The Tennessee Electric Cooperative Law, specifically concerning the issuance of revenue bonds, vests significant authority in the cooperative’s board of directors. When a cooperative seeks to finance capital improvements or expand its services through revenue bonds, the process is governed by Tennessee Code Annotated § 65-25-201 et seq. This statute empowers the board to authorize the issuance of such bonds, subject to certain procedural requirements. These requirements typically involve a resolution adopted by the board, which specifies the principal amount, interest rate, maturity dates, and other terms of the bonds. Crucially, the law does not mandate a separate vote by the membership of the cooperative for the issuance of revenue bonds. Instead, the board’s resolution, duly adopted and recorded, serves as the official authorization. This reflects the principle that the board of directors acts as the elected representative body responsible for the financial and operational decisions of the cooperative, including the undertaking of debt for capital projects. Therefore, the board’s resolution is the operative legal instrument for authorizing revenue bond issuance under Tennessee law.

The Tennessee Agricultural Cooperative Marketing Act of 1923, as codified in Tennessee Code Annotated Title 43, Chapter 16, outlines the framework for agricultural cooperatives. A critical aspect of this act is the ability of cooperatives to merge or consolidate. When two or more cooperatives merge, the resulting entity generally assumes all the rights, powers, and obligations of the constituent cooperatives. This includes contractual obligations, property rights, and liabilities. Specifically, Tennessee Code Annotated § 43-16-105 addresses the effect of consolidation or merger. It states that the new or surviving cooperative shall be responsible for all the debts and liabilities of the former cooperatives, whether secured or unsecured. This principle ensures continuity and protects creditors and members of the merging entities. Therefore, a cooperative formed by the merger of two existing Tennessee agricultural cooperatives is legally responsible for the outstanding debts and contractual obligations of both predecessor cooperatives, as stipulated by state law. This is not a matter of voluntary assumption but a legal consequence of the merger itself, ensuring that the legal and financial continuity of the cooperatives is maintained.

The Tennessee Agricultural Cooperative Marketing Act of 1923, codified in Tennessee Code Annotated Title 43, Chapter 16, outlines the framework for agricultural cooperatives. A critical aspect of this act pertains to the dissolution of cooperatives. When a cooperative is dissolved, the distribution of its assets is governed by specific provisions. Section 43-16-107 of the Tennessee Code Annotated addresses this. It mandates that after all debts and liabilities are paid, any remaining assets shall be distributed to the members of the cooperative in proportion to the patronage they have contributed to the cooperative during the period of its operation. Patronage is typically measured by the volume or value of business conducted with the cooperative by each member. This ensures that the residual value of the cooperative is returned to those who actively supported it through their participation. Therefore, the distribution is not based on the number of shares held or the initial investment, but rather on the actual use of the cooperative’s services or facilities by its members.

The Tennessee Agricultural Cooperative Marketing Act of 1923, as codified in Tennessee Code Annotated Title 43, Chapter 14, outlines the framework for agricultural cooperatives. A critical aspect of cooperative governance is the process by which members can influence decisions and hold management accountable. The Act specifically addresses the rights of members to vote on important matters, such as the election of directors and significant changes to the cooperative’s bylaws or operations. While direct recall of directors is a common mechanism in corporate governance, cooperative law often emphasizes other methods of member control and oversight. For instance, the Act empowers members to elect directors at annual or special meetings, and these directors are responsible for the management of the cooperative’s affairs. Furthermore, the bylaws of a cooperative, adopted by the members, can prescribe specific procedures for member participation and oversight, which may include mechanisms for proposing resolutions or expressing dissatisfaction with management’s performance. However, the Act does not mandate a specific, separate statutory procedure for the immediate recall of directors by a petition of a certain percentage of members outside of the regular election cycle, as might be found in other forms of governance. The primary avenues for member influence and accountability are through the election process and the ability to amend bylaws to implement desired governance structures. Therefore, the absence of a specific statutory provision for a recall petition process means that such a mechanism would need to be established through the cooperative’s own bylaws, if permitted by the Act, rather than being a default right.

