Blackberry Food
Co-op Bylaws
Bylaws of
Blackberry Food Cooperative
Last Updated 11/26/2025.
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Article I
Organization
Section 1.01 – Name. The name of this cooperative, hereinafter referred to as “the Co-op,” shall be Blackberry Food Cooperative.
Section 1.02 – Purpose and Mission. The purpose of the Co-op is to provide groceries and other consumer goods and services to its members and other patrons. The mission of the Co-op is to provide Cottage Grove with fresh, organic, and natural foods at fair prices, supporting a resilient local economy by partnering with small farmers and businesses.
Section 1.03 – Cooperative Principles. The Co-op shall be operated in accordance with cooperative principles adopted by the International Co-operative Alliance, including the following: (i) voluntary and open membership without arbitrary discrimination; (ii) democratic governance by members with equal voting rights among members and opportunity for participation in setting policies and making decisions; (iii) economic participation by members with members equitably contributing to and democratically controlling the capital of the Co-op, and with earnings being equitably applied to the benefit of members in proportion to their patronage of the Co-op, to the development needs of the Co-op, and to the provision and extension of common services; (iv) autonomy and independence of the Co-op as a self-help organization controlled by its members being strictly maintained; (v) educating and training members, directors, managers and employees so they can contribute effectively to the development of the Co-op, and informing the general public about the nature and benefits of cooperation; (vi) strengthening the cooperative movement by working with other cooperative organizations at all levels; and (vii) working for sustainable development of the Co-op's community.
Section 1.04 – Nondiscrimination. The Co-op shall not discriminate against any person on the basis of race, color, ethnicity, national origin, religion, age, sex, gender identity or expression, sexual orientation, marital status, disability, veteran or military status, political affiliation, genetic information, or any other status protected by applicable federal, state, or local law. Membership, participation, employment, and access to services shall be open on a voluntary and nondiscriminatory basis.
Section 1.05 – Principal Office. The principal office of the Co-op shall be located at 926 East Main Street, Cottage Grove, OR 97424, or at such other place as may be determined by the Board of Directors.
Section 1.06 – Fiscal Year. The fiscal year of the Co-op shall end on March 31 of each year.
Article II
Membership
Section 2.01 – Class of Memberships. The Board of Directors shall establish one (1) class of voting memberships on terms and conditions established by the Board of Directors.
Section 2.02 – Eligibility for Membership. The Co-op’s members are its owners, hereinafter referred to as “Member-Owners.” Any person may become and remain a Member-Owner of the Co-op by:
(a) Complying with uniform conditions as may be prescribed by the Board of Directors;
(b) Purchasing one share of membership stock by making full payment of two hundred dollars ($200); or each Member-Owner who has not paid the full $200 share value shall make minimum payments, as determined by the Board of Directors, until the share value is paid in full, in which case they will be a Member-Owner at the first minimum payment. The share value must be paid in full within two years of application approval; and
(c) Accepting the responsibilities of membership and complying with share requirements.
Section 2.03 – Membership Application. An applicant eligible for and desiring admission to membership in the Co-op shall file a written application for admission, in whatever form and containing whatever information the Board of Directors shall prescribe. That individual (who shall be the Member-Owner of record) is responsible for promptly informing the Co-op of any changes in that information. Only purchases made by the Member-Owner of record and the other individuals living at the same location and sharing expenses for food shall be credited to that Member-Owner’s account.
Section 2.04 – Acceptance of Member-Owners. Applications for membership shall be reviewed by the Board of Directors or by a Membership Committee duly authorized by resolution to admit Member-Owners. The application will be accepted unless rejected in writing within thirty (30) days for reasons satisfactory to the Board. If accepted, the applicant shall be admitted to membership and shall be allowed to vote and hold office. If rejected, the applicant shall be entitled to a refund of any amounts paid for membership fees.
