SECTIONS 12400-12405 - California Statutes

CORPORATIONS CODE

SECTION 12400-12405

12400. Subject to the articles or bylaws, memberships may be issued
by a corporation for no consideration or for such consideration as
is determined by the board.

12401. (a) A corporation may issue, but is not required to issue,
membership certificates. In the event that membership certificates
are issued, the certificates shall state the information required to
be contained in the disclosure document described in subdivision (b).
Nothing in this section shall restrict a corporation from issuing
identity cards or similar devices to members which serve to identify
members qualifying to use facilities or services of the corporation.
(b) Except as provided in subdivision (e), prior to issuing a
membership, the corporation shall provide the purchaser of a
membership with a disclosure document. The disclosure document may be
a prospectus, offering circular, brochure, or similar document, a
specimen copy of the membership certificate, or a receipt which the
corporation proposes to issue. The disclosure document shall contain
the following information:
(1) A statement that the corporation is a cooperative corporation.
(2) A statement that a copy of the corporation's articles and
bylaws will be furnished without charge to a member or prospective
member upon written request, and the address of the office of the
corporation and the address to which such a written request is to be
directed.
(3) If there are restrictions imposed by the corporation upon the
transfer of membership, a statement to that effect and the
restrictions imposed on transfer.
(4) If the corporation may levy dues, assessments, or membership
or transfer fees, a statement to that effect and the conditions under
which the corporation may make such a levy.
(5) If the member is required to contribute services to the
corporation, a statement to that effect and the amount and nature of
the services to be contributed to the corporation.
(6) Whether the membership is redeemable and the conditions under
which the membership may be redeemed at the option of the corporation
or the member.
(7) If the voting power or the proprietary interests of the
members is unequal, a statement to that effect and the rule or rules
by which the voting power and proprietary rights are to be
determined.
(8) In lieu of specifying verbatim in the disclosure document the
restrictions on the transfer of a membership, conditions of levy,
amount and nature of services to be contributed, conditions under
which memberships are redeemable, or the rules by which the voting
power and proprietary rights of members are to be determined, the
disclosure document may contain a statement that such information
will be provided free of charge to a member or prospective member who
requests it in writing. If the disclosure document contains such a
statement it shall also set forth the address of the office of the
corporation and the address to which such a request is to be
directed.
(c) If the articles or bylaws are amended so that any statement
required by subdivision (a) on outstanding membership certificates is
no longer accurate, the board may cancel the outstanding
certificates and issue in their place new certificates conforming to
the articles or bylaws amendments.
(d) When new membership certificates are issued in accordance with
subdivision (c), the board may order holders of outstanding
certificates to surrender and exchange them for new certificates
within a reasonable time fixed by the board. The board may further
provide that the holder of the certificate to be surrendered shall
not be entitled to exercise any of the rights of membership until the
certificate is surrendered, but such rights shall be suspended only
after notice of the order is given to the holder of the certificate
and only until the certificate is surrendered. The requirement to
surrender outstanding certificates may be enforced by civil action.
(e) A corporation shall issue a membership certificate, receipt,
or written advice of purchase to anyone purchasing a membership upon
the member's first purchase of a membership of any class. No
disclosure document need be provided to an existing member prior to
the purchase of additional memberships if that member has previously
been provided with a disclosure document which is accurate and
correct as of the date of the purchase of the additional memberships.
(f) If a corporation does not issue new certificates as
contemplated by subdivisions (c) and (d), and if a transferee of a
membership certificate has not previously been provided with a
disclosure statement which is accurate and correct as of the date of
registration of the transfer, then the corporation shall provide a
disclosure document to the transferee upon registration with the
corporation of the transfer of the certificate.

12402. (a) A corporation may issue a new membership certificate in
the place of any certificate theretofore issued by it, alleged to
have been lost, stolen or destroyed, and the corporation may require
the owner of the lost, stolen or destroyed certificate or the owner's
legal representative to give the corporation a bond (or other
adequate security) sufficient to indemnify it against any claim that
may be made against it (including any expense or liability) on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
(b) If a corporation refuses to issue a new membership certificate
or other certificate in place of one theretofore issued by it, or by
any corporation of which it is the lawful successor, alleged to have
been lost, stolen or destroyed, the owner of the lost, stolen or
destroyed certificate or the owner's legal representative may bring
an action in the superior court of the proper county for an order
requiring the corporation to issue a new certificate in place of the
one lost, stolen or destroyed.

12403. (a) Except as provided in subdivision (b), or in its
articles or bylaws, a corporation may admit any person to membership.
(b) A corporation may not admit its subsidiary to membership.

12404. Except as permitted in Section 12314, the voting power of
members having voting rights shall be equal.

12405. There shall be no voting by proxy.