COOPERATIVE MARKETING

K.S.A. ch. 17, art. 16

in effect

K.S.A. 17-1601 Purpose of cooperative marketing act.

17-1601. Purpose of cooperative marketing act. The purpose of the cooperative marketing act is to promote, foster and encourage the intelligent and orderly marketing of agricultural products through cooperation and to eliminate speculation and waste; make the distribution of agricultural products as direct as can be efficiently done between producer and consumer; stabilize the marketing of agricultural products; and promote the development of the most profitable and permanent system of agriculture, the most wholesome and satisfactory living conditions, the highest ideals in home and community life and a general interest in the improvement of field crops and livestock and in the business of farming and in rural life. L. 1921, ch. 148, § 1; R.S. 1923, 17-1601; L. 1953, ch. 129, § 1; L. 1992, ch. 227, § 1; July 1. Law Review and Bar Journal References: Cooperative marketing act, Ralph E. Hoke, 22 J.B.A.K. 222 to 228 (1954). Problems in fluid milk marketing, John C. Gage, 7 K.L.R. 311, 322 (1959). Agricorporate membership in cooperatives, 17 W.L.J. 525, 544 (1978). CASE ANNOTATIONS 1. Association organized under this act not unlawful monopoly. Wheat Growers Ass'n v. Schulte, 113 Kan. 672, 216 P. 311; Wheat Growers Ass'n v. Rowan, 123 Kan. 169, 254 P. 326. 2. Cooperative marketing act is constitutional. Wheat Growers Ass'n v. Charlet, 118 Kan. 765, 236 P. 657. 3. Bylaws of company construed to determine quorum. Everts v. Wheat Growers Ass'n, 119 Kan. 276, 237 P. 1030. 4. Association organized under this statute is not a merchant within taxing statute. Wheat Growers Ass'n v. Sedgwick County Comm'rs, 119 Kan. 877, 241 P. 466. 5. Section considered in action by employee for compensation. Watson v. Wheat Growers Ass'n, 120 Kan. 444, 243 P. 1051. 6. Uniformity and special act clause of constitution not violated by act. Wheat Growers Ass'n v. Goering, 123 Kan. 508, 256 P. 119. 7. Decisions holding association created under this act not to be a monopoly set out. Wheat Growers Ass'n v. Oden, 124 Kan. 179, 257 P. 975. 8. Member cannot lease land to wife to avoid contract. Kansas Wheat Growers Ass'n v. Lucas, 124 Kan. 773, 262 P. 551. 9. Association cannot loan money to members for liquidation of pre-existing debts. Wheat Growers Ass'n v. Rowan, 125 Kan. 710, 266 P. 101. 10. Sections cited in action to recover for breach of marketing agreement. Kansas Wheat Growers Ass'n v. Leslie, 126 Kan. 694, 271 P. 284; Kansas Wheat Growers Ass'n v. Rinkel, 126 Kan. 733, 271 P. 311. 11. Sections considered in action to forfeit charter of association. State, ex rel., v. Kansas Wheat Growers Ass'n, 127 Kan. 669, 274 P. 731. 12. Member of association may make lawful lease for cash. Kansas Wheat Growers Ass'n v. Garnett, 128 Kan. 337, 278 P. 5. 13. Act should be liberally construed. Nebraska Wheat Growers Ass'n v. Smith, 115 Neb. 177, 212 N.W. 39. 14. Association may engage in selling or purchasing activities or both; entire act considered to determine powers and purposes of association. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 183 P.2d 423. 15. Plan to convert cooperative society to cooperative marketing association held unjust and inequitable. Hill v. Partridge Co-operative Equity Exchange, 168 Kan. 506, 508, 509, 512, 515, 214 P.2d 316. 16. County farm bureau could not become member of corporation organized hereunder. State, ex rel., v. Franklin County Farm Bureau, 172 Kan. 179, 184, 239 P.2d 570. 17. Provisions of Kansas Cooperative Marketing Act considered and applied; cooperative association not required to pay accumulation in patron's ledger account to estate of deceased member. Claassen, Executrix v. Farmers Grain Cooperative, 208 Kan. 129, 130, 490 P.2d 376.

K.S.A. 17-1602 Definitions, nonprofit character of associations.

17-1602. Definitions, nonprofit character of associations. (a) As used in this act: (1) "Agricultural products" shall include horticultural, viticultural, forestry, dairy, livestock, poultry, bee, and farm and ranch products. (2) "Member" shall include actual members of associations without capital stock and holders of common stock in associations organized with capital stock. (3) "Association" means any corporation organized under this act. (4) "Person" shall include individuals, firms, trusts, partnerships, corporations and associations. (5) "Patronage" shall include the volume or dollar value of business transacted with the corporation. (6) "Equity" shall include an initial share or shares of stock to reflect membership as well as amounts allocated to patrons in the form of stock, certificates, or other such instruments or book credits to reflect patronage. (7) "Cooperative" means any association organized under this act, a cooperative association organized under the laws of any other state, any other association or corporation qualifying as a "farmer's cooperative" within the meaning of section 521 of the federal internal revenue code of 1986, and amendments thereto, or any corporation operating on a cooperative basis within the meaning of section 1381 of the federal internal revenue code of 1986, and amendments thereto. (b) Associations organized under this act shall be deemed nonprofit, as they are not organized to make profit for themselves, as such, or for their members as such, but only for their members as producers. This act shall be referred to as the "cooperative marketing act." L. 1921, ch. 148, § 2; R.S. 1923, 17-1602; L. 1992, ch. 227, § 2; July 1. Law Review and Bar Journal References: Cooperative marketing act, Ralph E. Hoke, 22 J.B.A.K. 222, 225 (1954). The farmer and his cooperative, Edwin H. White, 7 K.L.R. 334 (1959). "The Kansas Corporation Code of 1972," William E. Treadway, 40 J.B.A.K. 301, 304, 305 (1971). Attorney General's Opinions: Farm winery constitutes an agricultural purpose and is exempt from county zoning regulations. 92-92. CASE ANNOTATIONS 1. Certain association securities within "blue-sky law"; definition of "person" applied in construing K.S.A. 17-1602, 17-1606. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 337, 353, 360, 183 P.2d 423. 2. Plan to convert cooperative society to cooperative marketing association held unjust and inequitable. Hill v. Partridge Co-operative Equity Exchange, 168 Kan. 506, 513, 214 P.2d 316. 3. County farm bureau could not become member of corporation organized hereunder. State, ex rel., v. Franklin County Farm Bureau, 172 Kan. 179, 184, 239 P.2d 570. 4. Deceased's estate not a "person." Hill v. The Partridge Co-operative Equity Exchange, 174 Kan. 5, 6, 254 P.2d 278. 5. Cited in holding cooperative not required to pay accumulation in patron's ledger account to estate of deceased member. Claassen, Executrix v. Farmers Grain Cooperative, 208 Kan. 129, 131, 490 P.2d 376.

K.S.A. 17-1603 Incorporation of associations.

17-1603. Incorporation of associations. (a) Five or more persons engaged in the production of agricultural products may form a nonprofit, cooperative association or associations with or without capital stock, under the provision of this act. (b) Any corporation organized under this act may form a corporation under the provisions of this act, for the purpose of acting as a subsidiary of the original corporation and conducting any part of the business of the original corporation. (c) All cooperative corporations, companies, or associations organized and doing business under other statutes or which have attempted to so organize and do business, shall have the benefit of all of the provisions of this act, and be bound thereby, on paying the fees provided for in this act, and filing with the secretary of state a written declaration signed and sworn to by the president and secretary, to the effect that such cooperative association, by a majority vote of such association's stockholders, has decided to accept the benefits and be bound by the provisions of this act. (d) The words "this act" as used herein include article 16 of chapter 17 of the Revised Statutes of 1923, and all acts amendatory thereto. L. 1921, ch. 148, § 3; R.S. 1923, 17-1603; L. 1931, ch. 150, § 1; L. 1992, ch. 227, § 3; July 1. CASE ANNOTATIONS 1. Cooperative organized under another statute may place itself under this act; methods; "persons" includes individuals, firms, partnerships, corporations and associations. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 352, 183 P.2d 423. 2. County farm bureau could not become member of corporation organized hereunder. State, ex rel., v. Franklin County Farm Bureau, 172 Kan. 179, 184, 239 P.2d 570.

K.S.A. 17-1604 Purposes of association.

