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except by prior loans of such association, shall be given by the borrower to secure the payment of the loan: Provided, that such real estate security shall be accompanied by an abstract of the title of the property in question or a guaranteed title thereof or a certificate under the Torrens system: Provided, however, that the stock of such associations may be received as security, to the amount of the withdrawal value of such stock: And provided, that the board of directors may by a twothirds vote of all its members temporarily invest the funds of the association in the treasury in excess of the demands of the shareholders in other securities, but such investment shall not exceed twenty per centum of the assets of the association. Any mutual building, loan and home stead association, which may have heretofore been incorporated under the laws of the State of Illinois, may avail itself of all the power conferred by this Act. APPROVED June 25th, 1915.

BUILDING AND LOAN ASSOCIATIONS.–MEETINGS TO ORGANIZE.

§ 1. Amends section 2 of Act of 1879. § 2. As amended, increases the number of shares necessary to be subscribed before a meeting may be held to organize.

(House BIll No. 254. Approved JUNE 29, 1915.)

AN ACT to amend section 2 of an Act entitled, “An Act to enable associations of persons to become a body corporate to raise funds to be loaned only among the members of such association,” in force July 1, 1879. SECTION 1. Be it enacted by the People of the State of Illinois, represented in the General Assembly: That section 2 of an Act entitled, “An Act to enable associations of persons to become a body corporate to raise funds to be loaned only among the members of such association,” be and the same is hereby amended so as to read as follows: § 2. That whenever 200 shares or more of the capital stock shall be subscribed in cities, towns or villages of fewer than 5,000 inhabitants; and 500 shares or more in cities, towns or villages of 5,000 inhabitants or more, the commissioners shall convene a meeting of the subscribers for the purpose of electing at least seven subscribers as directors, adopting by-laws and the transaction of such other business as shall come before them. Notice thereof shall be given by depositing in the postoffice, properly addressed to each subscriber, at least ten days before the time fixed, a written or printed notice, stating the object, time and place of such meeting. Directors of such corporations organized under this Act shall be elected, classified and hold their office for such period of time as is provided by general law governing the election and classification of directors, trustees or managers of corporations. APPROVED June 29th, 1915.

CO-OPERATIVE ASSOCIATIONS FOR PECUNIARY PROFIT.

$ 1. License—how obtained. § 14. Voting by mail. § 2. Subscriptions of stock—limitation. § 15. Distribution of profits or earnings. § 3. Sale of stock—notice to corporation. $ 16. Annual report to Secretary of State—what to contain. 4. Meeting to organize. § ng g $ 17. Benefits under this Act by associations $ 5. ootion completed—when license re- previously formed—procedure. wokeo. § 18. Payments for stock. § 6. Powers of corporation.

§ 19. To whom profits distributed. $ 7. Board of directors—officers. $ 20. May purchase stock in other societies. $ 8. Amendments to articles of incorporation— change in capital stock. $ 21. Voting.

$ 9. Number of shares limited to shareholder. § 22. Use of term “co-operative”.

$ 10. Association may invest its reserve or surplus $23. Assignment of stock—liability of sharein stock of another co-operative associa- holder—approval of directors. tion—limitation—notice of meeting. $ 24. May adopt by-laws. § 11. Purchase of business of another association

or person—payment in stock. $ 25. Validity. § 12. Shares held in trust—disposal—issue of $ 26. Name of Act. certificates.

$ 27. Secretary of State to furnish blanks. § 13. May borrow money.

(House BILL No. 314. FILED JULY 8, 1915.)

