S*1189 Session 110 (1993-1994)
S*1189(Rat #0447, Act #0392) General Bill, By Elliott, Courtney, Drummond,
Giese, Glover, Holland, Lander, Leventis, McGill, Mescher, O'Dell, Peeler,
Rankin, Reese, Russell, Short, Waldrep and Washington
Similar(H 4718)
A Bill to amend Title 33, Code of Laws of South Carolina, 1976, relating to
corporations, partnerships, and associations, by adding Chapter 46 so as to
enact the "Telephone Cooperative Act"; and to amend Section 33-45-20, relating
to cooperative associations and restrictions on use of the term "cooperative",
so as to permit the use of that term by corporations as part of their
corporate or other business name or title if such corporations are
incorporated under Chapter 46 of Title 33.
02/16/94 Senate Introduced and read first time SJ-4
02/16/94 Senate Referred to Committee on Judiciary SJ-4
03/16/94 Senate Committee report: Favorable Judiciary SJ-10
03/17/94 Senate Read second time SJ-36
03/22/94 Senate Read third time and sent to House SJ-14
03/23/94 House Introduced and read first time HJ-15
03/23/94 House Referred to Committee on Judiciary HJ-16
04/20/94 House Committee report: Favorable Judiciary HJ-7
05/05/94 House Read second time HJ-23
05/10/94 House Read third time and enrolled HJ-19
05/12/94 Ratified R 447
05/18/94 Signed By Governor
06/07/94 Effective date 05/18/94
06/09/94 Copies available
(A392, R447, S1189)
AN ACT TO AMEND TITLE 33, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO CORPORATIONS,
PARTNERSHIPS, AND ASSOCIATIONS, BY ADDING CHAPTER 46
SO AS TO ENACT THE "TELEPHONE COOPERATIVE
ACT"; AND TO AMEND SECTION 33-45-20, RELATING TO
COOPERATIVE ASSOCIATIONS AND RESTRICTIONS ON USE OF
THE TERM "COOPERATIVE", SO AS TO PERMIT THE
USE OF THAT TERM BY CORPORATIONS AS PART OF THEIR
CORPORATE OR OTHER BUSINESS NAME OR TITLE IF SUCH
CORPORATIONS ARE INCORPORATED UNDER CHAPTER 46 OF
TITLE 33.
Be it enacted by the General Assembly of the State of South Carolina:
Telephone Cooperative Act enacted
SECTION 1. Title 33 of the 1976 Code is amended by adding:
"CHAPTER 46
Telephone Cooperative Act
Article 1
General Provisions
Section 33-46-10. This chapter may be cited as the `Telephone
Cooperative Act'.
Section 33-46-20. In this chapter, unless the context otherwise
requires:
(1) `Person' means any natural person, firm, association, corporation,
business trust, partnership, federal agency, state or political subdivision, or
agency thereof, or any body politic.
(2) `Member' means each incorporator of a cooperative and each person
admitted to and retaining membership therein and includes a husband and
wife admitted to joint membership.
(3) `Articles of incorporation' means the articles of conversion of a
corporation converted to a telephone cooperative pursuant to Article 8 of
this chapter.
(4) `Telephone cooperative' means a corporation which is financed,
now or formerly, in whole or in part by the Department of Agriculture
made under the provisions of the Rural Electric Act of 1936, Title 26,
Section 922 of the United States Code, and acts amendatory thereto for the
purposes of owning or operating in this State equipment or facilities for the
transmission of intelligence through a communication service system
including, but not limited to, telephone services, mobile radio, and cable
television on a cooperative basis as is tax exempt pursuant to Internal
Revenue Service Code 501(c)(12) or an association of like corporations
exempt from tax pursuant to 501(c)(6), or operated under a cooperative
basis pursuant to Subchapter T of the Internal Revenue Code and originally
incorporated pursuant to Title 33, Chapter 45 of the South Carolina Code of
Laws or this chapter.
(5) `Telephone service' means the providing of communication service
including, but not limited to, the transmission of voice, sounds, signals,
pictures, writing, or signs of all kinds through the use of electricity or the
electromagnetic spectrum between the transmitting and receiving
apparatus, together with any communication services requiring band-width
capacity, community antenna, and cable television services and including
all lines, wires, radio, lights, electromagnetic impulse and all facilities,
systems, or other means used in the rendition of such services, but not
including message telegram service or radio broadcasting services or
facilities within the meaning of Section 3(o) of the Federal
Communications Act of 1934, as amended (47 USC Section 153(o)).
Section 33-46-30. Whenever any notice is required to be given under
the provisions of this chapter or under the provisions of the articles of
incorporation or bylaws of a telephone cooperative, a waiver thereof in
writing, signed by the person entitled to such notice, must be deemed
equivalent to such notice. If a person entitled to notice of a meeting attends
such meeting, the attendance constitutes a waiver of notice of the meeting,
except in cases where the attendance is for the express purpose of objecting
to the transaction of any business because the meeting was not lawfully
called or convened. If the articles of incorporation or bylaws prescribe
notice requirements not inconsistent with this section or other provisions of
this chapter, those requirements govern. Notice may be in such forms as
prescribed by Section 33-1-410(b). Written notice is effective when mailed,
if mailed postpaid and correctly addressed to members or officers as shown
in the records of the telephone cooperative. Oral notice is effective when
communicated in a comprehensive manner.
