1. (a) When a member of an association has paid his membership fee or stock subscription in full he shall receive, as the case may be, a certificate of membership or a stock certificate.
2. (b) No association shall issue membership certificates or stock until they have been fully paid for, but an association in its bylaws may admit a member and allow him to vote and hold office as soon as twenty percent (20%) of his membership fee or his stock certificate has been paid.
3. (c) Ownership of common stock, certificates of indebtedness, or membership certificates may be transferred by a member only to other associations or to persons engaged in the production of agricultural products, and who are eligible to hold same. Such transfer must be approved by the board of directors before it is binding on the association.
4. (d) An association may issue and sell preferred stock to members or nonmembers. Preferred stock may be redeemable or retirable by the association on such terms and conditions as may be provided by the bylaws and printed on the stock certificate. Preferred stockholders shall not be entitled to vote. Whenever an association organized hereunder with preferred stock shall purchase the stock or any interest in any property of any person it may discharge the obligation so incurred wholly or in part by exchanging for the acquired interest shares of its preferred stock to an amount which would equal the fair market value of the stock or interest so purchased as determined by the board of directors.

Laws 1937, p. 265, § 12, emerg. eff. May 22, 1937.