Utah § 16-16-1004 - Allocations of profits and losses.
Full text of Utah Utah Code § 16-16-1004 — Allocations of profits and losses., with citation guidance and answers to common questions.
§ 16-16-1004. Allocations of profits and losses.
16-16-1004.
Allocations of profits and losses.
(1)
The organic rules may provide for allocating profits of a limited cooperative association among members, among persons that are not members but conduct business with the association, to an unallocated account, or to any combination thereof. Unless the organic rules otherwise provide, losses of the association shall be allocated in the same proportion as profits.
(2)
Unless the organic rules otherwise provide, all profits and losses of a limited cooperative association shall be allocated to patron members.
(3)
If a limited cooperative association has investor members, the organic rules may not reduce the allocation to patron members to less than 50% of profits. For purposes of this Subsection (3), the following rules apply:
(a)
Amounts paid or due on contracts for the delivery to the association by patron members of products, goods, or services are not considered amounts allocated to patron members.
(b)
Amounts paid, due, or allocated to investor members as a stated fixed return on equity are not considered amounts allocated to investor members.
(4)
Unless prohibited by the organic rules, in determining the profits for allocation under Subsections (1), (2), and (3), the board of directors may first deduct and set aside a part of the profits to create or accumulate:
(a)
an unallocated capital reserve; and
(b)
reasonable unallocated reserves for specific purposes, including expansion and replacement of capital assets; education, training, cooperative development; creation and distribution of information concerning principles of cooperation; and community responsibility.
(5)
Subject to Subsections (2) and (6) and the organic rules, the board of directors shall allocate the amount remaining after any deduction or setting aside of profits for unallocated reserves under Subsection (4):
(a)
to patron members in the ratio of each member's patronage to the total patronage of all patron members during the period for which allocations are to be made; and
(b)
to investor members, if any, in the ratio of each investor member's contributions to the total contributions of all investor members.
(6)
For purposes of allocation of profits and losses or specific items of profits or losses of a limited cooperative association to members, the organic rules may establish allocation units or methods based on separate classes of members or, for patron members, on class, function, division, district, department, allocation units, pooling arrangements, members' contributions, or other equitable methods.
Frequently Asked Questions About Utah § 16-16-1004
What does Utah Code § 16-16-1004 cover?
Section 16-16-1004 ("Allocations of profits and losses.") is part of the Utah Code, the codified statutory law of Utah. 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 Utah § 16-16-1004?
A common citation format is "Utah Code § 16-16-1004" (Utah). 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 Utah law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Utah official source linked on this page or consult a licensed Utah attorney.
How does Utah § 16-16-1004 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Utah can advise on how this section applies to you. Contact your state or local bar association for a referral.
