How a Massachusetts Association Is Actually Organised

§ 1 Definitions

The following words, as used in this chapter, shall, except as otherwise expressly provided in section two A, have the following meanings: ''Association'', a voluntary association under a written instrument or declaration of trust, the beneficial interest under which is divided into transferable certificates of participation or shares. ''Secretary'', the state secretary. ''Department'', the department of public utilities or the department of telecommunications and cable. When used in sections two to seven, inclusive, and twelve to fourteen, inclusive, of this chapter, the word ''trust'' shall, except as otherwise expressly provided in section two A, mean a trust operating under a written instrument or declaration of trust, the beneficial interest under which is divided into transferable certificates of participation or shares, other than a trust established for the sole purpose of exercising the voting rights pertaining to corporate stock or other securities in accordance with the terms of a written instrument.

§ 2 Filing of copy of written instrument or declaration of trust; fee; amendments; violations; consolidation or merger

The trustees of an association or trust shall file a copy of the written instrument or declaration of trust creating it with the secretary and with the clerk of every city or town where such association or trust has a usual place of business. The fee for filing said copy with the secretary shall be determined annually by the commissioner of administration under the provision of section three B of chapter seven and for filing said copy or any amendment thereof with the said clerk the fee as provided by clause (75) of section thirty-four of chapter two hundred and sixty-two. Such trustees shall also, within thirty days after the adoption of any amendment thereof, file a copy of said amendment with said secretary and said clerk. The trustees of every association or trust, whose written instrument or declaration of trust creating it is not filed as required in this section shall be punished by a fine of not more than five hundred dollars or by imprisonment for not more than three months.

An association or trust may consolidate or merge with or into one or more domestic limited liability companies, as defined in section two of chapter one hundred and fifty-six C in the manner described, and with the effects set forth in said chapter one hundred and fifty-six C.

The trustees of an association or trust which is not the resulting or surviving entity in any such consolidation or merger shall file (1) a copy of the certificate of consolidation or merger with the secretary if no other entity which is a party to the transaction has done so within thirty days after the effective date of such transaction, and (2) a copy with the clerk of every city or town where such association or trust has a usual place of business.

The fee for filing such copy with the secretary shall be the fee determined annually by the commissioner of administration under the provision of section three B of chapter seven, and for filing with said clerk the fee as provided by clause (75) of section thirty-four of chapter two hundred and sixty-two.

§ 2A Names of or similar to other businesses; enjoining violations

No association or trust shall assume the name of any corporation established under the laws of the commonwealth, or of a corporation, firm, or association or trust whether or not as defined in section one, or of an individual, carrying on business in the commonwealth at the time when the association or trust is created or within three years prior thereto, or assume a name so similar thereto as to be likely to be mistaken for it, except with the written consent of such existing corporation, firm, association or trust or of such individual, previously filed with the secretary; and the secretary shall refuse to receive for filing the written instrument or declaration of trust of an association or trust if it appears to him to have assumed a name in violation hereof. The supreme judicial or superior court shall have jurisdiction in equity, upon the application of any person interested or affected, to enjoin an association or trust from doing business under any name assumed in violation hereof, although the written instrument or declaration of trust of such association or trust has been received for filing as aforesaid.

§ 2B Investment company trust; trustee

This section shall apply to a trust that is an investment company, as defined in the Investment Company Act of 1940, and that is registered thereunder with the United States Securities and Exchange Commission.

A trustee of a trust who with respect to the trust is not an interested person, as defined in said Investment Company Act of 1940, shall be deemed to be independent and disinterested when making any determination or taking any action as a trustee.

§ 3 Trusts owning or controlling certain public utilities; filing copy of declaration of trust

The trustees of an association or trust who own or control a majority of the capital stock of a railroad, street railway, electric railroad, elevated railway, gas, electric or water company, or corporation engaged in the common carriage of passengers by motor vehicle shall also file a copy of the written instrument or declaration of trust creating it with the department and shall also within thirty days after the adoption of any amendment of such instrument or declaration file a copy thereof with the department. Every such trustee who fails to comply with the foregoing requirements shall be punished by a fine of not more than five hundred dollars or by imprisonment for three months.

