Amend the articles and bylaws

Who this is for#

Boards and members who need to change the cooperative's founding documents.

The short answer#

Articles are amended by a board resolution, then a vote of the members, then a filing with the Secretary of State (SOS). Bylaws can be amended by the board at any time unless the power is reserved to members or a bylaw prohibits it, but members must be told within 10 days ^{P1, § 308B.221; § 308B.241, subd. 4}.

Amending the articles#

1. Board resolution. The board, by majority vote, passes a resolution stating the text of the proposed amendment ^{P1, § 308B.221, subd. 1}.
2. Notice to every member. The text of the amendment, and an attached mail or alternative ballot if the board provided for one, goes out with a regular or special meeting notice. The notice designates the time and place of the meeting ^{P1, § 308B.221, subd. 1}.
3. Member vote. If a quorum is registered as present or represented by alternative vote, the amendment is adopted if approved by a majority of the votes cast, or by whatever greater proportion or conditions the articles or bylaws require ^{P1, § 308B.221, subd. 1}. The statutory member quorum is 10 percent of members if there are 500 or fewer, otherwise 50 members; an action taken without a quorum is not valid ^{P1, § 308B.525}.
4. Sign. The chair, vice chair, records officer or assistant records officer signs the amendment ^{P1, § 308B.221, subd. 1}.
5. Prepare a certificate for the records. It states the board's vote and meeting, the notice given to members, the quorum registered and the vote cast. The chair, vice chair, records officer or financial officer signs it, and it is kept with the cooperative's records, not filed with the SOS ^{P1, § 308B.221, subd. 2}.
6. File with the SOS. The amendment is effective on filing or on the date specified in the resolution ^{P1, § 308B.221, subd. 4}.

No voting members. If the cooperative has no members with voting rights, a majority of directors may amend the articles ^{P1, § 308B.221, subd. 3}.

Amending the bylaws#

• Who and when. The board may amend the bylaws at any time unless the statute, the articles or the bylaws reserve the power to the members, or a particular bylaw expressly prohibits the board from amending it. Members may amend the bylaws even if the board may also do so ^{P1, § 308B.241, subd. 4}.
• Telling the members. The board must give a board-adopted amendment to the members within 10 days, and the annual meeting notice must include a summary of board-adopted amendments ^{P1, § 308B.241, subd. 4; § 308B.511}.
• Members' route. The notice must state that bylaws will be voted on and include either copies or a statement of availability with a summary. With a quorum present, approval requires a majority of votes cast unless the articles or bylaws require a greater proportion or number ^{P1, § 308B.241, subd. 3(b)}.
• Greater quorum or vote. Articles or bylaws adopted by members may require a greater quorum or vote § 308B.535, subdivision 3. The board cannot adopt or amend a bylaw fixing a greater member quorum or vote; members amending such a bylaw must satisfy the greater existing or proposed quorum and vote § 308B.241, subdivision 5 ^P1.
• No SOS filing for bylaws. We found no provision requiring that bylaws be filed with the SOS; § 308B.245 requires keeping them at the principal office ^{P1, § 308B.245}.

What goes where#

If a term is in the articles, changing it takes the member vote and an SOS filing. If it is only in the bylaws, the board can often change it quickly unless the bylaws reserve it. Some capital terms can be placed in either; see Write the articles of organization. Terms affecting rights already issued may be subject to additional limits in § 308B.601 and related sections; we have not mapped them.

Capital-rights changes need a separate review. Subject to contrary articles or bylaws, a materially adverse amendment may give affected nonpatron members a dissent-and-purchase right. If a member vote is needed, dissent must be asserted before the vote and the dissenter must not vote in favor; otherwise the section allows 30 days after the amendment and notice. The cooperative then has 60 days to rescind, or must purchase within 180 days on the statutory terms ^{P1, § 308B.601, subd. 7}. This is not a general appraisal right for every amendment.

Common mistakes#

1. Sending the amendment text without the meeting notice, or the notice without the text.
2. Voting on an articles amendment without a quorum.
3. Forgetting to file with the SOS after the vote.
4. Forgetting the 10-day notice to members of a board bylaw amendment.
5. Putting hard-to-change terms in the articles that belong in the bylaws.