Form a Minnesota cooperative under Chapter 308B

Who this is for#

Founders who want to organize a cooperative association in Minnesota, and the staff, lawyers and funders who need to know what "formed" means. It follows Minnesota Statutes chapter 308B, the Minnesota Cooperative Associations Act ^P1.

The short answer#

You form a 308B cooperative by filing articles of organization with the Minnesota Secretary of State (SOS) and paying the filing fee. Existence begins on filing ^{P1, § 308B.235}. Everything else on this page (bylaws, first meeting, issuing memberships, tax IDs, securities compliance) happens after that filing and is what makes the entity usable.

The filing is short. The SOS form asks for a name, a purpose, a duration, a registered office and one or more organizers ^G1. The hard work is deciding who your members are, how they vote and who puts money in. Do that thinking first.

The 13 steps#

Step 1. Confirm that Chapter 308B is the right chapter#

• What to do. Decide whether you are organizing under chapter 308B (Cooperative Associations), chapter 308A (the older Cooperative Law) or chapter 308C (Cooperative Housing). The decision is mostly about what you do and how you want to raise money. See Choose a cooperative type and chapter and Comparing cooperative and other Minnesota entity types.
• Statute says. A 308B cooperative may be formed "for any lawful purpose," including marketing or processing products, providing products, supplies and services to members, and other cooperative purposes ^{P1, § 308B.201}.
• Agency / form. None yet.
• Pitfall. Treating the choice as a branding decision. The chapters differ on voting, capital and distributions. Chapter 308A, for example, presumes a one-vote rule and a cap on dividends (read § 308A.131 subd. 1(d)) ^P2, while 308B allows nonpatron investor interests under conditions ^{P1, § 308B.601}.

Step 2. Choose the name#

• Statute says. The name must distinguish the cooperative, on the SOS records, from domestic and foreign business entity names already on file or reserved. Once the cooperative is formed, the name is reserved for it for as long as it exists ^{P1, § 308B.211}.
• Agency / form. The SOS articles form says a preliminary name availability check can be run on the SOS website ^G1. That check is only preliminary; SOS decides at filing.
• Using the word "cooperative." Section 308A.011 restricts who may use the term "cooperative" in a name in Minnesota. It covers entities subject to chapter 308A or "incorporated under other laws of this state authorizing incorporation of business on a cooperative plan" ^{P2, § 308A.011}. [INFERENCE] A 308B cooperative appears to fall in the second group, but the section is in chapter 308A and does not mention 308B by name. The statute does not say more; ask counsel if the name is central to your plans.
• Pitfall. Printing signs, domain names or a logo before SOS accepts the filing.

Step 3. Draft the articles of organization#

• Statute says. The articles must contain: the name, the purpose, the name and address of each organizer, the duration if not perpetual, the registered agent if any, and the registered office address. They may contain other lawful provisions. The organizers must sign them ^{P1, § 308B.215}. Organizers are one or more adult natural persons, and they do not have to be members ^{P1, § 308B.205, subd. 1}.
• Agency / form. The SOS form "Minnesota Cooperative | Articles of Organization, Minnesota Statutes, Chapter 308B" (Rev. 7/1/2025) has five articles: I Name, II Purpose, III Duration, IV Registered Office Address (registered agent optional), V Organizers ^G1. It says one organizer is enough, that the organizer must be an individual at least 18 years old, and that an authorized agent may sign ^G1. It also asks for an email address for official notices, which SOS uses for annual renewal reminders ^G1.
• In practice. The statute lets the bylaws, rather than the articles, carry member classes, voting and capital terms: § 308B.241 applies those requirements to the bylaws "if not in the articles" ^{P1, § 308B.241, subd. 2}. [OPINION] That lets you keep the filing short, but only if the bylaws really say it. Details are in Write the articles of organization.
• Pitfall. Leaving out something you will later want to change. Amending the articles takes a board resolution, notice to members, a member vote and a filing ^{P1, § 308B.221}.

Step 4. File with the Secretary of State#

• Statute says. File the original articles with SOS; the fee is $60 ^{P1, § 308B.215, subd. 2}. Filing with the fee creates a presumption that conditions are met, that the cooperative is chartered as a separate legal entity, and that SOS will issue a certificate of organization ^{P1, § 308B.215, subd. 3}.
• Agency / fee schedule (checked 2026-10-16). For Chapter 308B articles of organization: $60 by mail, $80 online, $80 in person by appointment ^F4. The articles form states the same expedited and mail rates ^G1. Section 5.14 authorizes the $20 expedited-service surcharge ^F1.
• Where. Online at www.sos.mn.gov, or in person or by mail to Minnesota Secretary of State, Business Services, First National Bank Building, 332 Minnesota Street, Suite N201, Saint Paul, MN 55101 ^G1.
• Agricultural land. The SOS form flags the Corporate Farm Program ^G1. MDA's instructions distinguish the initial application from annual renewal ^R12. The displayed 2025 statute separately regulates farming and interests in agricultural land, with definitions, exceptions and reporting requirements; a cooperative label alone does not answer eligibility. See Organize a producer or marketing cooperative under chapter 308B before acquiring or leasing farmland ^B3.
• Federal beneficial-owner reporting. The SOS form (Rev. 7/1/2025) refers to the federal Corporate Transparency Act ^G1. FinCEN's page, updated August 11, 2026, says a final rule exempts U.S. companies from BOI reporting ^G7. Check the FinCEN page again before you rely on this.
• Pitfall. The $60 in § 308B.215 is the base articles fee, not the full expedited charge. Budget $80 for online or in-person filing under the current schedule: $60 plus the authorized $20 surcharge ^{F1 F4}. The separate curative filing under § 308B.231 costs $500 ^P1.

