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 New Mexico, cooperative associations are typically formed under the New Mexico Cooperative Association Act. This act provides the legal framework for the creation, operation, and dissolution of cooperative associations in the state. Members of a cooperative association have rights and duties as outlined in the state statutes and the association's governing documents, such as the charter or articles of incorporation. Each member of a cooperative typically has an equal vote in the association's governance, regardless of the number of shares they hold, emphasizing democratic control. Profits generated by the cooperative are distributed among the members based on their patronage, or the amount of business they conduct with the cooperative, rather than on the number of shares owned. This reflects the principle that benefits are earned by members in proportion to their contribution to the cooperative's success, rather than their investment.