No person, firm, corporation or association organized or doing business in this state as a cooperative association to market agricultural products shall be entitled to use the word "cooperative" as a part of its corporate or other business name or title unless it has complied with the provisions of this chapter.

Associations incorporated under this article may, in carrying out their purposes, become members of and enjoy the facilities and cooperation of any federation whose members are agricultural societies, organizations or associations whose purposes and operations are in any way promotive of and not inconsistent with the purpose of this article.

Five or more associations or corporations organized under this article, or whose purposes and operations are in any way promotive of, and not inconsistent with, the purposes of this article, whether incorporated under this article or not, may organize and incorporate a federation with such incorporated associations as members thereof, such incorporated federation to be managed by a board of directors to be composed of representatives of such constituent member associations. The articles of association and incorporation for such federation shall contain the names of the constituent member associations, and the signatures thereto shall be those of an executive officer of each of the constituent associations. The other procedure and details of incorporation shall be the same as provided in this article for the incorporation of the constituent incorporated associations, and the organization meeting and adoption of bylaws shall be by representatives chosen by the respective constituent members for that purpose, one for each member. In the organization and management of such federation, each constituent member shall be entitled to one vote only, and if any constituent member has more than one representative, as members of the board of directors of said federation, such representatives as directors shall jointly have one vote only, it being intended that such a federation may be incorporated under this article as aforesaid for the purposes and with all the rights and powers given by this article to associations of producers of agricultural products under this article. After such federation has been organized and incorporated as provided in this section, agricultural societies, organizations, associations or corporations whose purposes and operation are in any way promotive of, and not inconsistent with, the purposes of this article, whether incorporated under this article or not, and which are accepted by the federation, may become members of such federation, and any such federation may limit its membership to associations incorporated under this article. Such federation may be organized with capital stock, at the option of the organizing associations, and in that event the provisions of this article applying to capital stock organization of incorporated associations shall apply also to such federation, and the management shall be vested in a board of directors of such number as the bylaws may provide, elected by the shareholders.

Any federation incorporated under Section 2-10-101 for the purpose of carrying out the purposes of this article and the rendition of services to its constituent members and their members shall have all the rights, powers, privileges and immunities given its constituent members as an incorporated association under this article. The members of the constituent members of such federation shall be treated as members of the federation to the extent that services rendered to them by the federation shall be considered to be rendered to its own members.

An association incorporated under this article may make charges to its members and deductions from the proceeds of their products for services rendered to them, for the purpose of paying the expenses of operation and the maintenance and development of such association and for the creation and maintenance of reserves for the purpose of paying expenses, retiring obligations, acquiring, maintaining and operating property necessary or useful in carrying out the purpose of this article and for caring for contingencies, and such reserves may be used or distributed as may be deemed proper by the board of directors under the bylaws. Such corporation may make patronage dividends or distributions to its members and may do any and all things not unlawful in carrying out the purposes of this article, and shall have and enjoy all the rights, privileges and immunities of other corporations not inconsistent with this article.

An association incorporated under this article may institute and defend civil actions and may collect, institute civil actions for and realize on claims for the purchase money of products sold by it for its members or nonmembers, and on claims for freight overcharges on and for loss and damage to shipments made by it for its members or nonmembers for the use and benefit of such persons.

Any corporation or association organized under this article shall pay to the state the annual permit fee of $10.00 now required by law and shall pay all ad valorem taxes on its real and personal property; except, that all cotton and all other agricultural products which have been raised or produced in the State of Alabama, title to which may be held by such corporation or association in its own right or for the use and benefit of its members, and all goods and articles purchased or acquired by such corporation, whether in or out of the state, for its own use or for the use and benefit of its members for strictly agricultural or farm purposes in this state, shall, so long as held by such corporation or association, be exempt from taxation, nor shall such corporation be liable for any other license or privilege fee or tax for the purpose of engaging in or transacting business or otherwise in this state.

Existing associations may come under this article. Any cooperative association already in existence may by majority vote of the stockholders or its members be brought under the provisions of this article by adopting the restrictions provided in this article and complying with the requirements of this article.

For filing articles of incorporation, an association organized under this article shall pay $5.00 to the probate judge in whose office the same is filed. The Secretary of State for the use of the state shall be paid $5.00 for filing the certificate of incorporation forwarded by the probate judge as provided by law. For filing an amendment to the articles an association shall pay $2.50.

This article shall not amend, repeal or in anywise affect the provisions of article 3 of this chapter, nor any corporation or association formed thereunder.

The word "association," as used in this article, shall refer to agricultural cooperative marketing associations and other organizations, whether incorporated or not, which have for their objects engaging in activities similar to those of a cooperative marketing association. Such associations are hereby declared to be impressed with a public service, and every such association shall be subject to the supervision, inspection and investigation of the commissioner.

No association shall engage in business until it has first secured a permit from the commissioner. Application for such permit shall be made on blanks prescribed by the State Board of Agriculture and Industries and shall be accompanied by a fee of $25.00.

