What happens to the capital credits of a business which ceases operation?
Capital credits for a sole-proprietorship business, upon the death of the proprietor, are handled like other estate retirements. If the sole-proprietorship business ceases operation prior to the death of the owner, the owner is not entitled to early retirement of the capital credits. Because of potential to adversely impact the financial condition of the cooperative, the capital credits of corporations, partnerships, associations, and LLC’s are not eligible for early retirement in the event the business is sold or discontinued, but instead will continue to be retired in the normal rotation to the corporate address. Some businesses chose to sell or transfer their capital credit allocation to another entity with interest in those capital credits. The cooperative will work with businesses to facilitate that transaction.
