Massachusetts General Laws
Chapter 157 - Co-Operative Corporations
Section 6 - Apportionment of Earnings

Section 6. The directors of every corporation formed under section three or under section three A shall apportion its earnings in the following manner:
1. They shall set aside annually not less than ten per cent of its net profits for a reserve fund until there is accumulated in said reserve fund an amount not less than thirty per cent of its paid-up capital stock.
2. They shall declare and pay dividends on the paid-up capital stock not exceeding the prime rate.
3. From the balance of its annual net earnings the directors may appropriate a sum not exceeding five per cent thereof to be used in teaching co-operation.
4. The directors shall distribute the remainder of such earnings or any part thereof by a uniform dividend upon the amount of purchases or rents or sales of shareholders, through the corporation, and, if the directors so vote, upon the amount of wages earned and paid to employees, except that in the case of a purchaser not a shareholder, who desires to become such, a dividend of one half the uniform dividend may be declared upon such non-shareholder's purchases, or rents or sales and credited to him on account of the purchase of stock for which he may subscribe. In productive corporations, including creameries, canneries, storages, factories and the like dividends shall be calculated on raw materials delivered to the corporation instead of on goods purchased. If the corporation be both a purchasing and a selling, or a productive concern, the dividends may be on both raw material and on goods purchased. The profits or net earnings of such corporation shall be distributed to those entitled thereto at such times as the by-laws prescribe, but at least once in every twelve months.

Structure Massachusetts General Laws