Upon receipt of an application by an association for a permit, the commissioner shall ascertain from the best source of information at his command whether the character and general fitness of the persons to have charge and control are such as to command the confidence of the community or communities in which it will operate and are such as to reasonably assure a fair and successful operation of such association.

If the commissioner is satisfied from his investigation that the character and general fitness of the persons to manage an association are such as to assure a proper, fair and successful operation of such association and that such association will be of public benefit, then a permit to operate shall be granted after all officers handling or controlling property or cash shall have given a bond in such amount and under such conditions as may be prescribed by the State Board of Agriculture and Industries. Thereafter, each association shall pay an annual renewal permit fee of $25.00, payable on or before the start of the fiscal year of said association. Such fee shall accompany completed forms for yearly renewal, provided by the association, prior to the start of its fiscal year. Those associations in possession of valid permits as of July 25, 1983 shall also be required to pay the above annual renewal permit fees on or before the start of their next fiscal year following the passage of this section. Failure to pay annual renewal permit fees shall be considered grounds for revocation of any existing permit. The above annual permit fee of $25.00 shall also be due and payable for each and every subsidiary, branch office or other like establishment of associations that conduct any business of the association, in towns or areas different from that of the home office of the association.

In the event the commissioner is of the opinion from his investigation that an association making application for a permit cannot be successfully conducted or that the character or general fitness of the person to have charge or control are not such as to assure its fair and successful operation or if for any reason he is of the opinion that said association should not attempt to function, he shall refuse to issue such permit.

If the commissioner refuses to issue a permit, he shall by registered or certified mail notify the principal officer or manager of the association and may notify by mail all members. An appeal by anyone interested shall lie from the decision of the commissioner to the State Board of Agriculture and Industries by filing with the Department of Agriculture and Industries a written demand for such appeal. The appeal shall be heard at the next meeting of said State Board of Agriculture and Industries, and the board shall render such judgment as it deems proper from the facts.

In the event an association desires to do business pending the appeal provided for in Section 2-10-25, it may be issued a temporary permit to do so upon paying $1.00 and filing bond with the commissioner in such sum as the commissioner may fix, conditioned to protect all persons dealing with the association from injury or loss. Said bond shall be in a reasonable amount, approved by the commissioner, and made in some bonding company authorized to do business in Alabama. Before such association shall be permitted to file bond as authorized in this section, there shall be filed with the Department of Agriculture and Industries, on blanks prescribed by the State Board of Agriculture and Industries, an application for such temporary permit, accompanied by a full list of the members of such association and their addresses. Immediately upon the filing of such application, the commissioner shall call a meeting, by mailing notice to each member of the association, at such place as the commissioner deems most convenient for the majority of said members, and at such meeting he shall explain the reasons why he rejected the application for a permit. If a majority vote for such temporary certificate after such statement by the commissioner, the temporary certificate shall issue. The commissioner may issue the temporary certificate without such hearing.

All cooperative agricultural associations of any kind or character whatsoever, heretofore or hereafter organized under the laws of the State of Alabama, are hereby authorized and empowered to purchase or otherwise acquire and to hold stock in the New Orleans Bank for Cooperatives and in the Central Bank for Cooperatives in accordance with the provisions of the Farm Credit Act of 1971, as heretofore amended and as it may hereafter be amended by the Congress of the United States. All corporations, heretofore or hereafter organized under the laws of the State of Alabama, which are eligible to borrow from production credit associations, are hereby authorized and empowered to purchase or otherwise acquire and to hold stock in production credit associations in accordance with the provisions of the Farm Credit Act of 1971, as heretofore amended and as it may hereafter be amended by the Congress of the United States.

Notwithstanding the provisions of other laws of the State of Alabama, any agricultural cooperative association organized under the laws of the State of Alabama or authorized to do business in said state may provide in its bylaws that the board of directors of such cooperative shall have the power to authorize the execution of mortgages covering its real property as security for debts of the cooperative; provided, that boards of directors of such cooperative associations shall not be authorized to mortgage real property unless such action is favored and approved by not less than a majority of the membership of the board of directors.

Every association shall prepare and make out an annual report, on forms furnished by the commissioner and approved by the State Board of Agriculture and Industries, containing such financial and other information relative to its operation during the fiscal year as may be required by the State Board of Agriculture and Industries. Such report shall contain, in addition to such other information as the board may require, the name of the association, its principal place of business, a general statement of its business operations during the fiscal year, the sources of its capital, expenses of operations and its balance sheets. Said report shall be filed with the commissioner on such date as required by the State Board of Agriculture and Industries. Said report shall be considered as a confidential document, and the information contained therein shall not be divulged except by permission of the board.

It shall be the duty of the commissioner to check or cause to be checked the annual report, make a summary of his findings therefrom and furnish such summary to each member of the State Board of Agriculture and Industries, that they may consider the same at their next meeting or such other time as the board sees fit.