Section 33-46-40. Telephone cooperatives transacting business in this
State pursuant to this chapter are subject to the jurisdiction of the Public
Service Commission of this State for such portions of their activities as are
regulated by Title 58, Chapter 9 and have all rights and privileges granted a
telephone utility as defined by Section 58-9-10(6).
Section 33-46-50. The provisions of Chapter 1 of Title 35 do not apply
to any note, bond, or other evidence of indebtedness issued by a telephone
cooperative transacting business pursuant to this chapter, to the United
States of America, any agency or instrumentality thereof, or to any
mortgage or deed of trust excluded to secure the same. The provisions of
that title do not apply to the issuance of shares or membership certificates
by any telephone cooperative.
Section 33-46-60. This chapter must be construed liberally. The
enumeration of any object, purpose, power, manner, method, or thing must
not be deemed to exclude like or similar objects, purposes, powers,
manners, methods, or things.
Section 33-46-70. The provisions of this chapter are not intended to be
repealed by implication. Should they be in conflict with other provisions of
the Code of Laws, the provisions of this chapter prevail.
Section 33-46-80. Each telephone cooperative transacting business in
the State is subject to the tax laws as written or thereafter amended for
cooperatives organized pursuant to Title 33, Chapter 45.
Section 33-46-90. Articles of incorporation, amendments,
consolidations, mergers, conversions, or dissolutions and certificates of
election to dissolve and affidavits of compliance, as the case may be, when
executed and acknowledged and accompanied by such affidavits as may be
required by the provisions of this chapter, must be presented to the
Secretary of State for filing in the records of that office. If the Secretary of
State's office finds that the articles presented conform to the requirements
of this chapter, it shall, upon payment of fees as prescribed in Section
33-1-220, file the articles so presented in the records of the office, and,
upon such filing, the incorporation, amendment, consolidation, merger,
conversion, or dissolution provided for therein is in effect.
Section 33-46-100. Telephone cooperatives transacting business in the
State have such rights, privileges, and responsibilities as specified in
Sections 33-1-240, 33-1-250, 33-1-260, 33-1-270, and 33-1-280.
Article 2
Incorporation
Section 33-46-210. Telephone cooperative nonprofit membership
corporations may be organized under this chapter for the purpose of
rendering communication and information services and for such other and
further acquisitions, construction, and extensions as may be reasonably
necessary and expedient for the proper control and operation of said
communication and/or information system.
Section 33-46-220. Five or more natural persons or two or more
telephone cooperatives may organize a telephone cooperative in the manner
hereinafter provided.
Section 33-46-230. The articles of incorporation shall recite in the
caption that they are executed pursuant to this chapter, must be signed and
acknowledged by each of the incorporators, and shall state:
(1) the name of the telephone cooperative;
(2) the address of its principal office;
(3) the name and address of the incorporators;
(4) the name and address of the persons who shall constitute its first
board of directors; and
(5) any provisions not inconsistent with this chapter considered
necessary or advisable for the conduct of its business and affairs.
Such articles of incorporation must be submitted to the Secretary of
State for filing as provided in this chapter. It is not necessary to set forth in
the articles of incorporation of a telephone cooperative the purpose for
which it is organized or any of the corporate powers vested in a telephone
cooperative under this chapter. Nothing in this chapter shall be interpreted
to require a corporation created pursuant to Title 33, Chapter 45 and
existing before the enactment of this chapter to amend its charter unless the
corporation elects to convert pursuant to Article 8.
Section 33-46-240. The name of each telephone cooperative shall
include the words `Telephone' and `Cooperative' and the abbreviation
`Inc.'; provided, however, such limitations do not apply if, from an affidavit
made by the president or vice president of a telephone cooperative and filed
with the Secretary of State, it appears that the telephone cooperative desires
to transact business in another state and is precluded therefrom by reason of
its name.
Article 3
Powers
Section 33-46-300. A telephone cooperative operating in accordance
with this chapter has all the powers conferred on private corporations by
Section 33-3-102 unless restricted herein or by the bylaws of the telephone
cooperative. A telephone cooperative also has the power to:
(1) construct, maintain, and operate lines for communications and
information services along, upon, under, and across all public
thoroughfares including, without limitation of the generality of the
foregoing, all roads, highways, streets, alleys, bridges, and causeways, and
upon, under, and across all publicly-owned lands, subject, however, to the
requirements in respect to the use of such thoroughfares and lands that are
imposed by the respective authorities having jurisdiction thereof upon
corporations constructing or operating telephone lines or systems;
(2) become a member in one or more other cooperatives or corporations
or to own shares therein;
(3) provide communication services including, but not limited to, the
transmission of voice, sounds, signals, pictures, writing, or signs of all
kinds through the use of electricity or the electromagnetic spectrum
between the transmitting and receiving apparatus, together with any
telecommunication services requiring band-width capacity, community
antenna, and cable television services and including all lines, wires, radio,
lights, electromagnetic impulse, and all facilities, systems, or other means
used in the rendition of such services, but not including message telegram
services or radio broadcasting services or facilities within the meaning of
Section 3(o) of the Federal Communications Act of 1934, as amended (47
USC Section 153(o));
(4) construct, purchase, take, receive, lease as lessee, or otherwise
acquire, to own, hold, use, equip, maintain, and operate, and to sell, assign,
transfer, convey, exchange, lease as lessor, mortgage, pledge, or otherwise
dispose of or encumber communication lines or systems, lands, buildings,
structures, plants, and equipment and any and all kinds and classes of real
or personal property whatsoever considered necessary, convenient, or
appropriate to accomplish the purpose for which the telephone cooperative
is organized;
(5) purchase or otherwise acquire, to own, hold, use, and exercise, and
to sell, assign, transfer, convey, mortgage, pledge, hypothecate, or
otherwise dispose of or encumber franchises, rights, privileges, licenses,
rights-of-way, and easements;
(6) borrow money and otherwise contract indebtedness, to issue notes,
bonds, and other evidences of indebtedness therefor and to secure the
payment thereof by mortgage, pledge, deed of trust, or any other
encumbrance upon any or all of its then-owned or after-acquired real or
personal property, assets, franchises, revenues, or income;
(7) exercise the power of eminent domain;
(8) conduct its business and exercise any or all of its powers within or
without this State;
(9) do and perform any and all other acts and things and to exercise any
and all other powers that may be necessary, convenient, or appropriate to
accomplish the purpose for which the telephone cooperative is
organized.