§ 4 Trusts owning or controlling certain public utilities; annual statement

The trustees of an association or trust who own or control a majority of the capital stock of a railroad, street railway, electric railroad, elevated railway, gas, electric or water company, or corporation engaged in the common carriage of passengers by motor vehicle shall annually on or before April first file with the secretary and with the department a statement showing the number of shares of such company or corporation owned or controlled by them and the stockholders of record on the books of such company or corporation in whose names such shares are held. Every such trustee who fails to comply with this section shall be punished by a fine of not more than five hundred dollars or by imprisonment for three months.

§ 5 Repealed, 1924, 190, Sec. 1repealed

Repealed, 1924, 190, Sec. 1

§ 5A Trusts; professional relationships

If a trust is formed under this chapter for the purpose of rendering one or more professional services as defined in chapter one hundred and fifty-six A, the relationship between the trust or a trustee or employee thereof rendering professional service and the person receiving such service shall be the same as if such trust or trustee or employee rendered such service to said person as an individual practitioner, including any liability arising out of the rendering of such service.

§ 6 Suits against associations or trusts; seals

An association or trust may be sued in an action at law for debts and other obligations or liabilities contracted or incurred by the trustees, or by the duly authorized agents of such trustees, or by any duly authorized officer of the association or trust, in the performance of their respective duties under such written instruments or declarations of trust, and for any damages to persons or property resulting from the negligence of such trustees, agents or officers acting in the performance of their respective duties, and its property shall be subject to attachment and execution in like manner as if it were a corporation, and service of process upon one of the trustees shall be sufficient.

An association or trust may have a seal, which it may alter at pleasure, and which may be used by the trustee or trustees of such association or trust as his or their seal. An impression of a seal purporting to be the seal of such an association or trust shall be sufficient for all purposes without the use of a wafer or wax.

§ 7 Investigation or examination of trusts owning or holding stock in certain public utilities; access to information

The department may by its members or duly authorized employees investigate and examine the books, accounts, contracts, records and memoranda of the trustees of any association or trust, who own or hold the capital stock or any part thereof of a railroad, street railway, electric railroad or elevated railway corporation, gas, electric or water company, or corporation engaged in the common carriage of passengers by motor vehicle, and may require said trustees to furnish such reports and information as the department shall from time to time direct with respect to the relations and dealings between such trustees and any such corporation or company.

§ 8 Investigation or examination of businesses under same ownership, control or management as certain public utilities; access to information

The department may by its members or duly authorized employees investigate and examine the books, accounts, contracts, records and memoranda of any partnership, express trust, voluntary association or corporation which is under the same ownership, control or management as a railroad, street railway, electric railroad or elevated railway corporation, gas, electric or water company, or company engaged in the common carriage of passengers by motor vehicle, in respect of the relations and of any contracts and dealings between such railroad, street railway, electric railroad or elevated railway corporation, gas, electric or water company, or company engaged in the common carriage of passengers by motor vehicle and such partnership, express trust, voluntary association or corporation, and in relation thereto may require from such partnership, express trust, voluntary association or corporation such reports and information as the department shall from time to time direct.

§ 9 Refusal to submit to investigation or examination

A railroad, street railway, electric railroad, elevated railway, gas, electric or water company, or corporation engaged in the common carriage of passengers by motor vehicle, or a partnership or corporation or the trustees of an express trust or voluntary association, described in sections seven and eight, which refuses or neglects to submit its or their books, accounts, contracts, records and memoranda to the investigation and examination of the department, or to furnish such reports and information as it shall from time to time direct and require, shall be punished by a fine of not more than five thousand dollars.

§ 10 Jurisdiction in equity

The supreme judicial court shall have jurisdiction in equity to enforce compliance with the three preceding sections, and with all orders of the department made under authority thereof.

§ 11 Application of chapter to rates or services

Nothing contained in this chapter shall be construed as authorizing, requiring or justifying the department in making any recommendations, rulings or orders with respect to the rates charged or the service furnished by any corporation subject to its supervision, to take into consideration in any respect whatsoever any certificates of participation or shares issued under a declaration of trust and representing the beneficial interest in the stock, bonds, notes or other securities of such corporation, or the investment in such certificates or shares.