The Tennessee Wholesale Supply Cooperative, a federated cooperative, is seeking to amend its articles of incorporation to allow for a new class of non-voting membership. Under Tennessee law, specifically the Tennessee Credit Union Act, which is often referenced for cooperative principles, and general cooperative statutes, a cooperative must follow specific procedures for amending its articles. While the Tennessee Credit Union Act is specific to credit unions, many of its procedural requirements for member approval and board action reflect broader cooperative governance principles that are applicable to other forms of cooperatives in Tennessee. For a significant amendment like altering membership classes, the cooperative must convene a member meeting, typically with a quorum requirement, and a supermajority vote of the voting membership is usually necessary. The specific percentage for a supermajority can vary, but it is commonly two-thirds or three-fourths of the votes cast at a meeting where a quorum is present. The cooperative’s own bylaws will also dictate the precise voting threshold. However, a critical element for any amendment affecting membership rights, even non-voting rights, is ensuring proper notice is given to all members eligible to vote, detailing the proposed amendment. Without this proper notice and the requisite supermajority vote of the *voting* membership, the amendment would be invalid. The scenario does not provide specific voting percentages from the bylaws or the meeting, but it highlights the procedural requirements. Therefore, the most critical action to validate the amendment, assuming the board has already approved it for presentation to members, is obtaining the required supermajority vote from the voting membership after proper notification.

The scenario describes a cooperative attempting to amend its bylaws. In Tennessee, cooperative corporations are governed by Title 48, Chapter 56 of the Tennessee Code Annotated, which deals with cooperative marketing associations. Specifically, Section 48-56-103 outlines the requirements for amending articles of incorporation and bylaws. For amendments to be valid, they generally require a specific voting threshold, typically a supermajority, of the members present and voting at a meeting where a quorum is established. The question hinges on understanding the statutory requirements for bylaw amendments in Tennessee cooperatives, which often necessitate a higher vote than a simple majority to ensure broad member consensus. A two-thirds vote of the members present and voting, assuming a quorum is met, is a common supermajority requirement for significant corporate actions like bylaw changes. This ensures that substantial agreement among the membership is achieved before fundamental governing rules are altered. The cooperative’s bylaws themselves might specify a different, potentially higher, threshold, but the statutory minimum must be met. If the bylaws are silent or specify a lower threshold, the statutory minimum applies. In this case, the statutory requirement of two-thirds of those present and voting, assuming a quorum, is the governing standard.

The Tennessee Agricultural Cooperative Marketing Act of 1923, as codified in Tennessee Code Annotated § 43-1-101 et seq., grants cooperatives significant latitude in their operations, particularly concerning their formation and the scope of their activities. A core principle is that cooperatives are formed by producers to collectively market their products and procure necessary supplies. The Act explicitly permits cooperatives to engage in activities that are “incidental or auxiliary” to their primary marketing or purchasing functions. This broad authorization allows cooperatives to undertake a range of business ventures, provided they serve the ultimate purpose of benefiting the member producers. For instance, a cooperative might process member products, engage in transportation and storage, or even provide educational services related to agricultural production and marketing. The key is that these ancillary activities must demonstrably support or enhance the cooperative’s main objectives. Without such flexibility, cooperatives would be severely limited in their ability to adapt to changing market conditions and to provide comprehensive services to their members, potentially hindering their economic viability and effectiveness in the agricultural sector of Tennessee. The Act’s intent is to foster robust agricultural enterprises through collective action.

