What a 308B cooperative is, for city and county staff

A 308B cooperative is a separate legal entity created under Minnesota Statutes chapter 308B, the Minnesota Cooperative Associations Act. It exists once its articles of organization are filed with the Secretary of State. It is owned by its members, governed by a board of directors, and its members are not personally liable for its debts just because they are members. This page is for staff who meet a cooperative as a permit applicant, vendor, loan or grant recipient or partner.

The short version in terms you already use#

Who can sign for a cooperative#

The statute says:

• The board acts for the cooperative. A director, alone or with other directors, has no authority to act for the cooperative unless the board authorizes it § 308B.401 ^P1.
• Officers other than the chief executive officer cannot bind the cooperative unless the board authorizes it § 308B.475, subd. 1(c) ^P1.
• The board may employ a chief executive officer. If it does, that person can implement the cooperative's functions except where the board has restricted them, but cannot exercise authority reserved to the board or members § 308B.475, subd. 5 ^P1.
• The chair and first vice-chair must be directors and members. The financial officer and records officer need not be § 308B.475, subd. 4 ^P1.

What this means for staff (our reading, not the statute's words): a title alone does not prove authority. A "chair" or "treasurer" has no power to bind the cooperative unless the board has given it. A board resolution naming the person who may sign a particular application or contract is the cleanest evidence. Asking for one is a reasonable local practice, not a statutory requirement on you.

Who can be liable#

Members. A member is not personally liable "merely on the account of that status" for the cooperative's acts, debts, liabilities or obligations. A member is liable for (1) an unpaid subscription for the membership interest, (2) unpaid membership fees, and (3) a debt the member separately contracted with the cooperative § 308B.505 ^P1. The member question has its own page: Are members of a cooperative personally liable for its debts?.

Directors. A director who performs the duties of the office as the statute requires is not liable "by reason of being or having been a director" § 308B.455, subd. 1 ^P1. The articles or bylaws may further limit director liability, subject to exceptions in § 308B.465 ^P1.

The cooperative itself is liable on its contracts. If it was administratively dissolved for missing its annual renewal and later reinstates, the reinstatement validates contracts and acts that were within the authority of its articles, and the cooperative is liable for them § 308B.121, subd. 5 ^P1.

How it differs from other entities you will meet#

• From an LLC. An LLC is formed under a different chapter (the 308B definitions refer to chapter 322C for Minnesota limited liability companies § 308B.005, subd. 18 ^P1). In a 308B cooperative the board governs, voting is organized around patron and nonpatron membership interests, and the chapter prescribes how profits and distributions are shared between patron interests and other interests § 308B.721 ^P1. This site's comparison table is Comparing cooperative and other Minnesota entity types.
• From a nonprofit corporation. Chapter 308B does not make a cooperative a nonprofit or tax-exempt. Whether a given cooperative has any tax or charitable status is a separate fact to ask the applicant about and document. See Is a Minnesota 308B cooperative a nonprofit? and Is a Minnesota cooperative tax-exempt?. We did not open the nonprofit corporation chapter, so we do not describe it here.
• From a 308A cooperative. Chapter 308A is the older Cooperative Law. A 308A cooperative has a president, vice-president, secretary and treasurer as required officers § 308A.401 and each member generally has one vote § 308A.635 ^P2. A 308B cooperative has a chair, vice-chair, records officer and financial officer § 308B.475 ^P1. Both are "domestic cooperatives" under the 308B definitions § 308B.005, subd. 11 ^P1. See What is the difference between chapter 308A and chapter 308B?.
• From a 308C housing cooperative. Chapter 308C is the Cooperative Housing Act, a separate chapter. The Secretary of State's search page lists "Housing Cooperative" as its own entity type ^L1.

What the statute does not give a cooperative#

Chapter 308B, as ingested on this site, contains no text about zoning, licensing or municipalities. We searched the chapter for "zoning", "licens", "municipal", "political subdivision" and "county board" and found no match. A cooperative therefore gets no special treatment, and no special burden, from chapter 308B when it applies to a city or county for a permit or license. What local law requires is for you to look up; see Licensing, zoning and permits when the applicant is a cooperative.

Next steps#

• Confirm it exists and is current: Verify that a cooperative exists and is in good standing.
• Quick answers: Frequently asked questions from city and county staff.
• Questions to put to an applicant: Model questions to ask a cooperative applicant.