17-1604. Purposes of association. An association may be organized to engage in any activity in connection with the marketing or selling of the agricultural products of the association's members; harvesting, threshing, milling, preserving, drying, processing, canning, packing, storing, handling, shipping, or utilization of the agricultural products; manufacturing or marketing of the agricultural by-products; manufacturing, selling, or supplying to the association's members and other patrons of services, products, machinery, equipment or supplies; agricultural education, research, legislation and economic and social conditions; improvement of livestock breeds by means of artificial breeding or otherwise; financing of the above-enumerated activities; or in any one or more of the activities specified above. Nothing in this act shall authorize such association to engage in the banking business. Corporations organized under this act primarily for the purposes stated above, unless prohibited from so doing by their articles of incorporation, also may deal in the products of nonmembers; manufacture, sell or supply to nonmembers services, products, machinery, equipment or supplies, whether or not supplied to members; and otherwise engage in business with nonmembers. Such associations shall not market, handle, process, store, or deal in the products of nonmembers; manufacture, sell or supply to nonmembers services, products, machinery, equipment or supplies, whether or not supplied to members; and otherwise engage in business with nonmembers; or handle supplies for nonmembers, to an amount greater in value than such as are handled by the association for members. L. 1921, ch. 148, § 4; R.S. 1923, 17-1604; L. 1931, ch. 150, § 2; L. 1953, ch. 129, § 2; L. 1992, ch. 227, § 4; July 1. Law Review and Bar Journal References: Cooperative marketing act, Ralph E. Hoke, 22 J.B.A.K. 222, 223 (1954). Problems in fluid milk marketing, John C. Gage, 7 K.L.R. 311, 331 (1959). The farmer and his cooperative, Edwin H. White, 7 K.L.R. 334, 336, 338 (1959). Lack of uniformity in financial statements and corporate statutes, 16 W.L.J. 655, 668, 670, 671 (1977). CASE ANNOTATIONS 1. Act construed and discussed in determining powers of association; right of association to have business transactions with nonmembers determined. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 183 P.2d 423. 2. Plan to convert cooperative society to cooperative marketing association held unjust and inequitable. Hill v. Partridge Co-operative Equity Exchange, 168 Kan. 506, 513, 214 P.2d 316. 3. County farm bureau could not become member of corporation organized hereunder. State, ex rel., v. Franklin County Farm Bureau, 172 Kan. 179, 184, 239 P.2d 570.

K.S.A. 17-1605 Powers of association.

17-1605. Powers of association. Each association incorporated under this act shall have the following powers: (a) To engage in any activity in connection with the marketing, selling, harvesting, threshing, milling, preserving, drying, processing, canning, packing, storing, handling or utilization of any agricultural products produced or delivered to the association by the association's members; manufacturing or marketing of the agricultural by-products, or in connection with the purchase, hiring, or use by the association's members or other patrons of supplies, machinery, or equipment; agricultural education, research, legislation and economic and social conditions; improvement of livestock breeds by means of artificial breeding or otherwise; or financing of any such activities; or in any one or more of the activities specified in this section. (b) To function as a general farm organization and to levy and collect dues from the association's members. (c) To borrow money without limitation as to amount of corporate indebtedness or liability; and to make advances to members. (d) To act as the agent or representative of any member or members in any of the above-stated activities. (e) To purchase or otherwise acquire; and to hold, own, and exercise all rights of ownership in, and to sell, transfer or pledge or guarantee the payment of dividends or interest on, or the retirement or redemption of shares of the capital stock or bonds. (f) To become a member, of any corporation or association engaged in any lawful activity. (g) To establish reserves and to invest the funds thereof in physical facilities, stock of subsidiary corporations or bonds or in such other property as may be provided in the bylaws. (h) To buy, hold, and exercise all privileges of ownership over such real and personal property as may be necessary or convenient for the conduct and operation of any of the business of the association or incidental thereto. (i) To do each and everything necessary, suitable, or proper for the accomplishment of any one of the purposes or the attainment of any one or more of the subjects herein enumerated; or conducive to or expedient for the interest or benefit of the association; and to contract accordingly. The association may exercise and possess all powers, rights, and privileges granted by the laws of this state to ordinary corporations, except such as are inconsistent with the express provisions of this act. L. 1921, ch. 148, § 5; R.S. 1923, 17-1605; L. 1931, ch. 150, § 3; L. 1953, ch. 129, § 3; L. 1992, ch. 227, § 5; July 1. Law Review and Bar Journal References: Cited in discussing the farmer and his cooperative, Edwin H. White, 7 K.L.R. 334, 336 (1959). CASE ANNOTATIONS 1. Powers of association discussed; may engage in selling or purchasing or both; cooperative corporations organized under other laws eligible members of association, when; right of association to have business transactions with nonmembers determined. State, ex rel., v. Consumers Co-operative Assn, 163 Kan. 324, 183 P.2d 423. 2. Plan to convert cooperative society to cooperative marketing association held unjust and inequitable. Hill v. Partridge Co-operative Equity Exchange, 168 Kan. 506, 513, 214 P.2d 316. 3. County farm bureau could not become member of corporation organized hereunder. State, ex rel., v. Franklin County Farm Bureau, 172 Kan. 179, 184, 239 P.2d 570.

K.S.A. 17-1606 Members or stockholders.

17-1606. Members or stockholders. (a) Under the terms and conditions in the association's bylaws, an association may admit as members, or issue voting common stock only to persons engaged in the production of agricultural products including the lessees and tenants of lands used for the production of such products and any lessors and landlords who receive as rent part of the crop raised on the leased premises, and may admit as a participating nonmember, participant or associate member, without power to vote, any person regardless of occupation. (b) If a stockholder or member of a nonstock association be other than a natural person, such stockholder or member may be represented by an individual, associate, officer, trustee or member thereof, duly authorized in writing. (c) Any agricultural cooperative association or farm organization, whether organized under the laws of this state or any other state, may become a member or stockholder of any association or associations organized under this act. L. 1921, ch. 148, § 6; R.S. 1923, 17-1606; L. 1953, ch. 129, § 4; L. 1992, ch. 227, § 6; July 1. CASE ANNOTATIONS 1. Cooperative corporations organized under other laws eligible members of association, when. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 183 P.2d 423. 2. Estate of deceased stockholder not eligible for membership. Hill v. The Partridge Co-operative Equity Exchange, 174 Kan. 5, 6, 8, 254 P.2d 278. 3. County farm bureau could not become member of corporation organized hereunder. State, ex rel., v. Franklin County Farm Bureau, 172 Kan. 179, 184, 239 P.2d 570.

K.S.A. 17-1607 Articles of incorporation.

17-1607. Articles of incorporation. (a) Each association formed under this act must prepare and file the articles of incorporation, setting forth: (1) The name of the association. (2) The purposes for which it is formed. (3) The term for which it is to exist, if the term is not to be perpetual. (4) The number of directors, which shall be five or more, and the term of office of such directors. (5) If organized without capital stock, the application shall set forth the general rule or rules applicable to all members by which the property rights and interests, respectively, of each member may and shall be determined and fixed. The association shall have the power to admit new members who shall be entitled to share in the property of the association with the old members, in accordance with such general rule or rules. This provision of the application for charter shall not be altered, amended, or repealed except by the written consent or the vote of 3 / 4 of the members. (6) If organized with capital stock, the amount of such stock and the number of shares into which it is divided and the par value thereof. (7) The address and county of its registered office in the state and the name, address, other than a post office box, and county of its resident agent in the state. (b) The capital stock may be divided into preferred and common stock. If so divided, the application for charter must contain a statement of the number of shares of stock to which preference is granted and the number of shares of stock to which no preference is granted and the nature and extent of the preference and privileges granted to each. The application for charter must be subscribed by the incorporators and shall be filed in accordance with the provisions of the general corporation law of this state. L. 1921, ch. 148, § 7; R.S. 1923, 17-1607; L. 1992, ch. 227, § 7; L. 2000, ch. 39, § 4; July 1. Cross References to Related Sections: Filing fees, see 17-1625. CASE ANNOTATIONS 1. Application for charter and amendments thereto governed by general corporation laws. Consumers Co-operative Ass'n v. Arn, 163 Kan. 489, 494, 183 P.2d 453. 2. Mentioned; capital may be increased only by sufficient vote pursuant to G.S. 1949, 17-1629. Hill v. The Partridge Co-operative Equity Exchange, 174 Kan. 5, 6, 254 P.2d 278.

K.S.A. 17-1608 Amendment of charter.

