AGO 1949-51 No. 154.

• Case Date: November 07, 1949
• Court: Washington

Washington Attorney General Opinions 1949. AGO 1949-51 No. 154. November 7, 1949[Orig. Op. Page 1]PRIVATECOOPERATIVE ASSOCIATIONS - PREFERRED STOCK.A cooperative association may issue preferred stock.Honorable Earl Coe Secretary of State Legislative Building Olympia, WashingtonCite as: AGO 1949-51 No. 154Attention: !ttMr. Ray Yeoman, Assistant Secretary of State Dear Sir: You have requested the opinion of this office as to whether a cooperative association organized under chapter 19, Laws of 1913 as amended by chapter 37, Laws of 1927 [Rem. Rev. Stat. 3904, et seq.] may issue shares of preferred stock. Our conclusion is that such cooperative associations may issue shares of preferred stock. ANALYSIS In the opinion of this office to the Secretary of State dated March 26, 1927 [Ops. Atty. Gen. 1927-28, page 40], it was decided that associations formed under the cooperative act do not have the power to issue preferred stock. That conclusion was premised upon section 13, chapter 19, Laws of 1913 which required such associations to apportion their net earnings by first paying dividends on the paid up capital stock at a rate not in excess of eight per cent per annum. It was felt that since this section made no distinction between classes of stock, and since it required payment on capital stock regardless of preferences, that statute was [Orig. Op. Page 2] inconsistent with the idea of preferred stock which gives its holders a preferred right with respect to the payment of dividends. We feel that that opinion was correct under the laws which then existed. The statute upon which that opinion was based has been amended, however, by section 1, chapter 37, Laws of 1947 [3916...