AN ACT to provide for the incorporation of co-operative associations for pecuniary profit. SECTION 1. Be it enacted by the People of the State of Illinois represented in the General Assembly: That any five or more persons who may be desirous of uniting as mechanics, laborers, agriculturists, or in any other capacity in any co-operative association for the purpose of purchasing of or selling to all shareholders and others, all manner of groceries, provisions and any other articles of merchandise, for cash or otherwise at such reasonable prices over the cost thereof as will enable the members of such association to obtain or dispose of such commodities at the smallest practicable rate of cost and also, if desired, to manufacture any such articles of trade or merchandise such as flour, meal, boots, shoes, clothing, groceries and to vend same as aforesaid, or for the purpose of cultivating and raising vegetables, fruits or other products, or animals for food for said members or to vend same as aforesaid, or who may be desirous of engaging as shareholders in any association for the conducting of a general agricultural or horticultural business, or any combination of the two for the purpose of growing or producing general or special agricultural, horticultural, orchard, garden, nursery or dairy produce, or for the manufacture and sale, or the sale, or the purchasing of, or the dealing in any of the commodities in this section mentioned either at wholesale or retail, either for the use of such shareholders or for sale to other persons, or who may be desirous of becoming interested in other like associations—may become incorporated for that purpose by making a statement to that effect under their hands and seals duly acknowledged before some officer authorized to take acknowledgments, setting forth the name of the proposed association, its capital stock, its location, and duration of the association and the particular branches of business which it intends to prosecute, which statement shall be filed in the office of the Secretary of State.

