SECTIONS 12440-12446 - California Statutes

CORPORATIONS CODE

SECTION 12440-12446

12440. (a) A member of a corporation is not, as such, personally
liable for the debts, liabilities, or obligations of the corporation.
(b) No person is liable for any obligation arising from membership
unless the person was admitted to membership upon the person's
application or with the person's consent.
(c) The ownership of an interest in real property, when a
condition of its ownership is membership in a corporation, shall be
considered consent to such membership for the purpose of this
section.

12441. A corporation may levy dues, assessments, or fees upon its
members pursuant to its articles or bylaws, but a member upon
learning of them may avoid liability for them by promptly resigning
from membership, except where the member is liable for them by
contract, as a condition to ownership of an interest in real
property, as an obligation arising out of the ownership of an
interest in real property, or otherwise. Unless called to the
attention of the member and agreed to in writing by the member,
article or bylaw provisions authorizing such dues, assessments or
fees do not, of themselves, create such liability. No action shall be
brought by or on behalf of any creditor to levy or to require the
levy of dues, assessments or fees upon the members of the
corporation.

12442. A person holding a membership as pledgee or a membership as
executor, administrator, guardian, trustee, receiver or in any
representative or fiduciary capacity is not personally liable for any
unpaid balance of the purchase price of the membership, or for any
amount owing to the corporation by the member, because the membership
is so held, but the estate and funds in the hands of such fiduciary
or representative are liable and the membership subject to sale
therefor.

12443. (a) No action shall be brought by or on behalf of any
creditor to reach and apply the liability, if any, of a member to the
corporation to pay the amount due on such member's membership or
otherwise due to the corporation unless final judgment has been
rendered in favor of the creditor against the corporation and
execution has been returned unsatisfied in whole or in part or unless
such proceedings would be useless.
(b) All creditors of the corporation, with or without reducing
their claims to judgment, may intervene in any such creditor's action
to reach and apply unpaid amounts due the corporation and any or all
members who owe amounts to the corporation may be joined in such
action. Several judgments may be rendered for and against the parties
to the action or in favor of a receiver for the benefit of the
respective parties thereto.
(c) All amounts paid by any member in any such action shall be
credited on the unpaid balance due the corporation by such member.

12444. Nothing in this part shall be construed as in derogation of
any rights or remedies which any creditor or member may have against
any promoter, member, director, officer or the corporation because of
participation in any fraud or illegality practiced upon such
creditor or member by any such person or by the corporation or in
derogation of any rights which the corporation may have by
rescission, cancellation or otherwise because of any fraud or
illegality practiced on it by any such person.

12445. The articles or bylaws shall prescribe:
(a) The manner of determining each member's share of the capital
of the corporation contributed by the members and, if repayable, the
time and manner for its repayment; and
(b) The manner of determining the value, if any, of the member's
interest in the corporation apart from contributed capital and the
time and manner of the corporation's purchase, if required, of such
interest from a terminated member.

12446. (a) Subject to the provisions of subdivision (b), the
provisions of Chapter 7 (commencing with Section 1500) of Title 10 of
Part 3 of the Code of Civil Procedure shall not apply to any
proprietary interest in a consumer cooperative corporation. Any
proprietary interest that would otherwise escheat to the state
pursuant to Chapter 7 (commencing with Section 1500) of Title 10 of
Part 3 of the Code of Civil Procedure shall instead become the
property of the corporation.
(b) Notwithstanding the provisions of subdivision (a), no
proprietary interest shall become the property of the corporation
under this section unless the following requirements are satisfied:
(1) The articles or bylaws shall specifically provide for the
transfer of ownership of the otherwise escheated proprietary
interests to the corporation.
(2) At least 60 days prior notice of the proposed transfer of the
proprietary interest to the corporation is given to the affected
member by first-class or second-class mail to the last address of the
member shown on the corporation's records, and by publication in a
newspaper of general circulation in the county in which the
corporation has its principal office. Notice given in the foregoing
manner shall be deemed actual notice.
(3) No proprietary interest shall become the property of the
corporation under this section if written notice objecting thereto is
received by the corporation from the affected member prior to the
date of the proposed transfer.
(c) For purposes of this section, a "proprietary interest" shall
mean and include any membership, membership certificate, membership
share, or share certificate of any class representing a proprietary
interest in, and issued by, the corporation together with all accrued
and unpaid dividends and patronage distributions relating thereto.