                                 CODE OF VIRGINIA

INTERNAL CAPITAL ACCOUNTS; REDEMPTION OF SHARES; COLLECTIVE RESERVE ACCOUNT (§
13.1-354)

A. A worker cooperative shall establish through its articles of incorporation or
bylaws a system of internal capital accounts to reflect the book value and to
determine the redemption price of membership shares, nonvoting shares, and
written notices of allocation. As used in this section, &#8220;written notice of
allocation&#8221; means a written instrument that discloses to a member the
stated dollar amount of such member&#8217;s patronage allocation and the terms
for payment of that amount by the worker cooperative.

B. The articles of incorporation or bylaws of a worker cooperative may permit
the periodic redemption of written notices of allocation and nonvoting shares
and shall provide for recall and redemption of the membership share upon
termination of membership in the cooperative.

C. The articles of incorporation or bylaws may provide for the worker
cooperative to pay or credit interest on the balance in each member&#8217;s
internal capital account.

D. The articles of incorporation or bylaws may authorize assignment of a portion
of retained net earnings and net losses to a collective reserve account.
Earnings assigned to the collective reserve account may be used for any and all
corporate purposes as determined by the board of directors.

E. A worker cooperative may issue nonvoting shares to members and nonmembers.
Nonvoting shares may be redeemed or retired by the worker cooperative on such
terms and conditions as may be provided in the articles of incorporation or
bylaws. Payment for nonvoting shares may be made in cash, services, or property
as determined by the board.

F. Any worker cooperative issuing shares under this article may accept
registrations of such shares in the names of two or more persons, payable to any
one of them, or to any one of them or the survivor, and any person so named,
whether the others be living or not, may accept dividend payments and withdraw
from the association and receive the amount payable on withdrawal in the same
manner and on the same terms as are allowed by law and the articles of
incorporation and bylaws in case of any other member or shareholder, and the
receipt or acceptance of dividends or amounts payable on withdrawal by the
person so paid shall be a valid and sufficient release and discharge of the
association for any payment so made.

HISTORY: 2020, c. 673.