ARTICLE I ORGANIZATION
Section 1.1 Name. This cooperative shall be formally known as Quilt Shop Co-op MN (the “Co-op”).
Section 1.2. Purpose. The purpose of the Co-op shall be to provide quilting and other types of fabric, sewing notions, sewing classes and other goods and services for its members. It will serve as a source of quilting education and information, a community gathering space, and a place to promote the history and practice of quilting. To this end, the Co-op shall operate a store at Minneapolis, MN known generally as Quilt Shop Co-op MN. The Co-op shall be owned by the Members and shall operate for the mutual benefit of the Members.
Section 1.3. Fiscal Year. The fiscal year of the Co-op shall end on the last day of July each year.
Section 1.4. Execution of Instruments. All deeds, leases, contracts, notes, bonds and other obligations authorized by the Board of Directors (the “Board”) to be executed on behalf of the Co-op shall be signed by the President or Treasurer unless otherwise authorized by the Board.
Section 1.5. Co-op Records. Copies of the following documents shall be kept at the principal office of the Co-op or the office of the Secretary: a) Articles of Incorporation and Bylaws, b) records of all meetings of the Co-op, Directors and Shareholders, c) stock and transfer records containing the names and record addresses of all members. Additional copies may be kept at another location for purposes of safety
ARTICLE II MEMBERSHIP
Section 2.1. Qualifications. Any individual, co-operative, non-profit organization, partnership or business corporation, may, on approval of their application by the Board, become a member of the Co-op on terms established by the Board. This Co-op shall not discriminate on social or political grounds or on the basis of race, color, national origin, ancestry, religion sex, marital status, gender, gender identity, sexual orientation, age or disability. Upon approval by the Board of the membership application, the prospective member shall purchase one membership share of the Co-op as determined by the Board.
Section 2.2. Admission of New Members. Any eligible person may be admitted to membership upon submitting an application and investing equity in an amount and on such terms as determined by the Board. The Board shall review applications for membership. Upon the Board’s approval of an application, and the payment of the applicable equity investment in the capital stock of the Co-op, the applicant shall be a member of the Co-op. The member identified in the application as the “primary member” of such membership may identify up to three additional persons as household members (each a “member” and collectively “members”). Each member shall have access to the Co-op’s Articles of Incorporation and Bylaws.
Section 2.3. Voting. Each household or corporate member shall designate one person to vote on their behalf. When a membership is held jointly in the names of two or more people or a corporation, the first person named on the membership shall have the right for cast the one vote for that membership, unless such right is given in writing by the person so first named to another person listed on the membership. If the member is not a natural person, the member shall appoint a natural person to cast its vote.
Section 2.4. Current Address. Each member agrees to provide to the Co-op their current address and to keep the Co-op informed of any changes in their address. This obligation shall continue as long as the member has any interest in the Co-op. A member who fails to inform the Co-op of their or its current address agrees that a failure to provide the current address is a decision on their part to make a gift to the Co-op their equity or other interest the member may have in the Co-op.
Section 2.5. Inactive Members. Every two years, prior to the annual meeting, the Board shall determine those members who have not kept a current address on file with the Co-op. These members shall be deemed inactive members.
Section 2.6. Termination or Withdrawal of Membership. A member may terminate such member’s membership voluntarily at any time by written notice to the Co-op. A member’s membership shall terminate automatically if a member dies; in the event a member who dies is a member of a household, the membership shall transfer to the next named member of such household as indicated on the member application. Membership may be terminated involuntarily by the Board for cause after the member is provided fair notice of the reasons for proposed termination and has an opportunity to respond in person or in writing. Cause may include intentional or repeated violation of any provision of the Co-op’s bylaws or policies, actions that will impede the Co-op from accomplishing its purposes, actions or threats that adversely affect the interests of the Co-op or its members, willful obstruction of any lawful purpose or activity of the Co-op, breach of any contract with the Co-op, or failure to patronize the business for more than 3 years.
2.7 Return of Equity. Equity may be returned upon termination of membership in the Co-op, under terms determined by the Board, provided that the Board has determined that the equity is no longer needed by the Co-op.
2.8 Unclaimed Equity. If a member voluntarily or involuntarily terminates membership in the Co-op, and fails to inform the Co-op of such member’s mailing address, then the equity and patronage dividend amount allocated to that member will be forfeited to the Co-op. The right of a member to unclaimed equity held by the Co-op is extinguished when the Co-op disburses the equity to a tax-exempt organization if: (i) the Co-op mails notice that payment is available to the last known address of the member shown on the records of the Co-op; or (ii) if the address is unknown, the Co-op publishes notice in its official publication.