§ 12 Annual reports

Every association or trust shall annually on or before June first file with the state secretary a report signed under the penalties of perjury by its trustees stating (a) the name of the association or trust; (b) the location (with street address) of its principal office in this commonwealth and elsewhere if the trust or association does business outside the commonwealth; (c) the number of its issued and outstanding transferable certificates of participation or shares; and (d) the names and addresses of its trustees.

§ 13 Examination of report; approval; endorsement; filing; fee

The state secretary shall examine such report, and if he finds that it conforms to the requirements of this chapter, he shall endorse his approval thereon, and upon the payment of a fee to be determined annually by the commissioner of administration under the provision of section three B of chapter seven shall cause this report to be filed in his office in book form for convenient reference, and open to public inspection.

§ 14 Failure to file report

If the trust or association fails to file its report within the time required by law, the state secretary shall give notice by mail, postage prepaid, to such trust or association in default. If the trust or association omits to file such report within thirty days after such notice of default has been given, it shall forfeit to the commonwealth not less than five dollars nor more than ten dollars for each day during which default continues. Such forfeiture may be recovered by the commonwealth in an action brought in Suffolk county in the name of the commonwealth, or may be recovered by an information in equity in the name of the attorney general at the relation of the state secretary brought in the supreme judicial court in Suffolk county. Upon such information, the court may issue an injunction restraining the further prosecution of the business of the trust or association until such forfeiture, with interest and costs, has been paid and until such report has been filed.

§ 1 Purpose of chapter

The purpose of this chapter is to foster safe, decent and affordable housing in the commonwealth by enabling individuals to form cooperative corporations for the purpose of developing, acquiring, owning, and operating multi-family housing on a cooperative plan.

§ 2 Application of chapter; amendment of articles of incorporation to comply with chapter

This chapter applies to all cooperative corporations organized under it. Any corporation organized under any other chapter of the General Laws may become a cooperative corporation by adopting an amendment to its articles electing to become subject to this chapter and by adopting any further amendment necessary to comply with this chapter. The amendment must be adopted and filed, and shall be effective, according to the chapter under which the corporation was organized before acceptance of this chapter.

§ 3 Cooperative corporations subject to certain laws

All cooperative corporations shall be subject to laws as may be enacted affecting or altering their corporate rights or duties or dissolving them.

§ 4 Definitions

In this chapter, the following words shall have the following meanings:—

''board'', board of directors;

''by-laws'', the by-laws of a cooperative corporation as they exist from time to time;

''cooperative corporation'', a corporation organized or existing under this chapter;

''limited equity cooperative housing corporation'', a cooperative corporation organized and operated primarily for the benefit of low and moderate income persons, and whose equity, after allowance for maximum transfer value of its stock, is permanently dedicated to providing housing to persons of low or moderate income or to a charitable purposes;

''member'', a person who holds voting stock of a cooperative corporation;

''proprietary lease'', an agreement between a cooperative corporation and its stockholder for occupancy of a dwelling unit owned by the cooperative corporation;

''transfer value'', the value which may be paid or received upon the sale or transfer of the stock of a cooperative corporation.

§ 5 Application of laws; conflict of laws

The provisions of chapter one hundred and fifty-six B shall be applicable to cooperative corporations, and they shall enjoy the powers and privileges, and be subject to the duties, restrictions and liabilities of other corporations, except where inconsistent with the letter and purpose of this chapter. This chapter shall take precedence in the event of any conflict with provisions of said chapter one hundred and fifty-six B, and any conflict with the provisions of section three A and section four of chapter one hundred and fifty-seven.

§ 6 Articles of organization

Three or more persons, residents of the commonwealth, may organize a cooperative corporation by filing articles of organization with the secretary of the commonwealth. The articles must meet the requirements of chapter one hundred and fifty-six B, and, in addition, shall state:

(1) whether transfer of its stock is restricted;

(2) whether or not it shall be authorized to pay dividends on its stock, but no cooperative corporation may pay a dividend of more than ten per cent, noncumulative, upon its stock;

(3) whether the transfer value of its stock is restricted.

§ 7 Name

The name of each cooperative corporation must comply with the provisions of chapter one hundred and fifty-six B and, in addition, must contain the word ''cooperative''.

