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 Michigan, cooperative associations are typically formed under the Michigan Cooperative Act (Act 327 of 1931), which provides the legal framework for the establishment and operation of cooperatives. These entities are designed to serve the mutual benefit of their members, and they can be organized for various purposes, including agricultural, utility, housing, and consumer cooperatives. The rights and duties of members are outlined in the cooperative's articles of incorporation and bylaws, as well as in the state statutes. Each member of a cooperative association generally has an equal vote, regardless of the number of shares they hold, emphasizing democratic control. Profits, referred to as 'patronage refunds' in a cooperative context, are distributed to members based on their usage or purchases from the cooperative, rather than on the number of shares owned. This aligns with the cooperative principle that members benefit in proportion to their transactions with the cooperative rather than their investment.