The Tennessee Agricultural Cooperative Marketing Act of 1923, codified in Tennessee Code Annotated Title 43, Chapter 16, governs the formation and operation of agricultural cooperatives in the state. A key aspect of this act relates to the rights and responsibilities of members and the cooperative itself, particularly concerning the marketing of agricultural products. When a member of a Tennessee agricultural cooperative, organized under this act, enters into a marketing agreement with the cooperative, that agreement is generally considered legally binding and enforceable. This enforceability is a cornerstone of cooperative marketing, allowing the cooperative to aggregate and market members’ products effectively, thereby gaining greater bargaining power and market access. Tennessee law specifically provides for the enforceability of such contracts, even in the absence of mutuality of remedy, meaning the cooperative can seek damages or specific performance from a member who breaches the agreement, even if the cooperative’s obligation to the member might be viewed differently. This principle is crucial for the stability and success of cooperative ventures, ensuring that all members contribute to the collective marketing effort as agreed. The act aims to protect the cooperative’s ability to fulfill its obligations to all members and third-party purchasers by ensuring that individual members adhere to their marketing commitments.

The Tennessee Code Annotated (TCA) § 43-16-101 outlines the general principles of cooperative marketing associations. Specifically, it addresses the purpose of such associations in facilitating the orderly marketing of agricultural products. The law empowers these associations to engage in activities that benefit their members, such as processing, preparing for market, handling, and marketing agricultural products. It also permits them to borrow money and issue secured or unsecured notes, bonds, or debentures for the purpose of carrying out their operations. Furthermore, TCA § 43-16-102 specifies that associations formed under this chapter are not to be construed as monopolies or combinations in restraint of trade. The core purpose is to enable producers to collectively achieve greater efficiency and market power, thereby improving their economic standing. When considering the dissolution of a cooperative, the process is typically governed by the association’s bylaws and the general corporate law of Tennessee, which often involves a vote of the membership and the orderly winding up of affairs, including the satisfaction of debts and the distribution of remaining assets. The question probes the foundational legal basis for a cooperative’s existence and its ability to operate within the state’s regulatory framework. The correct answer reflects the specific statutory authorization for forming and operating agricultural marketing cooperatives in Tennessee.

The Tennessee Electric Cooperative Law, specifically referencing the powers and limitations of cooperatives, dictates how such entities operate. When a cooperative wishes to engage in activities beyond its primary purpose, such as providing services to non-members or entering into joint ventures with for-profit entities, it must adhere to specific statutory provisions. Tennessee Code Annotated \(T.C.A.\) § 65-26-101 et seq., and related sections governing electric cooperatives, generally grant broad powers for the purpose of serving their members. However, venturing into new business areas or partnerships requires careful consideration of whether these activities are ancillary to or directly supportive of the cooperative’s core mission of providing electricity to its members. The ability to acquire, own, and operate facilities for the generation, transmission, and distribution of electric energy is paramount. Furthermore, cooperatives are empowered to enter into agreements, including joint ventures, for mutual benefit, provided these arrangements align with their cooperative principles and statutory authority. The critical factor in determining the legality of such an expansion is whether the proposed activity is reasonably necessary or incidental to the fulfillment of the cooperative’s statutory purpose of serving its member-owners. Without explicit statutory authorization or a clear nexus to member service, engaging in activities that primarily benefit non-members or pursue profit unrelated to cooperative goals can be legally problematic. Therefore, a cooperative must demonstrate that its proposed venture directly or indirectly serves its membership, even if it involves partnerships with external entities.

The scenario involves a cooperative seeking to amend its articles of incorporation to change its principal place of business within Tennessee. Tennessee Code Annotated (TCA) § 43-16-107 governs the amendment of articles of incorporation for agricultural cooperatives. This section specifies that amendments must be adopted by a vote of at least two-thirds of the members present and voting at a meeting called for that purpose, provided a quorum is present. Furthermore, TCA § 43-16-108 mandates that any amendment to the articles of incorporation must be filed with the Tennessee Secretary of State. The process requires a resolution adopted by the board of directors proposing the amendment, followed by a membership vote. Upon approval, the amended articles, or a certificate of amendment, must be filed. The question tests the understanding of the procedural requirements for such an amendment, specifically the voting threshold and the filing requirement with the state. A simple majority vote of members present is insufficient, as is a vote of only the board of directors. Filing with the Secretary of State is a mandatory step to make the amendment legally effective. Therefore, the correct sequence involves board approval, a two-thirds member vote, and subsequent filing with the Secretary of State.