17-1608. Amendment of charter. The charter may be altered or amended by any annual meeting or at any special meeting called for that purpose. Any amendment must first be approved by 2 / 3 of the directors and then be adopted by a vote representing a majority of all the members or voting stockholders of the association. In lieu of a vote representing a majority of all the members or voting stockholders, an amendment may be adopted by a vote of 2 / 3 of the voting members or voting stockholders present and voting at an annual meeting of the association or a special meeting called for the purpose of voting on the amendment and upon written notice sent by first-class mail to every member or voting stockholder at such member's or voting stockholder's last known post-office address at least 10 days prior to such meeting. Amendments to the charter when adopted as provided in this section shall be executed and filed and become effective in accordance with the provisions of the general corporation code. L. 1921, ch. 148, § 8; R.S. 1923, 17-1608; L. 1968, ch. 379, § 1; L. 1972, ch. 53, § 3; L. 1992, ch. 227, § 8; L. 1999, ch. 39, § 3; L. 2000, ch. 39, § 5; July 1. Cross References to Related Sections: Filing of amendments, see 17-6602(b). Execution, filing, recordation and effective date of articles of incorporation and other corporate instruments, see 17-6003. Law Review and Bar Journal References: Cooperative marketing act, Ralph E. Hoke, 22 J.B.A.K. 222, 227 (1954). CASE ANNOTATIONS 1. Application for charter and amendments thereto governed by general corporation laws. Consumers Co-operative Ass'n v. Arn, 163 Kan. 489, 490, 491, 492, 493, 494, 183 P.2d 453. 2. Mentioned; capital may be increased only by sufficient vote pursuant to K.S.A. 17-1629. Hill v. The Partridge Co-operative Equity Exchange, 174 Kan. 5, 7, 254 P.2d 278.

K.S.A. 17-1609 Bylaws.

17-1609. Bylaws. Each association incorporated under this act must, within 30 days after its incorporation, adopt for its government and management a code of bylaws, not inconsistent with the powers granted by this act. Each association under its bylaws may also provide for any or all of the following matters: (a) The time, place and manner of calling and conducting the association meetings. The bylaws may provide that the association may have an office or offices outside of this state and may hold the association's stockholders' and directors' meetings outside of this state. (b) The number or voting power of stockholders or members constituting a quorum. (c) The right of members or stockholders to vote by proxy or by mail or by both, and the conditions, manner, form and effect of such votes. (d) The number of directors constituting a quorum. (e) The qualifications, compensation, and duties and term of office of directors and officers, time of their election, and the mode and manner of giving notice thereof. (f) Penalties for violations of the bylaws. (g) The amount of entrance, organization and membership fees, if any; the manner and method of collection of the same and purposes for which they may be used. (h) The amount which each member or stockholder shall be required to pay annually or from time to time, if at all, to carry on the business of the association; the charge, if any, to be paid by each member or stockholder for services rendered by the association to such member or stockholder and the time of payment and the manner of collection; and the marketing contract between the association and the association's members or stockholders which every member or stockholder may be required to sign. (i) The number and qualifications of members or stockholders of the association and the conditions precedent to membership or ownership of common stock; the method, time and manner of permitting members to withdraw or the holders of common stock to transfer their stock; the manner of assignment and transfer of the interest of members and of the shares of common stock; the conditions upon which and time when membership of any member shall cease. The automatic suspension of the rights of a member when such member ceases to be eligible to membership in the association, and the mode, manner and effect of expulsion of a member; the manner of determining the value of a member's interest and provisions for its purchase by the association upon the death of a member, or forfeiture of such member's membership or at the option of the association, by conclusive appraisal by the board of directors. (j) The amount of annual dividends which may be paid on the common or preferred stock, which shall in no case exceed the greater of 8% or the contract interest rate set forth in subsection (a) of K.S.A. 16-207 , and amendments thereto, at the time of issuance, and the manner in which the remainder of the association's profits shall be prorated in the form of patronage allocations to the association's several stockholders or members upon such member's or stockholder's purchases from, or sales to, the association or upon both such purchases and sales. L. 1921, ch. 149, § 9; R.S. 1923, 17-1609; L. 1931, ch. 150, § 4; L. 1992, ch. 227, § 9; July 1. Law Review and Bar Journal References: Cooperative marketing act, Ralph E. Hoke, 22 J.B.A.K. 222, 224, 226, 227 (1954). The farmer and his cooperative, Edwin H. White, 7 K.L.R. 334, 335, 336, 338 (1959). CASE ANNOTATIONS 1. Cited in determining authority to adopt bylaws existed previous to act. Loch v. Paola Farmers Union, etc., 130 Kan. 136, 138, 285 P. 523. 2. Patronage refund certificates not subject to registration under "blue-sky law." State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 366, 183 P.2d 423. 3. Clause (h) cited in showing rights of shareholder in cooperative society are different. Hill v. Partridge Co-operative Equity Exchange, 168 Kan. 506, 515, 214 P.2d 316. 4. Mentioned; capital may be increased only by sufficient vote pursuant to K.S.A. 17-1629. Hill v. The Partridge Co-operative Equity Exchange, 174 Kan. 5, 7, 254 P.2d 278. 5. Section is permissive and not mandatory. Claassen, Executrix, v. Farmers Grain Cooperative, 208 Kan. 129, 132, 490 P.2d 376. 6. Equity credits allocated on association's books not subject to setoff against debt member or stockholder owes association. Atchison County Farmers Union Co-op Ass'n v. Turnbull, 241 Kan. 357, 359, 736 P.2d 917 (1987). 7. When claim against cooperative association for refusal to redeem member's capital credits accrued examined. First Nat. Bank and Trust v. Farmland Industries, 3 F.3d 1366, 1368 (1993).

K.S.A. 17-1610 Meetings; notice.

17-1610. Meetings; notice. In its bylaws each association shall provide for one or more regular meetings annually. The board of directors shall have the right to call a special meeting at any time, and 10% of the members or voting stockholders may file a petition stating the specific business to be brought before the association and demand a special meeting at any time. Such meeting must thereupon be called by the directors and held within 60 days of receipt of such demand by an officer of the cooperative. Notice of all meetings, together with a statement of the purposes, which may be brought before the members or common stockholders, shall be mailed to each member at least 10 days prior to the meeting. L. 1921, ch. 148, § 10; R.S. 1923, 17-1610; L. 1992, ch. 227, § 10; July 1.

K.S.A. 17-1611 Board of directors; election from districts; delegates to meetings; compensation of officers and directors; executive committee; vacancy in board of directors.

17-1611. Board of directors; election from districts; delegates to meetings; compensation of officers and directors; executive committee; vacancy in board of directors. (a) The affairs of the association shall be managed by a board of not less than five directors, elected by the members or voting stockholders from such association's own numbers. (b) The bylaws may provide that the territory in which the association has members shall be divided into districts and that the directors shall be elected according to such districts, either directly or by district delegates elected by the members in that district. In such a case the bylaws shall specify the number of directors to be elected by each district, the manner and method of reapportioning the directors and of redistricting the territory covered by the association. (c) The bylaws may provide that primary elections shall be held in each district to elect the directors apportioned to such districts and the result of all such primary elections must be ratified by the next regular meeting of the association. (d) The bylaws may take away the right to vote by proxy or by mail, and may provide for the election of delegates to the annual meeting. In all cases where the annual meeting is a delegate meeting a majority of the delegates elected shall constitute a quorum. The bylaws may provide for delegates to district meetings and define their powers. An association may provide for a fair remuneration for the time actually spent by its officers and directors in its service. No director during the term of such director's office shall be a party to a contract for profit with the association differing in any way from the business relations accorded regular members or holders of common stock of the association, or to any other kind of contract differing from terms generally current in that district. (e) The bylaws may provide for an executive committee and may allot to such committee all the functions and powers of the board of directors subject to the general direction and control of the board. (f) When a vacancy on the board of directors occurs, other than by expiration of term, the remaining members of the board, by a majority vote, shall fill the vacancy unless the bylaws provide for an election of directors by district. In such a case the board of directors shall immediately call a special meeting of the members or stockholders in that district to fill the vacancy. L. 1921, ch. 148, § 11; R.S. 1923, 17-1611; L. 1931, ch. 150, § 5; L. 1992, ch. 227, § 11; July 1. CASE ANNOTATIONS 1. Equity credits allocated on association's books not subject to setoff against debt member or stockholder owes association. Atchison County Farmers Union Co-op Ass'n v. Turnbull, 241 Kan. 357, 359, 736 P.2d 917 (1987).

K.S.A. 17-1612 Officers; requirements; elections.

17-1612. Officers; requirements; elections. (a) The directors shall elect from their number a president or chairperson. The directors shall also elect one or more vice-presidents or vice-chairpersons, one of whom shall be a director. The directors shall also elect a secretary and a treasurer, who need not be directors, and the directors may combine the two latter offices and designate the combined office as secretary-treasurer. The treasurer may be a bank or any depository, and as such shall not be considered as an officer but as a function of the board of directors. In such case the secretary shall perform the usual accounting duties of the treasurer, except that the funds shall be deposited only as authorized by the board of directors. (b) Notwithstanding the authority of members or voting stockholders to petition for removal of any officer or director pursuant to K.S.A. 17-1614 , and amendments thereto, any officer elected pursuant to subsection (a) may be removed from such office by a vote of the board of directors. The board may elect a replacement for such officer who has been removed. Nothing in this subsection shall be construed as removing from the board of directors any such officer removed from such office pursuant to the provisions of this subsection. L. 1921, ch. 148, § 12; R.S. 1923, 17-1612; L. 1965, ch. 151, § 1; L. 1992, ch. 227, § 12; L. 2004, ch. 28, § 1; July 1.

