A cooperative or co-op is a business structure that is owned and democratically controlled by its member-owners who utilize its services.
The cooperative is formed because of the recognition by persons that as individuals they cannot achieve their economic or social goals by working separately. Only by “group-action” and through cooperation, will they be able to achieve common objectives.
Members who use the cooperative own the co-op. Cooperatives are democratically controlled in that a person owning at minimum, one share of stock is entitled to one vote during member meetings.
Members finance the cooperative in a variety of ways. Each cooperative determines how the enterprise will be financed. Risk is limited to how much money a member has put into the business.
Members benefit from the cooperative based on the amount they use the co-op. All or a portion of the co-op’s profits may be distributed proportionately, based on the member’s use, or patronage, of the co-op.
In summary, a cooperative is an “autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise.” International Cooperative Alliance, Statement of Cooperative Identity.