308B.mnGet started

§ 308B.721 Allocations And Distributions To Members

Statute text

Extracted from the Revisor of Statutes; first captured here October 15, 2026. Formatting and whitespace are normalized. Extraction can contain errors; the linked official text controls.

Subdivision 1. Allocation of profits and losses.

The bylaws shall prescribe the allocation of profits and losses between patron membership interests collectively and any other membership interests. If the bylaws do not otherwise provide, the profits and losses between patron membership interests collectively and other membership interests shall be allocated on the basis of the value of contributions to capital made by the patron membership interests collectively and other membership interests and accepted by the cooperative. The allocation of profits to the patron membership interests collectively shall not be less than 50 percent of the total profits in any fiscal year, except that if authorized in the original articles as filed or in articles or bylaws that are adopted by an affirmative vote of the patron members or the articles or bylaws are amended by the affirmative vote of the patron members, the allocation of profits to the patron membership interests collectively may not be less than 15 percent of the total profits in any fiscal year.

Subdivision 2. Distribution of cash or other assets.

The bylaws shall prescribe the distribution of cash or other assets of the cooperative among the membership interests of the cooperative. If not otherwise provided in the bylaws, distribution shall be made to the patron membership interests collectively and other members on the basis of the value of contributions to capital made and accepted by the cooperative, by the patron membership interests collectively, and other membership interests. The distributions to patron membership interests collectively shall not be less than 50 percent of the total distributions in any fiscal year, except that if authorized in the articles or bylaws adopted by the affirmative vote of the patron members, or the articles or bylaws are amended by the affirmative vote of the patron members, the distributions to patron membership interests collectively shall not be less than 15 percent of the total distributions in any year.

History: 2003 c 105 art 1 s 64

Notes & interpretation Not part of the law

Verified against sources: October 15, 2026Last edited: October 16, 2026

In plain language#

The bylaws must prescribe how profits and losses are allocated between patron membership interests (collectively) and other membership interests, and how cash and other assets are distributed. If the bylaws are silent, both follow the value of capital contributions made and accepted by the cooperative.

Floors for the patron group (as a group):

  • Profit allocation (subd. 1): not less than 50 percent of total profits in any fiscal year.
  • Distributions (subd. 2): not less than 50 percent of total distributions in any fiscal year.
  • Profit-allocation exception (subd. 1): the 50 percent floor may be reduced to 15 percent by authorization in the original articles as filed, or articles or bylaws adopted or amended by affirmative patron-member vote.
  • Distribution exception (subd. 2): the 50 percent floor may be reduced to 15 percent through articles or bylaws adopted or amended by affirmative patron-member vote. This subdivision does not separately state the original-articles-as-filed route.

How it works in practice#

  • Draft the annual allocation and distribution provisions separately and document the authorization applicable to each. Original-articles authorization alone is not a stated alternative to patron approval in subd. 2.
  • A member control agreement cannot override these allocation and distribution provisions for patron members (§ 308B.627 subd. 2).
  • How profits then reach individual patrons is covered in § 308B.725. See Allocate patronage and make distributions.
  • Membership interests and the 60 percent rule: § 308B.601
  • Patron-member net income, reserves and patronage distributions: § 308B.725
  • Member control agreements: § 308B.627

Sources

  • P1 Minnesota Statutes, Chapter 308B (Cooperative Associations), Office of the Revisor of Statutes, State of Minnesota. revisor.mn.gov (primary; accessed October 15, 2026)

patronagedistributionscapitalbylawsmembership-classes

Edit (authorized collaborators only)History (authorized collaborators only)Corrections log & intake limitationNo public correction submission channel is currently available.