative.

6.10. New Members. Briefly describe provisions on the admission of new members.

Il-Gen: NA.

6.11. Membership Limitations. Briefly describe any limitation on the number of members.

Il-Gen: NA.

6.12. Membership Transfers. Briefly describe any restrictions on membership transfers.

Il-Gen 805 ILCS 310/3: Cooperative can retain right of first refusal.

Il-Gen 805 ILCS 310/23: No transfer without approval of a majority of directors, but can

appeal to members of director denial of transfer.

6.13. Membership Contribution. Describe briefly any provision that addresses ongoing

membership contributions.

Il-Gen 805 ILCS 310/15: Provision refers to members keeping funds on deposit with the

cooperative.

6.14. Member Distribution Rights. Briefly describe any provision addressing a member's

distribution rights.

Il-Gen 805 ILCS 310/15: Profits and earnings are distributed to those entitled thereto by

the cooperative's bylaws.

Il-Gen 805 ILCS 310/19: Profits shall be distributed, first-upon stock and to purchasers or

sellers (customers) based upon the percentage of purchases, or sales; or, second-to

purchasers or sellers exclusively, based upon the percentage of purchasers or sales; and

no vested interest shall attach to any of the above methods which shall prevent

changing from and substituting another provision provided herein.

6.15. Stock or Membership Certificates. Briefly describe any provisions addressing how

membership is evidenced (e.g., by stock or membership certificates).

Il-Gen 805 ILCS 310/12: Statute suggests stock certificates will be issued.

6.16. Certificate Information. Describe briefly if any provision that addresses whether any

particular information is required to appear on the stock or membership certificates.

Il-Gen: NA.

6.17. Member Property or Equity Rights. Briefly describe any provisions addressing a

member's property or equity rights in the cooperative.

Il-Gen: NA.

6.18. Non-Patron Equity. Briefly describe any provision addressing equity rights of a non-

patron.

Il-Gen: NA.

6.19. Voting. Briefly describe any statutory reference to "one member, one vote."

Il-Gen 805 ILCS 310/7, 805 ILCS 310/8, 805 ILCS 310/10: No specific reference but each

reference to a shareholder vote suggests "one member, one, vote;" directors elected by

shareholders and majority of shareholders can remove a director or officer for cause;

two-thirds vote of shareholders needed to amend articles of incorporation; majority of

members may approve investment in other cooperative.

6.20. Patronage Voting. Briefly describe whether the cooperative statute permits or

requires patronage voting.

Il-Gen: NA.

6.21. Director Elections. Briefly describe any statutory requirements regarding the election

of directors by patron members.

Il-Gen 805 ILCS 310/7: Directors elected by and from shareholders.

6.22. Investor Members. Briefly describe any limitations on voting by non-patron equity

stakeholders or "investor members."

Il-Gen: NA.

6.23. Patronage Dividends. Briefly describe member rights to receive patronage dividends.

Il-Gen 805 ILCS 310/15, 805 ILCS 310/19: Profits and earnings are distributed to those

entitled thereto by the cooperative's bylaws; profits shall be distributed, first-upon stock

and to purchasers or sellers (customers) based upon the percentage of purchases, or

sales; or, second-to purchasers or sellers exclusively, based upon the percentage of

purchasers or sales; and no vested interest shall attach to any of the above methods

which shall prevent changing from and substituting another provision provided herein.

6.24. Retained Allocations. Briefly describe member rights to receive per-unit retained

allocations.

Il-Gen: NA.

6.25. Nonmember Rights. Briefly describe a nonmember's right to receive patronage

dividends and or per-unit retained allocations.

Il-Gen: NA.

6.26. Nonmember Limitations. Briefly describe any limitations on the cooperative's

business with nonmembers (including how the limitations are measured).

Il-Gen: NA.

6.27. Allocations. Briefly describe any required rules regarding the allocation of profits and

losses among patron and non-patron members.

Il-Gen: NA.

6.28. Derivative Suit. Briefly describe any provision addressing whether a member has the

right to bring a derivative action.

Il-Gen: NA.

6.29. Liability Limitation. Briefly describe any limitation on a member's liability.

Il-Gen 805 ILCS 310/23: Each shareholder shall be liable jointly and severally for the

debts of the association only to the extent of the amount that may be unpaid upon the

shares held by him.

6.30. Records Inspection. Briefly describe a member's right to inspect cooperative records

and or audits.

Il-Gen: NA.

6.31. Membership Suspension. Briefly describe any provisions regarding membership

suspension.

Il-Gen: NA.

6.32. Membership Termination. Briefly describe any provisions regarding when

membership terminates (e.g., expulsion, death, withdrawal).

Il-Gen: NA.

6.33. Termination Procedure. Briefly describe any procedural requirements regarding

membership termination.

Il-Gen: NA.

6.34. Member Termination Rights. Briefly describe a former member's rights on

termination.

Il-Gen: NA.

6.35. Membership Valuation. Briefly describe any provisions regarding membership

valuation.

Il-Gen: NA.

6.36. Miscellaneous. Please address any issues related to this section that have not been

addressed by the previous questions.

Il-Gen: NA.