13.1-322 - Membership or voting stock certificates; transfers; dividends; nonvoting stock. - Virginia Statutes

§ 13.1-322. Membership or voting stock certificates; transfers; dividends;nonvoting stock.

A. No certificate for membership or stock shall be issued until fully paidfor, but promissory notes may be accepted by the association as full orpartial payment. The association shall hold the stock as security for thepayment of the note, but such retention as security shall not affect themember's right to vote and hold office.

Fractional shares may be issued by capital stock associations. Certificatesrepresenting shares and certificates of membership or other evidence of thepatron's equity in any fund, capital investment or other assets of theassociation shall be signed by the president or a vice-president or treasureror assistant treasurer and the secretary or an assistant secretary of theassociation, or by facsimiles of their signatures, and may be sealed with theseal of the association, or a facsimile thereof.

B. Certificates of membership of a nonstock association shall not betransferred without the consent of the association's board of directors.

C. Voting stock in capital stock associations shall not be transferable topersons not eligible to membership in the association and such restrictionsmust be set forth in the bylaws of each capital stock association and printedon every stock certificate subject thereto.

D. The board of directors of an association, from time to time, may declareand the association may pay dividends on the stock or membership capitalexcept when the declaration or payment thereof would be contrary to anyrestrictions contained in the articles of incorporation.

E. Net savings (which are hereby defined as being the excess of receipts overcosts and expenses for each year of operations) in excess of dividends onoutstanding stock or membership capital and additions to reserves shall bedistributed on the basis of patronage, and the books of the association shallprovide the basis for determining the interest of members and other patronsin the reserves. The distribution of patronage refunds may be restricted tomembers or be made at the same or a different rate for members andnonmembers. The bylaws may provide that any distribution to a nonmember,eligible for membership may be credited to such nonmember, until the amountthereof equals the value of a membership certificate or a share of theassociation's voting stock.

F. After a member has notified the association of his withdrawal, or afterthe adoption of a resolution by the board terminating his membership, theboard shall appraise the value in money of his membership interest in theassociation and shall determine and fix the time when the association shallpay him the value of his interest, unless the member, with the consent of theboard, transfers his certificate of membership.

G. An association may issue nonvoting stock to members and nonmembers.Nonvoting stock may be redeemed or retired by the association on such termsand conditions as may be provided in the articles of incorporation or bylawsand printed on the stock certificates. Payment for nonvoting stock may bemade in cash, services or property as determined by the board.

Voting stock may be issued only for money or notes or in payment of patronagerefunds at par.

H. Except when its debts exceed fifty per centum of its assets, anassociation may purchase for cash its voting stock at book value or parvalue, whichever is less, and may call such stock for redemption on the samebasis pursuant to a plan for rotating ownership of such stock set forth inits articles of incorporation or in its bylaws. The determination of bookvalue by the board of directors shall be incontestable except for fraud.

I. The association may from time to time issue to each patron a certificateor other evidence of the patron's equity in any fund, capital investment orother assets of the association. Such certificate or other evidence of suchequity may be transferred only to the association, or to such other purchaseras may be approved by the board of directors, upon such terms and conditionsas shall be provided in the bylaws and printed thereon.

J. Notwithstanding any other provision of law, when there is held by anyassociation any membership or patronage equity, including but not limited tomembership stock, patronage refunds, patronage refund allocations, or anycredit or distribution attributable to business done with or for patrons, tothe credit of a person who has not had a current address on file with theassociation for a period of not less than three consecutive years, then thebylaws or member agreements of the association may provide that such equityshall be deemed to have been transferred by forfeiture to the association andshall thereafter be the property of the association; however, such membershipor patronage equity shall be deemed forfeited to the association only if (i)the association publishes conspicuous notice of such pending forfeiture inits regular member publication, if any, and a publication of generalcirculation and (ii) such equity is not claimed by such person or, if suchperson is deceased, such person's next of kin within 180 days of suchpublication or such longer period as set out in the bylaws or memberagreements of the association. If there is no such provision in theassociation's bylaws or member agreements, or if there is no publication,then any unclaimed membership or patronage equity shall be treated inaccordance with the Uniform Disposition of Unclaimed Property Act (§ 55-210.1et seq.).

K. Any association organized with capital stock under this article may acceptregistrations of such stock in the names of two or more persons, payable toany one of them, or to any one of them or the survivor; and any person sonamed, whether the others be living or not, may accept dividend payments andwithdraw from the association and receive the amount payable on withdrawal inthe same manner and on the same terms as are allowed by law and the articlesof incorporation and bylaws in case of any other member or stockholder andthe receipt or acceptance of dividends or amounts payable on withdrawal bythe person so paid shall be a valid and sufficient release and discharge ofthe association for any payment so made.

(Code 1950, §§ 13-269, 13-270, 13-273 to 13-277; 1952, c. 166; 1956, c. 428;1975, c. 403; 1981, c. 51; 2001, cc. 797, 838.)