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 Connecticut, cooperative associations are typically formed under specific state statutes that provide for their creation, governance, and operation. These statutes outline the rights and duties of the members, as well as the procedures for the association's management. In Connecticut, cooperative associations are often governed by Chapter 600 of the Connecticut General Statutes, which includes the Cooperative Association Act. This act allows individuals to form a cooperative association for any lawful purpose, excluding banking, insurance, and making loans. Each member of a cooperative association in Connecticut has an equal vote, regardless of the number of shares they hold, ensuring democratic control. Profits are distributed among members based on their patronage or the amount of business they conduct with the cooperative, rather than on the number of shares owned. This aligns with the cooperative principle that economic participation is tied to the use of the cooperative's services rather than capital investment.