Delaware Code Title 6 Sec. 1406 – Allocation of earnings
(a) The net earnings of a workers cooperative shall be allocated and distributed by the board of directors in accordance with the organizational documents.
Terms Used In Delaware Code Title 6 Sec. 1406
- Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
- Patronage: means services (i) performed (directly or indirectly) by a person for a workers cooperative or (ii) received by a person (directly or indirectly) from a workers cooperative. See Delaware Code Title 6 Sec. 1401
- Workers cooperative: means any corporation that:
(b) Except as otherwise provided in the organizational documents, all of the net earnings of the workers cooperative with respect to a period of time shall be allocated to members on the basis of: (i) patronage during such period of time, (ii) capital contributions, or (iii) some combination of patronage during such period of time and capital contributions; provided, however, that, pursuant to the organizational documents, at least a majority of the allocated earnings of the workers cooperative with respect to a period of time shall be allocated to members on the basis of: (i) patronage during such period of time, (ii) capital contributions, or (iii) some combination of patronage during such period of time and capital contributions.
(c) The allocation, distribution and payment of earnings required by this section may be in cash, credits, written notices of allocation or any other type of tangible or intangible property, including, without limitation, shares of stock issued by the workers cooperative.