The Tennessee Code Annotated (TCA) § 46-2-101 outlines the requirements for the formation of agricultural cooperatives. Specifically, it mandates that a cooperative must have at least five members to be legally established. This foundational requirement ensures a minimum level of collective participation and shared interest, which is central to the cooperative model. Without meeting this threshold of five members, the entity cannot legally operate as a cooperative under Tennessee law, regardless of its stated purpose or intent. The purpose of this minimum membership is to foster a genuine cooperative spirit and prevent the formation of entities that might not truly represent the collective will of agricultural producers. Therefore, any cooperative seeking to incorporate or operate within Tennessee must demonstrate a membership base of five or more individuals or entities engaged in agricultural pursuits.

The Tennessee Agricultural Cooperative Marketing Act of 1923, as amended, specifically addresses the rights and responsibilities of agricultural cooperatives within the state. A core aspect of cooperative governance and member relations involves the process of removing directors. Tennessee law, in statutes such as Tennessee Code Annotated § 44-5-101 et seq., outlines the procedures for director removal. Generally, cooperative bylaws dictate the specific mechanisms for removing a director, often requiring a supermajority vote of the membership at a properly called meeting, provided due notice has been given and the director has had an opportunity to be heard. The question asks about the most common legal basis for removing a director, which is typically stipulated within the cooperative’s own governing documents, created under the authority of state law. While statutory provisions exist, the bylaws provide the direct operational framework for such actions. Therefore, the bylaws are the primary legal instrument governing the removal process, assuming they are consistent with state law. This includes provisions for cause, such as malfeasance or breach of fiduciary duty, or sometimes without cause, depending on the specific bylaws and the nature of the cooperative. The legal validity of any removal action hinges on strict adherence to these established procedures.

The Tennessee Code Annotated, specifically Title 48, Chapter 58, governs the dissolution of agricultural and other cooperatives. Section 48-58-101 outlines the procedures for voluntary dissolution. A cooperative can initiate dissolution by a resolution adopted by its board of directors, followed by approval from its members. This member approval typically requires a specific voting threshold, often a majority of all members or a supermajority of those voting, depending on the cooperative’s bylaws and the statute’s provisions. Once dissolution is authorized, the cooperative must cease its business operations except as necessary to wind up its affairs. This winding-up process involves notifying creditors, collecting assets, paying liabilities, and distributing any remaining assets to members or other designated recipients according to the articles of incorporation, bylaws, or state law. The Tennessee cooperative law emphasizes a structured process to ensure that all obligations are met and assets are distributed equitably before the cooperative is formally dissolved. The core principle is to protect the rights of creditors and members throughout the dissolution proceedings.

The Tennessee Electric Cooperative Act of 1937, as amended, governs the formation, operation, and dissolution of electric cooperatives in Tennessee. A critical aspect of cooperative governance involves the process of member withdrawal and the subsequent handling of their equity. When a member of a Tennessee electric cooperative, such as Volunteer Energy Cooperative, decides to terminate their membership, the cooperative is obligated to retire the member’s patronage capital or membership equity. This retirement is not an immediate cash payout in most cases. Instead, it is typically handled according to the cooperative’s bylaws and the provisions of the Tennessee Electric Cooperative Act. The Act generally mandates that such equity be retired on a patronage basis, meaning that existing members’ patronage is prioritized. The specific timing and method of retirement are determined by the board of directors, often over a period of years, and are usually outlined in the cooperative’s bylaws. The cooperative is not required to pay the full market value or the initial investment amount; rather, it must retire the equity at its book value, reflecting the member’s proportional share of the cooperative’s net worth at the time of retirement, according to the established retirement schedule. Therefore, the member is entitled to the book value of their membership equity, subject to the cooperative’s established retirement plan and bylaws.