K.S.A. 17-1613 Certificate of membership; stock and stockholders.

17-1613. Certificate of membership; stock and stockholders. (a) When a member of an association established without capital stock has paid such member's membership fee in full, such member shall receive a certificate of membership. No association shall issue stock to a member until such stock has been fully paid for; promissory notes of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note, but such retention as security shall not affect the member's right to vote. Except for debts lawfully contracted between the member and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on such member's membership fee or such member's subscription to the capital stock. No stockholder of a cooperative association, except another cooperative association shall own more than 20% of the common stock of the association. An association in its bylaws may limit the amount of common stock which one member may own to any amount less than 20% of the common stock. (b) The articles of incorporation or the bylaws may provide that no member or stockholder shall be entitled to more than one vote and may also provide for voting based on patronage or patronage equity or both. In the event voting is based on patronage or patronage equity or both, no member shall have more than 5% of the total vote unless the member is another cooperative association. If voting based on patronage or patronage equity, or both, is used, the provisions of this act referring to a majority or similar percentage vote by members, shareholders or shares shall refer to such majority or other proportion of the voting power of the members, stockholders or shares. Any association organized with stock, under this act, may issue preferred stock with or without the right to vote, or with such restrictions on its voting power as the articles of incorporation may prescribe; such stock may be redeemed or retired by the association upon such terms and conditions as may be provided for in the articles of incorporation, and printed on the certificate. (c) The bylaws shall prohibit the transfer of the common stock of the association to persons not eligible to be a member of the association and such restrictions must be printed upon every certificate of stock subject thereto. (d) The association may at any time buy in or purchase its common stock at par or book value as conclusively determined by the board of directors. L. 1921, ch. 148, § 13; R.S. 1923, 17-1613; L. 1931, ch. 150, § 6; L. 1992, ch. 227, § 13; July 1. Law Review and Bar Journal References: Cooperative marketing act, Ralph E. Hoke, 22 J.B.A.K. 222, 224 (1954). The farmer and his cooperative, Edwin H. White, 7 K.L.R. 334, 338, 340 (1959). CASE ANNOTATIONS 1. Cooperative corporations organized under other laws eligible members of association, when. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 325, 332, 334, 335, 351, 353, 183 P.2d 423.

K.S.A. 17-1614 Removal of director or officer.

17-1614. Removal of director or officer. (a) Any member or voting stockholder may bring charges against an officer or director by filing them in writing with the secretary of the association, together with a petition signed by 10% of the members, requesting the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the association and, by a vote of a majority of the outstanding shares of voting stock, or if the association is organized on a one person, one vote plan, then by a majority vote of the association's members or voting stockholders present and voting, the officer or director so charged shall be removed. A successor shall be elected to fill the unexpired portion of the term of such officer or director. (b) The director or officer against whom such charges have been brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses; and the person or persons bringing the charges against such director or officer shall have the same opportunity. In case the bylaws provide for election of directors by districts with primary elections in each district, then the petition for removal of a director must be signed by 20% of the members residing in the district from which such director was elected. The board of directors must call a special meeting of the members residing in that district to consider the removal of the director. By a vote of the majority of the members of that district, the director in question shall be removed from office. L. 1921, ch. 148, § 14; R.S. 1923, 17-1614; L. 1992, ch. 227, § 14; July 1.

K.S.A. 17-1615 Matters subject to referendum, when.

17-1615. Matters subject to referendum, when. Upon demand of one-third of the entire board of directors, any matter that has been approved or passed by the board must be referred to the entire membership or the stockholders for decision at the next special or regular meeting which shall be held not less than 15 days but not more than 60 days after such matter was approved or passed. L. 1921, ch. 148, § 15; R.S. 1923, 17-1615; L. 1992, ch. 227, § 15; July 1.

K.S.A. 17-1616 Marketing contracts; injunction to prevent breach.

17-1616. Marketing contracts; injunction to prevent breach. (a) The association and the association's members may make and execute marketing contracts, requiring the members to sell, for any period of time, not over 10 years, all or any specified part of their agricultural products or specified commodities exclusively to or through the association or any facilities to be created by the association. The contract may provide that the association may sell or resell products of the association's members with or without taking title thereto; and pay over to the association's members the resale price, after deducting all necessary selling, overhead, and other costs and expenses, and other proper reserves, including interest on common or preferred stock not exceeding the greater of 8% per annum or the contract interest rate set forth in subsection (a) of K.S.A. 16-207 , and amendments thereto, at the time of issuance thereof and reserves for retiring the stock, if any. These limitations shall not apply to dividends paid by subsidiaries created hereunder to parent cooperative corporations operating under this act. (b) The bylaws and the marketing contract may fix, as liquidated damages, specific sums to be paid by the member or stockholder to the association upon the breach by such member or stockholder of any provision of the marketing contract regarding the sale or delivery or withholding of products; and may further provide that the member will pay all costs, premiums for bonds, expenses and fees in case any action is brought upon the contract by the association; and any such provision shall be valid and enforceable in the courts of this state. In the event of the such breach or threatened breach of such marketing contract by a member, the association shall be entitled to an injunction to prevent the further breach of the contract, and to a decree of specific performance thereof. Pending the adjudication of such an action and upon filing a verified complaint showing the breach or threatened breach, and upon filing a sufficient bond, the association shall be entitled to a temporary restraining order and preliminary injunction against the member. L. 1921, ch. 148, § 16; R.S. 1923, 17-1616; L. 1931, ch. 150, § 7; L. 1992, ch. 227, § 16; July 1. CASE ANNOTATIONS 1. Association may restrain member from otherwise disposing of crop. Wheat Growers Ass'n v. Schulte, 113 Kan. 672, 216 P. 311; Wheat Growers Ass'n v. Floyd, 116 Kan. 522, 227 P. 336. 2. Character of contracts discussed in determining liability for taxes. Wheat Growers Ass'n v. Sedgwick County Comm'rs, 119 Kan. 877, 241 P. 466. 3. Recovery of attorney fees where contract breached discussed. Wheat Growers Ass'n v. Rowan, 125 Kan. 657, 266 P. 104. 4. Expenses recovered on bond where restraining order erroneous. Messmer v. Kansas Wheat Growers Ass'n, 129 Kan. 220, 282 P. 728.

K.S.A. 17-1617

K.S.A. 17-1617a Interest in other cooperative association or corporation.

17-1617a. Interest in other cooperative association or corporation. Any association may have an interest in or own the preferred or common stock or become a member of any cooperative association. Any association may have an interest in or own preferred or common stock of or become a part of any other corporation or corporations. L. 1931, ch. 150, § 8; L. 1992, ch. 227, § 17; July 1. CASE ANNOTATIONS 1. Cooperative corporations organized under other laws eligible members of association, when. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 325, 332, 334, 335, 354, 183 P.2d 423. 2. Mentioned; county farm bureau could not become member of corporation organized under the cooperative marketing act. State, ex rel., v. Franklin County Farm Bureau, 172 Kan. 179, 196, 239 P.2d 570.

K.S.A. 17-1618 Business entity information report; report fee.

17-1618. Business entity information report; report fee. Each association formed under this act shall prepare and make a written business entity information report to the secretary of state, and pay the required fee, as prescribed by K.S.A. 17-7504 , and amendments thereto. L. 1921, ch. 148, § 18; R.S. 1923, 17-1618; L. 1972, ch. 54, § 16; L. 1973, ch. 90, § 1; L. 1992, ch. 227, § 18; L. 1994, ch. 182, § 1; L. 2004, ch. 171, § 15; L. 2005, ch. 157, § 2; L. 2021, ch. 61, § 3; January 1, 2023.

K.S.A. 17-1619

K.S.A. 17-1620 Contracts generally.

17-1620. Contracts generally. Any association may, upon resolution adopted by its board of directors, enter into all necessary and proper contracts and agreements and make all necessary and proper stipulations, agreements and contracts and arrangements with any other cooperative corporation, association or associations, formed in this or in any other state, for the cooperative and more economical carrying on of its business, or any part or parts thereof. Any two or more associations may, by agreement between them, unite in employing and using, or may separately employ and use, the same methods, means and agencies for carrying on and conducting their respective businesses. L. 1921, ch. 148, § 20; May 25; R.S. 1923, 17-1620.