§ 8 Name; forfeiture; judicial action

Any person, partnership, association or corporation, domestic or foreign, except cooperative banks and corporations organized under chapter one hundred and fifty-seven, transacting business in the commonwealth under any name or title containing the word ''cooperative'' or any close variation, shall forfeit to the commonwealth one hundred dollars for every day such name or title is used. The forfeiture may be recovered by an information brought in the supreme judicial court or superior court by the attorney general or any other person; the court may enjoin such unlawful use and may make such other orders and decrees as justice and equity may require.

§ 9 Power to make, amend or repeal by-laws

The power to make, amend or repeal by-laws shall be reserved to the stockholders.

§ 10 Articles or by-laws

The articles or by-laws may provide:

(a) for election of directors and other officials by unit or district;

(b) for voting by stockholders on the basis of one vote per member or one vote per dwelling unit rather than one vote per share;

(c) that any action required or permitted to be taken at a meeting of stockholders may be taken by mail ballot;

(d) for a method of membership representation of stockholders at meetings by delegates from units or districts, provided that delegates must be proportional to the number of members in each unit district;

(e) for redemption or recall of stock;

(f) for termination of membership rights and privileges of a stockholder;

(g) standards for eligibility to become a stockholder;

(h) for the allocation of its net savings among the uses permitted in section twelve.

§ 11 Net savings; apportionment

At least once a year the board of every cooperative corporation shall, after first setting aside an adequate portion of the net savings in a reserve fund for the general operation of the business, apportion the remainder of the net savings in one or more of the following ways:

(1) as a dividend not to exceed ten per cent, noncumulative, upon one or more classes of stock;

(2) as an equitable distribution or refund to all patrons in proportion to their individual patronage except that (a) in the case of a subscriber patron, the distribution or refund may be credited to the subscriber's account until the subscription has been fully paid, and (b) in the case of a nonmember patron, the amount otherwise distributable may be retained by the cooperative corporation;

(3) this section does not prevent a cooperative corporation from disposing of the net savings by reducing the cost of goods, facilities or services or by applying such net savings otherwise for the common benefit of members;

(4) this section does not prevent a cooperative corporation from adopting a system by which the payment of net savings are deferred for a fixed period of time, nor from adopting a system in which the net savings distributed are partly in cash and partly in stock.

§ 12 Termination of proprietary leases

A cooperative corporation may terminate all of its proprietary leases, but only by agreement of proprietary lessees holding at least 80 per cent of its stock or any larger percentage the specified in the articles or by-laws.

§ 13 Loans

Any financial institution organized under the laws of the commonwealth and supervised either by the commissioner of banks or the commissioner of insurance shall be authorized to make loans secured by a pledge of a proprietary lease and the appurtenant stock of a cooperative corporation upon the same terms and with the same limitations as loans secured by mortgages of real property.

§ 1 Issuance of warrant for meeting upon application of proprietors of lands, wharves or other real estate held in common to organize as corporation

Upon written application of five or more proprietors of lands, wharves or other real estate held in common to a justice of the peace, stating that they intend to organize themselves as a corporation, he shall issue his warrant to one of the applicants, directing him to call a meeting of all the proprietors and expressing in the warrant the time, place, occasion and purpose of the meeting.

§ 2 Notice of organizational meeting

The meeting shall be called by posting a notice containing the substance of the warrant, signed by the person to whom the warrant is directed, fourteen days at least before the meeting, in one or more public places in the town, and by publishing it in a newspaper, if any, published in the county where the estate lies; otherwise, in a newspaper published in an adjoining county.

§ 3 Formation of corporation; selection of officers; certification of organization

At such meeting, by vote of a majority in number and interest of all of the proprietors, they may organize themselves as a corporation under this chapter; and they may thereupon choose a clerk, treasurer, collector and such committees and other officers as they deem necessary for the management of their affairs, and may agree upon and direct the manner of calling future meetings. Each officer chosen shall hold his office until his successor is qualified. The clerk, treasurer and collector shall forthwith make, sign and swear to a certificate setting forth the name of the corporation, its purpose, the town and county where it is located, the date of the meeting for organization and any adjournments thereof, and any other facts of importance contained in the proceedings of organization. The certificate and the record of the meeting, including any by-laws, shall be submitted to the state secretary, who shall examine them and who may require such amendments thereof or such additional information as he deems necessary. If he finds that the provisions of law relative to the organization of the corporation have been complied with, he shall endorse his approval on the certificate. The certificate shall, upon payment of a fee to be determined annually by the commissioner of administration under the provision of section three B of chapter seven, be filed in the office of the state secretary; otherwise, the organization shall be void.