The Tennessee Code Annotated (TCA) § 43-16-105 outlines the requirements for the formation of agricultural cooperatives. Specifically, it mandates that a cooperative must have at least three (3) members to be legally established and to conduct business. This foundational requirement ensures a minimum level of collective action and shared governance, which is a core principle of cooperative organization. Without meeting this minimum membership threshold, a cooperative cannot be legally formed or operate under Tennessee law. Therefore, any entity purporting to be an agricultural cooperative in Tennessee must demonstrate a membership base of three or more individuals or entities.

The Tennessee Agricultural Cooperative Marketing Act of 1923, as codified in Tennessee Code Annotated Title 43, Chapter 16, outlines the framework for agricultural cooperatives in the state. A critical aspect of cooperative governance involves member rights and the process for amending bylaws. Bylaws, which are the internal rules governing a cooperative’s operations, typically require a specific member approval threshold for amendments to ensure broad consensus and protect minority interests. While statutory provisions can vary, many cooperative statutes, including those in Tennessee, mandate a supermajority vote for bylaw amendments to prevent hasty or self-serving changes by a simple majority. This requirement is rooted in the principle of member control and the unique nature of cooperatives, which are owned and controlled by their members. The Tennessee Code Annotated § 43-16-109 specifically addresses the amendment of articles of incorporation and bylaws, generally requiring a two-thirds vote of members present and voting at a regular or called meeting, provided a quorum is present. This two-thirds threshold is a common supermajority requirement designed to provide a robust level of member approval for significant governance changes. Therefore, a bylaw amendment requiring a two-thirds majority of the members present and voting at a duly called meeting, assuming a quorum is met, aligns with the typical and statutory requirements for such significant decisions within Tennessee cooperatives.

The Tennessee Peanut Growers Cooperative (TPGC) is a cooperative association organized under Tennessee law. When a member, like Mr. Silas Croft, wishes to withdraw from the cooperative, the process is governed by the cooperative’s bylaws and Tennessee statutes, specifically the Tennessee Cooperative Marketing Act. The Act and typical cooperative bylaws stipulate a notice period for withdrawal, often tied to the end of a fiscal year or a specific membership term. Furthermore, the cooperative may have provisions for the repurchase of a member’s equity or capital retainage, which might be subject to a waiting period or specific valuation methods. The cooperative’s ability to repurchase this equity is contingent on its financial health and operational needs, as outlined in its governing documents. Therefore, a member’s withdrawal is not instantaneous; it involves adherence to established procedures, including notice requirements and potential limitations on immediate capital redemption. The question asks about the *process* of withdrawal, which encompasses these procedural and financial aspects. The correct option reflects the necessity of following established bylaws and statutory provisions for a member’s exit, including any associated financial settlements or waiting periods.

The Tennessee Electric Cooperative Law, specifically concerning the authority of cooperatives to engage in business activities beyond their traditional rural electrification mandate, is governed by statutes that permit diversification. Tennessee Code Annotated \(TCA\) § 65-25-201 grants electric cooperatives broad powers, including the authority to own, operate, and maintain facilities for the generation, transmission, and distribution of electric power. Furthermore, related statutes and case law have interpreted these powers to include ancillary services and related businesses that support the cooperative’s mission or provide economic benefits to its members. For instance, cooperatives in Tennessee have been authorized to invest in or develop renewable energy projects, broadband internet services, and energy efficiency programs. The key principle is that such ventures must generally be related to or supportive of the cooperative’s primary purpose of serving its members, which are rural electric consumers. The ability to acquire and hold property, enter into contracts, and generally conduct business as necessary for its purposes, as outlined in the cooperative statutes, allows for these expanded operations, provided they align with the membership’s benefit and the cooperative’s foundational principles. Therefore, a cooperative’s ability to engage in the sale of agricultural supplies to its members, if it can demonstrate a nexus to member benefit and operational synergy, falls within the purview of its statutory authority, as long as it is structured and operated in a manner consistent with cooperative principles and Tennessee law.

