§ 7-56-306 — Reserves, distributions, and patronage refunds

Colorado § 7-56-306

• Jurisdiction: Colorado
• Title 07: Corporations
• Art.: Cooperatives

Text

(1) A
cooperative shall periodically set aside a portion of net margins, per unit retains, or
other funds that is reasonable as determined by the board or in accordance with the
articles or bylaws, for reserves, distributions, patronage refunds, capital, or other
lawful business purposes.

(2) Net margins, after deductions for reasonable reserves and for allowances
for income tax, shall be calculated and allocated on a patronage basis at least once
every twelve months to members or to members and other qualified persons on an
equitable basis as determined by the board or in accordance with the articles or
bylaws. This section shall not be construed as prohibiting the retention of net
margins, excess per unit retains, or other funds allocated to members as a means of
providing capital for the cooperative.

(3) If a cooperative has retained net margins or other funds allocated to
members, the board shall have the right in accordance with the articles, bylaws, and
policies established by the board to redeem or retire the net margins or other funds
so retained. All decisions relating to the redemption or retirement of such funds
shall be made solely by the board.

Legislative History

Source: L. 96: Entire article R&RE, p. 498, � 1, effective July 1.