N.Y. Cooperative Corporations Law § 92: Internal capital accounts; recall or redemption of shares; interest; collective reserve account

§ 92. Internal capital accounts; recall or redemption of shares;

interest; collective reserve account. 1. Any worker cooperative may

establish through its certificate of incorporation or by-laws a system

of internal capital accounts, to reflect the book value and to determine

the redemption price of membership shares, capital stock and written

notices of allocation. As used in this article, "written notice of

allocation" means a written instrument which discloses to a member the

stated dollar amount of such member's patronage allocation and the terms

for payment of that amount by the worker cooperative.

2. The certificate of incorporation or by-laws of a worker cooperative

may permit the periodic redemption of written notices of allocation and

capital stock, and must provide for recall and redemption of the

membership share upon termination of membership in the cooperative. No

redemption shall be made if such redemption would result in the

liability of any director or officer of the worker cooperative under

section seven hundred nineteen and section seven hundred twenty of the

business corporation law.

3. The certificate of incorporation or by-laws may provide for the

worker cooperative to pay or credit interest on the balance in each

member's internal capital account.

4. The certificate of incorporation or by-laws may authorize

assignment of a portion of net retained proceeds and net losses to a

collective reserve account. Net retained proceeds assigned to the

collective reserve account may be used for any and all corporate

purposes as determined by the board of directors.