The Secretary of State shall thereupon issue to such persons a license as commissioners to open books for subscription to the capital stock of such association at such time and place as they may determine. § 2. No person shall be permitted to subscribe for more than five shares of the capital stock of such association, nor shall any person be permitted to own or control more than five shares of the capital stock of such association. The shares of stock shall be not less than five dollars nor more than one hundred dollars a share, and subscriptions thereto shall be made payable to the association at such time or times and in such manner as shall be determined by the directors. No stock shall be issued except at its par value and no stock shall be issued in amount to exceed five hundred dollars to any one shareholder, except as hereinafter provided for in section 12 of this Act. § 3. Corporations organized under this Act may provide in their by-laws that when a shareholder is desirous of disposing of his stock, he shall first give the corporation an opportunity to purchase the same, after reasonable notice; and nothing in this Act shall be construed as prohibiting or preventing the making of an agreement between the subscribers or purchasers of such shares that they and each of the subscribers to the shares of capital stock of such corporation, and subsequent purchasers of shares shall, before disposing of their shares, give to the said corporation an opportunity to purchase the same, after reasonable notice, at the amount paid for said shares to said corporation and reasonable interest thereon. All shares purchased by the corporation under the provisions of this section shall be held only for sale to new shareholders. § 4. As soon as the capital stock shall be subscribed to the extent of fifty per cent of the authorized capital, and as soon as fifty per cent of the stock subscribed shall be paid in, the commissioners shall convene a meeting of the subscribers for the purpose of electing directors, adopting by-laws and transacting such other business as shall properly come before them. Notice thereof shall be given by depositing in the postoffice, properly addressed to each subscriber at the address given on the subscription list or subscription blank, at least ten days before the time fixed, a written or printed notice calling the first meeting of the shareholders. Such notice shall designate the time and place of such meeting. § 5. The commissioners shall make a full report of their proceedings including therein a copy of the notice provided for in the foregoing section, a copy of the subscription list, a copy of the by-laws adopted by the association and the names of the directors elected and their respective terms of office, which report shall be sworn to by at least a majority of the commissioners and shall be filed with the Secretary of State. The Secretary shall thereupon issue a certificate of the complete organization of the association, duly authenticated under his hand and seal of [the] State; and the said certificate shall be recorded in the office of the recorder of deeds in the county in which the principal office of such association is located. Upon the recording of said certificate, the association shall be deemed fully organized and may proceed to business. Unless such association shall be organized and shall proceed to business within three years after the date of such license, the license to form such association shall be deemed revoked and all proceedings thereunder shall be void. § 6. Associations formed under this Act shall be bodies corporate and politic for the period for which they are organized, may sue and be sued, may have a common seal, which they may alter or renew at pleasure, may own, possess and enjoy so much real and personal estate as shall be necessary for the transaction of their business, and may sell and dispose of the same when, in the opinion of the shareholders, it is not required for the use of the association. § 7. Every such association shall be managed by a board of not less than five directors. The directors shall be elected by and from the shareholders of the association at such time and for such term of office as the by-laws may prescribe and shall hold office for the time for which elected, and until their successors are elected, and shall enter upon the discharge of their duties; but a majority of the shareholders shall have the power at any regular or special shareholders’ meeting, legally called, to remove any director or officer for cause and to fill the vacancy, and thereupon the director or officer so removed shall cease to be a director or officer of said association. The officers of every such association shall be a president, one or more vice presidents, a secretary and a treasurer, who shall be elected annually by the directors, and a manager who shall be under the control of the directors at all times, and each of said officers, except the manager, must be a director of the association. The office of the secretary and the treasurer can be combined, and when so combined the person holding the offices shall be the secretary-treasurer. § 8. The association may amend its articles of incorporation by a two-thirds vote of its shareholders at any regular shareholders’ meeting called for that purpose, or at a special meeting on ten days' notice to the shareholders. In either case the power to amend the articles of incorporation shall include the power to increase or diminish the amount of capital stock and the number and par value of shares, the par value, however, not to be reduced below that provided for in this Act; Provided, however, that the amount of the capital stock shall not be diminished below the amount of paid up capital at the time the amendment is adopted, unless there be, at that time, in the treasury sufficient undivided profits over and above all legal debts or other like obligations to off-set the capital so returned to shareholders. Within thirty days after the adoption of an amendment to its articles of incorporation the association shall cause a certified copy of such amendment to be recorded in the office of the Secretary of State and of the recorder of deeds in the county where the principal place of business is located. § 9. No shareholder in any association shall own more than five shares nor of a greater aggregate par value than five hundred dollars, except as hereinafter provided. 10. At any regular meeting or any regularly called special meeting at which at least two-thirds of all its shareholders shall be present, or represented, an association organized under this Act may, by a twothirds vote of the shareholders present, or represented, subscribe for shares and invest its reserve or surplus fund to an amount not exceeding twenty-five per cent of its paid up capital in the capital stock of any other co-operative association; provided, however, that ten days' notice has been given previously to each shareholder, stating in said notice the purpose of the meeting. The board of directors are empowered to subscribe for shares and invest its reserve or surplus fund in an amount not exceeding ten per cent of its paid up capital in the capital stock of any such other co-operative association[;] provided, the amounts thus invested by the stockholders or directors shall not in either case, exceed ten per centum of the amount of the capital stock of such other co-operative association. § 11. Whenever an association created under this Act shall purchase the business of another association, person or persons, it may pay for the same in whole or in part by issuing shares of its capital stock to an amount, which at par value, would equal the fair market value of the business so purchased, and in such case the transfer to the association of such business at such valuation shall be equivalent to payment in cash for the shares of stock so issued. § 12. In case the cash value of such purchased business exceeds five hundred dollars, the directors of the association are authorized to hold the shares in excess of five hundred dollars in trust for the vendor or his assignee and dispose of the same to such persons, and within such times as may be mutually satisfactory to the parties in interest, and to pay the proceeds thereof as currently received to the former owner of said shares. Certificates of stock shall not be issued to any subscriber until fully paid, but the by-laws of the association may allow subscribers to vote as shareholders: Provided, part of the stock subscribed has been paid in cash. § 13. Corporations organized under this Act may borrow money at legal rates of interest and pledge their property, both real and personal, to secure payment thereof, and may have and exercise all power necessary and requisite to carry into effect the objects for which they may be formed. § 14. At any regularly called general or special meeting of the shareholders a written vote received by mail from any absent shareholder and signed by him may be read in such meeting, and shall be equivalent to a vote of each of the shareholders so signing; provided, he has been previously notified in writing of the exact motion or resolution upon which such vote is taken, and a copy of same is forwarded with and attached to the vote so mailed by him. § 15. So much of the profits or earnings of such association, as may seem best to the directors, shall be distributed to those entitled thereto by its by-laws, and in the proportions and at the times therein prescribed, which shall be as often as once in twelve months. § 16. Every association organized under the terms of this Act shall annually, on or before the first day of March of each year, make a report of the condition and business of the association as of December 31 of the preceding year, to the Secretary of State; such report shall contain the name of the company, its principal place of business in this State and generally a statement as to its business, showing total amount of business transacted, amount of capital stock subscribed for and paid in, number of shareholders, total expense of operation, amount of indebtedness or liabilities, and its profits and losses.

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