General Assembly Raised Bill No. 5431 seeks to modernize the legal framework for cooperative corporations in Connecticut by updating terminology and governance structures. The bill replaces the term "association" with "corporation" throughout the relevant statutes and allows three or more individuals to act as incorporators without the requirement of being state inhabitants. It mandates that the corporation's objectives and business locations be clearly outlined in its certificate of incorporation or bylaws. Additionally, the management will now be overseen by a board of directors with at least three members, elected annually, and introduces provisions for staggering directors' terms and clarifying voting rights, ensuring each member has one vote and must hold at least one share of capital stock.

The legislation also introduces new provisions regarding member actions and share issuance, allowing actions to be taken without a meeting through "unanimous written consent" and via ballot, with specific criteria for validity. It repeals and replaces certain sections related to share issuance and profit distribution, stating that shares cannot be issued until fully paid in cash and that shareholders cannot receive less than the par value when disposing of shares to the corporation. Profit distribution will be governed by the corporation's bylaws, and the board of directors can allocate net profits to various funds. These changes are set to take effect on October 1, 2026, aiming to enhance clarity and operational efficiency in the governance of business cooperatives in the state.

Statutes affected:
Raised Bill: 33-183, 33-184, 33-185, 33-186, 33-190, 33-191, 33-193