K.S.A. 17-1621 Adoption of act by existing corporations.

17-1621. Adoption of act by existing corporations. Any corporation or association organized under previously existing statutes may by a 2 / 3 vote of the corporation's or association's voting stockholders or members voting at an annual meeting of the corporation or association or a special meeting called for such purposes upon written notice sent by first-class mail to every stockholder at such stockholder's last known post-office address at least 10 days prior to such meeting be brought under the provisions of this act by limiting the association's membership and adopting the other restrictions as provided herein. The association or corporation shall make out in duplicate a statement signed and sworn to by the directors, upon forms supplied by the secretary of state, to the effect that the corporation or association has by a 2 / 3 vote of the corporation's or association's stockholders or members voting at an annual meeting of the corporation or association or a special meeting called for such purpose, decided to accept the benefits and be bound by the provisions of this act, or acts amendatory thereto. Articles of incorporation shall be filed as required by K.S.A. 17-1607 , and amendments thereto, except that they shall be signed by the members of the board of directors. The filing fee shall be the same as for filing an amendment to the articles of incorporation. L. 1921, ch. 148, § 21; R.S. 1923, 17-1621; L. 1968, ch. 379, § 2; L. 1992, ch. 227, § 19; July 1. CASE ANNOTATIONS 1. Cooperative organized under another statute may place itself under this act; methods. State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 325, 327 328, 352, 183 P.2d 423. 2. Plan to convert cooperative society to cooperative marketing association held unjust and inequitable. Hill v. Partridge Co-operative Equity Exchange, 168 Kan. 506, 511, 513, 515, 214 P.2d 316.

K.S.A. 17-1622

K.S.A. 17-1623 Validity of act.

17-1623. Validity of act. If any section of this act, or acts amendatory thereto, shall be declared unconstitutional for any reason, the remainder of the act or acts amendatory thereto, shall not be affected thereby. L. 1921, ch. 148, § 23; R.S. 1923, 17-1623; L. 1992, ch. 227, § 20; July 1.

K.S.A. 17-1624

K.S.A. 17-1625 Application and recording fee.

17-1625. Application and recording fee. At the time of filing its articles of incorporation, an association organized hereunder shall pay the fees required by subsection (a) of K.S.A. 17-7502 . L. 1921, ch. 148, § 25; R.S. 1923, 17-1625; L. 1972, ch. 54, § 17; July 1. Cross References to Related Sections: Articles of incorporation, see 17-1607.

K.S.A. 17-1626 Conflicting laws not to apply; exemptions under existing laws to apply.

17-1626. Conflicting laws not to apply; exemptions under existing laws to apply. Any provisions of law which are in conflict with this act, or acts amendatory thereto, shall not be construed as applying to the associations herein provided for. Any exemptions under any and all existing laws applying to agricultural products in the possession or under the control of the individual producer shall apply similarly and completely to such products delivered by the association's farmer members in the possession or under the control of the association. L. 1931, ch. 150, § 9; L. 1992, ch. 227, § 21; July 1.

K.S.A. 17-1627 Limitation of use of term "co-operative."

17-1627. Limitation of use of term "co-operative." No person, firm, corporation, or association, hereafter organized or doing business in this state, shall be entitled to use the word "cooperative" as part of its corporate or other business name or title for producers' cooperative marketing activities unless it has complied with the provisions of this act, or with the provisions of article 15 of chapter 17 of the Revised Statutes of 1923, or acts amendatory thereto. L. 1931, ch. 150, § 10; L. 1992, ch. 227, § 22; July 1. Cross References to Related Sections: Cooperative societies, see 17-1515. CASE ANNOTATIONS 1. Word "cooperative" can be used only by cooperative incorporations. Clark v. Pargeter, 142 Kan. 781, 791, 52 P.2d 617.

K.S.A. 17-1628 Application of general corporation code.

17-1628. Application of general corporation code. The provisions of the general corporation code of this state and all powers and rights thereunder shall apply to the associations organized hereunder, except where such provisions are in conflict with or inconsistent with the express provisions of this act, or acts amendatory thereto. L. 1931, ch. 150, § 11; L. 1975, ch. 133, § 1; L. 1992, ch. 227, § 23; July 1. Law Review and Bar Journal References: Cooperative marketing act, Ralph E. Hoke, 22 J.B.A.K. 222, 223 (1954). CASE ANNOTATIONS 1. Certain association securities within "blue-sky law." State, ex rel., v. Consumers Co-operative Ass'n, 163 Kan. 324, 355, 183 P.2d 423. 2. Application for charter and amendments thereto governed by general corporation laws. Consumers Co-operative Ass'n v. Arn, 163, Kan. 489, 490, 491, 494, 183 P.2d 453. 3. Plan to convert cooperative society to cooperative marketing association held unjust and inequitable. Hill v. Partridge Co-operative Equity Exchange, 168 Kan. 506, 515, 214 P.2d 316.

K.S.A. 17-1629 Increase of capital.

17-1629. Increase of capital. Any corporation organized under this act may increase its capital to any amount provided that such increase must be first approved by a 2 / 3 vote of directors and then be approved by affirmative vote of 2 / 3 of the outstanding shares of voting stock, or if the corporation is organized on the one person, one vote plan, then by the affirmative vote of 2 / 3 of the corporation's voting stockholders. In lieu of affirmative vote of 2 / 3 of the outstanding shares of voting stock, or if the corporation is organized on the one person, one vote plan, then in lieu of the affirmative vote of 2 / 3 of the corporation's voting stockholders, the capital may be increased by affirmative vote of 2 / 3 of the voting stockholders present and voting at any annual meeting or special meeting called for such purpose and upon written notice sent by first-class mail to every stockholder at such stockholder's last known post-office address at least 10 days prior to such meeting. L. 1931, ch. 150, § 12; L. 1968, ch. 379, § 3; L. 1992, ch. 227, § 24; July 1. CASE ANNOTATIONS 1. One man, one vote corporation; co-owners of share each entitled to vote; vote insufficient; capital cannot be increased. Hill v. The Partridge Co-operative Equity Exchange, 174 Kan. 5, 6, 7, 9, 254 P.2d 278.

K.S.A. 17-1630 Meetings of stockholders and directors; resident agent.

17-1630. Meetings of stockholders and directors; resident agent. In all cases where it is not otherwise provided by the bylaws, the meetings of the stockholders of every cooperative corporation organized or doing business under this act shall be held at the corporation's registered office in this state. The stockholders and directors, however, may hold their meetings and have an office or offices outside of this state or elsewhere in this state if the articles of incorporation or bylaws so provide, and every such cooperative association shall maintain a resident agent who may be either an individual or a corporation, resident of, or located in this state, in charge thereof. Service of any form of legal process on such resident agent shall be sufficient service upon the corporation. L. 1931, ch. 150, § 13; L. 1992, ch. 227, § 25; July 1.

K.S.A. 17-1631 Dissolution for failure to carry on business; receivers.

17-1631. Dissolution for failure to carry on business; receivers. Any cooperative corporation, company or association heretofore organized under article 16, chapter 17, of the Revised Statutes of Kansas of 1923, and 17-1603 , 17-1604 , 17-1605 , 17-1609 , 17-1611 , 17-1613 , 17-1616 , 17-1617a , and 17-1626 through 17-1630 , and amendments thereto, which has for a period of three years ceased to engage, in good faith, in the primary business for which such corporation or association was organized, shall be dissolved by order of the district court having jurisdiction, on petition of the attorney general, supported by affidavit, and if the court shall find the petition is true, it shall appoint a receiver to wind up the affairs of such corporation and decree its dissolution. L. 1933, ch. 144, § 1; L. 1992, ch. 227, § 26; July 1.

K.S.A. 17-1632 Contracts fixing resale prices.

17-1632. Contracts fixing resale prices. Cooperative associations or corporations created under the provisions of article 16 of chapter 17 of the General Statutes of 1935, and any amendments thereto, or cooperative associations or corporations organized under similar statutes of other states and licensed to do business in the state of Kansas, are hereby empowered to enter into contracts with other cooperative associations or corporations, corporations or persons processing, handling, or selling, at wholesale or retail, the products produced by the members of such cooperative associations or corporations setting forth the minimum or maximum, or minimum and maximum resale prices at which such products may be sold by such other cooperative association or corporation, corporation or person, and to enter into contracts providing that any wholesaler purchasing, processing, handling or selling such products, upon the request of the cooperative association or corporation whose members have produced such products may refuse to sell or deliver the same to any retailer or retailers who sell or otherwise dispose of such products at prices below the resale retail prices established by such contract between such cooperative association or corporation and the wholesaler. L. 1937, ch. 181, § 1; March 31. Cross References to Related Sections: Contracts generally, see 17-1620.

