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 Dakota, cooperative associations are typically formed under specific state statutes that cater to their unique structure and operational needs. These statutes outline the formation, governance, and dissolution of cooperatives, ensuring that members benefit mutually from the association's activities. The rights and duties of members are dictated by both state law and the cooperative's own governing documents, such as its charter or articles of incorporation. In North Dakota, each member of a cooperative has an equal say in the control of the association, which is a principle known as 'one member, one vote,' regardless of the number of shares they hold. This is distinct from traditional corporations where voting power is often proportional to the number of shares owned. Profits in a cooperative are distributed among members based on their patronage, or the amount of business they conduct with the cooperative, rather than on the number of shares owned. This ensures that the benefits derived from the cooperative are shared equitably among those who use its services or products.