Incorporated Marketing Associations.

Ala. Code tit. 2, ch. 10, art. 3

in effect

Ala. Code § 2-10-50 Definitions.

2-10-50. Definitions. As used in this article, the following words and phrases shall have the meanings respectively ascribed to them in this section: (1) AGRICULTURAL PRODUCTS. Such term shall include horticultural, viticultural, forestry, dairy, livestock, poultry, bee, fish, aquatic and seafood products and any farm products. (2) MEMBER. Such term shall include actual members of associations without capital stock and holders of common stock in organizations organized with capital stock. (3) ASSOCIATION. Any corporation organized under this article. (4) PERSON. Such term shall include individuals, firms, partnerships and associations. (5) PRODUCTION OF AGRICULTURAL PRODUCTS. Such term shall include fishing activities and the harvesting of aquatic and seafood products as well as the production of other agricultural or farm products hereinabove defined in subdivision (1) of this section. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7127; Code 1940, T. 2, §85; Acts 1973, No. 1134, p. 1915, §1.)

Ala. Code § 2-10-51 Nonprofit Associations.

2-10-51. Nonprofit Associations. Associations organized under this article shall be deemed nonprofit, inasmuch as they are not organized to make profits for themselves as such or for their members as such, but only for their members as producers. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7128; Code 1940, T. 2, §86.)

Ala. Code § 2-10-52 Who May Form Association.

2-10-52. Who May Form Association. Five or more persons engaged in the production of agricultural products may form a nonprofit cooperative association, with or without capital stock, under the provisions of this article. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7129; Code 1940, T. 2, §87.)

Ala. Code § 2-10-53 Objects of Association.

2-10-53. Objects of Association. An association may be organized under this article to engage in any activity in connection with the marketing or selling of the agricultural products of its members or with the harvesting, preserving, drying, processing, canning, packing, storing, handling, shipping, ginning or utilization thereof or in connection with the manufacturing, selling or supplying to its members of machinery, equipment or supplies or in the financing of the above enumerated activities or in any one or more of the activities specified in this section. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7130; Code 1940, T. 2, §88.)

Ala. Code § 2-10-54 Powers of Association.

2-10-54. Powers of Association. Each association incorporated under this article shall have the following powers: (1) To engage in any activity in connection with the marketing, selling, harvesting, preserving, drying, processing, canning, packing, storing, handling, ginning or utilization of any agricultural products produced or delivered to it by its members; (2) To engage in any activity in connection with the manufacturing or marketing of the by-products thereof; (3) To engage in any activity in connection with the purchase, hiring or use by its members of supplies, machinery or equipment; (4) To engage in the financing of any one or more of the activities specified in this section; (5) To borrow money and to make advances to members; (6) To act as the agent or representative of any member or members in any of the above-mentioned activities; (7) To purchase or otherwise acquire and to hold, own and exercise all rights of ownership in and to sell, transfer or pledge shares of the capital stock or bonds of any corporation or association engaged in any related activity or in the handling or marketing of any of the products handled by the association; (8) To establish reserves and to invest the funds thereof in bonds or such other property as may be provided in the bylaws; (9) To buy, hold and exercise all privileges of ownership over such real or personal property as may be necessary or convenient for the conducting and operation of any of the business of the association or incidental thereto; (10) To establish, secure, own and develop patents, trademarks and copyrights; (11) To do each and everything necessary, suitable or proper for the accomplishment of any one or more of the objects enumerated in this section, or conducive to or expedient for the interest or benefit of the association, and to contract accordingly; (12) To exercise and possess all powers, rights and privileges necessary or incidental to the purpose for which the association is organized or to the activities in which it is engaged and, in addition, any other rights, powers, and privileges granted by the laws of this state to ordinary corporations, except such as are inconsistent with express provisions of this article and to do any such thing anywhere; (13) To have a corporate seal; (14) To own, buy and sell all kinds of property; and (15) To sue and be sued. Each association incorporated under this article may render the services mentioned in this section to nonmembers thereof as well as to members; provided, that no such incorporated association shall deal in the agricultural products of nonmembers to an amount greater in value than such as are handled by it for members and that no such incorporated association shall purchase supplies and equipment for or render farm business service to nonmembers in an amount greater in value than such as are purchased for or rendered to members. All business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the value of member or nonmember business transacted by such association. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7131; Acts 1935, No. 222, p. 612; Code 1940, T. 2, §89.)

