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 Wisconsin, cooperative associations are governed by Chapter 185 of the Wisconsin Statutes, which specifically addresses cooperatives. These entities are designed to serve the mutual benefit of their members, and they can be formed for any lawful purpose except banking. The rights and duties of members are outlined in the state statutes, as well as in the cooperative's articles of incorporation and bylaws. Each member of a cooperative typically has one vote, regardless of the number of shares they own, emphasizing democratic control. Profits, referred to as 'patronage dividends,' are distributed to members based on the proportion of business they conduct with the cooperative, rather than on the number of shares held. This structure is intended to benefit members by returning profits based on their use of the cooperative's services, rather than purely on investment.