Cooperatives Act Article 23

A cooperative shall use its surplus to offset accumulated deficits and pay the interest. Moreover, it shall set aside no less than ten percent of the surplus as the reserves, no less than five percent as the public welfare fund, and no more than ten percent as the compensation for its directors, supervisors, clerks, and technicians.Where the reserves as referred to in the above paragraph is more than two times of the total shares, the cooperative itself may determine the percentage of surplus that should be allocated into the reserves every year.In case that the reserves referred to in the preceding paragraph is more than twice the total amount of the shares, the cooperative itself may determine the percentage that shall be set aside every year.Members must not request to allocate the reserves.The public welfare fund set forth in Paragraph 1 is accounted as a liability in the balance sheet, as specified in Paragraph 1 of Article 36, and shall only be used for the educational and promotional purposes of social welfare enterprises, charitable enterprises, and cooperative enterprises. No other purposes are allowed. The same rule also applies after the cooperative is dissolved.