Section 2.05 – Inactive Status. Each Member-Owner shall keep current in payment of the share purchase requirement. Persons in financial need may seek and receive an extended payment plan, as determined by the Board of Directors. A Member-Owner who becomes delinquent in meeting the share purchase obligation to an extent determined by the Board shall, no sooner than thirty days after delivery of written notification of such delinquency, be placed into inactive status. A Member-Owner in inactive status may attain good standing upon full payment of all delinquent amounts and a processing fee, if any, as determined by the Board, or upon entering into a new payment plan as determined and approved by the Board. References in these bylaws to the rights and entitlements of Member-Owners shall be understood to refer only to Member-Owners in good standing.
Section 2.06 – Settlement of Disputes. In any dispute between the Co-op and any of its Member-Owners or former Member-Owners which cannot be resolved through informal negotiation, it shall be the policy of the Co-op to prefer the use of mediation whereby an impartial mediator may facilitate negotiations between the parties and assist them in developing a mutually acceptable settlement. No party with a grievance against the other shall have recourse to litigation until the matter is submitted to mediation and attempted to be resolved in good faith.
Section 2.07 – Limited Transferability. Membership rights and interests may not be transferred except that the Co-op will upon request following termination of membership transfer the carrying value of such person’s share credits, net of any authorized offsets, to the credit of another person designated by the requesting Member-Owner, provided that the transfer is gratuitous and that the person so designated is or becomes a Member-Owner of the Co-op. Any attempted transfer contrary to this section shall be wholly void and shall confer no rights to the intended transferee.
Section 2.08 – Membership Stock Value. The value of membership stock is $200. This value may be changed by a Member-Owner vote at the annual meeting of Member-Owners.
Section 2.09 – Bylaws and Articles to Prospective Member-Owners. Each prospective Member-Owner, upon application for membership, shall receive a copy of the Articles of Incorporation and Bylaws.
Section 2.10 – Termination of Membership. Membership in the Co-op may be terminated voluntarily or involuntarily as follows:
(a) A Member-Owner may voluntarily terminate her, his, or their membership by so informing the General Manager in writing.
(b) Membership in the Co-op may be terminated by the Board of Directors at their discretion if the Board of Directors determines that a Member-Owner has:
(1) become ineligible for membership for any reason (including failure to pay for a share of membership stock in accordance with Section 2.02(b));
(2) died; or
(3) the Board of Directors by resolution finds that a Member-Owner has:
(i) intentionally or repeatedly violated any provision of the Articles, the Bylaws, or Board polices of the Co-op;
(ii) taken actions that will impede the Co-op from accomplishing its purposes;
(iii) taken or threatened actions that adversely affect the interests of the Co-op or its Member-Owners;
(iv) willfully obstructed any lawful purpose or activity of the Co-op; or
(v) breached any contract with the Co-op.
The Board of Directors may terminate the membership of a Member-Owner only at a meeting of the Board of Directors, having given 20 days prior written notice of which was served upon the last known mailing address of the Member-Owner alleged to be ineligible by United States Certified Mail. The notice must state with reasonable particularity the grounds upon which the Member-Owner is alleged to be ineligible and that the Member-Owner will be entitled to be heard on the matter of termination at the meeting.
Upon termination of membership, all rights in the Co-op shall cease except to redemption of capital pursuant to Articles VII and VIII of these bylaws.
Article III
Meetings of Members
Section 3.01 – Annual Meetings. The annual meeting of the Member-Owners of the Co-op shall be held following the close of each fiscal year of the Co-op at such time and place as shall be determined by the Board of Directors. The notice of the meeting shall state the date, place and hour of the meeting. The Secretary shall give notice of annual Member-Owners’ meetings in the manner prescribed herein. The officers of the Co-op must submit reports to the Member-Owners at the annual meeting covering the business of the Co-op for the previous fiscal year that show the condition of the Co-op at the close of the fiscal year. At the annual meeting, the Member-Owners shall elect directors of the Co-op for the terms of office and in the manner prescribed by the Bylaws and transact such other business as may properly come before the meeting.