2.9 Non-transferability. Membership rights and member equity may not be transferred in any manner other than as permitted under Section 2.6 above, unless approved by the Board.
ARTICLE III MEMBERSHIP MEETINGS
Section 3.1. Annual Meeting. The annual meeting shall be held in Minneapolis, MN within four (4) months of the close of the fiscal year at a time and place to be determined by the Board. The purpose of such meetings shall be to hear reports on operations and finances, to review issues that vitally affect the Co-op, to elect Directors whose terms are ending, and to transact such other business as may properly come before the meeting.
Section 3.2. Special Meetings. The president shall call a special meeting of the membership upon a written request of at least twenty percent (20%) of the members, or upon a majority vote of the directors. The notice of the time, place and purpose of a special meeting called by member petition shall be issued within ten (10) days from and after the presentation of such petition, and such special meeting shall be held within thirty (30) days from and after the date of presenting such petition. No business shall be considered at such meeting except as may be mentioned in the call and included in the notice of the meeting.
Section 3.3. Notice of Meetings. Notice of all meetings of the membership shall be given by the secretary by publication in a magazine, periodical, email, or house organ regularly published by or on behalf of the Co-op and circulated generally among its members or by mailing or emailing a notice thereof to each member at their last known address, at least fifteen (15) days prior to the date of the meeting. This notification shall contain the following information: the date, time, place, and purpose of such meeting
The secretary shall keep a correct copy of such notice, showing the date of mailing or publication thereof. The failure of any member to receive any such notice of the annual or special meeting of the members shall not invalidate any action which may be taken by the members at any such annual or special meeting.
Section 3.4. Voting. Each member shall have one vote upon any matter submitted to a vote of the members. Voting may be by written ballots which must be sent to all members with the notice of a meeting, if authorized by the Board. There shall be no proxy voting. If voting is to be done remotely by mail or electronic means, the ballot must contain the exact language of the proposed motion, resolution or amendment being proposed and the co-op must be able to verify that the vote came from a legitimate member.
Section 3.5. Quorum, Members. At any regular or special meeting of the voting members, a quorum necessary for the transaction of business shall be at least ten percent (10%) of the total number of voting members of the Co-op, except that when the number of members shall exceed five hundred (500), fifty (50) voting members present shall constitute a quorum. Only members in actual attendance at the meeting shall count towards a quorum, except for matters submitted to the membership by mail. Mail ballots cast shall be counted towards fulfillment of the quorum requirement. The President of the Board or their designee shall preside at all meetings of the Co-op’s Members or its Directors.
ARTICLE IV BOARD OF DIRECTORS
Section 4.1. Number, Qualifications. The Board shall consist of five to seven voting members of the Co-op elected at the annual meeting by the voting membership without regard to race, color, national origin, ancestry, religion, sex, marital status, gender, gender identity, sexual orientation, age or disability, with exception that the minimum age of eighteen (18) applies. A member who is not a natural person may select a natural person to represent it on the Board. The Board may invite a selected consultant or technical advisor to attend one or more or all meetings. This individual is not a board member and does not vote.
Section 4.2. Term. The term of office of a Director shall be three years. Election of Directors should be scheduled so that one third will be filled annually. The number of consecutive terms of office that a Director may hold is two.
Section 4.3. Employees on Board. No more than one-third of the membership of the Board may be paid employees of the Co-op.
Section 4.4. Removal by Board. Each director shall fully comply with the Board’ policies as established by the Board. The Board, not including a director thought to be in violation of the policies, may remove a director who is determined by a majority vote of such directors to be in violation of the policies. The remaining directors may also fill any vacancy caused by such removal until the next annual meeting of the members.
Section 4.5. Removal by Members. Any Director may be removed, with cause, by a majority vote at a membership meeting. No Director shall be removed from office at an annual or special meeting unless that proposed action has been stated in the notice of the meeting and they have been informed of the meeting at which the matter is to be considered at least fifteen (15) days before such meeting. In case of removal of a director by the members, the members shall provide a recommendation to fill the vacancy for the unexpired term of the Director at the same meeting at which the Director was removed. This removal power shall be in addition to the power of the members under Sections 3.4 above. The Board will fill the vacancy for the remainder of the term of the removed director.
Section 4.6. Compensation. No compensation shall be given to the directors for serving on the Board. Such officers and Directors shall, however, be entitled to reimbursement for actual expenses incurred in attending to Co-op business, with board approval.
Section 4.7. Board Meetings. Regular meetings of the Board shall be held at least quarterly at such time and place as the Board determine. The directors are obligated to attend the majority of meetings held each year.
