The Illinois Agricultural Cooperative Act: The Possibility of and Procedure for Denying the Voting Rights of Stockholders
Adam J. Hermann | 2002 U. Ill. L. Rev. 1177
The Illinois Agricultural Cooperative Act (ACA) governs agricultural co-operative associations organized in Illinois. The Act incorporates by ref-erence all of the provisions of the Illinois Business Corporation Act of 1983 (BCA) that are not in conflict with the ACA. One provision of the BCA allows a corporation to limit or deny the voting rights of its share-holders if the corporation’s articles of incorporation so provide. Whether this particular provision is in conflict with the ACA, and hence whether agricultural cooperative associations organized under the ACA may limit or deny the voting rights of their shareholders, is a debatable question.
The resolution of this question will determine whether an agricultural co-operative organized under the ACA can go forward with a cooperative business action when an insufficient number of affirmative votes in favor of the action would prevent it from occurring despite the absence of op-position to the action. This situation would arise whenever a certain number of cooperative stockholders who do not oppose a proposed action nevertheless neglect to cast votes favoring the action, causing it to fail.
In this note, the author argues that agricultural cooperatives organized under the ACA can indeed limit or deny stockholder voting rights as pro-vided in the BCA, and recommends that the Illinois General Assembly make its intention clear in this regard.