Substitute House Bill No. 5431, also known as Public Act No. 26-59, amends the laws governing cooperative corporations in Connecticut by replacing the term "association" with "corporation" throughout the legislation. This change formalizes the structure of cooperative entities and allows three or more individuals to act as incorporators without the requirement of being state inhabitants. The bill mandates that the objects and business locations of the corporation be clearly stated in its certificate of incorporation or bylaws, and it establishes a board of directors with a minimum of three members, elected annually. Additionally, it outlines procedures for organizational meetings, voting rights, and quorum requirements, aiming to modernize governance and enhance operational efficiency.

The bill also introduces amendments to corporate actions and shareholder rights, allowing actions to be taken without a meeting through "unanimous written consent" and enabling corporations to deliver ballots for voting on actions typically decided in meetings. It clarifies that the approval of actions via ballot is valid only if quorum requirements and necessary approval thresholds are met. Furthermore, the bill repeals certain sections related to shareholder rights and profit distribution, replacing them with updated provisions that reflect the new terminology and processes, such as ensuring no shares are issued until fully paid and that profit distributions adhere to the corporation's bylaws. These changes are set to take effect on October 1, 2026.

Statutes affected:
Raised Bill: 33-183, 33-184, 33-185, 33-186, 33-190, 33-191, 33-193
JUD Joint Favorable: 33-183, 33-184, 33-185, 33-186, 33-190, 33-191, 33-193
File No. 534: 33-183, 33-184, 33-185, 33-186, 33-190, 33-191, 33-193
Public Act No. 26-59: 33-183, 33-184, 33-185, 33-186, 33-190, 33-191, 33-193