Limited Liability Worker Cooperative Act.

Existing law, the California Revised Uniform Limited Liability Company Act, governs the formation and operation of limited liability companies. Existing law authorizes a limited liability company to engage in any lawful business activity, except as specified, but prohibits construing the act to permit a limited liability company to render professional services, as defined. Existing law provides for the filing of specified records and further provides that an individual who signs such a record affirms under penalty of perjury that the information in the record is accurate. Existing law, the Consumer Cooperative Corporation Law, provides for the organization and operation of primarily consumer cooperatives, and is also applicable to other cooperatives. Existing law provides for, among other things, information to be included in a cooperative corporation's by laws, the definition of terms for purposes of that law, and requirements as to voting rights of members and time periods for sending notice of meetings at which members are entitled to vote. Existing law requires a cooperative corporation to include in its name the word "cooperative." This bill would establish the Limited Liability Worker Cooperative Act, which would provide for the organization and operation of worker cooperative companies. The bill would authorize a worker cooperative company to be formed for any lawful purpose provided that it is organized and conducts its business primarily for the mutual benefit of its members as patrons of the worker cooperative company. The bill would authorize a worker cooperative company to engage in any lawful business activity, except as specified, but would prohibit construing the act to permit a worker cooperative company to render professional services, as defined. The bill would provide for, among other things, information to be included in a worker cooperative company's articles of organization and operating agreement, requirements as to voting rights of members, and time periods for sending notice of meetings at which members are entitled to vote and would require an individual who signs specified records to affirm under penalty of perjury that the information in the record is accurate. The bill would authorize certain classes of membership in the worker cooperative company, including a worker-member class. The bill would provide that members of the worker cooperative company have equal votes, but would authorize the worker-member class to have ultimate decisionmaking authority. The bill would authorize members of a class to vote separately on any matter. The bill would authorize a worker cooperative company to include in its name the word "cooperative." The bill would authorize a worker cooperative company to set aside portion of its profits before distribution, as specified. The bill would define certain terms for its purposes. Because this bill would expand the scope of the crime of perjury, the bill would impose a state-mandated local program. Existing law authorizes the majority of the members of a limited liability company to vote to dissolve, merge, or sell the limited liability company, or to convert the limited liability company to another business entity. This bill would require 23 of the worker-members of a worker cooperative company to vote to dissolve, merge, or sell the worker cooperative company, or to convert the worker cooperative company to a business entity other than a worker cooperative company. Existing law, the Corporate Securities Law of 1968, provides for the regulation of the issuance of corporate securities, requires the qualification of an offer or sale of securities, and provides for exemptions from qualification. This bill would exempt the issuance of a membership by a limited liability worker cooperative company, as specified, from certain securities requirements. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.