§ 308B.005 Definitions

In plain language#

Section 308B.005 supplies the vocabulary for the whole chapter. Most of the terms are short and mechanical. The ones that shape how a 308B cooperative actually works are member, membership interest, patron, patronage and filed with the secretary of state. The definitions "apply to this chapter" (subd. 1) ^{P1, § 308B.005}.

Subdivision by subdivision#

Terms about the cooperative itself#

• Subd. 9, "Cooperative." An association organized under this chapter that conducts business "on a cooperative plan as provided under this chapter." The chapter does not itself define "cooperative plan"; see § 308B.201 for the purposes a cooperative may pursue and § 308B.301 for its powers.
• Subd. 11, "Domestic cooperative." A cooperative organized under chapter 308B or chapter 308A. The older chapter 308A cooperatives are therefore "domestic cooperatives" for purposes of the definition, even though they are not governed by 308B unless they convert (§ 308B.225).
• Subd. 14, "Foreign cooperative." A foreign business entity organized to conduct business on a cooperative plan consistent with 308B or 308A. See § 308B.152.
• Subd. 5, "Association" and subd. 7, "Business entity." Broad terms. An "association" is any organization conducting business on a cooperative plan under the laws of this or another state; a "business entity" includes companies, LLCs, LLPs and "other legal entit[ies]," domestic or foreign. Subds. 10 and 13 split business entities into domestic (organized under Minnesota law) and foreign (all others). Subd. 18 defines "Minnesota limited liability company" as one governed by chapter 322C.
• Subd. 8, "Chapter" means sections 308B.001 to 308B.975.

Terms about the documents#

• Subd. 4, "Articles." The articles of organization "as originally filed and subsequently amended." The chapter's term for the charter document is articles of organization. See § 308B.215 for content and § 308B.221 for amendments.
• Subd. 2, "Address." A mailing address including zip code. A registered address must be both the mailing address and "the actual office location, which may not be a post office box."
• Subd. 24, "Signed." For a document filed with the secretary of state, signed by a person authorized to do so by the chapter, the articles or bylaws, or by a resolution approved by the directors or members. A signature "may be a facsimile … transmitted by facsimile or electronically, or in any other manner reproduced on the document." See also § 308B.007.
• Subd. 12, "Filed with the secretary of state." A document meeting the chapter's requirements, "signed and accompanied by the required filing fee," that has been delivered to the secretary of state. The secretary of state endorses it "filed" (or a similar word) with the month, day and year, records it, and returns a document to the person who delivered it. The existence of a cooperative begins when the articles are filed (§ 308B.235).

Terms about members and money#

• Subd. 15, "Member." "A person or entity reflected on the books of the cooperative as the owner of governance rights of a membership interest." The definition includes both patron and nonpatron members. Membership is therefore tied to what the cooperative's books show.
• Subd. 16, "Membership interest." A bundle of four things: financial rights, the right to assign financial rights, governance rights, and the right to assign governance rights. The bundle includes both patron and nonpatron membership interests. See § 308B.601 and § 308B.611.
• Subds. 20–23, patron terms. A patron conducts patronage business with the cooperative. Patronage is "business, transactions, or services done for or with the cooperative as defined by the cooperative." A patron membership interest requires its holder to conduct patronage business "as specified by the cooperative" to receive financial rights or distributions; a nonpatron membership interest does not. A patron member holds a patron membership interest.
• Subd. 19, "Nonpatron membership interest." Does not require patronage business to receive financial rights or distributions.

Terms about voting#

• Subd. 3, "Alternative ballot." A voting method "prescribed by the board of directors in advance of the vote," which may include electronic, telephonic, Internet "or other means that reasonably allow members the opportunity to vote." Used in the director-election and member-meeting provisions, e.g. § 308B.411 and § 308B.221.
• Subd. 6, "Board" means the board of directors. Subd. 17, "Members' meeting" means a regular or special members' meeting (§ 308B.511, § 308B.515).

How it works in practice#

• The chapter gives a cooperative wide latitude to define "patronage." The statute leaves the content of the term to the cooperative. A founding group should define it (in the articles or bylaws) before issuing patron membership interests; see Allocate patronage and make distributions.
• A "member" is whoever the books show as owning governance rights. Keeping an accurate member list is therefore not just housekeeping; it also underlies the records duty in § 308B.245.
• Because a membership interest is defined as financial rights plus governance rights plus the right to assign each, a cooperative can design interests in which those parts are held by different people or treated differently. The definitions alone do not say how; see § 308B.601 and § 308B.605.

Related#

• Purposes: § 308B.201 · Powers: § 308B.301
• Membership interests: § 308B.601, § 308B.611
• Members: § 308B.501 · Patron member allocations: § 308B.725