Step 5. Set the registered office and agent#

• Statute says. The articles must give the registered office address. A registered agent is optional ^{P1, § 308B.215, subd. 1}. A registered address must be an actual office location, not a P.O. box ^{P1, § 308B.005, subd. 2}.
• Agency / form. A later change of registered office or agent: $35 by mail, $55 online or in person ^G2. A change of the email address for official notices: $0 by mail or in person; not available online ^G2.
• Pitfall. Using a founder's home address that changes, or one nobody checks. Notices to the registered office are how a lawsuit or SOS correspondence reaches you. Keep the notice email address current as well, because that is how the renewal reminder arrives ^G1.

Step 6. Take the organizational action#

• Statute says. After the articles are filed, an organizational meeting, or a written action, handles the first business of the cooperative: amending the articles if needed, electing directors, adopting bylaws, banking resolutions, office space and supplies, the fiscal year, contracting to receive contributions, and tax elections ^{P1, § 308B.205, subd. 3}. A meeting needs at least three days' notice; notice may be waived ^{P1, § 308B.205, subd. 3}.
• First board. If the articles do not name the first board, the organizers may elect it, or act as directors until directors are elected or a contribution is accepted, whichever occurs first. Electing directors requires an organizers' resolution and the directors' written acknowledgment and acceptance ^{P1, § 308B.205, subd. 2}. The first board fills vacancies until members elect directors ^{P1, § 308B.411, subd. 1}.
• Pitfall. Skipping this because "the articles are filed." The statute lists these first actions as the organizational business ^{P1, § 308B.205, subd. 3}, and a bank or other third party may ask to see them [OPINION]. See Hold the organizational meeting.

Step 7. Adopt bylaws#

• Statute says. Bylaws are required ^{P1, § 308B.241, subd. 1}. They must be adopted before any distribution to members and before accepting contributions to a class whose rights are set in the bylaws ^{P1, § 308B.241, subd. 3}. Until the next annual or special members' meeting, a majority of the directors may adopt and amend bylaws; members may also adopt them at a meeting if notice and quorum requirements are met ^{P1, § 308B.241, subd. 3}.
• What they must contain. Number, qualifications, election and powers of directors; member qualifications; admission, withdrawal, suspension and expulsion; and, if not in the articles, purpose, capital structure and classes, voting rights, and a statement that transfers need board approval ^{P1, § 308B.241, subd. 2}. The full checklist is in Write the bylaws.
• Pitfall. Copying bylaws from a 308A or nonprofit co-op without checking the 308B rules on patron voting ^{P1, § 308B.545} and on the minimum share of financial rights going to patron members ^{P1, § 308B.601, subd. 3}.

Step 8. Hold the first board and member meetings#

• Statute says. The board governs and individual directors cannot act alone § 308B.401. Apply the specific action rule in § 308B.435: the greater of a majority of directors present when action is taken or a majority of the minimum quorum number, unless law, articles or bylaws require more. Abstentions do not lower that floor. The board needs at least five directors; a cooperative with 50 or fewer members may prescribe three or more in its articles or bylaws § 308B.405 ^P1.
• Records. Keep the minutes, written actions and waivers permanently. Keep the articles, bylaws, member list and other listed records at the principal office ^{P1, § 308B.245}.
• Pitfall. Informal email or text decisions without a valid written action. Under § 308B.441, all directors sign unless the articles or bylaws authorize fewer for action not requiring member approval; the number signing must equal the vote needed at a meeting with all directors present. Notify all directors immediately of a less-than-unanimous action's text and effective date ^P1.

Step 9. Issue memberships and take in equity#

• Statute says. Contributions are accepted only when authorized by the board, and the acceptance must describe the contribution and state its value ^{P1, § 308B.701}. A membership interest may not be issued until the subscription price is paid in money or property whose value the board has approved ^{P1, § 308B.601, subd. 2}. The cooperative must give each acquirer a disclosure about its organization, capital structure, business prospects and risks, and the rights attached ^{P1, § 308B.601, subd. 2}. Transfers after issuance need board approval ^{P1, § 308B.601, subd. 4}.
• Patron share. Patron interests collectively must hold at least 60 percent of financial rights to profit allocations and distributions, reducible no lower than 15 percent under the conditions in § 308B.601, subdivision 3. Separately apply the annual allocation and distribution floors and their distinct approval conditions in § 308B.721 ^P1.