The Tennessee Limited Liability Company Act, specifically referencing Tennessee Code Annotated § 48-20-102, outlines the requirements for forming a limited liability company (LLC). A crucial aspect of this formation is the filing of a certificate of formation with the Tennessee Secretary of State. This certificate must contain specific information, including the name of the LLC, the address of its registered office in Tennessee, and the name and address of its registered agent for service of process. While an operating agreement is vital for the internal governance and management of an LLC, it is not a document that is filed with the state as part of the initial formation process. The operating agreement governs the relationships among members, managers, and the LLC itself, detailing profit and loss allocations, distributions, and management structure, but its absence does not prevent the legal creation of the LLC if the certificate of formation is properly filed. Therefore, the absence of a filed operating agreement does not preclude the existence of a legally formed LLC in Tennessee, provided the certificate of formation meets statutory requirements.

Tennessee law, specifically the Tennessee Electric Cooperative Law of 1937, as amended, governs the formation, operation, and dissolution of electric cooperatives. A key aspect of cooperative governance is the process for amending bylaws. Bylaw amendments typically require a specific voting threshold by the membership. While statutes often outline the minimum requirements, cooperative bylaws themselves detail the precise procedures, including notice periods and quorum requirements. For a bylaw amendment to be valid and legally binding within a Tennessee electric cooperative, it must be approved by a majority of the members present and voting at a duly called meeting, provided a quorum is met. This aligns with the general principles of cooperative democracy where member participation is paramount. The law also often grants the board of directors the authority to propose amendments, which are then subject to member ratification. The specific percentage required for passage can vary, but a simple majority of those voting is a common standard, assuming the meeting is properly constituted with a quorum.

Tennessee law, specifically the Tennessee Agricultural Cooperative Marketing Act of 1923, governs the formation and operation of agricultural cooperatives. A key aspect of cooperative law in Tennessee, as in many jurisdictions, is the concept of “doing business” and the requirements for foreign cooperatives seeking to operate within the state. A foreign cooperative, defined as one organized under the laws of another state or jurisdiction, must register with the Tennessee Secretary of State to lawfully conduct business in Tennessee. This registration process typically involves filing an application for a certificate of authority, which includes information about the cooperative’s name, principal office, and the name and address of its registered agent in Tennessee. Failure to register can result in penalties, including fines and the inability to maintain legal actions in Tennessee courts. The Act also outlines the rights and privileges granted to registered foreign cooperatives, which generally mirror those of domestic cooperatives, subject to Tennessee law. The purpose of this registration is to ensure transparency, accountability, and compliance with state regulations, allowing the state to exercise jurisdiction over entities operating within its borders. The correct option reflects this fundamental requirement for a foreign cooperative to be legally recognized and operate within Tennessee.

The Tennessee General Stock Cooperative Law, specifically referencing the provisions governing the formation and operation of agricultural cooperatives, outlines specific requirements for member participation and voting rights. When a cooperative is formed under these statutes, the principle of one vote per member is a fundamental aspect of democratic governance, ensuring that each member, regardless of their capital contribution or volume of business transacted with the cooperative, has an equal say in its management and strategic direction. This principle is designed to prevent the concentration of power within a few large stakeholders and to foster a sense of collective ownership and responsibility among all members. The law emphasizes that membership is typically tied to the individual or entity engaging in the cooperative’s business, such as producing or marketing agricultural products. Therefore, when considering a member who has consistently utilized the cooperative’s services for marketing their produce, they are considered an active and participating member. The law does not differentiate voting rights based on the volume of produce marketed or the duration of membership, as long as the individual meets the established membership criteria and actively engages with the cooperative’s services. Consequently, such a member is entitled to a single vote in all matters requiring member approval, such as the election of directors or amendments to the bylaws. This aligns with the cooperative’s foundational purpose of serving its members’ collective interests.

