The directors of each association organized under this chapter, subject to revisions by the association at any general or duly called special meeting, shall apportion the earnings of the business in the following manner:

(1) They shall declare and pay dividends on the paid-up capital stock not exceeding six per cent per annum, such dividends to be paid at such time as the bylaws shall prescribe;

(2) They shall set aside annually not less than ten per cent of the net profits of the association for a reserve fund until there is accumulated in said reserve fund an amount not less than thirty per cent of the paid-up capital stock;

(3) They shall appropriate five per cent of the net profits for an educational fund to be used in teaching cooperation; and

(4) The remainder of such net profits shall be applied as a uniform dividend, as follows

(a) one half of such uniform dividend upon the amount of purchases of shareholders and upon the wages of employees and

(b) one half of such uniform dividend to nonshareholders on the amount of their purchases from and through the association, which may be credited to the account of such nonshareholder on account of the capital stock of the association.

But in productive associations, such as creameries, canneries, elevators, factories and the like, such dividends shall be on the raw material delivered instead of on goods purchased.

In case the association is both a selling and a productive concern the dividend may be on both raw material delivered and on goods purchased by patrons.

HISTORY: 1962 Code Section 12-818; 1952 Code Section 12-818; 1942 Code Section 8146; 1932 Code Section 8146; Civ. C. '22 Section 4340; 1915 (29) 235.