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Statutory authority: NDCC, Chapter 10-15
North Dakota law defines a cooperative as "an association..." incorporated by five or more adults, one of which must be a North Dakota resident. A cooperative is a business like any other business, but in some ways very unique. A cooperative belongs to the people with a common purpose who use it; people who have organized to provide themselves with goods or services they need. It operates for the benefit of its members or its stockholders.
The members or stockholders:
- Share equally in the control of the cooperative
- Meet at regular intervals
- Review detailed reports; and
- Elect directors from among themselves. The directors elect their officers and hire management to manage the day-to-day affairs in a manner that serves the members' or stockholders' interests.
A cooperative may be formed for any business purpose except banking and insurance (insurer backing claims). Some of the most common business purposes pursued by existing cooperatives include:
- Utilities and cable T.V. services
- Marketing of agricultural and other products
- Equipment, hardware and farm supplies
- Child care
- Credit and personal financial services; and
A domestic cooperative is one that has filed articles of incorporation with North Dakota's Secretary of State according to North Dakota's Cooperative Associations Act (NDCC, Chapter 10-15). Cooperative existence commences when the articles of incorporation are filed, or at a later date specified in the articles of incorporation.
A cooperative using a trade name in the transaction of business must file a Trade Name Registration with the Secretary of State. A trade name is a name other than the cooperative name.
The Trade Name Registration:
- Affords exclusive right to that name in the State of North Dakota. No other business may file a name with the Secretary of State that is the same as, or deceptively similar, to any registered name.
- Establishes a public record from which the name of the cooperative association using the name can be identified.
Foreign Cooperative Association
A foreign cooperative association is one that has filed articles of incorporation under laws other than the laws of North Dakota. "Foreign" refers to cooperatives incorporated in jurisdictions out-of-state as well as out-of-country.
A foreign cooperative association must obtain a certificate of authority from the Secretary of State to transact business in North Dakota. A foreign cooperative association may obtain a certificate of authority to transact any business purpose except banking and insurance (insurer backing claims).
A foreign cooperative association using a name other than its cooperative association name must comply with the Trade Name Registration requirement as described above.