The Tennessee Electric Cooperative Act of 1937, as amended, specifically addresses the powers and limitations of electric cooperatives. While cooperatives are empowered to generate, transmit, and distribute electricity, their authority to engage in activities outside of providing electric service to their members is generally restricted. Specifically, Tennessee Code Annotated § 65-25-201 grants cooperatives the power to generate, manufacture, purchase, acquire, transmit, transport, distribute, sell, and supply electric energy. However, the Act also implies a primary purpose of serving the members. Engaging in the sale of surplus energy to entities that are not members, or directly competing with other energy providers in non-service territory areas without explicit statutory authorization, would likely fall outside the scope of their delegated powers and fiduciary duty to their membership. The core principle is that a cooperative’s business operations should primarily benefit its members. Therefore, a cooperative’s ability to enter into contracts for the sale of assets or services that are not directly related to its core mission of providing electricity to its members requires careful consideration of its enabling legislation and its bylaws, and is typically subject to specific approval processes or limitations to ensure it aligns with the cooperative’s purpose and does not jeopardize its financial stability or member service. The sale of a transmission line to a non-member entity, even if it results in immediate revenue, could be viewed as a divestiture of a core asset and potentially a deviation from its statutory mandate if not carefully structured within the bounds of cooperative law.

The Tennessee Electric Membership Corporation Act, specifically referencing the framework established for electric cooperatives, outlines the procedures for the dissolution of such entities. When an electric cooperative, operating under Tennessee law, decides to dissolve, the process is governed by specific statutory requirements to ensure an orderly winding up of affairs and proper distribution of assets. The Act generally mandates that upon dissolution, the cooperative’s assets, after satisfying all debts and liabilities, shall be distributed to its members. The method of distribution is typically determined by the cooperative’s bylaws or, in their absence, by the provisions of the governing Act itself. The Act does not permit the distribution of remaining assets to non-members or to the state government in the case of a solvent cooperative, unless specifically provided for in the bylaws or by a court order in certain insolvency situations. The core principle is that the residual value of the cooperative, after its obligations are met, belongs to those who were members and contributed to its existence. Therefore, the distribution to members, either in proportion to their patronage or as otherwise specified in the bylaws, is the legally prescribed outcome for a dissolving Tennessee electric cooperative.

The Tennessee Agricultural Cooperative Marketing Act of 1923, as amended, governs the formation and operation of agricultural cooperatives in Tennessee. A key aspect of this act relates to the rights and responsibilities of members, particularly concerning the transfer of membership interests and the distribution of patronage refunds. When a member of a Tennessee agricultural cooperative, organized under this act, ceases to be actively engaged in the production of agricultural products, the cooperative is generally obligated to purchase their membership interest. This purchase is typically at book value, as determined by the cooperative’s bylaws or articles of incorporation, less any outstanding debts owed by the member to the cooperative. This provision ensures that membership remains with active producers and provides a mechanism for orderly exit and capital recovery for departing members. The act emphasizes that patronage refunds, which represent a member’s share of the cooperative’s net earnings based on their use of the cooperative’s services, are to be distributed to members who have utilized the cooperative’s facilities or services during the fiscal period for which the refund is declared. Therefore, a member who has ceased active production but still holds a membership interest would be entitled to any patronage refunds declared for periods during which they were an active member and utilized the cooperative’s services, but not for periods after they ceased active engagement and their membership status might be subject to buyback. The question focuses on the entitlement to patronage refunds after ceasing active production, which is tied to prior patronage, not continued membership status per se, but the cooperative’s obligation to buy back the membership interest at book value is a distinct, subsequent action.