Section 33-46-310. A telephone cooperative by vote of a majority of
the incorporators when originally organized or thereafter by vote of
three-fourths of the members present in person or by proxy at a regular or
special meeting of the telephone cooperative may elect to have the
ownership interest in the telephone cooperative represented by shares, by
certificates of membership, or by other evidence of membership. The rights
and responsibilities of the members are as defined in the bylaws. No
member except a telephone cooperative shall own more than one-fifth of all
shares or certificates of membership of the telephone cooperative.
Section 33-46-320. The original bylaws of a telephone cooperative
must be adopted by its board of directors. Thereafter, bylaws must be
adopted, amended, or repealed in accordance with the provisions of the
bylaws. The bylaws shall set forth the rights and duties of members and
directors and may contain other provisions for the regulation and
management of the affairs of the telephone cooperative not inconsistent
with this chapter or with its articles of incorporation.
Section 33-46-330. A telephone cooperative may sell its assets as
follows:
(A) A sale (which term includes a sale, lease, exchange, or other
disposition of assets, except a mortgage of or other security interest in the
assets) of all, or substantially all, the property and assets, with or without
the goodwill, of a telephone cooperative may be made upon such terms and
conditions and for such consideration (which may consist in whole or in
part of money or property, real or personal, including shares of any other
corporation, domestic or foreign) as is authorized in the following
manner:
(1) The board of directors shall adopt a resolution recommending such
sale and directing the submission thereof to a vote at a meeting of members,
which may be either an annual or a special meeting.
(2) Written or printed notice must be given to each member of record
entitled to vote at such meeting within the time and in the manner provided
for the giving of notice of meetings of members. The notice shall state
whether the meeting is an annual or a special meeting and shall state that
the purpose, or one of the purposes, of the meeting is to consider the
proposed sale.
(3) At such meeting, the members may authorize such sale and may
fix or may authorize the board of directors to fix any or all of the terms and
conditions thereof, including the consideration to be received by the
telephone cooperative. Each member of the telephone cooperative is
entitled to vote thereon. Such authorization requires the affirmative vote of
at least two-thirds of all the members of the telephone cooperative.
(B) The articles of incorporation or bylaws of any telephone cooperative
may contain a provision prescribing for approval of any sale of assets by a
vote greater than, but in no event less than, two-thirds of all members.
(C) After such authorization by a vote of the membership, the board of
directors, in its discretion, may abandon such sale of assets, subject to the
rights of third parties under any contract relating thereto, without further
action or approval by members.
(D) A sale (which term includes a sale, lease, exchange, or any other
disposition of assets, except a mortgage of or other security interest in the
assets) of less than all or substantially all of the property and assets of the
cooperative may be undertaken without following the procedures of this
section upon determination of the board of directors that such sale will not
affect the quality of service provided by the cooperative or the economic
stability of the cooperative. After the board of directors makes this finding,
the assets may be sold upon such terms and conditions and for such
consideration as determined by the board, provided that two-thirds of the
directors vote to approve the terms, conditions, and price and thereafter
two-thirds of the board approves the sale.
Section 33-46-340. A mortgage or pledge of or other security interest in
all or any part of the assets of a telephone cooperative, whether or not in the
usual and regular course of business, may be made by authority of the
board of directors of the telephone cooperative without authorization of the
members, unless the articles of incorporation or bylaws require
otherwise.
Article 4
Members
Section 33-46-400. No person who is not an incorporator shall become
a member of a telephone cooperative unless such person agrees to use
telephone service furnished by the cooperative when such telephone service
is available through its facilities. The bylaws of the telephone cooperative
may provide for any or all of the following matters:
(1) the requirement of membership in the telephone cooperative or
ownership of shares;
(2) the method, time, and manner of permitting members to withdraw or
to transfer shares;
(3) the manner of assignment and transfer of the interest of members
and of the shares (if any) and conditions upon which membership of any
member shall cease;
(4) the automatic suspension of the rights of a member when he ceases
to be eligible for membership in the telephone cooperative and the mode,
manner, and effect of expulsion of a member;
(5) the manner of determining the value of a member's interest and
provision for the purchase of that interest by the telephone cooperative
upon the death, withdrawal, or other termination of the member's
membership;
(6) the property rights of members upon dissolution;
(7) the time, place, and manner of calling and conducting its
meetings;
(8) the rights of members to vote by proxy and the condition, manner,
form, and effect of such votes;
(9) the number of directors constituting a quorum;
(10) the qualifications, compensation, duties, and terms of officers and
directors, the time of their election, and the mode and manner of giving
notice thereof;
(11) the mode, method, and manner of determining the members'
patronage capital and of crediting the members' patronage capital to the
members' accounts, together with the mode, time, manner, and priority of
retiring or otherwise making provisions for payment of such patronage
capital credits;
(12) any other provisions that may be necessary, convenient, or
appropriate to accomplish the purpose for which the telephone cooperative
is organized.
