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Are members of a cooperative personally liable for its debts?

Not merely because they are members, but a member is liable for any unpaid subscription, unpaid membership fees, or a debt the member separately contracted with the cooperative.

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

Chapter 308B says a member is not, merely on account of that status, personally liable for the acts, debts, liabilities or obligations of the cooperative. A member is liable for any unpaid subscription for the membership interest, unpaid membership fees, or a debt for which the member has separately contracted with the cooperative P1, § 308B.505.

Directors have a separate rule: the articles or bylaws may limit director liability, with exceptions that include breaches of loyalty, bad faith, illegal distributions and improper personal benefit P1, § 308B.465.

This statutory protection is not a guarantee in every setting. For example, lenders can ask members for personal guarantees, which are separate contracts. [OPINION] Read any guarantee carefully. See Define members and membership classes.

Statute sections referenced

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)

liabilitymemberslimited-liability

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