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New Mexico

Cooperatives Generally

New Mexico has three kinds of legal cooperatives:    

These are all Domestic (NM) Cooperative Associations, a type of legal entity.

  • NM Stat § 53-4-37 (2018)
  • 53-4-37. Use of name “cooperative”; penalty.
  • Only the following entities are entitled to use the term “cooperative” or an abbreviation or derivation of that term as part of their business names or to represent themselves as conducting business on a cooperative basis:
    • (1) associations organized pursuant to the Cooperative Association Act;
    • (2) groups organized on a cooperative basis pursuant to any other law of this state; and
    • (3) foreign corporations authorized to do business in this state on a cooperative basis pursuant to the Cooperative Association Act or any other law of this state.

Statutes

Consumer, Worker and Producer Cooperatives

These three types of cooperatives are under the same statute (Agricultural Marketing and Rural Electric Cooperatives have their own statutes) – Regular Cooperative Associations

  • Regular Cooperative Associations -2018 New Mexico Statutes, Chapter 53 – Corporations, Article 4 – Cooperative Associations https://law.justia.com/codes/new-mexico/2018/chapter-53/article-4/
  • An association may be incorporated hereunder to engage in any one or more lawful mode or modes of acquiring, selling, producing, building, operating, manufacturing, furnishing, exchanging or distributing any type or types of property, commodities, goods or services, and for the transaction of any lawful business. NM Stat § 53-4-3 (2018)
  • A cooperative can be formed by five or more natural persons or two or more associations.NM Stat § 53-4-2 (2018)
  • All cooperatives must be one member – one vote (unless one of the members is a group of people), and no proxy voting is allowed.NM Stat § 53-4-13 (2018) and NM Stat § 53-4-14 (2018) Voting by mail may be allowed. NM Stat § 53-4-15 (2018)
  • An association shall be managed by a board of not less than five directors. NM Stat § 53-4-18 (2018)
  • A group incorporated under another law of this state and operating on a cooperative basis may elect by a vote of two-thirds of the members voting to secure the benefits of and be bound by the provisions of the Cooperative Association Act and shall amend its articles and bylaws not in conformity with those provisions. A certified copy of the amended articles shall be filed with the public regulation commission [secretary of state] and a fee of twenty-five dollars ($25.00) shall be paid.NM Stat § 53-4-40 (2018)
  • A foreign corporation operating on a cooperative basis and complying with the applicable laws of the state in which it is organized is entitled to receive from the public regulation commission [secretary of state] a certificate authorizing it to do business in this state as a foreign cooperative corporation. NM Stat § 53-4-41 (2018)
  • Associations formed under Chapter 53, Article 4 NMSA 1978 and foreign corporations admitted under Section 53-4-41 NMSA 1978 to do business in this state shall pay an annual license fee of twenty dollars ($20.00). NM Stat § 53-4-45 (2018)

Cooperative Marketing Associations  – For Agricultural Marketing

  • 2018 New Mexico Statutes, Chapter 76 – Agriculture, Article 12 – Cooperative Marketing Associations – https://law.justia.com/codes/new-mexico/2018/chapter-76/article-12/
  • Purpose: In order to promote, foster and encourage the intelligent handling, processing and orderly marketing of agricultural products and the organization and incorporation of cooperative marketing associations of agricultural producers. NM Stat § 76-12-2 (2018)
  • Associations organized hereunder shall be deemed nonprofit, inasmuch as they are not organized to make profit for themselves as such, nor for their members, as such, but only for their members as producers or users of products purchased. NM Stat § 76-12-3 (2018)
  • Five or more natural persons of full age, engaged in the production of agricultural products either as tenants or landlords, who are residents of this state or any other, or two or more cooperative associations, organized under the laws of this state or any other, may form a nonprofit cooperative association with or without capital stock, under the provisions of this act. NM Stat § 76-12-4 (2018)
  • An association may be organized under this act [76-12-1 through 76-12-23 NMSA 1978] to engage in any activity in connection with the marketing or selling of agricultural products, or with the harvesting, preserving, drying, processing, blending, canning, packing, grading, storing, warehousing, handling, shipping or utilizing such products; or in connection with the manufacturing, marketing, selling or supplying of the byproducts thereof or the manufacturing, selling or supplying of machinery, equipment, feed, fertilizer, seeds, oil, gasoline or other supplies; or in the financing of any of the above-enumerated activities or in performing or furnishing business or educational services on a cooperative basis for those engaged in agriculture as bona fide producers of agricultural products or in any one or more of the activities specified herein. NM Stat § 76-12-5 (2018)
  • May have but does not need to have “cooperative” in the association name. NM Stat § 76-12-7 (2018)
  • The affairs of the association shall be managed by a board of not less than five or [nor] more than twenty-one directors to be elected by the members with such qualifications as may be provided for in the articles of incorporation or bylaws. All of the directors shall be members of the association or officers, directors or members of member associations.NM Stat § 76-12-14 (2018)
  • The officers of every such association shall be a president, one or more vice presidents, a secretary and a treasurer and such other officers as may be authorized in the bylaws. The president and at least one of the vice presidents must be members and directors of the association. The office of secretary and treasurer may be combined. The treasurer may be other than a member of the association and as such shall not be considered as an officer, but as a function [functionary] of the board of directors. Officers shall be elected by the directors in the manner and for such terms as the bylaws provide.NM Stat § 76-12-15 (2018)
  • Members may be required to execute contracts as a condition of admission to the association, whereby the members agree to patronize the facilities created by the associations, to sell all or a specified part of their products to or through, or to buy all or a specified part of their supplies from or through, the association or any facilities created by it. NM Stat § 76-12-16 (2018)
  • It is the duty of every association organized pursuant to provisions of the Cooperative Marketing Association Act and foreign associations admitted to do business in this state under that act to procure annually from the secretary of state a license authorizing the transaction of business in the state. Each domestic or foreign corporation shall pay annually a license fee of twenty-five dollars ($25.00) to the secretary of state before receiving such license.NM Stat § 76-12-20 (2018)

Rural Electric Cooperatives

  • 2018 New Mexico Statutes, Chapter 62 – Electric, Gas and Water Utilities, Article 15 – Rural Electric Cooperatives – https://law.justia.com/codes/new-mexico/2018/chapter-62/article-15/
  • Cooperative nonprofit membership corporations may be organized under the Rural Electric Cooperative Act for the primary purpose of supplying electric power and energy and promoting and extending the use of electricity in rural areas. NM Stat § 62-15-2 (2018)
  • New Mexico Rural Electric Cooperative Association (http://www.nmelectric.coop/) represents member coops and has lots of good information on them.

Credit Unions: Financial Cooperatives

  • The Financial Institutions Division is responsible for supervision and regulation of credit unions organized under the Credit Union Act §58-11-1 NMSA 1978. Credit unions are cooperative, nonprofit, financial institutions organized under, or subject to, the Credit Union Act for the purposes of encouraging thrift among its members, creating a source of credit at fair and reasonable rates of interest and providing an opportunity for its members to use and control their own money on a democratic basis in order to improve their economic and social condition. https://law.justia.com/codes/new-mexico/2018/chapter-58/article-11/
  • The Financial Institutions Division does not regulate federal credit unions. They are regulated by the National Credit Union Administration (NCUA) and  New Mexico is under NCUA Region 4. http://www.rld.state.nm.us/financialinstitutions/Credit_Unions.aspx

Sample Bylaws and Operating Agreements

Cooperative Support Organizations

Author

Pat Feghali is an attorney licensed in New Mexico and Ohio. She works mostly in small business formations, real estate law, and estate planning. You can find her at www.feghalilaw.com

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