Provided, however, that any bylaw provisions in conflict with the
provisions of this chapter are of no force or effect.
Section 33-46-420. An annual meeting of the members must be held at
such time as is provided in the bylaws. Special meetings of the members
may be called by the president of the board of directors, by any three
directors, or by not less than ten percent of the members. Meetings of
members must be held at such place as may be provided in the bylaws. In
the absence of any such provision, all meetings must be held in the county
in which the principal office of the telephone cooperative is located.
Section 33-46-430. A majority vote of the members present and voting
at a meeting having a quorum is required for adoption of any question put
to the members, except when a greater affirmative vote is required by this
chapter or the bylaws. The foregoing majority requirement
notwithstanding, bylaws may provide for a plurality vote of the
membership for election of a director when more than two candidates are
running for the same seat. When multiple directors are to be elected from
the same district, each member has one vote for each vacancy in the
district. The vote shall not be cumulative.
Section 33-46-440. Each telephone cooperative shall establish in its
bylaws what percentage and/or number of its members shall constitute a
quorum and whether proxies will be considered in determining whether a
quorum is present for the transaction of business at all meetings of the
membership. If less than a quorum is present at any meeting, a majority of
those present in person may adjourn the meeting from time to time without
further notice.
Section 33-46-450. Each member is entitled to vote on each matter
submitted to a vote at a meeting. Unless prohibited by this chapter or by the
bylaws, voting may be by proxy.
Section 33-46-460. The bylaws of a telephone cooperative shall
provide for the distribution of excess revenue to its members. Excess
revenues do not include amounts:
(1) necessary to defray expenses of the telephone cooperative and for
the operation and maintenance of its facilities during such fiscal year;
(2) to pay interest and principal obligations of the telephone
cooperative coming due in such fiscal year;
(3) to finance or to provide a reserve for the financing of the
construction or acquisition by the telephone cooperative of additional
facilities to the extent determined by the board of directors;
(4) to provide a reasonable reserve for working capital; and
(5) to retire shares of the telephone cooperative to the extent determined
by the board of directors.
Sums in excess of those specified above must, unless otherwise
determined by a vote of the membership, be assigned by the telephone
cooperative to its members as patronage capital. Nothing herein shall be
construed so as to designate the method, manner, and time of distribution of
excess revenue to the members, which must be governed by the cooperative
bylaws, so long as the cooperative's distribution policies and procedures
comply with acceptable practices under the procedures for corporations
exempt from income tax pursuant to Title 26, Section 501(c)(12) of the
United States Code or Subchapter T of the United States Internal Revenue
Code.
Section 33-46-470. The private property of the members of a telephone
cooperative is exempt from execution for the debts of the telephone
cooperative, and no member is liable or responsible for any debts of the
telephone cooperative.
Article 5
Directors
Section 33-46-500. (A) The business affairs of a telephone cooperative
must be managed by a board of not less than three directors, each of whom
must be a member of the telephone cooperative or of another cooperative
which is a member of the telephone cooperative. The bylaws must
prescribe the number of directors, their qualifications (other than those
qualifications provided for in this chapter), the manner of holding meetings
of the board, and the filling of vacancies on the board.
(1) If a husband and wife hold a joint membership in a telephone
cooperative, one, but not both, may be elected as a director.
(2) The board of directors may exercise all of the powers of a
telephone cooperative, except those powers conferred upon the members by
this chapter or by the telephone cooperative's articles of incorporation or
bylaws.
(B) The bylaws also may provide for the removal of directors from
office and for the election of their successors as follows:
(1) (a) A temporary suspension of a director for cause may occur
upon the affirmative vote of at least two-thirds of the members of the board.
The suspension must be enforced until the next annual or special meeting.
At the next meeting, the membership may remove the suspended director
for cause from the board by an affirmative vote of a majority of the
members present and voting. In the event the members refuse to vote to
remove the director, he must be reinstated immediately with all the powers
of his office and he shall continue to serve for the remainder of his elected
term.
(b) `Cause' for removal of a director under this subsection means
fraudulent or dishonest acts, gross abuse of authority in the discharge of
duties to the telephone cooperative, or failure to adhere to such obligations,
duties, or qualifications as the bylaws may prescribe. Cause may not be
found unless written notice of the specific charges and opportunity to meet
and refute such charges has been provided to the director.
(c) If a removal occurs pursuant to this subsection, a successor must
be elected as provided by the bylaws of the telephone cooperative.
(2) Two-thirds of the members present and voting at a meeting legally
called according to the bylaws of the telephone cooperative may remove
any director, with or without cause.
Section 33-46-510. Unless the articles of incorporation provide
otherwise, the board of directors is authorized pursuant to Sections
33-2-107 and 33-3-103 to implement or exercise emergency bylaws and
powers.
