UNITED STATES DEPARTMENT OF AGRICULTURE 
DEPARTMENT BULLETIN No. 1106 
Washington, D. C. 
Issued October, 1922 
Revised October, 1929 
LEGAL PHASES OF COOPERATIVE ASSOCIATIONS * 
By L. S. Hulbert, Principal Marketing Economist, Division of Cooperative 
Marketing, Bureau of Agricultural Economics 
CONTENTS 
Introduction 
Incorporated associations or corporations 
Nature and characteristics 
Antiquity of corporations -. 
Power to create corporations 
Formation of incorporated associations. _ 
Name of association 
Charter 
By-laws 
Liability of association for promotion ex- 
penses. 
Limitation on indebtedness 
Lien on stock 
Subscriber, stock, capital stock 
How stock is paid for 
Stock and nonstock associations 
Restrictions as to transfer of stock 
Who may become members 
Rights of members 
Termination of membership 
Interest in association 
Dissolution 
Expiration of charter 
Board of directors 
Compensation of directors 
Meetings of the board.. 
Quorum .-- - 
Conflicting personal interests 
Contracts with directors 
Obligations and liabilities of directors:... 
Additional liabilities imposed by statute. 
Executive committee 
Minutes of meetings 
Officers and employees 
Terms and compensation 
Powers of efficers 
Removal of directors, officers, and agents. 
Liability for wrongs done 
Meetings of associations. 
Quorum 
Voting unit.. 
Proxy voting 
Bankruptcies— Receiverships 
Marketing contracts 
When may cooperative marketing con- 
tracts be made? 
Kinds of cooperative marketing contracts. 
When marketing contracts become effec- 
tive 
Duration of marketing contracts 
Signing marketing contracts 
Page 
Marketing contracts— Continued. 
Contracts obtained by force or fraud 
When title to products passes to associa- 
tion 
Pooling 
Excess advances or payments 
Effect of breach of contract 
Mismanagement no defense 
Deductions 
Control of crops by landlord 
Crop mortgages 
Liquidated damages 
Specific performance 
Injunctions 
Interference with marketing contracts 
Transfers in attempts to avoid contracts 
Conclusive presumption 
Monopoly— Restraint of trade 
Section 6 of the Clayton Act 
Capper- Volstead Act 
Classification of agriculture 
Promissory notes 
Agency 
Cooperative associations as agent.. 
Cooperative associations liable for acts of 
agents 
Taxes 
94 
General taxes 97 
License and stamp taxes... 98 
Income taxes 99 
Patronage dividends 102 
Certificates of indebtedness 105 
Associations operating in various States 107 
Associations and third persons... 111 
Unincorporated associations 112 
Characteristics.. 112 
How formed 112 
Admission of members in unincorporated 
associations 114 
Membership nontransferable 114 
Control of an unincorporated association. 114 
Notice of meetings 114 
Unincorporated associations and third 
persons 115 
Money must be used for purpose speci- 
fied 117 
Expulsion of members 117 
Withdrawing or expelled members receive 
50 nothing... 118 
51 Dissolution. 118 
52 Appendix... 118 
iThis bulletin is an extensive revision of Department 'Bulletin No. 1106, U. S. Dept. 
Agr., 1922, " Legal Phases of Cooperative Associations," and has been brought up to date. 
68118°— 29- 
