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 Massachusetts, cooperative associations are typically formed under specific state statutes that cater to the cooperative model, which is designed for mutual benefit among its members. These statutes outline the legal framework within which cooperatives operate, including the rights and duties of members, as well as the governance structure. The Massachusetts General Laws (MGL) Chapter 157 provides the regulations for cooperative corporations. According to MGL Chapter 157, each member of a cooperative association generally has an equal vote, ensuring democratic control—one member, one vote—regardless of the number of shares they hold. Profits, referred to as 'patronage dividends,' are distributed to members based on the proportion of business they conduct with the cooperative, rather than on the number of shares owned. This aligns with the cooperative principle that members benefit in proportion to their use of the cooperative's services, rather than their investment in shares.