Section 33-46-520. All directors of telephone cooperatives are immune
from suits arising from the conduct of the affairs of the telephone
cooperative. This immunity from suit is removed when the conduct
amounts to wilful, wanton, or gross negligence. Nothing in this section
may be construed to grant immunity to the telephone cooperative.
Section 33-46-530. Unless limited by its articles of incorporation, a
telephone cooperative shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the cooperative
against reasonable expenses incurred by him in connection with the
proceeding.
Section 33-46-540. General standards for directors are as follows:
(A) A director shall discharge his duties as a director, including his
duties as a member of a committee:
(1) in good faith;
(2) with the care an ordinarily prudent person in a like position would
exercise under similar circumstances; and
(3) in a manner he reasonably believes to be in the best interests of the
telephone cooperative and its members.
(B) In discharging his duties a director is entitled to rely on information,
opinions, reports, or statements, including financial statements and other
financial data, if prepared or presented by:
(1) one or more officers or employees of the telephone cooperative
whom the director reasonably believes to be reliable and competent in the
matters presented;
(2) legal counsel, public accountants, or other persons as to matters
the director reasonably believes are within the person's professional or
expert competence; or
(3) a committee of the board of directors of which he is not a member
if the director reasonably believes the committee merits confidence.
(C) A director is not acting in good faith if he has knowledge
concerning the matter in question that makes reliance otherwise permitted
by subsection (B) unwarranted.
(D) A director is not liable for any action taken as a director, or any
failure to take any action, if he performs the duties of his office in
compliance with this section.
(E) An action against a director for failure to perform the duties
imposed by this section must be commenced within three years after the
cause of action has accrued, or within two years after the time when the
cause of action is discovered, or should have reasonably been discovered,
whichever sooner occurs. This limitation period does not apply to breaches
of duty which have been concealed fraudulently.
Section 33-46-550. The bylaws may provide that the service area of the
telephone cooperative must be divided into two or more districts and that
one or more members be elected from each district to serve as director. The
bylaws may further provide that in lieu of electing the whole number of
directors annually that director election be staggered so that no less than
one-third of all director terms expire each year.
Section 33-46-560. A majority of the board of directors constitutes a
quorum, unless otherwise specified in the bylaws.
Section 33-46-570. Officers are as follows:
(1) A telephone cooperative has the officers described in its bylaws or
appointed by the board of directors in accordance with the bylaws.
(2) A duly appointed officer may appoint one or more officers or
assistant officers if authorized by the bylaws or the board of directors.
(3) The bylaws or the board of directors shall delegate to one of the
officers responsibility for preparing minutes of the directors' and members'
meetings and for authenticating records of the telephone cooperative.
(4) The same individual may hold more than one office in a telephone
cooperative simultaneously.
(5) Any officer may be removed from office and his successor elected
in the manner prescribed by the bylaws.
Article 6
Amendment of Articles of Incorporation;
Consolidation; Merger; etc.
Section 33-46-600. A telephone cooperative may amend its articles of
incorporation by complying with the following requirements:
(1) The proposed amendment must be first approved by the board of
directors and must then be submitted to a vote of the members at any
annual or special meeting thereof, the notice of which shall set forth the
proposed amendment. The proposed amendment, with such changes as the
members shall choose to make therein, must be considered approved on the
affirmative vote of not less than two-thirds of those members voting
thereon at the meeting.
(2) Upon such approval by the members, articles of amendment must be
executed and acknowledged on behalf of the telephone cooperative by the
directors carrying out the duties performed generally by the president or
vice president and its corporate seal must be affixed thereto and attested by
the director carrying out the duties of secretary. The articles of amendment
shall recite in the caption that they are executed pursuant to this chapter and
shall state:
(a) the name of the telephone cooperative;
(b) the address of the principal office;
(c) the date of the filing of its articles of incorporation in the Office of
the Secretary of State; and
(d) the amendment to its articles of incorporation.
The officers executing the articles of amendment shall also make and
annex thereto an affidavit stating that the provisions of this section were
complied with. The articles of amendment and affidavit must be submitted
to the Secretary of State for filing as provided in this chapter.
Section 33-46-610. A telephone cooperative may, without amending its
articles of incorporation, upon authorization of its board of directors,
change the location of its principal office by filing a certificate of change of
principal office, executed and acknowledged on behalf of the telephone
cooperative by the director carrying out the duties performed generally by
the president or vice president under its seal attested by the director
carrying out the duties of secretary, with the Office of the Secretary of State
and also in each county office in which the articles of incorporation or any
prior certificate of change of principal office of such telephone cooperative
has been filed. Such telephone cooperative shall also within thirty days
after filing such certificate of change of principal office in any county
office file therein certified copies of its articles of incorporation and all
amendments thereto if the same are not already on file therein.
