N.Y. Cooperative Corporations Law § 5: Applicability of business corporation law to cooperative corporations

§ 5. Applicability of business corporation law to cooperative

corporations. 1. The business corporation law applies to every

corporation heretofore or hereafter formed under this chapter, or under

any other statute or special act of this state, or under laws other than

the statutes of this state, which has as its purpose or among its

purposes the cooperative rendering of mutual help and service to its

members and which, if formed under laws other than the statutes of this

state, would, if it were to be formed currently under the laws of this

state, be formed under this chapter except a membership cooperative as

defined in section three of this chapter, to which the not-for-profit

corporation law shall apply. Any corporation to which the business

corporation law is made applicable by this section shall be treated as a

"corporation," "domestic corporation," or "foreign corporation," as such

terms are used in the business corporation law; provided, however, that

neither the purposes for which any such corporation may be formed under

this chapter nor its classification as a non-profit corporation shall

thereby be extended or affected. Any corporation to which the

not-for-profit corporation law is made applicable by this section shall

be a type D not-for-profit corporation.

(a) If any provision of the business corporation law conflicts with

any provision of this chapter, the provision of this chapter shall

prevail, and the conflicting provision of the business corporation law

shall not apply in such case. If any provision of this chapter relates

to a matter embraced in the business corporation law but is not in

conflict therewith, both provisions shall apply.

(b) The following provisions of the business corporation law shall not

apply to cooperative corporations: section two hundred one (a), section

four hundred three, the final clause of section five hundred one (a)

which reads "and no limitation or definition of dividend or liquidation

rights shall be effective unless at the time one or more classes of

outstanding shares, singly or in the aggregate, are entitled to

unlimited dividend and liquidation rights", section five hundred five,

section five hundred eighteen (c), section six hundred eight (a) and

(b), section six hundred nine, section six hundred fourteen (a), section

six hundred eighteen, section six hundred twenty-one, section six

hundred twenty-two, section six hundred thirty (a) (except as provided

in section forty-seven of this chapter), section seven hundred three

(a), section seven hundred four, and section eight hundred three (a).

(c) In applying the business corporation law to non-stock cooperative

corporations, unless the context requires otherwise, the terms

"shareholder" and "holder of shares" shall mean "member," and the terms

"shareholders" and "holders of shares" shall mean "members".

(d) In applying the business corporation law to corporations subject

to this chapter, unless the context requires otherwise, references to

the holders of a stated percentage or fraction of "all outstanding

shares," "all outstanding shares entitled to vote thereon," "the shares

entitled to vote," and "the outstanding shares, whether or not entitled

to vote," shall mean the stated percentage or fraction of the members or

delegates present and voting; provided, however, that this paragraph

shall not apply to shares of stock not evidencing membership.

2. For the purpose of this section and elsewhere in this chapter, the

effective date of the business corporation law shall be September first,

nineteen hundred sixty-seven.

3. Sections five hundred eight and five hundred fifteen of the

not-for-profit corporation law notwithstanding, a membership cooperative

shall be permitted to distribute any portion or all of its net retained

proceeds to its members pro rata on the basis of their patronage.