Cooperative Reserve and Member Dividend Ceiling Calculator

Review Korean cooperative reserves, the patronage 50% and capital 10% tests, member allocations and cash shortfalls before the annual meeting.

1. Scope and closing figures

Exclude prior retained surplus. Enter a current-year loss as negative.

Only losses not already deducted from the surplus above.

Must equal the sum of all members’ paid-in ordinary contributions.

Balance after approved loss coverage; exclude discretionary reserves.

Extra statutory and discretionary transfers beyond the calculated minimum.

Gross sum of patronage and capital dividends.

Leave blank if unknown. Reserve transfers are not a second cash payment.

This is not the return on paid-in capital. Enter 0–100%, up to two decimal places.

2. Complete member contribution and patronage ledger

Enter up to 100 members individually. Aliases are sufficient. Use the same bylaw-approved patronage basis and units for everyone. A zero-contribution member may still have patronage.

Member 1
Member 2
Member 3
Member 4
Member 5

Capital ledger total: 100,000,000 KRW

Review reserves and each member’s share before the annual meeting

This calculator reviews a Korean cooperative’s year-end surplus, loss coverage, reserve transfers and proposed member dividends under 2026 Korean rules.
It serves members and accounting staff who need to compare the appropriation proposal with their paid contributions and verified use of the cooperative’s business.
All amounts are gross KRW unless stated otherwise; this is not a general international cooperative model.

Start with the original proposal, inspect the two dividend restrictions, and then examine a revised proposal within the entered resources.
The member table distributes that same adjusted proposal so that its total can be reconciled with the meeting documents.
Unverified accounts, legal form or patronage records produce HOLD rather than invented entitlements.

Scope: ordinary cooperatives and ordinary contributions

Included

An ordinary cooperative established under Korea’s Framework Act on Cooperatives, reviewing a year-end dividend on ordinary contributions with no preferred contributions.
Use the actual bylaws and verified closing figures, including any approved loss coverage already reflected in existing reserves.
The calculation is for one appropriation proposal, not the legal qualification of the cooperative or its members.

Separate rules required

Social cooperatives cannot distribute member dividends under Article 98; their Article 97 reserve rate is 30%, not the ordinary cooperative rate.
Agricultural, fisheries, credit, consumer and other special-law cooperatives are excluded.
Preferred contributions under Article 22-2 have separate priority and bylaw rates and are also excluded.

Check the founding documents rather than inferring the legal form from a name containing cooperative.
Federations, redistribution of prior retained surplus, reserve reversals and the complete current-loss appropriation waterfall are outside scope.
A negative annual surplus produces zero dividend resources and a remaining-loss reference; it does not determine which existing reserves may be used to cover that loss.

Align the inputs with the accounts and ledgers

Annual surplus and carried losses

S is the after-tax current-year surplus before the carried loss entered separately below.
It is neither sales nor bank cash and excludes old retained surplus.
L includes only carried losses not already deducted from S.
If you only know a net figure after loss coverage, first obtain the original figures and reserve basis from the accounting adviser to avoid deducting losses twice.

Capital and existing reserves

C is year-end paid-in ordinary capital and must equal the complete member contribution ledger.
R0 is the existing statutory reserve after any already approved loss coverage.
Do not mix in discretionary reserves or substitute total net assets for paid-in capital.
Existing reserves are not added back to dividend resources.

Additional transfers and proposal

A includes extra statutory transfers above this tool’s minimum review amount and discretionary transfers required by the bylaws.
Do not enter the same calculated minimum twice.
D is the planned gross total of capital and patronage dividends.
The entered capital share p is a percentage of D, not a return rate on the paid-in contributions.

Patronage and cash

Use one comparable, bylaw-approved patronage basis and period for every member, such as transaction values, quantities or counts.
Do not casually mix sales and work hours.
Scale fractional records by the same factor to enter whole units.
Cash means funds actually available to pay dividends; leave it blank if unknown.

Reserve and distributable-resource formulas

G = max(3C − R0, 0)
B = max(S − L, 0)
R = min(ceil(max(S, 0) / 10), G)
F = max(B − R − A, 0)

Article 50 requires a statutory reserve of at least 10% of surplus until the reserve reaches three times year-end paid-in capital.
G is the remaining threshold, B the available surplus after the separately entered loss, R the new reserve review amount and F the remaining dividend resources.
Once the threshold is reached, the tool’s new minimum is zero; this does not release existing statutory reserves for dividends.

