Licensing, zoning and permits when the applicant is a cooperative

A city or county can treat a cooperative application like any other business application. Chapter 308B does not say anything about zoning, licenses or permits, so nothing in it either entitles a cooperative to approval or excuses it from your requirements. This page separates what the statute tells you about the applicant (which you may rely on) from what your own code decides (which you must look up). We do not describe any city's or county's ordinances.

What chapter 308B tells you about the applicant#

What chapter 308B does not decide#

• Whether a use is allowed in a zoning district. A city's authority to regulate land use by zoning ordinance is stated in its own statute; the municipal zoning enabling section is Minn. Stat. 462.357 ^L8. We read only the opening part of that section and do not summarize it. Counties and towns have their own enabling provisions, which we did not open. The point for staff: the question is the use, not the legal form of the owner. We did not find any provision in the text we read that depends on whether an owner is a cooperative; your zoning code is the authority.
• Whether a license or permit is required for a business activity (food, alcohol, tobacco, rental, home occupation, signs, building, and so on). Look to the license or permit category in your own code and to any state license for that activity.
• Fees, bonds, insurance, background checks or ownership disclosure you may require of applicants. Whether you may treat a cooperative differently from an LLC or corporation in these respects is a question for your attorney.

Terms in applications that fit poorly#

Local applications often ask for "owner", "shareholder", "partner" or "officer". A 308B cooperative has members and directors; the chapter's term for a member's stake is "membership interest" § 308B.005, subds. 15–16 ^P1. If your form asks for every person holding 20 percent or more, a cooperative may have no one who does, because voting and distributions are organized around membership interests rather than percentage shares. Decide in advance what your form should ask a cooperative to list (for example, its directors and officers) and say so on the form.

The word "cooperative" in a business name#

Two other chapters restrict the word "cooperative". Chapter 308A says a corporation or association organized in this state may not use the term in its name unless it is subject to that chapter or has incorporated under other state laws authorizing incorporation "on a cooperative plan", and misuse is a misdemeanor § 308A.011 ^P2. Chapter 308C restricts the term "housing cooperative" and says businesses organized under chapter 308A, 308B, 317A or 515B are not precluded from using it § 308C.009 ^P3. In the 308B text we ingested, the name section requires only that the name be distinguishable on the Secretary of State's records § 308B.211 ^P1, and we did not find a separate 308B restriction on the term. So the Secretary of State record, not the business's name, shows which chapter governs ^L2. If you screen business names, treat "cooperative" in a name as a reason to check the record, not as proof of a legal form. See Can I use the word "cooperative" in the name of my business?.

Questions staff often ask#

• "Is a cooperative a nonprofit, so fee-exempt?" Chapter 308B does not make a cooperative a nonprofit. Any exemption from your own fees depends on your code, not on chapter 308B. See Is a Minnesota 308B cooperative a nonprofit?.
• "Does the cooperative need a business license because it only serves members?" The statute does not address it. Look to your code and to the specific activity.
• "Who is our contact?" Check the registered office and registered agent if any; a 308B cooperative need not appoint an agent. The annual renewal also supplies the chief executive officer's name and business address under section 5.34. A public-record contact is not by itself proof of signing authority ^{P1, §§ 308B.121, 308B.151; @L2; @L7}.