The Tennessee General Stock Cooperative Law, specifically referencing Tennessee Code Annotated Title 48, Chapter 11, outlines the procedures and requirements for the formation and operation of cooperatives. When a cooperative proposes to merge with another entity, the law mandates a specific process to ensure member approval and legal compliance. This process typically involves a resolution by the board of directors, followed by a vote of the membership. The law specifies that such a merger must be approved by at least two-thirds of the votes cast by members present and voting at a meeting called for that purpose, provided a quorum is present. This threshold ensures significant member consensus for a fundamental change like a merger. The question hinges on understanding this specific voting requirement for mergers under Tennessee cooperative law. The core principle is that major structural changes require a supermajority vote to protect the interests of the membership and ensure broad support for such significant decisions. This aligns with the cooperative principle of democratic member control.

In Tennessee, the process of dissolving a cooperative involves several statutory steps to ensure an orderly winding up of affairs and protection of member and creditor interests. Under Tennessee law, specifically the Tennessee Business Corporation Act, which often governs cooperatives by default or through specific provisions, a cooperative may be dissolved voluntarily by the members or involuntarily by court order or administrative action. For a voluntary dissolution initiated by the members, the process typically begins with a resolution adopted by the board of directors recommending dissolution, followed by a vote of the members. The Tennessee Code Annotated, particularly in Title 48, outlines the procedures for corporate dissolution. Section 48-24-101 and subsequent sections detail the steps, which include filing Articles of Dissolution with the Tennessee Secretary of State after the member approval. Prior to or concurrently with the filing of the Articles of Dissolution, the cooperative must cease conducting business except as necessary to wind up its affairs. This winding up process involves collecting assets, paying or making provision for liabilities, and distributing any remaining assets to the members according to their rights and interests as defined in the cooperative’s articles of incorporation, bylaws, or Tennessee law. The distribution of assets must follow a specific order of priority, generally addressing debts and obligations to creditors first, then any preferential rights of members (if applicable), and finally, distributing the residual assets to the members on an equitable basis, often in proportion to their patronage or investment, as dictated by the cooperative’s governing documents and state law. The question asks about the final step in the voluntary dissolution of a Tennessee cooperative after all other winding-up activities are completed. This final step is the distribution of any remaining assets to the members.

The Tennessee Agricultural Cooperative Marketing Act of 1923, as codified in Tennessee Code Annotated Title 43, Chapter 17, provides the legal framework for agricultural cooperatives in the state. A key aspect of cooperative governance involves the rights and responsibilities of members, particularly concerning voting. While a cooperative can establish rules for member voting, the Act generally presumes one-vote-per-member, irrespective of the amount of capital stock or membership equity a member holds. This principle is fundamental to the democratic control of cooperatives, ensuring that each member has an equal voice in the cooperative’s affairs. Deviations from this one-member-one-vote principle would typically require specific statutory authorization or a clear provision within the cooperative’s articles of incorporation or bylaws that is not in conflict with the overarching state law. Therefore, a cooperative attempting to allocate voting rights based on patronage or capital contribution would likely be acting outside the standard provisions of the Tennessee Act, unless a specific, permissible exception is invoked and properly documented within its governing documents and in accordance with any statutory limitations on such deviations. The Act prioritizes member participation and control, which is best served by the one-member-one-vote standard.

Tennessee law, specifically under Title 43, Chapter 11 of the Tennessee Code Annotated, governs agricultural cooperatives. A key aspect of cooperative governance involves member rights and responsibilities, particularly concerning voting. For a cooperative to amend its articles of incorporation or bylaws, a supermajority vote of the membership is typically required. This requirement is designed to ensure broad consensus on significant changes that could alter the fundamental structure or operational principles of the cooperative. The exact threshold for such amendments is often stipulated within the cooperative’s own governing documents, but state law generally mandates a higher percentage than a simple majority. For instance, a two-thirds vote of members present and voting at a duly called meeting, or a specified percentage of the total membership, is common. This ensures that changes are not made by a slim margin, protecting the interests of the broader membership. The principle behind this is to foster stability and prevent hasty decisions that could be detrimental to the cooperative’s long-term viability or the collective interests of its members.