Member's Interest in Limited Cooperative Association

Utah Code tit. 16, ch. 16-16, pt. 16-16-P6

in effect

Utah Code § 16-16-601 Member's interest.

16-16-601. Member's interest. A member's interest: (1) is personal property; (2) consists of: (a) governance rights; (b) financial rights; and (c) the right or obligation, if any, to do business with the limited cooperative association; and (3) may be in certificated or uncertificated form. Enacted by Chapter 363, 2008 General Session

Utah Code § 16-16-602 Patron and investor members' interests.

16-16-602. Patron and investor members' interests. (1) Unless the organic rules establish investor members' interests, a member's interest is a patron member's interest. (2) Unless the organic rules otherwise provide, if a limited cooperative association has investor members, while a person is a member of the association, the person: (a) if admitted as a patron member, remains a patron member; (b) if admitted as an investor member, remains an investor member; and (c) if admitted as a patron member and investor member, remains a patron and investor member if not dissociated in one of the capacities. Enacted by Chapter 363, 2008 General Session

Utah Code § 16-16-603 Transferability of member's interest.

16-16-603. Transferability of member's interest. (1) The provisions of this chapter relating to the transferability of a member's interest are subject to Title 70A, Uniform Commercial Code. (2) Unless the organic rules otherwise provide, a member's interest other than financial rights is not transferable. (3) Unless a transfer is restricted or prohibited by the organic rules, a member may transfer the member's financial rights in the limited cooperative association. (4) The terms of any restriction on transferability of financial rights shall be: (a) set forth in the organic rules and the member records of the association; and (b) conspicuously noted on any certificates evidencing a member's interest. (5) A transferee of a member's financial rights, to the extent the rights are transferred, has the right to share in the allocation of profits or losses and to receive the distributions to the member transferring the interest to the same extent as the transferring member. (6) A transferee of a member's financial rights does not become a member upon transfer of the rights unless the transferee is admitted as a member by the limited cooperative association. (7) A limited cooperative association need not give effect to a transfer under this section until the association has notice of the transfer. (8) A transfer of a member's financial rights in violation of a restriction on transfer contained in the organic rules is ineffective as to a person having notice of the restriction at the time of transfer. Amended by Chapter 378, 2010 General Session

Utah Code § 16-16-604 Security interest and set-off.

16-16-604. Security interest and set-off. (1) A member or transferee may create an enforceable security interest in its financial rights in a limited cooperative association. (2) Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the member's governance rights in a limited cooperative association. (3) The organic rules may provide that a limited cooperative association has a security interest in the financial rights of a member to secure payment of any indebtedness or other obligation of the member to the association. A security interest provided for in the organic rules is enforceable under, and governed by, Title 70A, Chapter 9a, Uniform Commercial Code - Secured Transactions. (4) Unless the organic rules otherwise provide, a member may not compel the limited cooperative association to offset financial rights against any indebtedness or obligation owed to the association. Enacted by Chapter 363, 2008 General Session

Utah Code § 16-16-605 Charging orders for judgment creditor of member or transferee.

16-16-605. Charging orders for judgment creditor of member or transferee. (1) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the financial rights of the judgment debtor for the unsatisfied amount of the judgment. A charging order issued under this Subsection (1) constitutes a lien on the judgment debtor's financial rights and requires the limited cooperative association to pay over to the creditor or receiver, to the extent necessary to satisfy the judgment, any distribution that would otherwise be paid to the judgment debtor. (2) To the extent necessary to effectuate the collection of distributions pursuant to a charging order under Subsection (1), the court may: (a) appoint a receiver of the share of the distributions due or to become due to the judgment debtor under the judgment debtor's financial rights, with the power to make all inquiries the judgment debtor might have made; and (b) make all other orders that the circumstances of the case may require to give effect to the charging order. (3) Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the financial rights. The purchaser at the foreclosure sale obtains only the financial rights that are subject to the charging order, does not thereby become a member, and is subject to Section 16-16-603. (4) At any time before a sale pursuant to a foreclosure, a member or transferee whose financial rights are subject to a charging order under Subsection (1) may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order. (5) At any time before sale pursuant to a foreclosure, the limited cooperative association or one or more members whose financial rights are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and succeed to the rights of the judgment creditor, including the charging order. Unless the organic rules otherwise provide, the association may act under this Subsection (5) only with the consent of all members whose financial rights are not subject to the charging order. (6) This chapter does not deprive any member or transferee of the benefit of any exemption laws applicable to the member's or transferee's financial rights. (7) This section provides the exclusive remedy by which a judgment creditor of a member or transferee may satisfy the judgment from the member's or transferee's financial rights. Enacted by Chapter 363, 2008 General Session

Source: Utah Office of Legislative Research and General Counsel (le.utah.gov)URL: https://le.utah.gov/xcode/Title16/Chapter16/16-16-P6.html?v=C16-16-P6_1800010118000101Fetched: 10/26/2026