Section 4.8. Special Board Meetings. Special meetings of the Board may be called by the president or by a majority of the Board. No business except that mentioned in the call for a special meeting of the Board shall receive final action at said meeting. Each member of the Board shall be duly notified by mail or phone in advance of any such meeting. Presence at a meeting shall constitute a waiver of notice of such meeting.
Section 4.9. Board Quorum. A majority of the Directors shall constitute a quorum at all meetings of the Board, and a majority of the Directors present shall decide all questions.
Section 4.10. Ballots. It is the policy of the Co-op that printed ballots may be used in the process of electing directors and shall be used in the process of removing directors. When using printed ballots, the ballots shall be signed by the Member casting the vote. Any printed ballot without a signature, when required, or whose signature is illegible, shall be void and not counted for any purpose. In the case of elections, nominations must be made before the ballot is prepared, and the Board shall establish a process for notifying patrons for the nomination process not less than 30 days prior to preparation of the printed ballot. Nominees must be voting members in good standing.
Section 4.11. Concern for Community and Demutualization. In discharging the duties of director, a director may consider the best interests of the Co-op’s employees, customers and other stakeholders and that they may look to preserving long-term as well as short-term interests of members, including the possibility that these interests may best be served by the continued independence of the Co-op.
Section 4.12 Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Board may be taken by written action affirmed by all of the Directors or transmitted electronically by each director and filed with the Minutes. The action is effective when affirmed by all of the Directors, unless a different effective time is provided in the action.
Section 4.13 Conflicts of Interest. Directors shall be under an obligation to disclose their actual or potential conflicts of interest. Directors having such a conflict shall absent themselves from discussion and decision of any related matter under consideration by the Board unless otherwise determined by the Board. Directors may not do business with the Co-op except in the same manner as other members generally do business with the Co-op or under other conditions that are procedurally defined to avoid preferential treatment.
Section 4.14 Officers. The Board shall meet within thirty (30) days after the annual election of directors by the members and shall elect by and from their number a president, one or more vice presidents, a secretary, and a treasurer. The offices of secretary and treasurer may be combined and, when so combined, shall be termed the secretary-treasurer. Officers shall hold office until their successors shall have been elected and qualified. Responsibilities of the Officers shall be those set forth in the policies of the Board.
Section 4.15 Indemnification. The Co-op shall indemnify and reimburse each present, past and future Director for any claim or liability (including expenses and attorneys’ fees actually and reasonably incurred in connection therewith) to which such person may become subject by reason of being a Director, to the full extent allowed by law, except to the extent the Director acted in bad faith.
ARTICLE V RULES
Section 5.1. Rules. Parliamentary procedure shall govern all meetings of the membership and of the Board. In cases of dispute, Robert’s Rules of Order shall be the guide. The Board may adopt additional rules outside of the Bylaws that it deems necessary to further implement guidelines needed for the ongoing operations of the business.
ARTICLE VI OFFICERS
Section 6.1. Officers. The officers of the Board shall be a president, one or more vice presidents, a treasurer, and secretary.
Section 6.2. Election. The officers shall be Directors and shall be elected by the Board after each annual meeting.
Section 6.3. Removal. The Board may remove an officer from office, but not from the Board, by a majority vote at any Board meeting.
Section 6.4. Officer Term. The term of an officer position shall be three years or until their regular term as a director expires.
ARTICLE VII DUTIES OF OFFICERS
Section 7.1. President. The President shall preside at all membership and Board meetings. They may be authorized by a majority vote at any legally constituted membership or Board meeting to issue statements on behalf of the co-op regarding its activities and policies. They shall sign as legal representative of the co-op, along with one other officer, all notes, deeds, conveyances and other documents as is necessary.
Section 7.2. Vice President. In the absence or disability of the president, the vice president shall preside and perform the duties of the president. If there is more than one vice president, the Board shall designate a line of succession.
Section 7.3. Treasurer. The treasurer shall be responsible for:
- Keeping all accounts;
- Presenting quarterly financial statements to the Board;
- Posting and publishing annual financial statements for discussion at the annual meetings;
- Filing all necessary financial statements, reports, and returns with all governmental bodies;
Section 7.4. Secretary. The secretary shall be responsible for:
- Taking and transcribing the minutes of all membership and Board meetings;
- making all mailings required by these Bylaws;
- filing an annual renewal of the articles of incorporation with the Secretary of State of Minnesota
Section 7.5. Combination of duties. The duties of the secretary and treasurer may be combined into a secretary/treasurer position.
