Subdivision 1. Distribution of net income. Net income in excess of dividends on capital stock, nonstock units of equity, and additions to reserves shall be distributed on the basis of patronage. A cooperative may establish allocation units, whether the units are functional, divisional, departmental, geographic, or otherwise, and pooling arrangements and may account for and distribute net income on the basis of allocation units and pooling arrangements. A cooperative may offset the net loss of an allocation unit or pooling arrangement against the net income of other allocation units or pooling arrangements to the extent permitted by section 1388(j) of the Internal Revenue Code of 1986, as amended through December 31, 1996.
Subd. 2. Frequency of income distribution. (a) Distribution of net income shall be made at least annually.
(b) A cooperative with income from trucking operations may only distribute net income annually. The board shall present to the members at their annual meeting a report covering the operations of the cooperative during the preceding fiscal year.
Subd. 3. Dividends. Dividends may be paid on common stock and nonstock units of equity only if the net income of the cooperative for the previous fiscal year is sufficient. Unless otherwise provided in the articles of incorporation, the dividends are not cumulative.
Subd. 4. Form of distribution. A cooperative may distribute net income in cash, capital stock credits, allocated patronage equities, revolving fund certificates, or its own or other securities.
Subd. 5. Eligible nonmember patrons. (a) The members may provide in the bylaws that nonmember patrons are allowed to participate in the distribution of net income on equal terms with member patrons.
(b) If a nonmember patron is qualified and eligible for membership, the amount of patronage refund due shall be credited to the patron's individual account.
(c) If the credits equal the value of a share of common stock that entitles the stockholder to vote, or a membership, a share of stock or a membership shall be issued to the nonmember patron.
Subd. 6. Patronage credits for ineligible members. If a nonmember patron with patronage credits is not qualified or eligible for membership, a refund due may be credited to the patron's individual account. If the credited amount in the individual account of a patron ineligible for membership equals the value of a share of common stock and does not entitle the holder to vote, or to preferred stock or a certificate of interest, the board may issue a share of preferred stock or a certificate of interest. After the patron is issued preferred stock or a certificate of interest, the patron may participate in the distribution of income on the same basis as a stockholder or member.
1989 c 144 art 1 s 38; art 3 s 25; 1997 c 231 art 16 s 11; 1998 c 401 s 47,48; 2000 c 379 s 2
Structure Minnesota Statutes
Chapters 300 - 323A — Business, Social, And Charitable Organizations
Section 308A.005 — Definitions.
Section 308A.011 — Use Of Term Cooperative Restricted.
Section 308A.015 — Reservation Of Right.
Section 308A.021 — Filing Fee.
Section 308A.025 — Registered Office.
Section 308A.027 — Annual Renewal.
Section 308A.032 — Foreign Cooperatives; Sections Applicable.
Section 308A.101 — Organizational Purpose.
Section 308A.105 — Incorporators.
Section 308A.121 — Cooperative Name.
Section 308A.125 — Stock And Nonstock Organization.
Section 308A.131 — Articles Of Incorporation.
Section 308A.135 — Amendment Of Articles.
Section 308A.141 — Amendment Of Articles To Be Governed By This Chapter.
Section 308A.145 — Amendment Of Articles To Incorporate Defectively Organized Cooperative.
Section 308A.155 — Corporate Existence.
Section 308A.205 — Agricultural Marketing Contracts.
Section 308A.210 — Telecommunication Services Purchasing Cooperatives.
Section 308A.301 — Board Governs Cooperative.
Section 308A.305 — Number Of Directors.
Section 308A.311 — Election Of Directors.
Section 308A.313 — Apportionment Of Directors Among Districts Or Units.
Section 308A.315 — Filling Vacancies.
Section 308A.321 — Removal Of Directors.
Section 308A.325 — Limitation Of Director's Liability.
Section 308A.327 — Electric Cooperative; Board Meetings.
Section 308A.328 — Standard Of Conduct.
Section 308A.501 — Capital Stock.
Section 308A.503 — Health Care Cooperative Members.
Section 308A.505 — Subject To Securities Law.
Section 308A.601 — Grouping Of Members.
Section 308A.605 — Member And Stockholder Violations.
Section 308A.611 — Regular Members' Meetings.
Section 308A.615 — Special Members' Meetings.
Section 308A.621 — Certification Of Mailed Meeting Notice.
Section 308A.625 — Failure To Receive Meeting Notice.
Section 308A.635 — Member Voting Rights.
Section 308A.645 — Vote Of Corporate Stock Held By Cooperative.
Section 308A.705 — Distribution Of Income.
Section 308A.711 — Distribution Of Unclaimed Property.
Section 308A.801 — Merger And Consolidation.
Section 308A.901 — Liquidation.
Section 308A.905 — Methods Of Dissolution.
Section 308A.911 — Voluntary Dissolution By Members.
Section 308A.915 — Winding Up.
Section 308A.921 — Revocation Of Dissolution Proceedings.
Section 308A.925 — Statute Of Limitations.
Section 308A.931 — Articles Of Dissolution.
Section 308A.935 — Application For Court-supervised Voluntary Dissolution.
Section 308A.941 — Court-ordered Remedies Or Dissolution.
Section 308A.945 — Procedure In Involuntary Or Court-supervised Voluntary Dissolution.
Section 308A.951 — Receiver Qualifications And Powers.
Section 308A.955 — Dissolution Action By Attorney General.
Section 308A.961 — Filing Claims In Court-supervised Dissolution Proceedings.
Section 308A.965 — Discontinuance Of Court-supervised Dissolution Proceedings.
Section 308A.971 — Court-supervised Dissolution Order.
Section 308A.975 — Filing Court's Dissolution Order.
Section 308A.981 — Barring Of Claims.
Section 308A.985 — Right To Sue Or Defend After Dissolution.