2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 77 - Workers' Cooperative Corporations
7705 - Capital stock.

     § 7705.  Capital stock.
        (a)  Issuance and redemption.--A corporation shall issue as
     capital stock a class of voting common stock designated as
     membership shares only to those individuals who fulfill all
     requirements for member status upon terms and conditions
     provided in the articles of incorporation. Each member may own
     only one membership share, and only members may own membership
     shares. A member is entitled to one vote per membership share on
     each question that may be presented at any meeting of the
     members, regardless of the number of shares of stock or
     membership capital owned by the member. Membership shares shall
     be issued for a fee determined by the board of directors. Except
     as otherwise provided in this chapter, a membership share
     entitles a member to the rights and obligations of a stockholder
     of a corporation organized under this title. Upon voluntary or
     involuntary termination of a member's work in the corporation,
     the membership share shall be transferred back to the
     corporation at the time of the termination. The redemption price
     of a membership share shall be determined solely by reference to
     the member's internal capital account under section 7706
     (relating to internal capital accounts and net worth).
        (b)  Voting power.--No capital stock other than membership
     shares shall be granted voting power in a corporation except as
     provided in section 7720 (relating to amendments of articles)
     and the articles of incorporation.
        (c)  Preferred stock.--A corporation may issue as capital
     stock a class of nonvoting preferred stock upon terms and
     conditions provided in the articles of incorporation. Preferred
     stock shall be freely transferable.
        (d)  Payment for stock.--No corporation may issue a
     membership share, and no certificate of stock may be issued
     until fully paid for, except that promissory notes may be
     accepted by the corporation as full or partial payment if the
     promissory note requires payment by regular payroll deductions
     commencing on the date of the member's acceptance for membership
     in the corporation. The corporation shall hold the membership
     share or stock as security for the payment of the note, but
     retention as security shall not affect the member's right to
     vote and hold office.
        (e)  Fractional shares and scrip.--Fractional shares of and
     scrip for common and preferred stock may not be issued by the
     corporation.
        (f)  Form of certificates.--Certificates representing shares,
     membership shares and evidences of a person's equity in a fund,
     capital investment or other asset of the corporation shall be
     signed by the president, vice president, treasurer or assistant
     treasurer and the secretary or an assistant secretary of the
     corporation. Facsimiles of signatures are acceptable. These
     certificates may be sealed with the seal of the corporation or a
     facsimile.
        (g)  Dividend and lien.--Dividends may be paid on preferred
     stock and may be cumulative if the articles of incorporation so
     provide. A corporation shall have a lien on all of its
     outstanding preferred stock and dividends declared or accrued
     for all indebtedness of the holders to the corporation if
     provision for a lien is stated on the face of the certificate of
     stock.
        (h)  Status of membership.--A membership is not a security as
     defined in section 102 of the act of December 5, 1972 (P.L.1280,
     No.284), known as the Pennsylvania Securities Act of 1972. Sale,
     redemption and other transactions with respect to membership
     shares are not governed by the Pennsylvania Securities Act of
     1972, except that Part IV of that act, relating to fraudulent
     and prohibited practices, applies.
        (i)  Sale, transfer and redemption of stock.--The sale,
     transfer and redemption of stock in the corporation other than
     membership shares is subject to the Pennsylvania Securities Act
     of 1972.
        (j)  Issuance without other first offer.--Unless otherwise
     provided in the articles of incorporation, a corporation may
     issue shares without first offering them to shareholders of any
     class.