Section 3.02 – Special Member-Owner Meetings. Special meetings of the Member-Owners of the Co-op shall be held at the place specified in the notice of the meeting. The notice shall state the time, place and purpose of the special Member-Owners' meeting. A special meeting of the Member-Owners may be called by a majority vote of the Board of Directors, or upon the written petition of at least 20% of the Member-Owners submitted to the President of the Co-op. The President shall give notice of a special Member-Owners' meeting in the manner prescribed herein. In the event a special Member-Owners' meeting is called by the written petition of Member-Owners, the notice of the special Member-Owners' meeting shall be given within thirty (30) days from and after the date of the presentation of the Member-Owners' petition, and the special Member-Owners' meeting must be held within sixty (60) days after the date of the presentation of the Member-Owners' petition. No business shall be considered at a special Member-Owners' meeting except as covered in the notice of the meeting.
Section 3.03 – Notice. Written or printed notice of all annual and special Member-Owners' meetings shall be given to each Member-Owner either personally, by mail, or by email (provided Member-Owner consents to receiving notice via email) not less than seven (7) or more than thirty (30) days before the meeting by direction of the person calling the meeting. If mailed, the notice shall be deemed to be given when deposited in the United States mail addressed to the Member-Owner at his address as it appears on the records of the Co-op with postage thereon prepaid. If notice is delivered to a Member-Owner via email (provided Member-Owner has consented to receive notices via email) it shall be deemed given when the email was sent.
Failure of a Member-Owner to receive notice of an annual or special Member-Owners' meeting shall not invalidate an action that is taken by the Member-Owners at a Member-Owners' meeting. The Secretary shall execute a certificate containing a correct copy of the mailed, emailed or published notice; the date of mailing, emailing or publishing the notice; and a statement that the notices were mailed or published as prescribed by Oregon Revised Statutes, Chapter 62, Section 62.255.
Section 3.04 – Quorum. Ten percent (10%) of Member-Owners in good standing, or 30 Member-Owners, whichever is less, shall constitute a quorum.
Section 3.05 – Voting. Each Member-Owner shall be entitled to only one vote. A Member-Owner's vote at a Member-Owners' meeting must be in person or may be by absentee ballot if absentee voting is authorized by the Board of Directors. Voting by proxy and cumulative voting is not permitted. Except where a higher percentage is specified in the Bylaws or required by applicable law, Member-Owners shall take action on all matters submitted to them by the affirmative vote of a two-thirds majority of the votes cast at a duly held meeting, either in person or by absentee vote if an absentee ballot has been authorized by the Board of Directors.
Section 3.06 – Mailed Ballots. Unless otherwise prohibited by these Bylaws, any action which may be taken at any annual or special meeting of the Member-Owners may be taken without a meeting if the Co-op delivers a written ballot to every Member-Owner entitled to vote on the matter provided the following provisions are followed:
(a) Ballot. The written ballot shall set forth each proposed action; and provide an opportunity to vote for or against each proposed action.
(b) Approval. Approval by written ballot pursuant to this section shall be valid only when the number of votes cast by ballot equals or exceeds any quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.
(c) Solicitation. All solicitations for votes by written ballot shall:
(i) Indicate the number of responses needed to meet the quorum requirements;
(ii) State the percentages of approvals necessary to approve each matter other than election of directors; and
(iii) Specify a reasonable time by which a ballot must be received by the Co-op in order to be counted.
(d) Revocation. Except as otherwise provided in the Articles or Bylaws, a written ballot may not be revoked.
(e) Delivery of Notice/Ballot via Electronic Transmission. For purposes of this Section 3.06, the written ballot(s), together with the notice of the meeting, may be delivered by electronic means (e-mail), provided the Member-Owner has consented to received communications from the Co-op via email.
Section 3.07 – Record Date. Unless otherwise determined by the Board of Directors, only persons who are Member-Owners at the close of business on the business day 7 days preceding the date of distribution of notices of annual and special Member-Owners' meetings shall be entitled to receive such notice and to vote at such meetings as a Member-Owner. In the event an action is taken via mailed ballots pursuant to Section 3.06 above, only persons who are Member-Owners at the close of business on the business day 7 days preceding the date on which the ballots are mailed shall be entitled to vote, unless otherwise determined by the Board of Directors.
