Substitute House Bill No. 5431 seeks to modernize the legal framework for cooperative corporations in Connecticut by replacing existing statutes with new provisions that simplify the incorporation process and governance structure. The bill allows three or more individuals to serve as incorporators without the requirement of being state residents, and it clarifies that cooperative corporations will have the same powers and responsibilities as other corporations. Key changes include the establishment of a board of directors with a minimum of three members, elected annually, and provisions for staggered terms, organizational meetings, and actions taken without meetings through written consents. The bill also transitions the terminology from "association" to "corporation" throughout the legal text, ensuring a consistent framework.

In addition to these updates, the bill repeals outdated provisions related to cooperative associations, including those concerning capital stock and franchise tax, and introduces new rules for share issuance, profit distribution, and board authority. It mandates that bylaws outline members' rights, including the requirement to hold at least one share of capital stock, and adjusts quorum requirements for voting. The effective date for these changes is set for October 1, 2026, aiming to enhance the governance and operational protocols of cooperative entities while maintaining essential voting procedures.

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