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 Minnesota, cooperative associations are governed by specific state statutes, which include the Minnesota Cooperative Association Act (Chapter 308B of the Minnesota Statutes). This act provides the legal framework for the formation, operation, and dissolution of cooperative associations. Members of a cooperative association have rights and duties as outlined in the state statutes and the association's governing documents, such as its charter or articles of incorporation. In a cooperative association, each member typically has an equal vote, regardless of the number of shares they hold, embodying the principle of 'one member, one vote.' Profits, referred to as 'patronage dividends,' are distributed to members based on their usage or purchases from the cooperative, rather than on the number of shares owned. This structure is designed to benefit the members by returning profits in proportion to their individual contributions to the cooperative's business volume.