The commissioner shall have authority, when so ordered by the State Board of Agriculture and Industries, to examine and investigate each association as to its conduct of business, the correctness of its books, its financial condition and the safety and prudence of its management. Such investigation may also be made by any duly authorized agent of the commissioner. The report of such examination shall be a confidential document for official use only and subject to examination only by duly authorized agents of the commissioner and members of the State Board of Agriculture and Industries. Such report shall be kept on file with the commissioner.

Whenever the commissioner finds that an association is violating the purposes for which organized or is conducting its business in any unauthorized manner or is not serving the interest of its members or is being conducted in such a manner as to seriously impair its capital or jeopardize the interest of its members or has seriously impaired its capital or for any other reason such association should be discontinued or have a change of management, the commissioner shall call a meeting of the State Board of Agriculture and Industries and present all facts to such board.

The State Board of Agriculture and Industries shall consider all facts relative to the report of the commissioner required by Section 2-10-30 in executive session; provided, that any person the board sees fit may be admitted to such session, but such person shall not disclose to the public the proceeding, unless otherwise ordered by said board. The board may summons and examine under oath witnesses, shall consider the facts contained in the report and may hear from any person interested in such association. If upon such hearing the board is of the opinion that the protection of the public interest requires the discontinuance of the operation of the association, or a change of management or that it should continue without change, the board shall issue such order as necessary to protect the public and members of such association, stating its reasons therefor.

The State Board of Agriculture and Industries, upon any hearing provided for in this article, may require the commissioner to call a meeting of the directors of the association and seek to work out a solution of conditions with them, may order the conditions on which there may be a continuation of the operation of such association or may require an agent appointed by the board or commissioner to take charge and reorganize the association or wind its business up or may make such other order as it deems will best protect the interest of the public. An appeal shall lie from the order of the board by any person interested by filing bond with and to be approved by the register or clerk of the Circuit Court of Montgomery County. The matter shall be heard de novo in such court; provided, that the order of the board shall be presumed prima facie correct. Upon such hearing the court shall issue an order sustaining or reversing the order of the board or remanding the matter to the board for further consideration. An appeal shall lie from the order of the circuit court to the Court of Civil Appeals.

Whenever the State Board of Agriculture and Industries shall place an association in the charge or control of a person, as provided in Section 2-10-32, such person shall be bonded by a bonding company in such amount and under such conditions as shall be fixed by the board to faithfully comply with the duties imposed in this article. Said bond shall be filed with and approved by the commissioner. Such agent shall have full authority to handle the property and affairs of said association as ordered by the board.

The expense of operating or closing out an association, as provided in Section 2-10-32, shall be paid by the association, including the reasonable salary of the agent placed in charge thereof, reasonable attorney's fees and any other expense incident to properly closing said association's affairs.

(a) Any cooperative marketing corporation or association or mutual cooperative marketing or purchasing corporation or association organized under the laws of this state, may be dissolved in the mode and manner following:

(1) In any mode or manner now provided by law in this state for the dissolution of corporations;

(2) By proceedings in the circuit court in the county wherein the corporation or association was organized, under its statutory jurisdiction; or

(3) By complaint in the circuit court in the county wherein the corporation or association was or may be organized, in the manner provided in subsections (b) and (c) of this section.

(b) If the board of directors or other governing body shall deem it advisable to dissolve such corporation or association and shall adopt a resolution to that effect at any regular meeting of the board or other governing body or at any special meeting called for that purpose, 30 days' notice of which shall have been given each member of such board or other governing body, such resolution to be adopted by a vote of not less than two thirds of its members and spread upon the minutes of such board or other governing body, and such members so voting for such dissolution may file a complaint in their names and in the name of the corporation or association against the remaining members or stockholders of such corporation or association in said circuit court for the purpose of effectuating such dissolution. But, if it shall be made to appear to the court or to the judge thereof that the stockholders or members of such corporation or association are, in the judgment of the court or judge, so numerous as to render it impracticable or inexpedient to bring them all before the court, and, in the judgment of the court or judge, a sufficient number, not less than 10 representative stockholders or members of such corporation or association are made defendants to such complaint, such court or judge may make an order directing personal service on the defendants named and that publication, in such manner and form as the court or judge may prescribe, be made as to all other members and parties interested once a week for four consecutive weeks in some newspaper of general circulation published in the county wherein such complaint is filed. If, upon the final hearing, such court shall find that a continuance of such corporation is impracticable or that it will be in the interest of the corporation or association that it be dissolved, it may make and enter a judgment dissolving said corporation and, upon such dissolution, may direct the business and affairs of said corporation to be wound up by the board of directors or other governing body of said corporation or association under the supervision and direction of the court, or the court may, in its discretion, appoint a receiver for that purpose. Such court may make all such orders and judgments as may be deemed necessary and proper to effectuate such dissolution, the winding up of the business of the association or corporation and the final disposition of the assets thereof, if any.