Ala. Code § 2-10-55 Who May Become Members or Stockholders.

2-10-55. Who May Become Members or Stockholders. Under the terms and conditions prescribed in its bylaws, an association may admit as members (or issue common stock to) only persons or associations or corporations composed solely of persons engaged in the production of the agricultural products to be handled by or through the association, including the lessees and tenants of land used for the production of such products and any lessors and landlords who receive as rent all or part of the crop raised on the leased premises. Any such persons or associations of persons or corporations may be citizens of or organized under the laws of this state or any other state of the United States and shall handle such agricultural products for members only. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7132; Acts 1927, No. 21, p. 28; Code 1940, T. 2, §90.)

Ala. Code § 2-10-56 Contents of Articles of Incorporation; Signing, Acknowledgment and Filing.

2-10-56. Contents of Articles of Incorporation; Signing, Acknowledgment and Filing. Each association formed under this article shall prepare and file articles of incorporation, setting forth: the name of the association; the purposes for which it was formed; the place where its principal business will be transacted; the term for which it is to exist; the number of directors thereof, which must not be less than five and may be any number in excess thereof; the term of office of such directors; the names and addresses of the persons who are to serve as incorporating directors until their successors are elected and qualified; if organized without capital stock, whether the property rights and interest of each member shall be equal or unequal, and, if unequal, the articles 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, and 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; and, if organized with capital stock, the amount of such stock and number of shares into which it is divided and the par value thereof. The capital stock may be divided into preferred and common stock. If so divided, the articles of incorporation 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 articles must be subscribed by the incorporators and acknowledged by one of them before an officer authorized by the law of this state to take and certify acknowledgments of deeds and conveyances and shall be filed in accordance with the provisions of the general corporation law of this state. When so filed, the said articles of incorporation or certified copies thereof shall be received in all the courts of this state and in other places as prima facie evidence of the facts contained therein and of the due incorporation of such association. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7133; Acts 1935, No. 222, p. 612; Code 1940, T. 2, §91.)

Ala. Code § 2-10-57 Amendments to Articles of Incorporation.

2-10-57. Amendments to Articles of Incorporation. The articles of incorporation or charter of any cooperative or mutual association of farmers organized under the provisions of this article may be altered or amended at any regular meeting of the members or at any special meeting called for that purpose; provided that a quorum shall be present as defined in the bylaws or other governing rules. The amendment must first be approved by two thirds of the directors or other governing body and then adopted by vote of two thirds of the members present and voting at the meeting. Amendments to the articles of incorporation, when so adopted, shall be filed in accordance with the provisions of the general corporation laws of the state. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7134; Acts 1935, No. 222, p. 612; Code 1940, T. 2, §92.)

Ala. Code § 2-10-58 Provisions of Bylaws.

2-10-58. Provisions of Bylaws. Each association incorporated under this article shall, within 30 days after its incorporation, adopt for its government and management bylaws not inconsistent with the powers granted by this article. A majority vote of the members or stockholders or their written assent is necessary to adopt such bylaws. Each association, under its bylaws, may also provide for any or all of the following matters: (1) The time, place and manner of calling and conducting its meetings; (2) The number of stockholders or members constituting a quorum; (3) The right of members or stockholders to vote by proxy or by mail or by both and the conditions, manner, form and effects of such votes; (4) The number of directors constituting a quorum; (5) The qualification, compensation, duties and term of office of directors and officers, the time of their election and the mode and manner of giving notice thereof; (6) Penalties for violations of the bylaws; (7) The amount of entrance, organization and membership fees, if any, the manner and method of collection of the same and the purposes for which they may be used; (8) 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 him and the time of payment and manner of collection and the marketing contract between the association and its members or stockholders which every member or stockholder may be required to sign; (9) The number and qualification of members or stockholders of the association and the conditions precedent to membership or ownership of common stock and the method, time and manner of permitting members to withdraw or the holders of common stock to transfer their stock; (10) The manner of assignment and transfer of the interest of members and of the shares of common stock; (11) The conditions upon which and the time when membership of any member shall cease; (12) The automatic suspension of the rights of a member when he ceases to be eligible to membership in the association and the mode, manner and effect of the expulsion of a member; and (13) The manner of determining the value of a member’s interest and provision for its purchase by the association upon the death or withdrawal of a member or stockholder or upon the expulsion of a member or forfeiture of his membership or, at the option of the association, by conclusive appraisal by the board of directors. In case of the withdrawal or expulsion of a member, the board of directors shall equitably and conclusively appraise his property interests in the association and shall fix the amount thereof in money which shall be paid to him within one year after such expulsion or withdrawal. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7135; Code 1940, T. 2, §93.)

