The following words and phrases – wherever they appear in this Law – shall have the meanings specified next to each of them unless the context requires otherwise.
Center: National Center for Non-Profit Sector.
Council: Board of Directors of the Center.
Association: Any cooperative association registered under the provisions of this Law.
General Assembly: All members contributing to the capital of the cooperative association.
Board of Directors: Board of Directors of the cooperative association.
Member: The founding member of the association, or a member who joins after its establishment.
Regulation: Implementing Regulation of this Law.

A cooperative society is defined as any association formed by individuals in accordance with the provisions of this law, with the aim of improving the economic and social conditions of its members, whether in terms of production, consumption, marketing, or services, through the joint efforts of the members, adhering to cooperative principles. The name of the society must include an indication of its cooperative nature and the type of its work.

The association consists of individuals numbering no less than twelve persons, and each member may own a number of shares, provided that the ownership of a single member does not exceed (10%) of the capital of the association throughout the duration of their membership in the association. In exceptional cases deemed appropriate by the center, it may be established with no less than five members, in which case it is required that the ownership of a single member does not exceed 20% of the capital of the association throughout the duration of their membership in it.

The association acquires legal personality upon the completion of the registration and announcement processes stipulated in this Law, and the publication of that in two local newspapers. The association may establish branches after obtaining a license from the center, in accordance with the regulations set forth by the Regulation.

Subject to the provisions of Article (3) of this Law, the price of the share is fixed, and it may not be divided. A member withdrawing from the association may waive the value of their shares to another member of the association or to a new shareholder after obtaining the approval of the Board of Directors. If the waiver is not possible and the Board of Directors is convinced of the reasons for withdrawal, the withdrawing member shall be entitled to recover the value of their shares after adding any profits earned or deducting any losses incurred. The same applies if a member loses their membership due to the loss of one of its conditions or due to expulsion. In the event of death, the heirs or some of them shall replace their deceased ancestor or agree to appoint one of them in their place, provided that the conditions of membership are met by the heir; otherwise, the value of the shares shall be returned to them after adding any profits earned or deducting any losses incurred.

The assets of the association may not be seized except for the settlement of its debts and by virtue of a judicial ruling. The member's liability in the rights and obligations of the association is limited to the extent of their ownership of shares.

The chapter on membership in the association is open to those who meet the membership criteria, except in exceptional cases specified by the regulation.

The individuals who participate in the formation of a cooperative society are considered its founders, and they are responsible for preparing the preliminary establishment contract and the basic regulation of the society. They jointly bear the expenses required for the establishment of the society and any related obligations, and they will be reimbursed for the establishment expenses from the capital after the society is registered. If the formation of the society is not possible, they shall have no right to seek reimbursement from anyone for their expenditures.

The founding contract of the association must include the following:
1 - The date and place of its drafting.
2 - The names of the founders, their places of residence, and their professions.
3 - The name of the association.
4 - The headquarters of the association and its area of operation.
5 - The type of association and its purposes.
6 - The value of the capital and the nominal value of each share.