N.Y. Cooperative Corporations Law § 113: Reserves

§ 113. Reserves. In addition to reserves for depreciation, depletion,

obsolescence and bad debts, agricultural cooperatives shall create and

maintain minimum general purpose reserves. Such reserves shall be set

aside periodically until or unless they total an aggregate minimum

amount computed in accordance with one of the following optional

methods.

The aggregate minimum amount of such general purpose reserve shall be

computed and equal either (1) at least two per centum of the average

annual gross receipts of the preceding five years to be accumulated at a

rate of not less than two-fifths of one per centum of the gross receipts

per annum or such part thereof as may be necessary to establish and

maintain such reserves, or (2) at least the total amount of paid up

capital stock or membership capital contributed to the corporation

accumulated at a rate of not less than ten per centum of the net margins

in each year or such part thereof as may be necessary to establish and

to maintain such reserve, or (3) at least an amount necessary to

establish a sixty per centum net worth wherein the paid in capital and

surplus (including the general purpose reserve) shall equal sixty per

centum of the total assets of the cooperative. Such a reserve shall be

accumulated at a rate of not less than ten per centum of the net margins

in each year or such part thereof as may be necessary to establish and

to maintain such reserves.

The general purpose reserve created, accumulated and maintained in

accordance with this article six shall be deemed to be a required

statutory reserve for each agricultural cooperative as defined in this

article.