Conservative basis and rounding policy

The statutory wording does not specify every accounting treatment of carried losses or a whole-KRW rounding method.
To avoid understating reserves, this tool applies 10% to the full positive annual S before the separately entered carried loss and rounds up, capped at the remaining three-times-capital threshold.
This is an explicit conservative review policy, not a final determination of the minimum under every set of bylaws.
Confirm the basis with the auditor; insufficient reserve funding is shown separately and never used to increase dividends.

The 50% patronage test and 10% capital test use different bases

Minimum patronage share

Under Article 51(3), patronage dividends must be at least 50% of the total dividend.
For a 40,000,000 KRW total, patronage must therefore be at least 20,000,000 KRW.
For an odd whole-KRW total, round the half-total threshold up.
This aggregate restriction is distinct from an individual member’s share of the patronage records.

Maximum capital dividend

Capital dividends may not exceed 10% of paid-in capital.
With 100,000,000 KRW paid in, the capital-dividend ceiling is 10,000,000 KRW.
The denominator is paid-in capital, not total dividends.
The tool also conservatively limits each member’s capital dividend to their own contribution’s whole-KRW 10% cap.

The adjusted total T is the smaller of the requested D and the available F.
Its capital dividend is limited to the requested percentage of T, half of T, 10% of C, and the sum of the individual whole-KRW capital caps.
Any capital amount removed by these limits moves to patronage while T stays fixed.
The tool never increases the requested total; the reduction in total dividends and the change in composition are separate outputs.

Step-by-step use

  1. Confirm the founding law and absence of preferred contributions, then obtain the closing accounts and bylaws.
    Replace the fictional example with verified surplus, loss, capital and reserve figures.
  2. Enter the proposed total dividend, the capital share of that total and known cash available for payment.
    Clear the cash field when it is unknown.
  3. Enter every member separately using the complete contribution ledger and comparable patronage records.
    Combining members into one row changes individual caps and remaining-won allocation.
  4. Confirm the accounts, reserve basis and records, then submit the form.
    Resolve any HOLD message from source documents before continuing.
  5. Review reserves, resources, original-proposal restrictions, the adjusted proposal, member totals and cash gaps.
    Save the TXT review and give it to the auditor with the supporting documents.

Worked example: reduce the total and revise the dividend mix

Assume annual surplus before loss coverage of 50,000,000 KRW, unabsorbed carried loss of 10,000,000 KRW, paid-in capital of 100,000,000 KRW, existing statutory reserves of 200,000,000 KRW and additional transfers of 2,000,000 KRW.
The proposal is 40,000,000 KRW, with a 60% capital share and 25,000,000 KRW in available cash.
These are fictional figures for illustrating the model, not an audited cooperative’s results.

Fictional reserve and dividend proposal review amounts in KRW
Review itemAmount (KRW)
New minimum reserve review5,000,000
Dividend resources after transfers33,000,000
Original capital / patronage dividends24,000,000 / 16,000,000
Original patronage 50% shortfall4,000,000
Original capital 10% excess14,000,000
Required total reduction7,000,000
Adjusted total / capital / patronage33,000,000 / 10,000,000 / 23,000,000
Original / adjusted cash shortfall15,000,000 / 8,000,000

The 7,000,000 KRW total reduction is different from the capital-share adjustment.
Applying the requested 60% to the adjusted 33,000,000 KRW gives 19,800,000 KRW, but capital dividends are limited to 10,000,000 KRW; the remaining 9,800,000 KRW moves to patronage.
The adjusted proposal still has an 8,000,000 KRW cash shortfall, requiring a separate payment-plan review.

Member allocation and remaining won

Suppose five members each contributed 20,000,000 KRW and their patronage weights are 40, 25, 15, 10 and 10.
Each receives a 2,000,000 KRW capital dividend.
The 23,000,000 KRW patronage pool allocates 9,200,000, 5,750,000, 3,450,000, 2,300,000 and 2,300,000 KRW respectively.
Gross totals are 11,200,000, 7,750,000, 5,450,000, 4,300,000 and 4,300,000 KRW, summing to 33,000,000 KRW.

Exact integer arithmetic first floors each proportional amount, then assigns remaining won by largest fractional remainder, with input order breaking ties.
Capital allocation skips members already at their individual 10% caps and revisits eligible rows if necessary.
Very small contributions can therefore affect the final won allocation.
This method preserves the pool totals and caps; it is the tool’s policy rather than a statutory rounding method, so reconcile it with the actual bylaws and payment resolution.

A member’s total can exceed 10% of their contribution because the total includes patronage dividends.
The 10% restriction here applies to the capital-dividend component.
The displayed member total allocates this adjusted proposal; it is not an independent statutory ceiling on every possible total dividend to that member.

