Co-op References

General 
Introduction

     This section is intended to provide easy access 
to the laws under which Iowa cooperatives are 
incorporated and a list of co-op topics for which we 
can provide information (most of it from USDA). 

 

 


Iowa Cooperative Laws

In General  
    
Cooperatives, to be responsible to their owners and to the laws of the land, are formally organized under a specific law that fits their purpose for being. They are generally organized under some state law rather than a federal law and usually under a law in the state where their headquarters are located. These state laws permit a company to be created and to exist. Each of them describes the allowable nature, in a general way, of a company created under them. The company’s founders choose the law that fits their purposes best and file "articles of incorporation" with the state’s Secretary of State. If all is in order, the Secretary of State issues a charter, or some similar authorization, to show that the company is permitted to be created.
     The company’s articles of incorporation are written by the company’s founders to describe the purposes and general structure of their particular company more specifically than the law does, but they must stay within the limits of the law. The founders also create a set of "bylaws" to even more specifically spell out how the company will function. The bylaws must conform to the provisions in the articles of incorporation. In Iowa, the co-op laws require that the cooperative company’s members must approve any changes to the articles of incorporation (as must the Secretary of State), but the bylaws may be changed either by the members or by the company’s board of directors. In some states, the board of directors may not change the bylaws without the approval of the members.

Specific Laws Under Which Iowa Cooperatives are Created and/or Operate  
     Most farmer cooperatives, petroleum cooperatives, utility cooperatives, and consumer food cooperatives are organized under Chapter 499 of the Code of Iowa. A very few were organized under older laws (Chapters 497 or 498) and did not convert to Chapter 499 after it was created by the Iowa Legislature in 1935. Credit Union cooperatives are organized under Chapter 533. Some cooperatives, most of them farmer cooperatives, were organized under the general business corporation law in Iowa, which is now found in Chapter 490, but operate much the same way as cooperatives organized under cooperative laws. They meet requirements in federal law to be treated by the federal government as cooperatives but are not required to meet all of the provisions found in the state’s cooperative laws. Because they are not organized under a cooperative law, however, they are not permitted to use the word "cooperative" in their name.
     In 1996, a new law was passed which provided the structure for "closed," or "new generation" cooperatives owned by farmers. This law is Chapter 501. A summary of it is found at the beginning of its description.
     In 1998, another new law affecting cooperatives was passed which provides additional choices of organizational structures for farmers wishing to engage in livestock and poultry production without being held to the same limits found in Iowa’s Corporate Farming Law as other organizations must meet which do not meet the specified standards for farmer ownership. This law is Chapter 10. It is an enabling law, however, not a law under which companies are organized. A summary of it is found at the beginning of its description.

USDA Publications List

The Rural Business-Cooperative Service has a section on their web site called Library of Publications which contains a listing of USDA publications which you may find useful.  To access this Library of Publications, click here:  http://www.rurdev.usda.gov/rbs/pub/newpub.htm .

     

Do You Know Your Cooperative?

"Do You Know Your Cooperative" published by the Iowa Institute for Cooperatives contains 191 common questions and answers about cooperatives.   It was written primarily as a compact source of cooperative information for members, young people, employees, and others interested in or connected with farmer cooperatives.  Efforts have been made to limit each question to one idea, and to make the answers as short and direct as possible.

If you are interested in purchasing a copy, please contact the IIC Office at 515-292-2667.  Single copy cost is $5.00.  Prices for quantities are negotiable.


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