Colorado § 7-56-306 - Reserves, distributions, and patronage refunds.
Full text of Colorado Colorado Revised Statutes § 7-56-306 — Reserves, distributions, and patronage refunds., with citation guidance and answers to common questions.
§ 7-56-306. Reserves, distributions, and patronage refunds.
(1) A cooperative shall periodically set aside a portion of net margins, per unit retains, or other funds that is reasonable as determined by the board or in accordance with the articles or bylaws, for reserves, distributions, patronage refunds, capital, or other lawful business purposes.
(2) Net margins, after deductions for reasonable reserves and for allowances for income tax, shall be calculated and allocated on a patronage basis at least once every twelve months to members or to members and other qualified persons on an equitable basis as determined by the board or in accordance with the articles or bylaws. This section shall not be construed as prohibiting the retention of net margins, excess per unit retains, or other funds allocated to members as a means of providing capital for the cooperative.
(3) If a cooperative has retained net margins or other funds allocated to members, the board shall have the right in accordance with the articles, bylaws, and policies established by the board to redeem or retire the net margins or other funds so retained. All decisions relating to the redemption or retirement of such funds shall be made solely by the board.
Source: L. 96: Entire article R&RE, p. 498, § 1, effective July 1.
Source: official Colorado text · Last verified 2026-08-27
Frequently Asked Questions About Colorado § 7-56-306
What does Colorado Revised Statutes § 7-56-306 cover?
Section 7-56-306 ("Reserves, distributions, and patronage refunds.") is part of the Colorado Revised Statutes, the codified statutory law of Colorado. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Colorado § 7-56-306?
A common citation format is "Colorado Revised Statutes § 7-56-306" (Colorado). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Colorado law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Colorado official source linked on this page or consult a licensed Colorado attorney.
How does Colorado § 7-56-306 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Colorado can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Colorado.