§ 308B.505 Member Not Liable For Cooperative Debts

In plain language#

A member "is not, merely on the account of that status, personally liable for the acts, debts, liabilities, or obligations of a cooperative." ^{P1, § 308B.505} Three exceptions follow, each of which is the member's own obligation, not the cooperative's: any unpaid subscription for the membership interest, unpaid membership fees, and a debt the member has separately contracted with the cooperative.

How it works in practice#

• This is the statutory limited-liability rule for members. It protects against liability that rests only on status. It does not address personal guarantees a member signs for a lender or landlord, or a member's own wrongful conduct; those arise from other law and contracts.
• It does not cover directors, whose own duties and liability limits are in § 308B.455 and § 308B.465.
• Because a contribution agreement or subscription can be a source of liability, see § 308B.711 for contribution agreements.
• For local officials: the section is one reason a cooperative can be treated like other limited-liability entities for risk analysis, but this page does not address veil-piercing or other doctrines. See Comparing cooperative and other Minnesota entity types.

Related#

• Contribution agreements: § 308B.711 · Powers: § 308B.301
• Entity comparison: Comparing cooperative and other Minnesota entity types