                                 CODE OF VIRGINIA

DISTRIBUTION OF EARNINGS (§ 13.1-306)

The net earnings and profits of an association organized pursuant to § 13.1-301
shall be apportioned, distributed and applied as the association may at any
general or special meeting direct. The association may in its bylaws prescribe
the terms and conditions, rules and regulations under and by which the
stockholders or employees, or cooperating nonstockholders may participate in the
earnings of the association.
		Unless and until otherwise ordered by the association at any general or
special meeting the board of directors shall annually apportion the net earnings
by first paying dividends on the paid-up capital stock not exceeding eight per
centum per annum, and by then setting aside not less than ten per centum of the
remaining net earnings for a reserve fund until an amount has accumulated in the
reserve fund equal to thirty per centum of the paid-up capital stock, and five
per centum of the then remaining net earnings for an educational fund to be used
in teaching cooperation; and shall apportion the remainder of such net profits
by uniform dividends to its stockholders upon the amount of purchases of such
association from its stockholders, and sales by the association to its
stockholders or for their account, and upon the wages and salaries of employees,
and one-half of such uniform dividend to cooperating nonstockholders unless
otherwise provided by the bylaws of such association as follows: If the
association be engaged in the mercantile business, then to the extent the
business is so conducted, dividends, except as hereinafter otherwise provided,
shall be paid as above provided to cooperating nonstockholders only upon the
amount of their purchases and not upon the purchases made by the association. If
the association be engaged to any extent in the purchase and sale of products of
farm or orchard or as selling agent of such products, or if the association be a
productive association, such as a creamery, cannery or factory, and the like,
dividends to such extent shall be paid as above provided to cooperating
nonstockholders who furnish such products upon the amounts of such products so
furnished and not upon sales by the association.

HISTORY: Code 1950, § 13-243; 1956, c. 428.