Patronage

Patronage is business, transactions or services done for or with the cooperative, as defined by the cooperative.

Statutory definition#

This is a term defined by statute. Section 308B.005, subdivision 21, defines it for purposes of chapter 308B ^{P1, subd. 21}. Our paraphrase is above; the statute's own words control and are in § 308B.005.

The cooperative should clearly document what counts as patronage; section 308B.005 does not itself require that definition to appear in the bylaws. See Allocate patronage and make distributions and Write the bylaws. Net income allocated to patron members above dividends on equity and reserve additions is distributed on the basis of patronage § 308B.725, subd. 3 ^P1. Federal tax treatment has separate conditions; see Patronage dividend.