Colorado § 7-58-1004 Allocations of profits and losses

Colorado Statutes

§ 7-58-1004 — Allocations of profits and losses

Colorado § 7-58-1004

Title 07Corporations

Art.Uniform Limited Cooperative Association Act

This text of Colorado § 7-58-1004 (Allocations of profits and losses) is published on Counsel Stack Legal Research, covering Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Colo. Rev. Stat. § 7-58-1004 (2026).

Text

(1)Unless the articles or bylaws otherwise provide, all profits and losses of a limited cooperative association must be allocated to patron members. Unless the articles or bylaws otherwise provide, losses of the association must be allocated in the same proportion as profits.

(2)The articles or bylaws may provide for allocating profits of a limited cooperative association among members, among persons that are not members but conduct business with the association, to an unallocated account, or to any combination thereof.

(3)If a limited cooperative association has investor members, the articles or bylaws may not reduce the allocation to patron members to less than fifty percent of profits. For purposes of this subsection (3), the following rules apply:

(a)Amounts paid or due

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(1) Unless the articles or
bylaws otherwise provide, all profits and losses of a limited cooperative association
must be allocated to patron members. Unless the articles or bylaws otherwise
provide, losses of the association must be allocated in the same proportion as
profits.

(2) The articles or bylaws may provide for allocating profits of a limited
cooperative association among members, among persons that are not members but
conduct business with the association, to an unallocated account, or to any
combination thereof.

(3) If a limited cooperative association has investor members, the articles or
bylaws may not reduce the allocation to patron members to less than fifty percent
of profits. For purposes of this subsection (3), the following rules apply:

(a) Amounts paid or due on contracts for the delivery to the association by
patron members of products, goods, or services are not considered amounts
allocated to patron members.

(b) Amounts paid, due, or allocated to investor members as a stated fixed or
variable rate of return on investment are not considered amounts allocated to
investor members if the determination of the return is not related to or based on
profits.

(4) Unless prohibited by the articles or bylaws, in determining the profits for
allocation under subsections (1), (2), and (3) of this section, the board of directors
may first deduct and set aside a part of the profits to create or accumulate:

(a) Unallocated capital; and

(b) Reasonable unallocated reserves for specific purposes, including
expansion and replacement of capital assets; education, training, and cooperative
development; creation and distribution of information concerning principles of
cooperation; and community responsibility.

(5) Subject to subsections (1) and (6) of this section and the articles and
bylaws, the board of directors shall allocate the amount remaining after any
deduction or setting aside of amounts under subsection (4) of this section:

(a) To patron members in the ratio of each member's patronage to the total
patronage of all patron members during the period for which allocations are to be
made; and

(b) To investor members, if any, in the ratio of each investor member's
contributions to the total contributions of all investor members.

(6) For purposes of allocation of profits and losses or specific items of
profits or losses of a limited cooperative association to members, the articles or
bylaws may establish allocation units or methods based on separate classes of
members or, for patron members, on class, function, division, district, department,
allocation units, pooling arrangements, members' contributions, or other equitable
methods.