35-17-302. Stock -- issuance -- limitations on ownership and transfer -- repurchase by association. (1) When a member of an association established without capital stock has paid his membership fee in full, he shall receive a certificate of membership.
     (2) No association shall issue stock to a member until it has been fully paid for. The promissory notes of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note, but such retention as security shall not affect the members' right to vote.
     (3) No stockholder of a cooperative association shall own more than one-twentieth of the issued common stock of the association, and an association, in its bylaws, may limit the amount of common stock which one member may own to any amount less than one-twentieth of the issued common stock.
     (4) The bylaws shall prohibit the transfer of the common stock of the association to persons not engaged in the production of the agricultural products handled by the association, and such restrictions must be printed upon every certificate of stock subject thereto.
     (5) The association may at any time, except when the debt of the association exceeds 50% of the assets thereof, buy in or purchase its common stock at book value thereof as conclusively determined by the board of directors and pay for it in cash within 1 year thereafter.

     History: En. Sec. 14, Ch. 233, L. 1921; re-en. Sec. 6441, R.C.M. 1921; re-en. Sec. 6441, R.C.M. 1935; R.C.M. 1947, 14-414(part).