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Capital reserve

A capital reserve is a portion of net income allocated to patron membership interests that the board sets aside as it determines advisable, under chapter 308B.

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

A cooperative may set aside a portion of net income allocated to the patron membership interests, as the board determines advisable, to create or maintain a capital reserve § 308B.725, subd. 1 P1. The board may also set aside up to five percent of annual net income for promoting and encouraging cooperative organization, and may establish and accumulate reserves for buildings, equipment, depreciation, losses and other proper purposes § 308B.725, subd. 2 P1.

See Raise member equity and capital.

Statute sections referenced

  • § 308B.725 ALLOCATIONS AND DISTRIBUTIONS TO PATRON MEMBERS.

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)

glossary

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