Article IV
Board of Directors
Section 4.01 – Number, Qualifications and Terms of Office. The business and affairs of the Co-op will be governed by the Board of Directors (collectively, the “Board’, and individually, a “Director”). Except for the initial Board of Directors where the number of Directors will be determined by the Articles of Incorporation, the Board of Directors shall consist of not less than five (5), nor more than nine (9) Directors. Each Director must be a Member-Owner of the Co-op. Except as otherwise provided herein, all Directors shall serve three-year terms and until their successors are duly elected and qualified. In order to preserve continuity of governance and the harmonious transition of the initial Board of Directors to the elected Board of Directors, the terms of the Directors of the initial Board of Directors shall be staggered such that one-third of the Directors (or as nearly as possible) shall be elected at the annual Member-Owners' meeting following the date on which the Board of Directors determines that the initial membership in the Co-op has been established and at each annual meeting thereafter. The Board of Directors shall adopt a procedure to achieve the desired staggered effect prescribed by the Bylaws. No person may serve as a Director if they are an immediate family member of a person already serving as a Director.
Section 4.02 – General Powers. The Board of Directors shall govern the business and affairs of the Co-op and shall exercise all of the powers of the Co-op, except those powers that are conferred upon or reserved to the Member-Owners by law, the Articles of Incorporation, or these Bylaws. The Board of Directors shall adopt such policies, rules, and regulations and shall take such actions as it may deem advisable, provided that the Board of Directors does not act in a manner inconsistent with law, the Articles of Incorporation, or these Bylaws.
Section 4.03 – Committees. By resolution, the Board of Directors may designate three or more Directors, one of whom shall be the President of the Co-op, to constitute an Executive Committee. The Executive Committee shall have and exercise only such authority of the Board of Directors in the management of the Co-op as provided in the resolution establishing the Executive Committee. The Board of Directors may establish such other committees from time to time as it deems advisable, having such authority as provided by the Board of Directors. Committees are subject at all times to the direction and control of the Board of Directors.
Section 4.04 – Director Eligibility. No more than two employees may serve as directors at any time. The staff directors shall not participate in decisions relating to personnel matters, compensation, or other issues presenting a conflict of interest.
Section 4.05 – Financial Matters. The Board of Directors shall have the power to select one or more banks or other financial institutions to act as depositories of the funds of the Co-op, and to determine the person or persons who shall have authority to sign checks and other instruments.
Section 4.06 – Election of Directors. Directors shall be elected by ballot at the annual meeting. Nominations for Director may be made by the Board or by petition signed by at least twenty-five (25) Member-Owners entitled to vote and submitted to the Secretary at least thirty (30) days before the annual meeting.
Member-Owners may vote by mail and/or electronic ballot for the election of directors pursuant to Section 3.06, provided a mail ballot is specifically authorized by the Board of Directors.
The Member-Owners will vote using the following procedure. On paper ballots each Member-Owner shall rank order all candidates for Directors, with a Member-Owner's first choice candidate receiving a number one ranking. A ballot which does not include all candidates in the ranking shall still be valid. In the first tabulation, all first-choice rankings shall count as one vote. The candidate who receives the fewest votes as a result of the first tabulation shall be eliminated, and all Member-Owners who indicated that candidate as a first choice shall have their votes redistributed to their second-choice candidates. The votes shall again be tallied and subsequent eliminations made in a similar manner. If any Member-Owner's highest choice candidate is subsequently eliminated, the next highest choice candidate on that Member-Owner's ballot who has not yet been eliminated shall receive the vote of that Member-Owner. Redistribution of votes shall continue until the number of candidates remaining is equal to the number of positions to be filled, and those candidates remaining shall be elected. If a vacancy is also being filled at an annual election, redistribution of votes shall continue in order to determine which candidates are elected to full terms, assigning the shortest term to the first elected candidate to be eliminated.