(c) If the corporation or association has ceased business and become and remained inactive in the transaction of its business affairs for 12 months or more or, if it has no board of directors or other governing body, such complaint for dissolution may be filed by and on behalf of 10 or more stockholders or members of such corporation or association and in the name of such corporation or association, in the manner and form provided for in subsection (b) of this section, and the court may make such order or judgment thereon as in said subsection authorized and provided.

As used in this article, the following words and phrases shall have the meanings respectively ascribed to them in this section:

(1) AGRICULTURAL PRODUCTS. Such term shall include horticultural, viticultural, forestry, dairy, livestock, poultry, bee, fish, aquatic and seafood products and any farm products.

(2) MEMBER. Such term shall include actual members of associations without capital stock and holders of common stock in organizations organized with capital stock.

(3) ASSOCIATION. Any corporation organized under this article.

(4) PERSON. Such term shall include individuals, firms, partnerships and associations.

(5) PRODUCTION OF AGRICULTURAL PRODUCTS. Such term shall include fishing activities and the harvesting of aquatic and seafood products as well as the production of other agricultural or farm products hereinabove defined in subdivision (1) of this section.

Associations organized under this article shall be deemed nonprofit, inasmuch as they are not organized to make profits for themselves as such or for their members as such, but only for their members as producers.

Five or more persons engaged in the production of agricultural products may form a nonprofit cooperative association, with or without capital stock, under the provisions of this article.

An association may be organized under this article to engage in any activity in connection with the marketing or selling of the agricultural products of its members or with the harvesting, preserving, drying, processing, canning, packing, storing, handling, shipping, ginning or utilization thereof or in connection with the manufacturing, selling or supplying to its members of machinery, equipment or supplies or in the financing of the above enumerated activities or in any one or more of the activities specified in this section.

Each association incorporated under this article shall have the following powers:

(1) To engage in any activity in connection with the marketing, selling, harvesting, preserving, drying, processing, canning, packing, storing, handling, ginning or utilization of any agricultural products produced or delivered to it by its members;

(2) To engage in any activity in connection with the manufacturing or marketing of the by-products thereof;

(3) To engage in any activity in connection with the purchase, hiring or use by its members of supplies, machinery or equipment;

(4) To engage in the financing of any one or more of the activities specified in this section;

(5) To borrow money and to make advances to members;

(6) To act as the agent or representative of any member or members in any of the above-mentioned activities;

(7) To purchase or otherwise acquire and to hold, own and exercise all rights of ownership in and to sell, transfer or pledge shares of the capital stock or bonds of any corporation or association engaged in any related activity or in the handling or marketing of any of the products handled by the association;

(8) To establish reserves and to invest the funds thereof in bonds or such other property as may be provided in the bylaws;

(9) To buy, hold and exercise all privileges of ownership over such real or personal property as may be necessary or convenient for the conducting and operation of any of the business of the association or incidental thereto;

(10) To establish, secure, own and develop patents, trademarks and copyrights;

(11) To do each and everything necessary, suitable or proper for the accomplishment of any one or more of the objects enumerated in this section, or conducive to or expedient for the interest or benefit of the association, and to contract accordingly;

(12) To exercise and possess all powers, rights and privileges necessary or incidental to the purpose for which the association is organized or to the activities in which it is engaged and, in addition, any other rights, powers, and privileges granted by the laws of this state to ordinary corporations, except such as are inconsistent with express provisions of this article and to do any such thing anywhere;

(13) To have a corporate seal;

(14) To own, buy and sell all kinds of property; and

(15) To sue and be sued.

Each association incorporated under this article may render the services mentioned in this section to nonmembers thereof as well as to members; provided, that no such incorporated association shall deal in the agricultural products of nonmembers to an amount greater in value than such as are handled by it for members and that no such incorporated association shall purchase supplies and equipment for or render farm business service to nonmembers in an amount greater in value than such as are purchased for or rendered to members. All business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the value of member or nonmember business transacted by such association.

Under the terms and conditions prescribed in its bylaws, an association may admit as members (or issue common stock to) only persons or associations or corporations composed solely of persons engaged in the production of the agricultural products to be handled by or through the association, including the lessees and tenants of land used for the production of such products and any lessors and landlords who receive as rent all or part of the crop raised on the leased premises. Any such persons or associations of persons or corporations may be citizens of or organized under the laws of this state or any other state of the United States and shall handle such agricultural products for members only.