K.S.A. 17-1633 Same; restrictions.

17-1633. Same; restrictions. This act, or acts amendatory thereto, should not be construed as authorizing the fixing of prices by contract or otherwise in such a manner as to be arbitrary, unjustly discriminatory or otherwise detrimental to the public interest. L. 1937, ch. 181, § 2; L. 1992, ch. 227, § 27; July 1. Cross References to Related Sections: Monopolies and unfair trade, see chapter 50.

K.S.A. 17-1634 Same; construction.

17-1634. Same; construction. No association, contract, method or act which complies with the provisions of article 16 of chapter 17 of the General Statutes of 1935, and any amendments thereto, or with this act, or acts amendatory thereto, shall be deemed a conspiracy or combination in restraint of trade or as creating an illegal monopoly. L. 1937, ch. 181, § 3; L. 1992, ch. 227, § 28; July 1.

K.S.A. 17-1635 Same; invalidity of part.

17-1635. Same; invalidity of part. If any clause, sentence, paragraph or part of this act, or acts amendatory thereto, for any reason, shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect or impair the validity of the remainder of this act, or acts amendatory thereto. L. 1937, ch. 181, § 4; L. 1992, ch. 227, § 29; July 1.

K.S.A. 17-1636 Disposition of property, assets and good will; notice to stockholders.

17-1636. Disposition of property, assets and good will; notice to stockholders. Any cooperative association or corporation, created, organized or existing under the provisions of article 15 or article 16 of chapter 17 of the Kansas Statutes Annotated, and any amendments thereto, or any cooperative association or corporation organized under similar statutes of other states and licensed to do business in the state of Kansas, shall have the additional right and power to make disposition of all or substantially all of the association's or corporation's property, assets and good will, or good will, by sale, lease, exchange, or otherwise, to such individual, association, partnership, or corporation on such terms and conditions and for such consideration as the board of directors thereof may determine. Such transaction shall be authorized or approved by the vote of not less than 2 / 3 in number of the members or holders of voting stock or, in the case of any such association or corporation whose stockholders vote by shares, the holders of 2 / 3 in amount of the outstanding shares of capital stock entitled to vote, represented and voting at any meeting duly called and held for such purpose in accordance with the bylaws, and upon written notice sent by first-class mail to every member or stockholder at such member's or stockholder's last-known post-office address at least 10 days prior to such meetings. In lieu of the vote of 2 / 3 of the members or the vote of holders of 2 / 3 in amount of the outstanding shares of capital stock entitled to vote, the rights and powers granted by this section may be authorized by an association which is organized by a one person one vote plan by a vote of 2 / 3 of the voting members or voting stockholders present and voting at any duly called meeting when approved by the unanimous vote of the board of directors present. L. 1939, ch. 157, § 1; L. 1951, ch. 203, § 1; L. 1968, ch. 379, § 4; L. 1992, ch. 227, § 30; July 1.

K.S.A. 17-1637 Merger or consolidation of cooperative associations and corporations.

17-1637. Merger or consolidation of cooperative associations and corporations. (a) Any two or more associations incorporated under the cooperative marketing act, cited at K.S.A. 17-1601 et seq., and amendments thereto, or any association incorporated under the cooperative marketing act, cited at K.S.A. 17-1601 et seq., and amendments thereto, and a corporation existing under the laws of this state, may merge into a single association or corporation, which may be any of the constituent associations or corporations or they may consolidate into a new association or corporation formed by the consolidation, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with this section. (b) The board of directors of each association or corporation which desires to merge or consolidate shall adopt a resolution approving an agreement of merger or consolidation. The agreement shall state: (1) The terms and conditions of the merger or consolidation; (2) the mode of carrying the same into effect; (3) in the case of a merger, such amendments or changes in the articles of incorporation of the surviving association or corporation as are desired to be effected by the merger or, if no such amendments or changes are desired, a statement that the articles of incorporation of the surviving association or corporation shall be its articles of incorporation; (4) in the case of consolidation, that the articles of incorporation of the resulting association or corporation shall be as is set forth in an attachment to the agreement; (5) the manner of converting the shares of each of the constituents into shares or other securities of the association or corporation surviving or resulting from the merger or consolidation, and, if any shares of any of the constituents are not to be converted solely into shares or other securities of the surviving or resulting association or corporation, the cash, property, rights or securities of any other association or corporation which the holders of such shares are to receive in exchange for, or upon conversion of, such shares and the surrender of the certificates evidencing certificated shares, which cash, property, rights or securities of any other association or corporation may be in addition to or in lieu of shares or other securities of the surviving or resulting association or corporation; and (6) such other details or provisions as are deemed desirable, including, without limiting the generality of the foregoing, a provision for the payment of cash in lieu of the issuance or recognition of fractional shares, interests or rights, or for any other arrangement with respect thereto, consistent with the provisions of K.S.A. 17-6405 , and amendments thereto. (c) The agreement adopted as provided in this section shall be executed in accordance with K.S.A. 17-6003 , and amendments thereto. Any terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement, provided that the manner in which such facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation. (d) The agreement required by subsection (b) shall be submitted to the members or stockholders of each constituent association or corporation at an annual or special meeting for the purpose of acting on the agreement. Due notice of the time, place and purpose of the meeting shall be mailed to each member or holder of stock of the association or corporation, whether voting or nonvoting, at the member's or stockholder's address as it appears on the records of the association or corporation, at least 20 days prior to the date of the meeting. At the meeting the agreement shall be considered and a vote taken for its adoption or rejection. If the agreement is adopted by a vote representing a majority of all members of the association or, a majority vote of all outstanding stock of the corporation entitled to vote thereon, as applicable, that fact shall be certified on the agreement by the secretary or assistant secretary of the association or corporation. In lieu of an affirmative vote of a majority of all members of the association or, a majority vote of all outstanding stock of the association entitled to vote, as applicable, the agreement may be adopted by a vote of 2 / 3 of the members or voting stockholders present and voting at any annual meeting or special meeting called for such purpose. The method of adoption and the votes cast shall be certified on the agreement by the secretary or assistant secretary of the association or corporation. If the agreement is adopted and certified by each constituent association or corporation, the agreement shall then be executed and filed, and shall become effective, in accordance with K.S.A. 17-6003 , and amendments thereto. In lieu of filing the agreement of merger or consolidation, the surviving or resulting association or corporation may file a certificate of merger or consolidation, executed in accordance with K.S.A. 17-6003 , and amendments thereto, which states: (1) The name and state of incorporation of each of the constituent associations or corporations; (2) that an agreement of merger or consolidation has been approved, adopted, certified and executed by each of the constituent associations or corporations in accordance with this subsection; (3) the name of the surviving or resulting association or corporation; (4) in the case of a merger, such amendments or changes in the articles of incorporation of the surviving association or corporation as are desired to be effected by the merger or, if no such changes or amendments are desired, a statement that the articles of incorporation of one of the surviving associations or corporation shall be the articles of incorporation; (5) in the case of a consolidation, that the articles of incorporation of the resulting corporation shall be as is set forth in an attachment to the certificate; (6) that the executed agreement of consolidation or merger is on file at the principal place of business of the surviving association or corporation, stating the address thereof; and (7) that a copy of the agreement of consolidation or merger will be furnished by the surviving association or corporation, on request and without cost, to any member or stockholder of any constituent association or corporation. (e) Any agreement of merger or consolidation may contain a provision that at any time prior to the filing of the agreement with the secretary of state, the agreement may be terminated by the board of directors of any constituent association or corporation notwithstanding approval of the agreement by the members or stockholders of all or any of the constituent associations or corporations. Any agreement of merger or consolidation may contain a provision that the boards of directors of the constituent associations or corporations may amend the agreement at any time prior to the filing of the agreement, or a certificate in lieu thereof, with the secretary of state provided that an amendment made subsequent to the adoption of the agreement by the members or stockholders of any constituent association or corporation shall not: (1) Alter or change the amount or kind of shares, securities, cash, property or rights, or any of the proceedings, in exchange for or on conversion of all or any of the shares of any class or series thereof of such constituent association or corporation; (2) alter or change any term of the articles of incorporation of the surviving association or corporation to be effected by the merger or consolidation; or (3) alter or change any of the terms and conditions of the agreement if such alteration or change would adversely affect the members or holders of any class of series thereof of such constituent association or corporation. (f) In the case of a merger, the articles of incorporation of the surviving association or corporation shall automatically be amended to the extent, if any, that change in the articles of incorporation are set forth in the agreement of merger. (g) Notwithstanding the requirements of subsection (d), unless required by its articles of incorporation, no vote of members or stockholders of a constituent association or corporation surviving a merger shall be necessary to authorize a merger if: (1) The agreement of merger does not amend in any respect the articles of incorporation of the surviving corporation; and (2) the aggregate stockholders' equity, as determined in accordance with generally accepted accounting principles, of the stock or other equity of the surviving association or corporation to be issued or delivered under the plan of merger does not constitute more than 25% of the aggregate stockholders' equity, as determined in accordance with generally accepted accounting principles, of all classes of stock or other equity of the surviving association or corporation immediately following the effectiveness of the merger. If an agreement of merger is adopted by the constituent association or corporation surviving the merger, by action of its board of directors and without any vote of the constituent association's or corporation's members or stockholders pursuant to this subsection, the secretary or assistant secretary of such association or corporation shall certify on the agreement, under the seal, that the agreement has been adopted pursuant to this subsection and that, as of the date of such certificate, the stockholders' equity of the association or corporation was such as to render this subsection applicable. The agreement adopted and certified as provided in this section shall be executed and filed, and shall become effective, in accordance with K.S.A. 17-6003 , and amendments thereto. Such filing shall constitute a representation by the person who executes the agreement that the facts stated in the certificate remain true immediately prior to such filing. L. 1991, ch. 74, § 1; L. 1998, ch. 189, § 1; L. 2000, ch. 39, § 6; July 1.