Section 33-46-620. Any two or more telephone cooperatives, each of
which is hereinafter designated a `consolidating cooperative', may
consolidate into a new telephone cooperative, hereinafter designated the
`new cooperative', by complying with the following requirements:
(1) The proposition for the consolidation of the consolidating
cooperatives into the new cooperative and proposed articles of
consolidation to give effect thereto must be first approved by the board of
directors of each consolidating cooperative. The proposed articles of
consolidation shall recite in the caption that they are executed pursuant to
this chapter and shall state:
(a) the name of each consolidating telephone cooperative, the address
of its principal office, and the date of the filing of its articles of
incorporation in the Office of the Secretary of State;
(b) the name of the new telephone cooperative and the address of its
principal office;
(c) the names and addresses of the persons who shall constitute the
first board of directors of the new cooperative;
(d) the terms and conditions of the consolidation and the mode of
carrying the same into effect, including the manner and basis of converting
memberships in each consolidating cooperative into memberships in the
new cooperative and the issuance of certificates of membership or other
evidence of membership in respect of such converted memberships;
and
(e) any provisions not inconsistent with this chapter considered
necessary or advisable for the conduct of the business and affairs of the
new telephone cooperative.
(2) The proposition for the consolidation of the consolidating telephone
cooperatives into the new telephone cooperative and the proposed articles
of consolidation approved by the board of directors of each consolidating
telephone cooperative must then be submitted to a vote of the members of
each consolidating cooperative at any annual or special meeting thereof, the
notice of which shall set forth full particulars concerning the proposed
consolidation. The proposed consolidation and the proposed articles of
consolidation must be considered approved upon the affirmative vote of not
less than two-thirds of those members of each consolidating telephone
cooperative present and voting thereon at such meeting.
(3) Upon such approval by the members of the respective consolidating
telephone cooperatives, articles of consolidation in the form approved must
be executed and acknowledged on behalf of each consolidating cooperative
by the director carrying out the duties performed generally by the president
or vice president, and its seal must be affixed thereto and attested by the
director carrying out the duties of secretary. The director carrying out the
duties performed generally by the president or vice president of each
consolidating telephone cooperative executing such articles of
consolidation shall also make and annex thereto an affidavit stating that the
provisions of this section were complied with by such telephone
cooperative. The articles of consolidation and affidavits must be submitted
to the Secretary of State for filing as provided in this chapter.
Section 33-46-630. Any one or more telephone cooperatives, each of
which is hereinafter designated a `merging cooperative', may merge into
another telephone cooperative, hereinafter designated the `surviving
cooperative', by complying with the following requirements:
(1) The proposition for the merger of the merging cooperatives into the
surviving cooperative and proposed articles of merger to give effect thereto
must be first approved by the board of directors of each merging
cooperative and by the board of directors of the surviving cooperative. The
proposed articles of merger shall recite in the caption that they are executed
pursuant to this chapter and shall state:
(a) the name of each merging cooperative, the address of its principal
office, and the date of the filing of its articles of incorporation in the Office
of the Secretary of State;
(b) the name of the surviving cooperative and the address of its
principal office;
(c) a statement that the merging cooperative elects to be merged into
the surviving cooperative;
(d) the terms and conditions of the merger and the mode of carrying
the same into effect, including the manner and basis of converting
memberships in the merging cooperative or cooperatives into memberships
in the surviving cooperative and the issuance of certificates of membership
or other evidence of membership in respect of such converted
memberships; and
(e) any provisions not inconsistent with this chapter considered
necessary or advisable for the conduct of the business and affairs of the
new telephone cooperative.
(2) The proposition for the merger of the merging cooperatives into the
surviving cooperative and the proposed articles of merger approved by the
board of directors of the respective telephone cooperatives, parties to the
proposed merger, must then be submitted to a vote of the members of each
such telephone cooperative at any annual or special meeting thereof, the
notice of which shall set forth full particulars concerning the proposed
merger. The proposed merger and the proposed articles of merger must be
considered approved upon the affirmative vote of not less than two-thirds
of those members of each telephone cooperative present and voting thereon
at such meeting.
(3) Upon such approval by the members of the respective telephone
cooperatives, parties to the proposed merger, articles of merger in the form
approved must be executed and acknowledged on behalf of each such
cooperative by the director carrying out the duties generally of the
president or vice president, and its seal must be affixed thereto and attested
by the director carrying out the duties of secretary. The director carrying
out the duties of president or vice president of each telephone cooperative
executing such articles of merger shall also make and annex thereto an
affidavit stating that the provisions of this section were complied with by
such telephone cooperative. The articles of merger and affidavits must be
submitted to the Secretary of State for filing as provided in this chapter.
Section 33-46-640. The effect of consolidation or merger is as
follows:
(1) The several telephone cooperatives, parties to the consolidation or
merger, are a single cooperative which, in the case of a consolidation, is the
new telephone cooperative provided for in the articles of consolidation and,
in the case of a merger, is that telephone cooperative designated in the
articles of merger as the surviving cooperative, and the separate existence
of all cooperatives, parties to the consolidation or merger, except the new
or surviving cooperative, ceases.
(2) The new or surviving telephone cooperative has all the rights,
privileges, immunities, and powers and is subject to all the duties and
liabilities of a telephone cooperative organized under the provisions of this
chapter and possesses all the rights, privileges, immunities, and franchises
of a public, as well as of a private nature, and all property, real and
personal, applications for membership, all debts due on whatever account,
and all other choses in action of each of the consolidating or merging
cooperatives, and, furthermore, all and every interest of, or belonging or
due to, each of the cooperatives so consolidated or merged must be taken
and considered to be transferred to and vested in such new or surviving
cooperative without further act or deed; and the title to any real estate or
any interest therein under the laws of this State vested in any such
cooperative shall not revert or be in any way impaired by reason of such
consolidation or merger;
(3) The new or surviving telephone cooperative thenceforth is
responsible and liable for all of the liabilities and obligations of each of the
telephone cooperatives so consolidated or merged and any claim existing or
action or proceeding pending by or against any of such cooperatives may
be prosecuted as if such consolidation or merger had not taken place, but
such new or surviving cooperative may be substituted in its place;
(4) Neither the rights of creditors nor any liens upon the property of any
of such telephone cooperatives are impaired by such consolidation or
merger; and
(5) In the case of a consolidation the articles of consolidation must be
considered to be the articles of incorporation of the new telephone
cooperative, and in the case of a merger the articles of incorporation of the
surviving telephone cooperative must be considered to be amended to the
extent, if any, that changes therein are provided for in the articles of
merger.