Ala. Code § 2-10-59 Regular and Special Meetings of Members.

2-10-59. Regular and Special Meetings of Members. 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 percent of the members or 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. Notice of all meetings, together with a statement of the purpose thereof, shall be mailed to each member at least 10 days prior to the meeting, but the bylaws may require instead that such notice may be given by publication in a newspaper of general circulation, published at the principal place of business of the association. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7136; Code 1940, T. 2, §94.)

Ala. Code § 2-10-60 Selection of Directors; Contracts with Association; Vacancies.

2-10-60. Selection of Directors; Contracts with Association; Vacancies. The affairs of an association shall be managed by a board of not less than five directors, elected by the members or stockholders from their own number. 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. In such case, the bylaws shall specify the number of directors to be elected by each district and the manner and method of reapportioning the directors and redistricting the territory covered by the association. The bylaws may provide that primary elections shall be held in each district to elect the directors apportioned to such districts and the results of all such primary elections must be ratified by the next regular meeting of the association. The bylaws may provide that one or more directors may be appointed by the Commissioner of Agriculture and Industries, the President of Auburn University or any other public official or commission. The director or directors so appointed need not be members or stockholders of the association, but shall have the same powers and rights as other directors. An association may provide a fair remuneration for the time actually spent by its officers and directors in its service. No director, during the term of his 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. 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. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7137; Code 1940, T. 2, §95.)

Ala. Code § 2-10-61 Officers.

2-10-61. Officers. The directors of each association shall elect from their number a president and one or more vice-presidents. They shall also elect a secretary and a treasurer, who need not be directors, and they may combine the two latter offices and designate the combined office as secretary-treasurer. The treasurer may be a bank or any depository, and 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. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7138; Code 1940, T. 2, §96.)

Ala. Code § 2-10-62 Certificate of Membership; Stock of Association; Member’s Liability for Association’s Debts.

2-10-62. Certificate of Membership; Stock of Association; Member’s Liability for Association’s Debts. When a member of an association established without capital stock has paid his membership fee in full, he shall receive a certificate of membership. No association shall issue stock to a member until it has been fully paid for. The 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 him and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee or his subscription to the capital stock, including any unpaid balance or any promissory notes given in payment thereof. No stockholder of a cooperative association shall own more than 20 percent of the common stock of the association, and an association in its bylaws may limit the amount of common stock which one member may own to any amount less than 20 percent of the common stock. No member or stockholder shall be entitled to more than one vote. Any association organized with stock under this article may issue preferred stock, with or without the right to vote. Such stock may be redeemable or retirable by the association on such terms and conditions as may be provided for by the articles of incorporation and printed on the face of the certificate. The bylaws shall prohibit the transfer of the common stock of the association to persons not engaged in the production of the agricultural products handled by the association, and such restrictions must be printed upon every certificate of stock subject thereto. The association may at any time except, when the debts of the association exceed 50 percent of the assets thereof, buy in or purchase its common stock at book value thereof as conclusively determined by the board of directors and pay for it in cash within one year thereafter. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7139; Code 1940, T. 2, §97.)

Ala. Code § 2-10-63 Removal of Officer or Director.

2-10-63. Removal of Officer or Director. Any member 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 percent 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 members, the association may remove the officer or director and fill the vacancy. 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 him 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 percent of the members residing in the district from which he 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 a majority of the members of that district, the director in question shall be removed from office. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7140; Code 1940, T. 2, §98.)

Ala. Code § 2-10-64 Referring Questions to Entire Membership.

2-10-64. Referring Questions to Entire Membership. 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, but a special meeting may be called for the purpose. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7141; Code 1940, T. 2, §99.)

Ala. Code § 2-10-65 Marketing Contracts.