K.S.A. 17-1638 Merger or consolidation of cooperative associations and domestic and foreign corporations; service of process upon surviving or resulting corporation.

17-1638. Merger or consolidation of cooperative associations and domestic and foreign corporations; service of process upon surviving or resulting corporation. (a) Any one or more associations incorporated under the cooperative marketing act, cited at K.S.A. 17-1601 et seq., and amendments thereto, may merge or consolidate with one or more other associations or corporations of any other state or states of the United States, or of the District of Columbia if the laws of such other jurisdiction permit an association or corporation of such jurisdiction to merge or consolidate with an association or corporation of another jurisdiction. The constituent associations or corporations may merge into a single association or corporation, which may be any one of the constituents, or they may consolidate into a new association or corporation formed by the consolidation, which may be an association or corporation of the state of incorporation of any one of the constituent associations or corporations, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with this section. In addition, any one or more associations or corporations organized under the laws of any jurisdiction other than one of the United States may merge or consolidate with one or more associations incorporated under the cooperative marketing act, cited at K.S.A. 17-1601 et seq., and amendments thereto, if the surviving or resulting association or corporation will be an association or corporation of this state, and if the laws under which the other associations or corporations are formed permit an association or corporation of such jurisdiction to merge or consolidate with an association or corporation of another jurisdiction. (b) All the constituent associations or corporations shall enter into an agreement of merger or consolidation. The agreement shall state: (1) The terms and conditions of the merger or consolidation; (2) the mode of carrying the same into effect; (3) the manner of converting the shares of each of the constituent associations or corporations into shares or other securities of the association or corporation surviving or resulting from the merger or consolidation and, if any shares of any of the constituents are not to be converted solely into shares or other securities of the surviving or resulting association or corporation, the cash, property, rights or securities of any other association or corporation which the holders of such shares are to receive in exchange for, or upon conversion of, such shares and the surrender of the certificates evidencing certificated shares, which cash, property, rights or securities of any other association or corporation may be in addition to or in lieu of the shares or other securities of the surviving or resulting association or corporation; (4) such other details or provisions as are deemed desirable, including, without limiting the generality of the foregoing, a provision for the payment of cash in lieu of the issuance or recognition of fractional shares of the surviving or resulting association or corporation or of any other association or corporation the securities of which are to be received in the merger or consolidation, or for some other arrangement with respect thereto consistent with the provisions of K.S.A. 17-6405 , and amendments thereto; and (5) such other provisions or facts as shall be required to be set forth in articles of incorporation by the laws of the state which are stated in the agreement to be the laws that shall govern the surviving or resulting association or corporation and that can be stated in the case of a merger or consolidation. (c) Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement, provided that the manner in which such facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation. (d) The agreement shall be adopted, approved, certified and executed by each of the constituent associations or corporations in accordance with the laws under which it is formed, and, in the case of a Kansas association, in the same manner as provided in K.S.A. 17-1637 , and amendments thereto. The agreement shall be filed and shall become effective for all purposes of the laws of this state as provided in K.S.A. 17-1637 , and amendments thereto, with respect to the merger or consolidation of associations or corporations of this state. In lieu of filing the agreement of merger or consolidation, the surviving or resulting association or corporation may file a certificate of merger or consolidation, executed in accordance with K.S.A. 17-6003 , and amendments thereto, which states: (1) The name and state of incorporation of each of the constituents; (2) that an agreement of merger or consolidation has been approved, adopted, certified and executed by each of the constituents in accordance with this subsection; (3) the name of the surviving or resulting association or corporation; (4) in the case of a merger, such amendments or changes in the articles of incorporation of the surviving association or corporation as are desired to be effected by the merger or, if no such amendments or changes are desired, a statement that the articles of incorporation of the surviving association or corporation shall be the association's or corporation's articles of incorporation; (5) in the case of a consolidation, that the articles of incorporation of the resulting association or corporation shall be as is set forth in an attachment to the certificate; (6) that the executed agreement of consolidation or merger is on file at the principal place of business of the surviving association or corporation and address thereof; (7) that a copy of the agreement of consolidation or merger will be furnished by the surviving association or corporation, on request and without cost, to any member or stockholder of any constituent; (8) if the association or corporation surviving or resulting from the merger or consolidation is to be an association or corporation of this state, the authorized capital stock of each constituent association or corporation which is not an association or corporation of this state; and (9) the agreement, if any, required by subsection (e). (e) If the association or corporation surviving or resulting from the merger or consolidation is to be governed by the laws of the District of Columbia or any state other than this state, it shall agree that it may be served with process in this state in any proceeding for enforcement of any obligation of any constituent association or corporation of this state, as well as for enforcement of any obligation of the surviving or resulting association or corporation arising from the merger or consolidation, including any suit or other proceeding to enforce the right of any member or stockholder as determined in appraisal proceedings pursuant to the provisions of K.S.A. 17-1642 , and amendments thereto, and shall irrevocably appoint the secretary of state as such association's or corporation's last known agent to accept service of process in any such suit or other proceedings and shall specify the address to which a copy of such process shall be mailed by the secretary of state. Service of such process shall be made by personally delivering to and leaving with the secretary of state duplicate copies of such process. The secretary of state shall forthwith send by registered mail one of such copies to such surviving or resulting association or corporation at such association's or corporation's last known address. (f) The provisions of subsection (e) of K.S.A. 17-1637 , and amendments thereto, shall apply to any merger or consolidation under this section. The provisions of subsection (f) of K.S.A. 17-1637 , and amendments thereto, shall apply to a merger under this section in which the surviving association or corporation is an association or corporation of this state. The provisions of subsection (g) of K.S.A. 17-1637 , and amendments thereto, shall apply to any merger under this section. L. 1991, ch. 74, § 2; L. 1998, ch. 189, § 2; L. 2000, ch. 39, § 7; July 1.

K.S.A. 17-1639 When mergers effective; rights and liabilities to surviving association.

17-1639. When mergers effective; rights and liabilities to surviving association. No merger or consolidation shall become effective under this act until all corporate fees and taxes due to or assessable by the state have been paid by the constituent associations or corporations. Any fees or taxes which become due to or assessable by the state with respect to any such constituent, subsequent to the merger or consolidation, shall become the debt of the resulting or surviving association or corporation. When any merger or consolidation shall have become effective under this act, for all purposes of the laws of this state the separate existence of all constituent associations or corporations, or of all such constituents except the one into which the other or others of such constituents have been merged, shall cease and the constituents shall become a new association or corporation, or be merged into one of such associations or corporations, possessing all rights, privileges, powers and franchises of a public as well as of a private nature. Such associations or corporations shall be subject to all the restrictions, disabilities and duties of each of such associations or corporations so merged or consolidated. The rights, privileges, powers and franchises of each of such associations or corporations; property, real, personal and mixed; debts due to any of such constituents on whatever account; and stock subscriptions as all other things in action or belonging to each of such associations or corporations shall be vested in the association or corporation surviving or resulting from such merger or consolidation. All property, rights, privileges, powers and franchises, and every other interest shall be thereafter as effectually the property of the surviving or resulting association or corporation as such associations or corporations were of the several and respective constituents, and the title to any real estate vested by deed or otherwise, under the laws of this state, in any of such constituents, shall not revert or be in any way impaired by reason of this act. All rights of creditors and all liens upon this property of any of such constituents shall be preserved unimpaired, and all debts, liabilities and duties of the respective constituents shall attach to such surviving or resulting association or corporation, and may be enforced against the association or corporation to the same extent as if such debts, liabilities and duties had been incurred or contracted by the association or corporation. L. 1991, ch. 74, § 3; May 30.

