Senate Bill 2842 - Cooperative Associations Summary

• Establishes comprehensive framework for incorporating and operating cooperative associations in Mississippi, allowing formation by five or more adults (one must be a resident) with articles of association filed with the Secretary of State.

• Permits cooperatives to organize with or without capital stock, with stock dividend rates capped at 6% annually and membership stock requirements definable in bylaws; stock has no voting power.

• Requires cooperatives to have minimum 3-5 directors (depending on membership size), all of whom must be members, with members holding one vote each regardless of stock ownership.

• Mandates annual distribution of net proceeds to patrons based on patronage ratio, allowing cooperatives to deduct operating expenses, set aside educational funds (up to 5%), pay stock dividends, and distribute remainder to patrons as cash, credits, stock, or other property.

• Restricts use of term "cooperative" to entities organized under this act or credit unions, with penalties up to $100 per day for improper use; cooperatives must include "cooperative" in their corporate name.