Each association formed under this article shall prepare and file articles of incorporation, setting forth: the name of the association; the purposes for which it was formed; the place where its principal business will be transacted; the term for which it is to exist; the number of directors thereof, which must not be less than five and may be any number in excess thereof; the term of office of such directors; the names and addresses of the persons who are to serve as incorporating directors until their successors are elected and qualified; if organized without capital stock, whether the property rights and interest of each member shall be equal or unequal, and, if unequal, the articles shall set forth the general rule or rules applicable to all members by which the property rights and interests, respectively, of each member may and shall be determined and fixed, and the association shall have the power to admit new members who shall be entitled to share in the property of the association with the old members in accordance with such general rule or rules; and, if organized with capital stock, the amount of such stock and number of shares into which it is divided and the par value thereof. The capital stock may be divided into preferred and common stock. If so divided, the articles of incorporation must contain a statement of the number of shares of stock to which preference is granted and the number of shares of stock to which no preference is granted and the nature and extent of the preference and privileges granted to each.

The articles must be subscribed by the incorporators and acknowledged by one of them before an officer authorized by the law of this state to take and certify acknowledgments of deeds and conveyances and shall be filed in accordance with the provisions of the general corporation law of this state. When so filed, the said articles of incorporation or certified copies thereof shall be received in all the courts of this state and in other places as prima facie evidence of the facts contained therein and of the due incorporation of such association.

The articles of incorporation or charter of any cooperative or mutual association of farmers organized under the provisions of this article may be altered or amended at any regular meeting of the members or at any special meeting called for that purpose; provided that a quorum shall be present as defined in the bylaws or other governing rules. The amendment must first be approved by two thirds of the directors or other governing body and then adopted by vote of two thirds of the members present and voting at the meeting. Amendments to the articles of incorporation, when so adopted, shall be filed in accordance with the provisions of the general corporation laws of the state.

Each association incorporated under this article shall, within 30 days after its incorporation, adopt for its government and management bylaws not inconsistent with the powers granted by this article. A majority vote of the members or stockholders or their written assent is necessary to adopt such bylaws. Each association, under its bylaws, may also provide for any or all of the following matters:

(1) The time, place and manner of calling and conducting its meetings;

(2) The number of stockholders or members constituting a quorum;

(3) The right of members or stockholders to vote by proxy or by mail or by both and the conditions, manner, form and effects of such votes;

(4) The number of directors constituting a quorum;

(5) The qualification, compensation, duties and term of office of directors and officers, the time of their election and the mode and manner of giving notice thereof;

(6) Penalties for violations of the bylaws;

(7) The amount of entrance, organization and membership fees, if any, the manner and method of collection of the same and the purposes for which they may be used;

(8) The amount which each member or stockholder shall be required to pay annually or from time to time, if at all, to carry on the business of the association, the charge, if any, to be paid by each member or stockholder for services rendered by the association to him and the time of payment and manner of collection and the marketing contract between the association and its members or stockholders which every member or stockholder may be required to sign;

(9) The number and qualification of members or stockholders of the association and the conditions precedent to membership or ownership of common stock and the method, time and manner of permitting members to withdraw or the holders of common stock to transfer their stock;

(10) The manner of assignment and transfer of the interest of members and of the shares of common stock;

(11) The conditions upon which and the time when membership of any member shall cease;

(12) The automatic suspension of the rights of a member when he ceases to be eligible to membership in the association and the mode, manner and effect of the expulsion of a member; and

(13) The manner of determining the value of a member's interest and provision for its purchase by the association upon the death or withdrawal of a member or stockholder or upon the expulsion of a member or forfeiture of his membership or, at the option of the association, by conclusive appraisal by the board of directors.

In case of the withdrawal or expulsion of a member, the board of directors shall equitably and conclusively appraise his property interests in the association and shall fix the amount thereof in money which shall be paid to him within one year after such expulsion or withdrawal.

In its bylaws each association shall provide for one or more regular meetings annually. The board of directors shall have the right to call a special meeting at any time, and 10 percent of the members or stockholders may file a petition stating the specific business to be brought before the association and demand a special meeting at any time. Such meeting must thereupon be called by the directors. Notice of all meetings, together with a statement of the purpose thereof, shall be mailed to each member at least 10 days prior to the meeting, but the bylaws may require instead that such notice may be given by publication in a newspaper of general circulation, published at the principal place of business of the association.

The affairs of an association shall be managed by a board of not less than five directors, elected by the members or stockholders from their own number. The bylaws may provide that the territory in which the association has members shall be divided into districts and that the directors shall be elected according to such districts. In such case, the bylaws shall specify the number of directors to be elected by each district and the manner and method of reapportioning the directors and redistricting the territory covered by the association. The bylaws may provide that primary elections shall be held in each district to elect the directors apportioned to such districts and the results of all such primary elections must be ratified by the next regular meeting of the association. The bylaws may provide that one or more directors may be appointed by the Commissioner of Agriculture and Industries, the President of Auburn University or any other public official or commission. The director or directors so appointed need not be members or stockholders of the association, but shall have the same powers and rights as other directors. An association may provide a fair remuneration for the time actually spent by its officers and directors in its service. No director, during the term of his office, shall be a party to a contract for profit with the association differing in any way from the business relations accorded regular members or holders of common stock of the association or to any other kind of contract differing from terms generally current in that district. When a vacancy on the board of directors occurs, other than by expiration of term, the remaining members of the board by a majority vote shall fill the vacancy, unless the bylaws provide for an election of directors by district. In such a case, the board of directors shall immediately call a special meeting of the members or stockholders in that district to fill the vacancy.

