Definition of a Cooperative
A cooperative is an association of persons (organization) that is owned and controlled by the people to meet their common economic, social, and/or cultural needs and aspirations through a jointly-owned and democratically controlled business (enterprise). The people of the cooperative are those who use its products, supplies, and/or services. Profits are also often returned to the members of the cooperative; however, cooperatives are often more focused on services for members than on return on investment.
Cooperatives can be created for several different reasons or to fulfill several different needs: jointly process goods, split costs, split control over work, purchasing power (bulk buys), shared employees, shared wages, etc.
Cooperative Legal Fact Sheet - Formation
NCDC encourages engaging legal counsel to guide this process. The steering team and future board of directors should know which questions to ask to ensure that the cooperative is legally structured, that legal procedures are followed as the cooperative begins operations, and policy decisions are made.
Legal Formation of a Cooperative.
Questions to Consider before Engaging a Lawyer.
Principles of a Cooperative
Cooperatives around the world generally operate according to the same core principles and values, adopted by the International Co-operative Alliance in 1995. Cooperatives trace the roots of these principles to the first modern cooperative founded in Rochdale, England, in 1844.
1) Voluntary and Open Membership: Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities and meet the requirements of membership, without gender, social, racial, political, or religious discrimination. Members control the co-op's policies and make decisions for the cooperative.
2) Democratic Member Control: Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions.
3) Member Economic Participation: Members contribute equitably to, and democratically control, the capital of their cooperative.
4) Autonomy and Independence: Cooperatives are autonomous, self-help organizations controlled by their members.
5) Education, Training, and Information: Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute to the development of their cooperatives. They inform the general public about the nature and benefits of cooperatives.
6) Cooperation among Cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
7) Concern for Community: Cooperatives work for the sustainable development of their communities through policies approved by their members.
Entity Options