Section 4.07 – Annual Meeting. Within 30 days after the election of Directors at either the annual Member-Owners' meeting or by mailed ballots, the Board of Directors shall meet for the purpose of electing officers of the Co-op and for the transaction of such other business as shall come before the meeting. The annual meeting of the Board of Directors shall be held at such time and place as may be fixed by the Board of Directors.
Section 4.08 – Regular Meetings. Regular meetings of the Board of Directors shall be held from time to time at such time and place as may be fixed by the Board of Directors.
Section 4.09 – Special Meetings. Special meetings of the Board of Directors may be called by the President, and must be called upon request by any three of the Directors. Special meetings of the Board shall be held from time to time at a time and place as may be designated in the notice of the meeting.
Section 4.10 – Notice of Meetings. Notice of each annual, regular or special meeting of the Board of Directors shall be given by the President or Secretary who shall give at least five (5) days prior notice of the meeting to each Director by mail, telephone, telephonic facsimile transmission, telegram, electronic mail or in person unless, a shorter time period is otherwise agreed to. Notice shall be deemed given upon mailing, if notice is given by mail.
Section 4.11 – Waiver of Notice. Notice of any meeting of the Board of Directors may be waived either before, at, or after the meeting, in writing signed by each Director. A Director, by attendance at any meeting of the Board of Directors, shall be deemed to have waived notice of such meeting, except when a Director attends the meeting and objects to the transaction of business because the meeting was not lawfully convened.
Section 4.12 – Quorum; Board Action. A majority of the members of the Board of Directors shall constitute a quorum for the transaction of business except that, when a vacancy or vacancies exist, a majority of the remaining Directors shall constitute a quorum. The Board of Directors shall take action by the affirmative vote of a majority of the Directors present at a duly held meeting.
Section 4.13 – Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken by written action signed by all of the Directors. The written action is effective when signed by all of the Directors, unless a different effective time is provided in the written action.
Section 4.14 – Electronic Communications. Any meeting of the Board of Directors may be conducted by telephone or other electronic means of communication through which all Directors may simultaneously communicate with one another.
Section 4.15 – Vacancies. If a Director's position is vacant, the Board of Directors may appoint a Member-Owner of the Co-op to fill the Director's position until the next annual or special Member-Owners' meeting. At the next annual or special Member-Owners' meeting, the Member-Owners shall elect a Director to fill the unexpired term of the vacant Director's position.
Section 4.16 – Removal. Any individual Director may be removed from the Board of Directors as follows:
(1) Either a majority of the Board of Directors shall vote to request the removal, or at least thirty-three percent (33%) of the Member-Owners shall sign a petition requesting the Director’s removal;
(2) The Director whose removal is sought shall be given at least ten (10) days’ notice of the date, time and place of the membership meeting at which removal will be considered, together with a written statement of the reasons for removal. The notice shall also inform the Director that the Director shall be given an opportunity to answer the reasons for the removal at the meeting;
(3) The Member-Owners shall be given the notice of meeting required in Section 3.03 above and the notice shall include a statement that one of the purposes of the meeting is to consider removal of a Director;
(4) After the Director is heard, a majority of the Member-Owners present at the Membership meeting at which a quorum is present must vote in favor of removal. The written statement of reasons for removal shall be filed with the minutes of the meeting. This section does not restrict any Directors’ voluntary resignation from the Board of Directors or from office.
Section 4.17 – Compensation. Directors shall serve without compensation. All Directors can be reimbursed for their expenses, if any, of attendance at meetings of the Board of Directors or any committee thereof, including for travel and child care. Nothing in these Bylaws shall be construed to preclude any Director from serving the Co-op in any other capacity and receiving proper compensation for the service.