Section 33-46-650. Any telephone cooperative may merge into a
corporation which is not another telephone cooperative by complying with
the following requirements:
(1) The proposition for the merger of the telephone cooperative into the
corporation and proposed articles of merger to give effect thereto must be
first approved by the board of directors of the cooperative. The proposed
articles of merger shall recite in the caption that they are executed pursuant
to this chapter and shall state:
(a) the name of the telephone cooperative, the address of its principal
office, and the date of the filing of the articles of incorporation in the Office
of the Secretary of State;
(b) the name of the corporation and the address of its principal
office;
(c) a statement that the telephone cooperative elects to be merged into
the corporation;
(d) the terms and conditions of the merger and the mode of carrying
the same into effect, including the manner and basis of converting
memberships in the telephone cooperative into shares of stock in the
corporation; and
(e) any provisions not inconsistent with this chapter considered
necessary or advisable for the conduct of the business and affairs of the
new corporation.
(2) The proposition for the merger and the proposed articles of merger
approved by the board of directors of the telephone cooperative must then
be submitted to a vote of the members of such telephone cooperative at any
annual or special meeting thereof, the notice of which shall set forth full
particulars concerning the proposed merger. The proposed merger and the
proposed articles of merger must be considered approved upon the
affirmative vote of not less than two-thirds of the members of the telephone
cooperative.
(3) Upon such approval by the members of the telephone cooperative,
articles of merger in the form approved must be executed and
acknowledged on behalf of the cooperative by the director carrying out the
duties generally of the president or vice president, and its seal must be
affixed thereto and attested by the director carrying out the duties of
secretary. The director carrying out the duties of the president or vice
president of the telephone cooperative executing such articles of merger
shall also make and annex thereto an affidavit stating that the provisions of
this section were complied with by such telephone cooperative. The
articles of merger and affidavits must be submitted to the Secretary of State
for filing as provided in this chapter.
Article 7
Dissolution
Section 33-46-700. A telephone cooperative which has not commenced
business may dissolve voluntarily by delivering to the Secretary of State
articles of dissolution, executed and acknowledged on behalf of the
telephone cooperative by a majority of the incorporators, and shall
state:
(1) the name of the telephone cooperative;
(2) the address of its principal office;
(3) the date of its incorporation;
(4) that the telephone cooperative has not commenced any
business;
(5) that the amount, if any, actually paid in on account of membership
fees, less any part thereof disbursed for necessary expenses, has been
returned to those entitled thereto and that all easements have been released
to the grantors;
(6) that no debt of the telephone cooperative remains unpaid; and
(7) that a majority of the incorporators elect that the telephone
cooperative be dissolved.
The articles of dissolution must be submitted to the Secretary of State
for filing as provided in this chapter.
Section 33-46-710. A telephone cooperative which has commenced
business may dissolve voluntarily and wind up its affairs in the manner
provided in this article.
Section 33-46-720. Two-thirds of the membership of the board of
directors shall first recommend to the membership that the telephone
cooperative be dissolved. The proposition that the telephone cooperative
be dissolved must be submitted to the membership of the telephone
cooperative for a vote at a special meeting of the membership called only
for this purpose. The notice for the meeting at which a proposal to dissolve
the telephone cooperative is considered shall set forth:
(1) a detailed proposition for dissolution;
(2) the plan for sale and distribution of assets;
(3) the plan for continuance of service; and
(4) the time and location of the meeting.
The proposed voluntary dissolution is approved upon affirmative vote of
not less than two-thirds of the members of the telephone cooperative.
Section 33-46-730. Upon such approval a certificate of election to
dissolve, in this article designated the `certificate', must be executed and
acknowledged on behalf of the cooperative by the director carrying out the
duties generally of the president or vice president, and its corporate seal
must be affixed thereto and attested by the director carrying out the duties
of secretary. The certificate shall state:
(1) the name of the telephone cooperative;
(2) the address of its principal office;
(3) the names and addresses of its directors; and
(4) the total number of members of the telephone cooperative and the
number of members who voted for and against the voluntary dissolution of
the telephone cooperative.
Section 33-46-740. Such certificate and affidavit must be submitted to
the Secretary of State for filing as provided in this chapter and thereupon
the telephone cooperative shall cease to carry on its business except insofar
as may be necessary for the winding up thereof, but its corporate existence
shall continue until articles of dissolution have been filed by the Secretary
of State.
Section 33-46-750. After the filing of the certificate and affidavit by the
Secretary of State, the board of directors shall immediately cause notice of
the winding up proceedings to be mailed to each known creditor and
claimant and to be published once a week for two successive weeks in a
newspaper of general circulation in the county in which the principal office
of the telephone cooperative is located.