Section 7.6. Membership. The Board has responsibility for:
- Maintaining a membership file which will include name, address, telephone number, e-mail address and voting status for all members;
- Acting as ballot judge for all elections;
- Maintaining the stock register;
- The Board may delegate the duties enumerated in this section to some employee or employees of the Co-op.
Section 7.7. General Manager. The Board shall have power to employ and dismiss the general manager of the Co-op. The general manager shall have general charge of the ordinary and usual business operations of the Co-op, under and subject to the direction, approval and oversight of the Directors.
- The manager shall be required to maintain the Co-op’s records and accounts in such general manner that the true and correct condition of the business may be ascertained from such records at any time.
- The general manager shall employ and discharge employees not specifically employed by the Directors.
- The general manager shall handle and account for all monies belonging to the Co-op, which come into his or her possession, in the manner and form prescribed by the Directors.
ARTICLE VIII MANAGEMENT OF BUSINESS
Section 8.1. Management of Business. The Board shall oversee the general manager’s management of the business and the affairs of the Co-op and make all necessary rules and regulations consistent with state and federal law or with these Bylaws, for the management of the business and the guidance of the officers, employees, and agents of the Co-op.
Section 8.2 Bonds of Employees. The Board of Directors may require the manager and all other officers, agents and employees charged by the Co-op with responsibility for the custody of any of its funds or property to provide a fidelity bond in such sum as the Board of Directors shall determine. Such bond shall be furnished by a responsible bonding company or other surety satisfactory to the Directors, and the cost thereof shall be paid by the Co-op.
Section 8.3.Board Audits. The Board shall examine all accounts at their regular meetings. In addition, the books shall be audited as often as deemed appropriate by the Board by a competent auditing service. Such audit shall be made between the date of the close of the fiscal year and the date of the annual meeting, and a report of such audit shall be available to the members at their annual meeting in either typewritten, mimeographed, or printed form, and shall contain at least a balance sheet showing the financial condition of the Co-op at the close of the fiscal year and a statement of income and expense for the year, and such statistical memoranda as may be desired by the Board.
Section 8.4. Declaration of Patronage Refund. The Board shall have the authority to declare the patronage refund and the manner and time of payment.
ARTICLE IX CAPITAL STOCK AND SURPLUS
Section 9.1. Book Entry System. No certificates of stock shall be issued by the Co-op. Instead, the Co-op shall keep a record of the name and address of each person or entity that owns stock in the Co-op, as well as the amount of each class or stock owned by each person or entity. The Co-op shall provide to each member of stock information about the class and amount of stock owned upon written request by the person or entity.
Section 9.2. Stock Issued or Transferred. Stock shall be transferable only to the Co-op with the consent and approval of the Board. Shares of stock may not be transferred in any other manner.
ARTICLE X PATRONAGE DIVIDENDS
Section 10.1 Allocations to members. The Co-op shall allocate and distribute to members the net profit from business done with them in such a manner as to qualify them as patronage dividends consistent with cooperative principles, applicable state and federal laws and generally accepted accounting principles. The Board shall determine when and how such allocations and distributions will be made; distributions may be issued in cash or equity (Class B Stock) or any combination thereof. In the event the Co-op distributes a patronage dividend for cash by check, each member agrees that if such member does not cash such patronage dividend check within 120 days of the date on which it was issued by the Co-op, the Co-op shall have the right to treat such patronage dividend amount as unclaimed equity and follow the procedures set forth Section 2.8.
Section 10.2 Tax Consent of members. By obtaining or retaining membership in the Co-op, each member consents to take into account, in the manner and to the extent required by federal and state tax law, any patronage dividend received from the Co-op.
ARTICLE XI LIMITED LIABILITY AND INDEMNIFICATION
Section 11.1. Indemnification. This Co-op shall indemnify each person who is or has been a director, officer or employee of this Co-op, and each person who is serving or who has served at the request of this Co-op as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in fullest extent of his or her right to indemnity under current Minnesota Corporation Law.
Section 11.2. Limited Liability. A director is not personally liable to the Co-op or its members for monetary damages for breach of fiduciary duty except in the following circumstances: (a) for a breach of the Director’s duty of loyalty to the Co-op or its members; (b) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (c) for a transaction from which the Director derived an improper personal benefit; or (d) for an act or omission occurring prior to the date these amended articles of incorporation became effective.
ARTICLE XII AMENDMENTS
Section 12.1. These Bylaws may be amended, repealed or altered, in whole or in part, by a majority vote of the members voting in person or by mail, if authorized by the Board, at any annual or special meeting of the members when such action has been announced in the call of the meeting as provided by law.