Article V
Officers
Section 5.01 – Officers. The officers of the Co-op shall be a President, a Vice-President, a Secretary and a Treasurer, who shall be elected in the manner as provided in Section 5.07 of these Bylaws. The Co-op shall also have a General Manager that shall serve at the direction of the Board. The offices of the Secretary and Treasurer may be combined and when so combined shall be termed “Secretary-Treasurer.” Except for the Secretary-Treasurer, no offices may be held concurrently by the same person. The President and Vice-President must be Directors and Member-Owners of the Co-op. The Board of Directors may elect other officers from time to time as it deems advisable or as required by these Bylaws, and in such event shall establish appropriate duties and responsibilities for any such other officers.
Section 5.02 – President. The President shall see that all orders and resolutions of the Board of Directors are carried into effect and shall preside at all meetings of the Member-Owners and Directors. The President shall be the official representative of the Co-op to all outside associations or organizations of which the Co-op is a member, unless another person is appointed by the President or other action is taken by the Board of Directors. The President shall sign and deliver in the name of the Co-op any deeds, mortgages, bonds, contracts and other instruments pertaining to the business of the Co-op, except in cases in which the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the Articles or the Bylaws or the Board to some other officer or agent of the Co-op. This broad signing authority shall not be construed so as to preclude the Board of Directors from authorizing any other officer or agent of the Co-op to sign any deeds, mortgages, bonds, contracts and other instruments pertaining to the business of the Co-op on behalf of the Co-op. The President shall have such other duties as may, from time to time, be assigned by the Board of Directors.
Section 5.03 – Vice-President. The Vice-President shall have powers and perform duties as may be specified in the Bylaws or prescribed by the Board of Directors or by the President. In the event of the absence or disability of the President, the Vice-President shall perform the duties and exercise the powers of the President.
Section 5.04 – Secretary. Subject to the discretion of the Board of Directors, the Secretary shall attend all meetings of the Member-Owners and Board of Directors; record all votes at and keep minutes of all the meetings; and record all proceedings of the meetings in the minute book of the Co-op. The Secretary shall give proper notice of meetings of the Member-Owners and of the Board of Directors. The Secretary shall perform such other duties as may, from time to time, be prescribed by the Board of Directors or by the President.
Section 5.05 – Treasurer. Subject to the discretion of the Board of Directors, the Treasurer shall be the custodian of all funds, securities and properties of the Co-op and shall perform such other duties with respect to the finances of the Co-op as may be prescribed by the Board of Directors or by the President. Some duties may be delegated by the Board of Directors to the General Manager with oversight by the Treasurer or the Board of Directors.
Section 5.06 – Compensation of Officers. The officers of the Co-op shall serve without compensation. Nothing in these Bylaws shall be construed to preclude any officer from serving the Co-op in any other capacity and receiving proper compensation for the service.
Section 5.07 – Election of Officers. On an annual basis, the Board of Directors shall elect from its members a President and one or more Vice-Presidents. Election for persons to fill any other offices established by these Bylaws or by the Board of Directors pursuant to Section 5.01 of these Bylaws shall be held at the annual meeting of the Board of Directors or at any other meeting of the Board of Directors, provided that notice of such election has been given in the notice of such meeting if other than the annual meeting. The officers shall hold their offices until their successors have been elected, subject to any removal provisions of these Bylaws.
Section 5.08 – Removal of Officers. Any officer may be removed by the Board of Directors whenever in its judgment the best interests of the Co-op will be served. Any vacancy among the officers caused by such removal shall be filled by the Board of Directors. No election or appointment to an office of the Co-op shall itself create any contract rights.
Section 5.09 – General Manager. The term “General Manager” shall designate an individual that is appointed by the Board of Directors to perform such undertakings as are necessary to manage the day-to-day operation of the Co-op. The General Manager shall have such other powers and duties as the Board may prescribe from time-to-time. The General Manager shall be considered an employee of the Co-op, whose compensation is set by the Board of Directors.
Article VI
Indemnification and Insurance
Section 6.01 – Indemnification. The Co-op may indemnify each person who is or was a Director, officer, manager, employee or agent of the Co-op, and any person serving at the request of the Co-op as a Director, officer, manager, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred to the extent to which such Directors, officers, managers, employees or agents of the Co-op may be indemnified under the law of Oregon.
