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 North Carolina, cooperative associations are recognized as a type of business entity that is formed by individuals for their mutual benefit. These entities are typically organized under specific state statutes that govern cooperative associations, which can be found in the North Carolina General Statutes (N.C.G.S.). The rights and duties of the members are outlined by these statutes as well as by the cooperative's charter or articles of incorporation. In terms of governance, each shareholder in a cooperative association in North Carolina has equal ownership and an equal say in the control of the association, irrespective of the number of shares they hold. This is a key principle of cooperative associations, emphasizing democratic control. Profits earned by the cooperative are distributed among the shareholders based on the volume of their purchases from the cooperative during the profit-earning period, rather than on the number of shares owned. This aligns the distribution of profits with the members' use of the cooperative's services or products, rather than their capital investment.