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 Montana (MT), cooperative associations are typically formed under the Montana Cooperative Association Act, which provides the legal framework for their creation, governance, and operation. These associations are designed to serve the mutual benefit of their members and are often used in agricultural, consumer, and service sectors. The rights and duties of members are outlined in the state statutes and the cooperative's own governing documents, such as its bylaws or articles of incorporation. In a cooperative association, each member typically has an equal vote, regardless of the number of shares they own, embodying the principle of 'one member, one vote.' Profits, referred to as 'patronage dividends,' are distributed to members based on their use or patronage of the cooperative, rather than on the number of shares held. This means that the more a member uses the cooperative's services or products, the greater their share of the profits will be. These unique characteristics distinguish cooperatives from traditional corporations, where control is often proportional to the number of shares owned and profits are distributed based on investment.