What is the process for filing papers to establish a processing cooperative in Tennessee?

To start a processing cooperative, it is best to think of meeting two requirements:

1. written "articles of incorporation" must be filed with the Tennessee Secretary of State
2. "articles of incorporation" submitted to the Secretary of State must be accompanied by a written letter of approval by the Commissioner of Agriculture.

Filing with the Secretary of State
The process for establishing a "processing cooperative" in Tennessee includes the filing of articles (of organization) with the Secretary of State. The information required to be in these articles is consistent with the forms required for establishing other legal business structures and is described in the original wording of the Tennessee Processing Cooperative Act. The information required to be in the articles can be assembled and documented in a variety of ways. To date, the Secretary of State has not prescribed a mandatory form to be used with or as the organizational documents of a processing cooperative. However, the information required is similar in format to the requirements for articles of incorporation for other businesses.

Organizational documents must include a statement which makes it clear that the articles are being filed pursuant to the Tennessee Processing Cooperative Act.

As described in the Act, "articles" of organization shall include:

1. Name of the cooperative.
2. Purpose of the cooperative.
3. Name and address of each organizer.
4. Street address and zip code of the principle place of business for the cooperative and the county in which it is located.
5. If anything other than perpetual, explain the period of duration of the cooperative.
6. Capital structure of the cooperative including a statement of the classes (of membership rights) and related rights, preferences and restrictions; the right to share in profits ro distributions of the cooperative and the authority to issue member interests which may be designated to be determined by the board.
7. Provisions for designating the voting governance rights for each membership class and any limitations or restrictions on voting power.
8. A statement that patron membership interests with voting power shall be restricted to one (1) vote for each member regardless of the amount of patron-member interests held in the cooperative or a statement describing the allocation of voting power allocated.
9. A statement that membership interests held by a member are transferable only with the approval of the board or as provided in the bylaws.
10. The names, post office address and terms of office of the board of directors.
11. A statement as to how profits and losses will be allocated and cash will be distributed between patron membership interests collectively and non-patron membership interest collectively, a statement that net income allocated to patron membership interests as determined by the board in excess of dividends and additions to reserves shall be distributed on the basis of patronage, and that the records of the cooperative shall include the interests of patron membership interests and nonpatron membership interests which may be further described in the bylaws, of any classes, and in the reserves.
12. The street address and zip code of the initial registered office of the cooperative, the county in which the office is located and the name of its initial registered agent in that office.

Articles must be signed by all organizers. All documents must be typed (or legibly printed) on one side of letter- or legal-size paper. Document must be in the English language. Tennessee Processing Cooperatives must have a registered office and a registered agents in Tennessee. The appropriate fees must be paid to the Secretary of State.

Approval by the Commissioner of Agriculture
Articles will not be accepted by the Secretary of State unless the articles have been approved in writing by the Commissioner of Agriculture. Approval by the Commissioner of Agriculture shall be based on his determination that the cooperative will provide new or improved markets for agricultural products in Tennessee or that the cooperative will provide opportunities for patron members of the cooperative to participate in the processing of agricultural products in Tennessee. The Commissioner of Agriculture = s evaluation will be thorough and will likely represent the most significant review by state government. Articles of organization should be sent first to the Commissioner of Agriculture for review. If approved, the Commission will provide a written letter stating such. The letter should accompany the articles when submitted to the Secretary of State.