{"data":{"id":"us-ky/krs-272a.10-040","jurisdiction":"us-ky","citation":"KRS 272A.10-040","heading":"Allocation of profits and losses.","body":"(1) The organic rules may provide for allocating profits of a limited cooperative\nassociation among members, among persons that are not members but conduct\nbusiness with the association, to an unallocated account, or to any combination\nthereof. Unless the orga nic rules otherwise provide, losses of the association shall\nbe allocated in the same proportion as profits.\n(2) Unless the organic rules otherwise provide, all profits and losses of a limited\ncooperative association shall be allocated to patron members.\n(3) If a limited cooperative association has investor members, the organic rules may not\nallocate to patron members less than fifty percent (50%) of profits. For purposes of\nthis subsection, the following rules apply:\n(a) Amounts paid or due on contracts fo r the delivery to the association by patron\nmembers of products, goods, or services are not considered amounts allocated\nto patron members; and\n(b) Amounts paid, due, or allocated to investor members as a stated fixed return\non equity are not considered amounts allocated to investor members.\n(4) Unless prohibited by the organic rules, in determining the profits for allocation\nunder subsections (1), (2), and (3) of this section, the board of directors may first\ndeduct and set aside a part of the profits to create or accumulate:\n(a) An unallocated capital reserve; and\n(b) Reasonable unallocated reserves for specific purposes, including:\n1. Expansion and replacement of capital assets;\n2. Education, training, and cooperative development;\n3. Creation and distribu tion of information concerning principles of\ncooperation; and\n4. Community responsibility.\n(5) Subject to subsections (2) and (6) of this section and the organic rules, the board of\ndirectors shall allocate the amount remaining after any deduction or setting aside of\nprofits for unallocated reserves under subsection (4) of this section:\n(a) To patron members in the ratio of each member's patronage to the total\npatronage of all patron members during the period for which allocations are to\nbe made; and\n(b) To investor members, if any, in the ratio of each investor member's\ncontributions to the total contributions of all investor members.\n(6) For purposes of allocation of profits and losses or specific items of prof its or losses\nof a limited cooperative association to members, the organic rules may establish\nallocation units or methods based on separate classes of members or, for patron\nmembers, on class, function, division, district, department, allocation units, po oling\narrangements, members' contributions, or other equitable methods.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=41056","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:22Z","sha256":"1659f12dad07891f1b95641c9bf61ae30554c4a273eb4a6707d353e35d87d9f4","source_id":"us-ky","stale":false,"prev":"us-ky/krs-272a.10-030","next":"us-ky/krs-272a.10-050"},"notice":"GroundRules: Original legal text. Not legal advice."}