Section 193.725 - Allocations and distributions of profits to patron members(1) CAPITAL RESERVES. A cooperative may set aside any portion of profits allocated to the patron membership interests that the board determines is advisable for the purpose of creating or maintaining a capital reserve.(2) OTHER RESERVES. The board may do any of the following with regard to profits allocated to the patron membership interests: (a) Set aside an amount not to exceed 5 percent of the annual profits of the cooperative for promoting and encouraging cooperative organization.(b) Establish and accumulate reserves for new buildings, machinery and equipment, depreciation, losses, and other proper purposes.(3) PATRONAGE DISTRIBUTIONS. Profits allocated to patron members in excess of dividends on equity and additions to reserves shall be allocated and distributed to patron members on the basis of patronage and, if the bylaws provide, to nonmember patrons as so provided. A cooperative may establish allocation units and pooling arrangements and may account for and distribute profits to patrons on the basis of allocation units and pooling arrangements. A cooperative may offset the losses of an allocation unit or pooling arrangement against the profits of other allocation units or pooling arrangements.(4) FREQUENCY OF DISTRIBUTION. A cooperative shall make distributions under sub. (3) at least annually.(5) FORM OF DISTRIBUTION. A cooperative may make distributions under sub. (3) in the form of cash, capital credits, allocated patronage equities, revolving fund certificates, or its own or other securities.(7) PATRONAGE CREDITS FOR INELIGIBLE MEMBERS. If a nonmember patron with patronage credits is not qualified or eligible for membership, the cooperative may credit to the nonmember patron's account a refund due to the nonmember patron. The board may issue a certificate of interest to reflect any such credit and, after the board issues such a certificate, the patron may receive distributions of profits in the same manner as a patron member.