H 4718 Session 110 (1993-1994)
H 4718 General Bill, By L.M. Martin, Keegan, Kelley, Witherspoon and
H.G. Worley
Similar(S 1189)
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.
02/09/94 House Introduced and read first time HJ-76
02/09/94 House Referred to Committee on Labor, Commerce and
Industry HJ-76
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.
Be it enacted by the General Assembly of the State of South Carolina:
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 U.S. 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 in so far 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."
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 shall
be 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 be is incorporated
under Chapters 46 or Chapter 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."
SECTION 3. This act takes effect upon approval by the Governor.
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