Section 6.02 – Insurance. The Co-op shall have the power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, manager, employee, or agent of the Co-op against liability asserted against and incurred by the person in the person's capacity as a Director, officer, manager, employee, or agent, or arising from the person's status as a Director, officer, manager, employee, or agent of the Co-op.
Article VII
Equity
Section 7.01 – Issuance. To evidence capital funds provided by Member-Owners, the Co-op shall issue shares constituting membership stock within the meaning of Oregon law. Shares may be issued only to persons eligible for and admitted to membership in the Co-op, and no more than one share shall be issued to each Member-Owner. Such shares shall be issued only upon full payment of the stated value of the shares, as determined by the Board of Directors. Payment for shares shall not exceed three hundred dollars or such higher amount as may be permitted by ORS 59.025(11) or the corresponding provision of any subsequently enacted Oregon statute.
Section 7.02 – Terms. Shares shall be entitled to no dividend or other monetary return on capital. Shares shall not be transferable other than to or through the Co-op and may not be pledged as security for a debt. Shares shall be subject to assessment insofar as it may become necessary to increase the share purchase requirement of Member-Owners by reason of the current or prospective capital needs of the Co-op.
Section 7.03 – Redemption. Upon request following termination of membership, shares shall be redeemable as soon as practicable, subject to the financial needs of the Co-op, and only when such redemption will not impair the ability of the Co-op to meet its obligations. Shares shall be redeemable at the lesser of their carrying value on the books of the Co-op or their net book value less a reasonable processing fee, if any, as determined by the Board. Reapplications for membership after full or partial redemption shall be subject to full repayment of redemption proceeds.
Section 7.04 – Lien and Offset. The Co-op shall have a first lien on shares for amounts owed by Member-Owners to the Co-op. The Co-op may, at any time after such amounts remain due and payable for thirty days, offset such amounts against the carrying value of the share. Such offset may not be affected by a Member-Owner or by anyone acting in the right of a Member-Owner.
Article VIII
Finance
Section 8.01 – Financial Operation. The Co-op operates on a cooperative basis and allocates earnings and losses to patron Member-Owners on the basis of the business done with or for such patrons. Thus, in accordance with Section 1381 of the Internal Revenue Code of 1954 (the “IRC”), the Co-op shall declare a patronage dividend to be distributed among the Member-Owners in accordance with the total amount of purchases by each such patron during the preceding fiscal year.
Section 8.02 – Patronage Dividend. The patronage dividend, as determined by the Board of Directors, shall be payments in the form of “qualified written notes of allocation” as defined in IRC Section 1388. In accordance with Section 1382, the patronage dividends declared by the Co-op are deductible from the taxable income of the Co-op and must be included in the taxable personal income of the Member-Owner to the extent provided by law.
Each Member-Owner shall have an internal capital account in their name. The amount available for patronage dividends is the pre-tax book basis earnings of the Co-op. Unless otherwise decided by the Board of Directors, the patronage dividend shall be credited to the Member-Owners' Internal Accounts. At least 20% of each year's patronage dividend must be paid out in cash/check to Member-Owners. As determined by the Board, not all of the pre-tax book basis earnings need be allocated to patronage dividends, a portion may be kept as unallocated retained earnings.
The Co-op shall maintain a “Reserve Fund” consisting of retained earnings and other amounts set aside by the Board of Directors for the reasonable and foreseeable needs of the Co-op, including operating stability, capital improvements, and future development. The Reserve Fund shall be the collective property of the Co-op and not allocated to individual members, except as provided in these Bylaws upon dissolution.
Section 8.03 – Equity Capital. The Board of Directors shall manage the Co-op's equity capital in a way to preserve and build upon the Co-op's financial position while also allowing for redemptions of equity as and when the Co-op has the financial strength to redeem equity.