2-10-65. Marketing Contracts. The association and its 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 the products of its members, with or without taking title thereto, and pay over to its members the resale price, after deducting all necessary selling, overhead and other costs and expenses, including interest on preferred stock, not exceeding eight percent per annum, and reserves for retiring the stock, if any, and other proper reserves and interest not exceeding eight percent per annum upon common stock or other items deemed proper. The bylaws and the marketing contract may fix, as liquidated damages, specified sums to be paid by the member or stockholder to the association upon the breach by him 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 provisions shall be valid and enforceable in the courts of this state. In the event of any 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 judgment of specific performance thereof. Pending the adjudication of such an action, upon filing a verified complaint showing the breach or threatened breach, upon filing a sufficient bond and upon notification of the member and a hearing, the association shall be entitled to a temporary restraining order and preliminary injunction against the member. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §§7142, 7143; Code 1940, T. 2, §§100, 101.)

Ala. Code § 2-10-66 Exchange of Stock.

2-10-66. Exchange of Stock. Whenever an association organized under this article with preferred capital stock shall purchase the stock or any property or any interest in any property of any person, firm, corporation or association, it may discharge the obligations so incurred, wholly or in part, by exchanging for the acquired interest shares of its preferred capital stock to an amount which at par value would equal a fair market value of the stock or interest so purchased, as determined by the board of directors. In that case the transfer to the association of the stock or interest purchased shall be equivalent to payment in cash for the shares of stock issued. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7144; Code 1940, T. 2, §102.)

Ala. Code § 2-10-67 Annual Report of Association.

2-10-67. Annual Report of Association. Each association formed under this article shall prepare and make out an annual report on forms furnished by the Secretary of State, containing the name of the association, its principal place of business and a general statement of its business operations during the fiscal year, showing the amount of capital stock paid up and the number of stockholders of a stock association or the number of members and amount of membership fees received, if a nonstock association, the expenses of operations, the amount of its indebtedness or liability and its balance sheets. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7145; Code 1940, T. 2, §103.)

Ala. Code § 2-10-68 Conflicting Laws Not Applicable.

2-10-68. Conflicting Laws Not Applicable. Any provisions of law which are in conflict with this article shall not be construed as applying to the associations provided for in this article. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7146; Code 1940, T. 2, §104.)

Ala. Code § 2-10-69 Association May Form, Own or Control Another Corporation.

2-10-69. Association May Form, Own or Control Another Corporation. The association may organize, form, operate, own, control, have an interest in, own stock of or be a member of any other corporation or corporations, with or without capital stock, engaged in preserving, drying, processing, canning, packing, storing, handling, shipping, ginning, utilizing, manufacturing, marketing or selling the agricultural products handled by the association or the by-products thereof. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7148; Code 1940, T. 2, §106.)

Ala. Code § 2-10-70 Agreements Between Associations.

2-10-70. Agreements Between Associations. 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, 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 business. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7150; Code 1940, T. 2, §108.)

Ala. Code § 2-10-71 Association Not a Monopoly.

2-10-71. Association Not a Monopoly. No association organized under this article shall be deemed to be a combination in restraint of trade or an illegal monopoly or an attempt to lessen competition or fix prices arbitrarily, nor shall the marketing contracts or agreements between the association and its members or any agreements authorized in this article be considered illegal or in restraint of trade. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7152; Code 1940, T. 2, §110.)

Ala. Code § 2-10-72 Applicability of General Corporation Laws.

2-10-72. Applicability of General Corporation Laws. The provisions of the general corporation laws of this state and all powers and rights thereunder shall apply to the associations organized under this article, except where such provisions are in conflict with or inconsistent with the express provisions of this article. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7153; Code 1940, T. 2, §111.)

Ala. Code § 2-10-73 Fees to Probate Judges and Secretary of State.

2-10-73. Fees to Probate Judges and Secretary of State. For examining and filing corporation papers under provisions of this article, the probate judge in whose office the same is filed shall receive a fee of $2.00 and be paid $.15 per 100 words for recording the same. The Secretary of State for the use of the state shall be paid $5.00 for filing a certificate of incorporation forwarded by the probate judge as provided by law. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7154; Code 1940, T. 2, §112.)

Ala. Code § 2-10-74 Fees for Filing Articles of Incorporation.

2-10-74. Fees for Filing Articles of Incorporation. For filing articles of incorporation, an association organized under this article shall pay $10.00, and for filing an amendment to the articles, $2.50. (Acts 1921, Ex. Sess., No. 31, p. 38; Code 1923, §7155; Code 1940, T. 2, §113.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026