13.1-306 - Distribution of earnings. - Virginia Statutes

§ 13.1-306. Distribution of earnings.

The net earnings and profits of an association organized pursuant to §13.1-301 shall be apportioned, distributed and applied as the association mayat any general or special meeting direct. The association may in its bylawsprescribe the terms and conditions, rules and regulations under and by whichthe stockholders or employees, or cooperating nonstockholders may participatein the earnings of the association.

Unless and until otherwise ordered by the association at any general orspecial meeting the board of directors shall annually apportion the netearnings by first paying dividends on the paid-up capital stock not exceedingeight per centum per annum, and by then setting aside not less than ten percentum of the remaining net earnings for a reserve fund until an amount hasaccumulated in the reserve fund equal to thirty per centum of the paid-upcapital stock, and five per centum of the then remaining net earnings for aneducational fund to be used in teaching cooperation; and shall apportion theremainder of such net profits by uniform dividends to its stockholders uponthe amount of purchases of such association from its stockholders, and salesby the association to its stockholders or for their account, and upon thewages and salaries of employees, and one-half of such uniform dividend tocooperating nonstockholders unless otherwise provided by the bylaws of suchassociation as follows: If the association be engaged in the mercantilebusiness, then to the extent the business is so conducted, dividends, exceptas hereinafter otherwise provided, shall be paid as above provided tocooperating nonstockholders only upon the amount of their purchases and notupon the purchases made by the association. If the association be engaged toany extent in the purchase and sale of products of farm or orchard or asselling agent of such products, or if the association be a productiveassociation, such as a creamery, cannery or factory, and the like, dividendsto such extent shall be paid as above provided to cooperating nonstockholderswho furnish such products upon the amounts of such products so furnished andnot upon sales by the association.

(Code 1950, § 13-243; 1956, c. 428.)