The directors of each association shall elect from their number a president and one or more vice-presidents. They shall also elect a secretary and a treasurer, who need not be directors, and they may combine the two latter offices and designate the combined office as secretary-treasurer. The treasurer may be a bank or any depository, and such shall not be considered as an officer but as a function of the board of directors. In such case, the secretary shall perform the usual accounting duties of the treasurer, except that the funds shall be deposited only as authorized by the board of directors.

When a member of an association established without capital stock has paid his membership fee in full, he shall receive a certificate of membership. No association shall issue stock to a member until it has been fully paid for. The promissory notes of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note, but such retention as security shall not affect the member's right to vote. Except for debts lawfully contracted between him and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee or his subscription to the capital stock, including any unpaid balance or any promissory notes given in payment thereof. No stockholder of a cooperative association shall own more than 20 percent of the common stock of the association, and an association in its bylaws may limit the amount of common stock which one member may own to any amount less than 20 percent of the common stock. No member or stockholder shall be entitled to more than one vote. Any association organized with stock under this article may issue preferred stock, with or without the right to vote. Such stock may be redeemable or retirable by the association on such terms and conditions as may be provided for by the articles of incorporation and printed on the face of the certificate. The bylaws shall prohibit the transfer of the common stock of the association to persons not engaged in the production of the agricultural products handled by the association, and such restrictions must be printed upon every certificate of stock subject thereto. The association may at any time except, when the debts of the association exceed 50 percent of the assets thereof, buy in or purchase its common stock at book value thereof as conclusively determined by the board of directors and pay for it in cash within one year thereafter.

Any member may bring charges against an officer or director by filing them in writing with the secretary of the association, together with a petition signed by 10 percent of the members, requesting the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the association; and, by a vote of a majority of the members, the association may remove the officer or director and fill the vacancy. The director or officer against whom such charges have been brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses, and the person or persons bringing the charges against him shall have the same opportunity. In case the bylaws provide for election of directors by districts with primary elections in each district, then the petition for removal of a director must be signed by 20 percent of the members residing in the district from which he was elected. The board of directors must call a special meeting of the members residing in that district to consider the removal of the director. By a vote of a majority of the members of that district, the director in question shall be removed from office.

Upon demand of one third of the entire board of directors, any matter that has been approved or passed by the board must be referred to the entire membership or the stockholders for decision at the next special or regular meeting, but a special meeting may be called for the purpose.

The association and its members may make and execute marketing contracts, requiring the members to sell, for any period of time not over 10 years, all or any specified part of their agricultural products or specified commodities exclusively to or through the association or any facilities to be created by the association. The contract may provide that the association may sell or resell the products of its members, with or without taking title thereto, and pay over to its members the resale price, after deducting all necessary selling, overhead and other costs and expenses, including interest on preferred stock, not exceeding eight percent per annum, and reserves for retiring the stock, if any, and other proper reserves and interest not exceeding eight percent per annum upon common stock or other items deemed proper. The bylaws and the marketing contract may fix, as liquidated damages, specified sums to be paid by the member or stockholder to the association upon the breach by him of any provision of the marketing contract regarding the sale or delivery or withholding of products and may further provide that the member will pay all costs, premiums for bonds, expenses and fees in case any action is brought upon the contract by the association, and any such provisions shall be valid and enforceable in the courts of this state.

In the event of any such breach or threatened breach of such marketing contract by a member, the association shall be entitled to an injunction to prevent the further breach of the contract and to a judgment of specific performance thereof. Pending the adjudication of such an action, upon filing a verified complaint showing the breach or threatened breach, upon filing a sufficient bond and upon notification of the member and a hearing, the association shall be entitled to a temporary restraining order and preliminary injunction against the member.

Whenever an association organized under this article with preferred capital stock shall purchase the stock or any property or any interest in any property of any person, firm, corporation or association, it may discharge the obligations so incurred, wholly or in part, by exchanging for the acquired interest shares of its preferred capital stock to an amount which at par value would equal a fair market value of the stock or interest so purchased, as determined by the board of directors. In that case the transfer to the association of the stock or interest purchased shall be equivalent to payment in cash for the shares of stock issued.

Each association formed under this article shall prepare and make out an annual report on forms furnished by the Secretary of State, containing the name of the association, its principal place of business and a general statement of its business operations during the fiscal year, showing the amount of capital stock paid up and the number of stockholders of a stock association or the number of members and amount of membership fees received, if a nonstock association, the expenses of operations, the amount of its indebtedness or liability and its balance sheets.

Any provisions of law which are in conflict with this article shall not be construed as applying to the associations provided for in this article.