Section 33-46-760. The board of directors has full power to wind up
and settle the affairs of the telephone cooperative, convey and dispose of its
property and assets, pay, satisfy, and discharge its debts, obligations, and
liabilities, and do all other things required to liquidate its business and
affairs and, after paying or adequately providing for the payment of all its
debts, obligations, and liabilities, shall distribute the remainder of its
property and assets among its members in proportion to the aggregate
patronage of each such member during the seven years next preceding the
date of such filing of the certificate or, if the telephone cooperative was not
in existence for such period, during the period of its existence.
Section 33-46-770. When all debts, liabilities, and obligations of the
telephone cooperative have been paid and discharged or adequate
provisions have been made therefor, and all the remaining property and
assets of the telephone cooperative have been distributed to the members
pursuant to the provisions of Section 33-46-460, the board of directors shall
authorize the execution of articles of dissolution, which must thereupon be
executed and acknowledged on behalf of the cooperative by the director
carrying out the duties generally of the president or vice president, and its
corporate seal must be affixed thereto and attested by the director carrying
out the duties of secretary. The articles of dissolution shall recite in the
caption that they are executed pursuant to this chapter and shall state:
(1) the name of the telephone cooperative;
(2) the address of the principal office of the telephone cooperative;
(3) that the telephone cooperative has theretofore delivered to the
Secretary of State a certificate of election to dissolve and the date on which
the certificate was filed by the Secretary of State in the records of his
office;
(4) that all debts, obligations, and liabilities of the telephone
cooperative have been paid and discharged or that adequate provisions
have been made therefor;
(5) that all the remaining property and assets of the telephone
cooperative have been distributed among the members in accordance with
the provisions of Section 33-46-460; and
(6) that there are no actions or suits pending against the telephone
cooperative.
The director executing the articles of dissolution shall also make and
annex thereto an affidavit stating that the provisions of this article have
been complied with. The articles of dissolution and affidavit accompanied
by proof of the publication required in Section 33-46-750 must be
submitted to the Secretary of State for filing as provided in this chapter.
Article 8
Conversion
Section 33-46-800. Any corporation organized under the laws of the
State of South Carolina for the purpose of providing communications and
informational services in rural areas pursuant to Title 33, Chapter 45 may
be converted into a telephone cooperative and become subject to this
chapter with the same effect as if originally organized under this chapter by
complying with the requirements of this article.
Section 33-46-810. The proposition for the conversion of such
corporation into a telephone cooperative and the proposed articles of
conversion to give effect thereto must be first approved by the board of
directors of such corporation. The proposed articles of conversion shall
recite in the caption that they are executed pursuant to this chapter and shall
state:
(1) the name of the corporation before its conversion into a telephone
cooperative;
(2) the address of the principal office of such corporation;
(3) the date of the filing of the articles of incorporation of such
corporation in the Office of the Secretary of State;
(4) the statute or statutes under which such corporation was
organized;
(5) the name assumed by such corporation;
(6) a statement that such corporation elects to become a telephone
cooperative nonprofit membership corporation subject to this chapter;
(7) the manner and basis of converting memberships or shares of stock
in such corporation into memberships in the telephone cooperative after
completion of the conversion; and
(8) any provision not inconsistent with this chapter considered
necessary or advisable for the conduct of the business and affairs of such
telephone cooperative.
Section 33-46-820. The proposition for the conversion of the
corporation into a telephone cooperative and the proposed articles of
conversion approved by the board of directors of such corporation must
then be submitted to a vote of the members or shareholders, as the case may
be, of such corporation at any annual or special meeting thereof, the notice
of which shall set forth full particulars concerning the proposed conversion.
The proposition for the conversion of such corporation into a telephone
cooperative and the proposed articles of conversion, with amendments
thereto as the members or shareholders of such corporation shall choose to
make, must be considered approved upon approval by the board of
directors or the affirmative majority vote of those members of such
corporation present and voting thereon at such meeting or, if such
corporation is a stock corporation, upon the affirmative vote of the holders
of a majority of the shares of such corporation represented at such
meeting.
Section 33-46-830. Upon such approval by the members or
shareholders of such corporation, the articles of conversion in the form
approved by the board of directors must be executed and acknowledged on
behalf of such corporation by the director carrying out the duties generally
of the president or vice president, and its corporate seal must be affixed
thereto and attested by the director carrying out the duties of secretary. The
director executing such articles of conversion on behalf of such corporation
shall also make and annex thereto an affidavit stating that the provisions of
this article with respect to the approval of its directors and its members or
shareholders of the proposition for the conversion of such corporation into
a telephone cooperative and such articles of conversion were complied
with. Such articles of conversion and affidavit must be submitted to the
Secretary of State for filing as provided in this chapter."
Use of term "cooperative" by certain corporations
expanded
SECTION 2. Section 33-45-20 of the 1976 Code is amended to read:
"Section 33-45-20. No corporation or association organized or
doing business for profit in this State after March 21, 1915, is entitled to
use the term `cooperative' as part of its corporate or other business name or
title unless it has complied with the provisions of this chapter or unless it is
incorporated under Chapters 46 or 49 of this title or under Chapter 27 of
Title 34. Any corporation or association violating the provisions of this
section may be enjoined from doing business under such name at the
instance of any stockholder of any association legally organized
hereunder."
Time effective
SECTION 3. This act takes effect upon approval by the Governor.
Approved the 18th day of May, 1994. |