§ 4 Duties of clerk

The clerk shall be sworn, and shall record all votes, orders and proceedings of the proprietors in books which he shall keep for that purpose until they are delivered to the town clerk as hereinafter provided.

§ 5 Duties of treasurer

The treasurer shall demand and receive all money due or belonging to the proprietors, shall sue for and recover in his own name to their use all fines and penalties incurred under sections seven and eight, shall pay out all money in his hands according to the order of the proprietors and shall, from time to time when required, render his accounts thereof.

§ 6 Actions by and against corporations

Such proprietors may sue and be sued as a body corporate; and an action brought by the corporation for trespass on the common property may be pleaded in abatement or answered in bar of an action for the same trespass brought by any of the proprietors in his individual capacity.

§ 7 By-laws; annexation of penalties

They may make by-laws consistent with law for the orderly conducting of their business, with penalties for the breach thereof not exceeding three dollars for each offence; but by-laws with penalties annexed shall be approved by the county commissioners for the county where the estate lies.

§ 8 Power of moderator

The moderator of a meeting of the proprietors shall have the same power as the moderator of a town meeting, except the power of confining a person or causing him to be removed from the meeting. Whoever resists or disobeys his orders shall be subject to the pecuniary penalties provided for the like offences at a town meeting.

§ 9 Powers of proprietors at legal meeting

The proprietors may, at a legal meeting, exercise any of the powers granted to them in this chapter; but no business shall be acted on unless set forth in the notice for the meeting.

§ 10 Voting rights

Each proprietor may vote according to the number of his shares or the amount of his interest, if known; and if not known, the proprietors shall vote equally. Absent proprietors may vote by written proxy.

§ 11 Conduct of business

The proprietors may by vote adopt such measures and levy such assessments in proportion to their respective rights and interests in the property as they deem proper for managing, improving or dividing their common property and carrying on their business.

§ 12 Failure of proprietor to pay assessment

If a proprietor fails to pay an assessment for six months after demand therefor by the collector or other proper officer, or after a notice of such assessment posted and published in the manner prescribed for the first meeting, the committee of the proprietors or other officers authorized by them for that purpose may sell by public auction and give to the purchaser a deed of so much of the right or share of such proprietor as is sufficient to pay the amount so due from him and all the reasonable charges of the sale, first giving thirty days' notice of the time and place appointed for such sale in the manner prescribed for notifying the first meeting.

§ 13 Redemption of shares

The proprietor of the share or part sold may, within one year after the sale, redeem it by paying to the purchaser or his assigns the purchase price with interest at the rate of twelve per cent a year from the time of the sale.

§ 14 Sale by proprietors

If there are ten or more proprietors, they may, by vote of more than two thirds both in number and interest at a legal meeting, sell their estate and divide the proceeds thereof.

§ 15 Division of property; deposit of records; fees

After the final division of their common property, the proprietors may deposit their records with the clerk of the city or town where the land or any part of it lies; and the clerk may make and certify copies from the records as the clerk of the proprietors might have done. Such proprietors shall, upon so depositing their records, pay the fee provided by clause (27) of section thirty-four of chapter two hundred and sixty-two, and the fees for copies of said records shall be as provided by clause (28) of said section thirty-four.

§ 16 Termination of corporation

A final division of the common property shall not dissolve the corporation until the expiration of ten years thereafter; but the proprietors at the time of the division and their heirs shall retain their corporate powers for the purpose of collecting all assessments, debts and effects due or belonging to the corporation, and shall be liable for its debts.

§ 17 Powers after disposal of property

The proprietors may, within ten years after such division, call and hold meetings and vote and raise money by assessments, as before provided, for the payment of their debts and all other charges and demands against them, and may do all other lawful acts necessary for closing their business.