COOPERATIVE ORGANIZATION BY-LAWS. 3 



Associations of the former class are rather loosely organized and lack 

 certain advantages which are gained by incorporation. 



It is advisable for all organizations to incorporate, as this gives the 

 organization a distinct legal status which can not be obtained other- 

 wise. For instance, an unincorporated association is hampered in 

 the matter of bringing suit as an organization, while the incorporated 

 association is not subject to such disability. Another advantage of 

 the incorporated over the unincorporated form is that, in the former, 

 the individual liability of a member is fixed by statute and is usually 

 limited to the amount which he has invested in its capital stock. 

 In some States the unincorporated organization is considered a part- 

 nership. Where this is the case, the liability of the members is that 

 of partners. In other States the unincorporated organization is 

 regarded as an agent for its members. Where it is so held, the 

 liability of the members is that of principals. Moreover, the incor- 

 porated association has a more definite form of organization than the 

 unincorporated and the management thereof is placed in the hands 

 of certain officers who can be required to account more strictly to 

 the association. Among other advantages of incorporation may be 

 included its value in providing an established business, the contin- 

 ued existence of which is assured more fully than that of the unin- 

 corporated. Incorporation usually prevents any dispute as to the 

 ownership of the property held by the association. 



The relation of the by-laws to the State incorporation laws has 

 already been discussed, but it should be remembered that some of 

 the States have more than one law for the incorporation of associa- 

 tions. In that event, it must be decided which law is the most 

 desirable and the by-laws must be drawn accordingly. Articles of 

 incorporation must be prepared before incorporation, but as the 

 form of this procedure differs somewhat in the various States and 

 the requirements can usually be ascertained from the Secretary of 

 State or other official in charge of such matters, a suggested form for 

 articles of incorporation is not included here. 



SECTION 6 OF THE CLAYTON AMENDMENT. 



In 1890 Congress passed the Sherman antitrust law, and in 1914 

 an amendment to the antitrust law, commonly known as the Clayton 

 amendment, was passed. Section 6 of the Clayton Act is of particu- 

 lar interest to farmers' cooperative associations, because to a valuable 

 extent it exempts such associations, provided they conform to its 

 requirements, from the operation of the United States antitrust laws. 

 Section 6 of the Clayton Act reads as follows : 



That the labor of a human being is not a commodity or article of commerce. Nothing 

 contained in the antitrust laws shall be construed to forbid the existence and opera- 

 tion of labor, agricultural, or horticultural organizations, instituted for the purposes 