• Pitfall. Taking a deposit "to hold a spot" before the bylaws and board acceptance exist. See Raise member equity and capital and Define members and membership classes.

Step 10. Get a federal EIN#

• Agency / form. The IRS online EIN application is free; the IRS says "You never have to pay a fee for an EIN" ^G3. You need the entity type and the Social Security number or ITIN of the "responsible party"; the application must be completed in one session and expires after 15 minutes of inactivity; you can apply for only one EIN per responsible party per day ^G3.
• Order. The IRS page tells corporations and LLCs to form the entity with the state first, or the application may be delayed ^G3. It does not mention cooperatives. [INFERENCE] Filing with SOS first is the safer order for a cooperative as well.
• Federal income tax return. The IRS instructions for Form 1120-C say a corporation operating on a cooperative basis under section 1381 and allocating amounts to patrons based on business done with or for them should file Form 1120-C ^G4. Whether your cooperative is one of those is a tax-counsel question; see Understand cooperative tax basics.
• Pitfall. Paying a third-party site for an EIN, or applying before the entity exists on SOS records.

Step 11. Register for Minnesota taxes if you need to#

• Agency / form. The Minnesota Department of Revenue says a seven-digit Minnesota Tax ID is needed if you make taxable sales or leases in Minnesota, perform taxable services, withhold Minnesota income tax from employee wages, make estimated business tax payments, or file a Minnesota corporation franchise return, among other triggers. You can apply through Business Tax Registration ^G6. You do not need a Minnesota Tax ID just to open a bank account ^G6.
• Pitfall. Assuming a cooperative is exempt from sales tax or income tax because of its form. Neither the statute nor the DOR page we read says that. Ask a Minnesota tax adviser.

Step 12. Check securities law before you take member or investor money#

• Why. Selling membership or equity interests can be an offer of securities under Minnesota's Chapter 80A. We are not saying every membership is a security; that is a fact-specific legal question.
• What the displayed 2025 statute provides for 308B cooperatives. Section 80A.46, clause (25)(B), covers offers and sales to existing members, purchases necessary or incidental to establishing patron membership, and patronage dividends. Except for patronage-dividend securities, each offeree or purchaser must receive the specified material Regulation D rule 502(b) disclosures before completion of sale. Within 15 days after completion of the first sale in each offering, the cooperative must furnish the administrator a written general description and any other required information, and file a consent to service of process unless previously filed ^G8.
• Agency warning (page fetched 2026-10-16). Commerce says there is no formal submission form and no legal advice. Its page, marked modified September 28, 2026, says notice should be filed “at least 15 days after” completion of the first sale, while the displayed statute says within 15 days after. Do not use that inconsistent agency wording to delay notice; resolve filing requirements with counsel and Commerce before relying on the exemption ^G9.
• Outside investors. Offers to people who are not yet members are different. Minnesota has a separate crowdfunding-style exemption, § 80A.461, with a $2,000,000 offering cap with audited or reviewed statements, $1,000,000 without, $10,000 per non-accredited purchaser, and sales only through a registered portal to Minnesota residents ^P4. See Understand securities rules before raising money.

Step 13. Calendar the annual renewal#

• Statute says. Every cooperative must file an annual renewal with SOS in each calendar year after the calendar year in which it incorporated, by December 31 of that year. If it does not, SOS must issue a certificate of involuntary dissolution ^{P1, § 308B.121, subds. 1, 2, 4}.
• Agency / fee (checked 2026-10-16). Annual renewal for an active 308B cooperative is free. Reinstatement is $65 by mail or $85 expedited online/in person ^F4: the $25 base fee in § 308B.121, subdivision 5, plus a late penalty of up to $40 authorized by section 5.60 ^F2, with a further $20 expedited surcharge under section 5.14 ^F1. More than six years inactive prevents online reinstatement under the schedule, not reinstatement generally ^F4.
• Pitfall. Missing the renewal because the reminder went to a dead email. See Keep your cooperative in good standing each year and Filing calendar for a 308B cooperative.

After step 13: opening the doors#

Cities and counties may license, zone or permit the business separately from state formation. See Licensing, zoning and permits when the applicant is a cooperative. A filed 308B articles does not substitute for a local business license.

Common mistakes#

1. Filing first and deciding the member model later.
2. Using the wrong chapter and discovering it when the first investor asks for stock.
3. Taking money before bylaws and board acceptance exist.
4. Assuming a fee or form from an old guide. The SOS amounts cited here were checked on 2026-10-16; confirm before paying.
5. Forgetting the annual renewal in the year after incorporation.

What this page does not cover#

• Whether your cooperative qualifies for federal "Subchapter T" treatment or any exemption.
• Industry licensing (food, health, financial, insurance) and local permits.
• Corporate Farm Program details.
• Forming a cooperative that wants to use the word "bank" or "credit union"; § 308B.301 says a 308B cooperative does not have bank, credit union or savings association powers ^{P1, § 308B.301}.