Interpret three common outcomes

Threshold reached

The new minimum reserve review is zero when existing reserves reach three times current year-end capital.
Loss coverage, additional bylaw transfers and both dividend tests still apply.
A capital increase changes the threshold.

Resource shortfall

When losses and transfers exhaust the surplus, dividend resources are zero and reserve-funding insufficiency is shown separately.
Do not use statutory reserves as a dividend top-up.
Ask the auditor to review the loss treatment and reserve basis.

Records on HOLD

Unmatched contribution totals or unconfirmed patronage are not replaced by zero entitlements.
A positive patronage dividend also requires positive total patronage.
Correct missing members, periods, units or amounts first.

Distinguish accounting resources, cash and tax

Surplus and reserves are accounting classifications; cash measures actual payment capacity.
A reserve transfer is not another cash payment and is not subtracted from the cash field a second time.
Enter only cash available after considering taxes, wages, suppliers and other payment restrictions.
Unknown cash remains Unknown and does not become a zero shortfall.

The member amounts are before tax.
The calculator does not estimate withholding, cooperative-specific tax exemptions, personal net receipts or filing obligations.
Ask the tax adviser to confirm the dividend classification and taxation before payment.
Passing these numeric tests does not certify compliance with all bylaws, contracts, audit procedures, general-meeting resolutions or payment requirements.

Documents to give the auditor and meeting

  • Closing accounts and the appropriation proposal: reconcile after-tax annual surplus, loss coverage and statutory versus discretionary reserves.
  • Bylaws and the complete capital ledger: verify governing law, ordinary contributions, individual balances, transfers and distribution rules.
  • Complete patronage records: verify the period, business scope, common units, cancellations, refunds, omissions and duplicates.
  • Cash plan and saved TXT review: compare the original and adjusted proposals, member amounts and remaining cash gaps.
    Recalculate and save again after changing inputs.

Do not close the accounts using the calculator alone where the amounts or accounting interpretations are material.
Ask the auditor to confirm how losses were covered and whether this reserve basis and additional restrictions match the cooperative’s accounts.
Editing one member’s patronage can change other members’ shares and remaining-won allocation.

Frequently asked questions

Is the 10% reserve based on total dividends?

The reserve review uses positive annual surplus.
This differs from a stock-company earned-reserve model based on cash dividends.
Also check the three-times-paid-in-capital threshold.

Are capital dividends capped at 10% of total dividends?

The capital-dividend test uses paid-in capital as its denominator.
The 50% patronage test uses total dividends, so both tests must be applied separately.

Can a member with no patronage receive a capital dividend?

Verified paid contributions can receive an allocation from the capital pool.
Zero individual patronage produces zero patronage dividend, while member status and bylaw eligibility still need separate review.

Can sufficiently large statutory reserves be distributed?

Article 50(3) restricts statutory-reserve use outside loss coverage or dissolution.
This tool never adds existing reserves to dividend resources.

Can a social cooperative use this dividend table?

Social cooperative dividends are prohibited, so the tool blocks that calculation.
Do not mix the social cooperative 30% reserve rule with the ordinary cooperative 10% rule.

Can I use an incomplete member ledger?

All member contributions must reconcile with year-end capital and patronage must be confirmed.
Incomplete records distort individual allocations and produce HOLD.

How are fractional patronage units and remaining won handled?

Scale all patronage units by the same factor to enter whole numbers.
Remaining won follow largest remainder and input-order ties, subject to individual capital caps.
Verify the actual payment rounding against the bylaws and resolution.

Does the review guarantee approval or net payment?

The report is a conditional reference proposal.
Current law, bylaws, audit, meeting approval, cash and withholding remain separate checks.
It does not guarantee net receipts or approval.

Official sources and update basis

The National Law Information OPEN API was checked directly on 2026-11-06 for the current Framework Act on Cooperatives, ID011528, MST280423.
It was promulgated on 2025-12-23 as Act No. 21226, with the Act and relevant articles effective 2026-06-24.
The Enforcement Decree, MST287357, was also cross-checked in its 2026-06-24 version.
Review Articles 50 and 51 for reserves and dividends, Article 22-2 for preferred contributions, and Articles 97 and 98 for social cooperative restrictions.

Recheck amendments, year-end capital, loss coverage, the reserve basis, bylaws, patronage periods and payment cash at the next closing.
The whole-KRW allocation policy must also agree with the actual payment process.

Reconcile this meeting’s proposal with source documents

Review the new reserve, dividend mix, member patronage and cash shortfall alongside the headline total.
Save the review under confirmed conditions and send it to the cooperative’s auditor with the accounts before revising the meeting proposal.

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