Article IX
Consent
Section 9.01 – Consent to Take Patronage Distributions Into Income. Each person who hereafter applies for and is accepted to membership in the Co-op and each Member-Owner of the Co-op as of the effective date of this bylaw who continues as a Member-Owner after such date shall, by such act alone, consent that the amount of any distributions with respect to its patronage which are made in written notices of allocation (as defined in 26 U.S.C. § 1388), and which are received by the Member-Owner from the Co-op, will be taken into account by the Member-Owner at their stated dollar amounts in the manner provided in 26 U.S.C. § 1385(a) in the taxable year in which the notices of allocation are received by the Member-Owner.
Article X
Merger or Consolidation; Dissolution.
Section 10.01 – Merger or Consolidation. If the terms of a merger or consolidation of which the Co-op is a party do not provide the Member-Owners of the Co-op with an economic interest in the surviving entity that is substantially similar to the economic interest possessed by such Member-Owners in the Co-op immediately before such merger or consolidation, the value of the consideration received shall be divided among them in the same manner as a comparable amount of net liquidation proceeds would be distributed pursuant to Section 8.02. This shall not be construed to prevent issuance of differing forms of consideration to different groups of Member-Owners to the extent allowed by law.
Section 10.02 – Liquidation, Dissolution and Winding-Up. Subject to the Articles of Incorporation, in the event of any liquidation, dissolution or winding up of the affairs of the Co-op, whether voluntary or involuntary, all debts and liabilities of the Co-op shall be paid first according to their respective priorities. The remaining assets shall be distributed in the following manner and order of preference: (1) outstanding membership loans; (2) second to payment of the stated dollar amount of all Member-Owners' equities based on their patronage, in chronological order of year beginning with the oldest outstanding Member-Owner equities first and on a pro rata basis within a year if necessary; (3) third to payment of the stated dollar amount of Member-Owners' equity not based on patronage, in chronological order of year beginning with the oldest outstanding Member-Owners' equity first and on a pro rata basis within a year if necessary; and (4) fourth to the Member-Owners in accordance with their interest in the Reserve Fund. Any assets remaining after the foregoing payments have been made shall be allocated among the allocation units in the manner as the Board of Directors, having taken into consideration the origin of the amounts, shall determine to be reasonable and equitable. Amounts so allocated shall be paid to current and former Member-Owners of each such allocation unit in proportion to their patronage of the unit over the period as may be determined to be equitable and practicable by the Board of Directors. The obligation to distribute shall be construed as a preexisting duty to distribute any patronage sourced net gain realized in the winding up process to the maximum extent allowable by law.
Article XI
Amendments
Section 11.01 – Amendments. Any bylaw provision may be adopted, amended or repealed by a two-thirds majority of the Member-Owners present at any regular or special meeting of the Member-Owners.
Explanation of Patronage Dividend Consent Provision
The Federal Internal Revenue Code generally requires each person receiving a patronage dividend to include the amount of such distribution in their gross income in the taxable year in which the related notice is received. Under Bylaw Section 8.01, mere acceptance or retention of membership in the Co-op constitutes a consent to such inclusion in taxable income, including the portion of the patronage dividend that is retained by the Co-op for its capital needs. The Co-op has been advised, however, that the general rule for inclusion in income of patronage dividends is subject to an exception that is applicable to consumer cooperatives. Under that exception, a patronage dividend is not required to be included in such gross income to the extent attributable to a Member-Owner’s purchases for personal, living, or family items. However, to the extent a Member-Owner's patronage dividend is attributable to purchases that constitute supplies, equipment or services used in a trade or business, or otherwise are not attributable to purchases for personal, living, or family items, such amounts must be included in the Member-Owner's gross income.
Disclaimer: The Co-op cannot give definitive advice on the tax consequences of patronage dividends to any Member-Owner. Member-Owners are encouraged to seek their own tax advice.
Would you like to help?
We are absolutely looking for volunteers for outreach, fundraising, and tabling (chatting with interested community members from a booth at events like the Farmer's Market).
We would love to hear from you!
Email us at Blackberryfoodcoop@riseup.net