The association may organize, form, operate, own, control, have an interest in, own stock of or be a member of any other corporation or corporations, with or without capital stock, engaged in preserving, drying, processing, canning, packing, storing, handling, shipping, ginning, utilizing, manufacturing, marketing or selling the agricultural products handled by the association or the by-products thereof.

Any association may, upon resolution adopted by its board of directors, enter into all necessary and proper contracts and agreements and make all necessary and proper stipulations, agreements, contracts and arrangements with any other cooperative corporation, association or associations formed in this or in any other state for the cooperative and more economical carrying on of its business or any part or parts thereof. Any two or more associations may, by agreement between them, unite in employing and using or may separately employ and use the same methods, means and agencies for carrying on and conducting their respective business.

No association organized under this article shall be deemed to be a combination in restraint of trade or an illegal monopoly or an attempt to lessen competition or fix prices arbitrarily, nor shall the marketing contracts or agreements between the association and its members or any agreements authorized in this article be considered illegal or in restraint of trade.

The provisions of the general corporation laws of this state and all powers and rights thereunder shall apply to the associations organized under this article, except where such provisions are in conflict with or inconsistent with the express provisions of this article.

For examining and filing corporation papers under provisions of this article, the probate judge in whose office the same is filed shall receive a fee of $2.00 and be paid $.15 per 100 words for recording the same. The Secretary of State for the use of the state shall be paid $5.00 for filing a certificate of incorporation forwarded by the probate judge as provided by law.

For filing articles of incorporation, an association organized under this article shall pay $10.00, and for filing an amendment to the articles, $2.50.

The following terms, as used in this article, shall have the meanings respectively ascribed to them in this section:

(1) PRODUCERS OF AGRICULTURAL PRODUCTS. Individual persons, partnerships, associations and corporations who produce such products either directly or as landlords, tenants or sharecroppers.

(2) AGRICULTURAL PRODUCTS. The products of field, pasture, meadow and garden; fruits, melons, berries, nuts, vegetables, livestock, poultry and poultry products, dairy products, fish, aquatic and seafood products and all other things commonly known as agricultural products.

The purposes of this article are to promote the general welfare of agriculture; to enable producers of agricultural products, whether in the State of Alabama or not, to cooperate in the production, processing, packing, distribution, financing and marketing of agricultural products and in the manufacturing, supplying or selling of machinery, equipment, or supplies used in connection with the production of said agricultural products or in the financing of the above enumerated activities; and to enable such producers to organize incorporated associations with or without capital stock and not for profit but for service to their members by the organization and operation of such corporations by a simplified and inexpensive procedure for the promotion and accomplishment of such cooperative and the general welfare of agriculture.

Five or more producers of agricultural products, whether in the State of Alabama or not, who may desire that they, their associates and successors shall come under this article and enjoy its benefits may enter into articles of association and incorporation which shall set forth the name of the organization, the period of its existence, its domicile and the purposes for which it was formed and that said association is to be organized or operated under this article. The articles must be subscribed by the incorporators and acknowledged by one of them before an officer authorized by the law of this state to take and certify acknowledgments of deeds and conveyances and shall be filed in accordance with the provisions of the general corporation law of this state. When so filed the said articles of incorporation or certified copies thereof shall be received in all the courts of the state and other places as prima facie evidence of the facts contained therein and the due incorporation of such association. Such articles of incorporation may thereafter be altered or amended at any regular meeting of the members or stockholders or at any special meeting called for that purpose, if a quorum, as defined in the bylaws, is present. The amendment must first be approved by two thirds of the directors and then adopted by vote of two thirds of the members present and voting at the meeting. Amendments when so adopted shall be filed in accordance with the general corporation laws of the state.

A majority of the organizing members named in the articles of incorporation, at a time and place agreed upon in writing by all the said organizers, or when and where all are present, or upon call of a majority of such organizers upon five days' notice thereof, in writing, giving the time, place, and purposes of the meeting, mailed or delivered by hand to all of the other said organizing members, may make permanent organization of such corporation and adopt bylaws for the same, which bylaws may thereafter be amended or repealed by the members of such incorporated association in the manner provided in the bylaws. At such organization meeting, the members of the board of directors and such officers as provided for in this article and in the bylaws shall be elected. Each association incorporated under this article shall, within 30 days after its incorporation, adopt for its government and management bylaws not inconsistent with the powers granted in this article.

The affairs of an association incorporated under this article shall be conducted, controlled and managed by a board of directors of such number, not to be less than five, and with such terms of office as may be provided by the bylaws. The said directors shall be elected by the members or stockholders of the association from their own number. When a vacancy on the board of directors occurs other than by expiration of term, the remaining members of the board by a majority vote shall fill the vacancy until the next regular meeting of the members of the association. An association may provide a fair remuneration for the time actually spent by its officers and directors in its service. No director, during his term of office, shall be a party to a contract for profit with the association differing in any way from the business relations accorded regular members or holders of stock of the association.

