42 Cooperation in Agriculture 



THE DIFFICULTY OF ORGANIZING UNDER PRESENT LAWS 



Under the corporation laws of most of the states, it is 

 generally impossible to organize a business agricultural 

 association on a non-profit cooperative basis. The method 

 of handling an organization must conform to the laws of 

 the state. They must be consistent with the federal 

 statutes and with the articles of incorporation. The laws 

 that govern an organization for pecuniary profit have been 

 enacted primarily to meet the needs of capital, not those 

 of agricultural non-profit corporations. The laws re- 

 lating to non-profit corporations usually cover religious, 

 fraternal, social, scientific, educational, benevolent, or 

 charitable institutions, or other similar associations. 



The laws governing the formation of membership 

 corporations or partnerships are not adapted to the 

 formation of agricultural non-profit cooperative organiza- 

 tions. The money contributed by each member to es- 

 tablish and maintain the business of these membership 

 corporations or partnerships may be fixed by mutual 

 agreement among the members. The money required 

 for operating expenses in many of the farmers' organiza- 

 tions is raised by withholding certain percentages from 

 the products marketed and not by assessment on the 

 capital contributed by each or by proportional assess- 

 ments of the members. These laws are therefore not 

 adapted to the organization and management of associa- 

 tions formed on the cooperative plan. 



In stock corporations formed for pecuniary profit, the 

 voting power of the member is proportional to the number 

 of shares held by each member, though in some states 



