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 Maryland, cooperative associations are recognized as a type of business entity that is formed for the mutual benefit of its members. These entities are typically governed by specific state statutes that outline the formation, operation, and dissolution of cooperatives. Maryland law, particularly under the Maryland Cooperative Association Act, provides the legal framework for the creation and functioning of cooperative associations. The Act stipulates the rights and responsibilities of members, as well as the procedures for the management of the cooperative. Each member of a cooperative association in Maryland has an equal say in the control of the association, regardless of the number of shares they hold. This is in line with the cooperative principle of 'one member, one vote.' Profits generated by the cooperative are distributed among the members based on their patronage, or the amount of business they conduct with the cooperative, rather than on the number of shares they own. The cooperative's charter or articles of incorporation, along with state statutes, dictate the specific rights and duties of the members.