The board of directors shall elect from its number a president and one or more vice-presidents. It shall also elect a secretary and a treasurer who need not be directors, and it may combine the two latter offices and designate the combined office as secretary-treasurer. The duties of said officers shall be those usual to like officers in corporations and such other additional duties as may be designated in the bylaws.

The bylaws may provide, among other things, for voting by the members by mail or by proxy in writing and for membership fees and dues and shall provide how membership in the incorporated association may be acquired and lost.

Under the terms and conditions prescribed in its bylaws, an association may admit as members or issue common stock or certificates of membership only to persons engaged in the production of agricultural products, including the lessees and tenants of land used for the production of such products and lessors and landlords who receive as rent part of the crops raised on the leased premises. If a member of a nonstock association shall be other than a natural person, such member may be represented by an individual, associate, officer, manager or member thereof duly authorized in writing. All membership shall be personal to the member and equal in right and shall not be transferable, assignable, vendable, inheritable, devisable or seizable, and each member shall have one vote only.

Incorporated associations may be organized under this article with capital stock at the option of the organizers. In that event the association shall be organized by the same method and for the same recording fee as in the case of those associations organized without capital stock, except that the articles of association shall set forth also that the association is organized with capital stock and the amount of capital stock authorized with particulars as to the class or classes thereof and the par value of shares. There shall be no individual liability on the part of shareholders, members, officers or directors for the obligations of the corporation. The articles of association may provide for preferred stock as well as common stock, but all shares shall have a definite par value, and all shares of the same class shall have the same par value. If so divided, the articles of incorporation must contain a statement of the number of shares of stock to which preference is granted and the number of shares of stock to which no preference is granted and the nature and extent of the preference and privileges granted to each. No member or stockholder shall be entitled to more than one vote irrespective of the number of shares of stock held by such member or stockholder. No stockholder shall hold more than 20 percent of the common stock. Common stock shall be issued only to and held only by producers of agricultural products who make use of the service and facilities of the association or to agricultural associations, organizations, federations or corporations organized under this article or whose purposes and operations are in harmony with the purposes of this article; provided, that the articles of association may limit the ownership of stock to producers of agricultural products. Dividends upon the capital stock shall not be declared or paid in excess of eight percent per annum. If any shareholder shall cease to be eligible to hold his shares or shall die or shall be dissolved, and if his shares are not promptly transferred to some producer or organization eligible to hold the same, the association shall take up such shares at par value or at the option of the association at appraised value, such value to be conclusively fixed by the board of directors of the association, and the association may pay therefor in cash or by certificate of indebtedness to be thereafter paid from the income of the association. If any shareholder shall attempt to transfer his share except as permitted, such shares may, at the option of the association, be taken up as in the case of the death of a shareholder.

An association incorporated under this article shall have the power to:

(1) Contract and be contracted with;

(2) Borrow and lend money;

(3) Issue notes, bonds and other obligations and secure the payment of the same by mortgage or otherwise;

(4) Buy, contract for, own, sell, convey, pledge, mortgage and otherwise have, use and dispose of property of all kinds, insofar as not prohibited by law;

(5) Promote and carry out the purpose of this article to market the agricultural products of its members, cooperatively in pools or otherwise and collect for the same;

(6) Purchase such products from its members;

(7) Advance money upon such products to its members;

(8) Act as agents for its members;

(9) Process, condition, pack, store and otherwise safeguard, care for and make ready for market the agricultural products of its members;

(10) Purchase for and distribute to its members and purchase and sell to its members seed, plants, fertilizers, machinery, implements, livestock, feed, chemicals, foodstuffs, materials, supplies, packages, containers, wrappings, labels, tags and any other goods, wares or merchandise necessary or useful in the production, processing, packing, storage, distribution and marketing of agricultural products;

(11) Erect, buy, own, rent, operate, manage and control all plants, properties, machinery and installations necessary or useful in processing, conditioning, packing, manufacturing, storing, shipping, distributing and marketing of such products of its members; and

(12) Render to its members farm business service.

In addition to the foregoing, the articles of incorporation of any association incorporated under this article may contain any provision consistent with law with respect to management, regulation, government, financing, indebtedness, membership, the establishment of voting districts and the election of delegates for representative purposes, the issuance, retirement and transfer of its stock, if formed with capital stock, or any provisions relative to the way or manner in which it shall operate or with respect to its members, officers or directors and any other provisions relating to its affairs. The powers granted in this section shall be possessed by an association or federation organized under this article fully and completely, whether specified in the articles of association. Such incorporated association may render the services mentioned in this section to nonmembers thereof as well as to members; provided, that no such incorporated association shall deal in the agricultural products of nonmembers to an amount greater in value than such as are handled by it for members and that no such incorporated association shall purchase supplies and equipment for or render farm business service to nonmembers in an amount greater in value than such as are purchased for or rendered to members. All business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the value of member and nonmember business transacted by such association.