A cooperative association is a business entity formed by individuals for their mutual benefit, and is usually organized under general state business laws or specific state statutes governing cooperative associations. The rights and duties of the members of a cooperative association are governed by state statutes and by the association’s charter or articles of incorporation.

Each shareholder in a cooperative association has equal ownership and an equal share in the control of the association, regardless of the number of shares of stock held by the shareholder. Profit earned by the association is divided among the shareholders based on the amount of their purchases during the period the profit was earned.

In Colorado, cooperative associations are recognized as a type of business entity that is formed by individuals for their mutual benefit. These entities are typically organized under specific state statutes that govern cooperative associations, which in Colorado can be found in the Colorado Revised Statutes (C.R.S.), particularly under the Colorado Cooperative Act. The rights and duties of the members are outlined by these statutes as well as by the cooperative's charter or articles of incorporation. In a cooperative association in Colorado, each shareholder has equal ownership and an equal say in the control of the association, regardless of the number of shares they hold. This means that each member has one vote in decision-making processes. Profits earned by the cooperative are distributed among the shareholders based on the volume or value of business conducted with the cooperative, rather than on the number of shares owned. This distribution is often referred to as patronage dividends and is meant to reflect the members' contribution to the cooperative's success during the profit-earning period.