K.S.A. 17-1640 Surviving association right to issue bonds or other obligations.

17-1640. Surviving association right to issue bonds or other obligations. When two or more associations or corporations are merged or consolidated, the association or corporation surviving or resulting from the merger or consolidation may issue bonds or other obligations, negotiable or otherwise, and with or without coupons or interest certificates thereto attached, to an amount sufficient with the association's or corporation's capital stock to provide for all the payments the association or corporation will be required to make, or obligations it will be required to assume, in order to effect the merger or consolidation. For the purpose of securing the payment of any such bonds and obligations, it shall be lawful for the surviving or resulting association or corporation to mortgage the association's or corporation's corporate franchise, rights, privileges and property, real, personal or mixed. The surviving or resulting association or corporation may issue certificated or uncertificated shares of the association's or corporation's capital stock and other securities to the members of the constituent associations or corporations in exchange or payment for the original shares, in such amount as shall be necessary in accordance with the terms of the agreement of merger or consolidation in order to effect such merger or consolidation in the manner and on the terms specified in the agreement. L. 1991, ch. 74, § 4; May 30.

K.S.A. 17-1641 Effect of merger on pending actions.

17-1641. Effect of merger on pending actions. Any action or proceeding, whether civil, criminal or administrative, pending by or against any association or corporation which is a party to a merger or consolidation shall be prosecuted as if such merger or consolidation had not taken place, or the association or corporation surviving or resulting from such merger or consolidation may be substituted in such action or proceeding. L. 1991, ch. 74, § 5; May 30.

K.S.A. 17-1642 Payment for interest of member objecting to merger; demand for payment; appraisal and determination of value; taxation of costs; status of member's interest; section inapplicable to certain member's interest.

17-1642. Payment for interest of member objecting to merger; demand for payment; appraisal and determination of value; taxation of costs; status of member's interest; section inapplicable to certain member's interest. (a) Except as provided in subsection (j), the association or corporation surviving or resulting from any merger or consolidation, within 10 days after the effective date of the merger or consolidation, shall notify each member or stockholder of any association or corporation of this state so merging or consolidating who objected thereto in writing and whose shares either were not entitled to vote or were not voted in favor of the merger or consolidation, and who filed such written objection with the association or corporation before the taking of the vote on the merger or consolidation, that the merger or consolidation has become effective. If any such member or stockholder, within 20 days after the date of mailing of the notice, shall demand in writing, from the association or corporation surviving or resulting from the merger or consolidation, payment of the value of the member's or stockholder's interest, the surviving or resulting association or corporation shall pay to the member or stockholder, within 30 days after the expiration of the period of 20 days, the value of the member's or stockholder's interest on the effective date of the merger or consolidation, exclusive of any element of value arising from the expectation or accomplishment of the merger or consolidation. (b) If during a period of 30 days following the period of 20 days provided for in subsection (a), the association and any such member or stockholder fail to agree upon the value of such member's or stockholder's interest, any such member or stockholder, or the association or corporation surviving or resulting from the merger or consolidation, may demand a determination of the value of the member's or stockholder's interest by an appraiser or appraisers to be appointed by the district court, by filing a petition with the court within four months after the expiration of the thirty-day period. (c) Upon the filing of any such petition by a member or stockholder, service of a copy shall be made upon the surviving association or corporation, which shall file with the clerk of the district court, within 10 days after such service, a duly verified list containing the names and addresses of all members or stockholders who have demanded payment for such member's or stockholder's interest and with whom agreements as to the value of such member's or stockholder's interest have not been reached by the association or corporation. If the petition is filed by the surviving association or corporation, the petition shall be accompanied by such duly verified list. The surviving association or corporation shall give notice of the time and place fixed for the hearing of such petition pursuant to subsection (c) of K.S.A. 60-303 , and amendments thereto, to the members or stockholders shown upon the list at the addresses therein stated and notice shall also be given by publishing a notice at least once, at least one week before the day of the hearing, in a newspaper of general circulation in the county in which the district court is located. The court may direct such additional publication of notice as the court deems advisable. The forms of the notices by mail and by publication shall be approved by the court. (d) After the hearing on the petition the court shall determine the members or stockholders who have complied with the provisions of this section and become entitled to the valuation of and payment for such member's or stockholder's interest, and shall appoint an appraiser or appraisers to determine such value. The appraiser or appraisers may examine any of the books and records of the associations or corporations the stock of which such appraiser or appraisers is charged with the duty of valuing, and following an investigation, the appraiser or appraisers shall make a determination of the value of the member's or stockholder's interest. The appraiser or appraisers shall also afford a reasonable opportunity to the parties interested to submit to the appraiser or appraisers pertinent evidence on the value of the member's or stockholder's interest. The appraiser or appraisers, also, shall have the powers and authority conferred upon masters by K.S.A. 60-253 , and amendments thereto. (e) The appraiser or appraisers shall determine the value of the stock of the members or stockholders adjudged by the district court to be entitled to payment therefor and shall file a report respecting such value in the office of the clerk of the district court, and notice of the filing of such report shall be given by the petitioners to the parties in interest. Such report shall be subject to exceptions to be heard before the court both upon the law and facts. The court by decree shall determine the value of the stock of the members or stockholders entitled to payment and shall direct the payment of such value, together with interest, if any, to the members or stockholders entitled by the surviving or resulting corporation. Upon payment of the judgment by the surviving or resulting corporation, the clerk of the district court shall surrender to the surviving association or corporation the certificates of shares of stock held by the clerk pursuant to subsection (f). The decree may be enforced as other judgments of the district court may be enforced, whether such surviving or resulting association be an association of this state or of any other state. (f) At the time of appointing the appraiser or appraisers, the court shall require the members or stockholders who hold certificated shares and who demanded payment for the shares to submit the certificates of stock to the clerk of the court, to be held by the clerk pending the appraisal proceedings. If any member or stockholder fails to comply with such direction, the court shall dismiss the proceedings as to such member or stockholder. (g) The cost of any such appraisal, including reasonable fees and expenses of the appraiser or appraisers, but exclusive of fees of counsel or of experts retained by any party, shall be determined by the court and taxed upon the parties to such appraisal or any of them as appears to be equitable, except that the cost of giving the notice by publication and by certified mail shall be paid by the surviving association or corporation. Postjudgment interest, if any, shall be in accordance with K.S.A. 16-204 , and amendments thereto, to be paid upon the value of the stock of the members or stockholders entitled thereto. (h) Any member or stockholder who has demanded payment of the member's or stockholder's interest as herein provided shall not thereafter be entitled to vote such member's or stockholder's stock for any purpose or be entitled to the payment of dividends or other distribution on such stock, except dividends or other distributions payable to members or stockholders of record at a date which is prior to the effective date of the merger or consolidation, unless the appointment of an appraiser or appraisers shall not be applied for within the time herein provided, or the proceeding be dismissed as to such member or stockholder, or unless such member or stockholder with the written approval of the surviving association or corporation shall deliver to the association or corporation a written withdrawal of the member's or stockholder's objections to and an acceptance of the merger or consolidation, in any of which cases the right of such member or stockholder to payment for the member's or stockholder's interest shall cease. (i) The shares of the surviving or resulting association or corporation into which the shares of such objecting members or stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting association or corporation. (j) This section shall not be applicable to the members, stockholders or other holders of equity securities of the surviving association or corporation in any merger where the active members of the surviving association or corporation continue to be eligible to be members of the surviving association or corporation after the merger and the agreement of merger does not amend the articles of incorporation, and shall not apply to the members, stockholders or other holders of equity securities of the constituent association or corporation not surviving the merger in any merger where the active members of such constituent association or corporation are eligible to become members of the surviving association or corporation on the same terms and conditions as other similarly classified members of the surviving association or corporation. L. 1991, ch. 74, § 6; L. 2000, ch. 175, § 1; July 1. Law Review and Bar Journal References: "Y2K: An active year for judicial legislation," Paul T. Davis, 69 J.K.B.A. No. 7, 12 (2000).

K.S.A. 17-1643 Act supplemental to cooperative marketing act.

17-1643. Act supplemental to cooperative marketing act. This act shall be part of and supplemental to the cooperative marketing act, cited at K.S.A. 17-1601 et seq., and amendments thereto. L. 1991, ch. 74, § 7; May 30.

Source: Kansas Office of Revisor of Statutes (ksrevisor.gov)URL: https://www.ksrevisor.gov/statutes/ksa_ch17.htmlFetched: 10/20/2026