Corporations, Associations, and Partnerships

Consumers' Cooperatives


§ 7-8-2. Definitions.

As used in this chapter, unless the context otherwise requires:

(1) "Association" means any corporation formed under this chapter.

(2) "Capital," in the case of an association formed without capital stock, means the aggregate amount of consideration for which the total number of memberships in the association were issued.

(3) "Cooperative basis," as applied to any incorporated or unincorporated group referred to in these provisions, means that:

(i) Each member has only one vote, except as is altered in the articles of association or bylaws by provision for voting by member organizations. However, voting by member organizations shall not be on the basis of the number of shares held by the organizations.

(ii) The maximum rate of return on share or membership capital is not more than eight percent (8%) per year.

(iii) The net savings, or net income, after making provision for payment of return on capital, and for any separate funds and purposes that are not inconsistent with its cooperative character, are allocated or distributed to member patrons, or to all patrons, in proportion to their patronage.

(4) "Member" means not only a member in a nonshare association but also a member in a share association.

(5) "Membership" means, in the case of a share association, the status whereby a shareholder becomes entitled to all the rights, including, but not limited to, the right of voting and of receiving dividends on shares, and apportionment of net savings in cash, which accrue to him or her under the articles of association and bylaws upon the acquisition of the minimum number of shares of stock required by the articles of association for membership and upon fulfillment of the eligibility requirements of the association.

(6) "Par value," in the case of membership in an association formed without shares, means the consideration, in terms of money, for which the membership was issued.

History of Section.
(P.L. 1947, ch. 1976, § 2; G.L. 1956, § 7-8-2.)