P.R. Laws tit. 7, § 1362f
(a) Preferred stock. —
(1) Subject to the approval of the Corporation, every cooperative may issue one or more classes of preferred stock, or one or more series of stock in any of the classes. The total preferred stock shall never exceed the total common stock issued and outstanding. Any of them may be of stock with or without par value, and in such series and denominations and with the preferences and relative rights of financial interest, of option or other special, conditional, limited or restricted rights that are declared and stated in the resolution that provides for the issuing of the stock approved by the Board of Directors. With the exception of said rights, the holding of preferred stock shall not grant voting rights, participation in assemblies, the right to be elected or to be designated to the boards of directors of the cooperative.
(2) Any preferred stock may be redeemable in their terms and at the[ir] prices, and may be issued with the denominations, preferences and relative rights, of financial participation, options, or other special rights, and their conditions, limitations or restrictions that are consigned in the resolution that provides for the issuing of this stock and is approved by the Board of Directors with the authorization of the Corporation.
(3) The holders of preferred stock of any class or series shall be entitled to dividends at the rate and under the terms and conditions s[t]ated in the resolution that provides for the issue of these shares and is approved by the Board of Directors with the authorization of the Corporation. These dividends shall be payable with preference over, or prior to the dividends payable in any other class of stock, and shall be cumulative or not, as stated. When dividends have been paid on the preferred stock pursuant to the terms and conditions said stock is entitled to, or when the dividends have been declared and set aside for payment, dividends may be paid on the remaining classes of stock charged to the remainder of the assets that the cooperative has available for the payment of dividends. The dividends and interest earned by the persons that acquire or hold any class of stock issued by a cooperative shall be exempt from the payment of the income tax established in §§ 8006 et seq. of Title 13, known as the “Puerto Rico Internal Revenue Code of 1994”, and from all classes of movable property taxes.
(4) Preferred stock shall not be insured by the Corporation, which fact shall be stated clearly in the offering, in every contract, and in any other documents that evidence the preferred stock. At any time the payment of this stock shall be subordinated to the payment of all the obligations and liabilities of the cooperative and the capital obligations. The denominations, preferences and relative rights, of financial shares, options and other special rights of each class or series, with the conditions, limitations or restrictions of such preferences or rights, or both, shall be fully consigned or summarized on the face or reverse of the certificate issued by the cooperative to represent said classes or series of stock.
(5) The power of a cooperative to issue preferred stock shall be previously consented to by the corresponding general assembly of members or delegates, through express authorization consigned in the general regulations. Once the authorization is granted, and while it is in force, the Board of Directors shall have the right to define the terms and conditions under which the preferred stock shall be issued and offered without need of subsequent approval by the assembly.
(6) The Corporation is empowered to define by regulations the standards corresponding to the approval of the preferred stock issue by the cooperative. Preferred stock issued pursuant to regulations shall be deemed as part of the total capital of the cooperative.
(b) Capital liabilities. — Any cooperative may issue capital liabilities, upon prior approval of the Corporation. Capital liabilities are deemed to be part of the capital of the cooperative, pursuant to the regulations adopted to such effects by the Corporation. Said capital liabilities shall not have a maturity of less than five (5) years and shall be legally subordinated to the obligations with the depositors and with the other creditors of the issuing cooperative. The Corporation may require the Board of Directors to suspend the payment of principal and interest of the capital obligations on their maturity, or before their maturity, when said payment reduces the amount of capital in shares, the reserve fund and capital obligations, or when, in its judgment, said payment could affect the financial solvency of the cooperative, or endanger the interests of the depositors and of the public in general. Capital obligations may be collateral and redeemable pursuant to the terms and conditions approved by the Corporation. No cooperative may acquire its own obligations or the capital obligations issued by other cooperatives for their investment portfolio.
Capital obligations shall be deemed to be part of the capital, but shall be presented and designated separately in all the general balance sheets. Such obligations shall not be insured by the Corporation, which shall be clearly stated in the tender, in every contract, and any other documents that evidence such obligations. The dividends and interest that are earned by the persons who acquire or possess capital obligations of any kind issued by a cooperative, shall be exempt from the payment of the income tax established in §§ 8006 et seq. of Title 13, known as the “Puerto Rico Internal Revenue Code of 1994”, and of any type of movable property taxes.
History —Oct. 28, 2002, No. 255, § 2.07.