Browse Definitions :
Definition

cooperative (co-op)

A cooperative, often shortened to “co-op,” is a business that is owned and operated by and for the benefit of its members.

A cooperative is formed when several people identify an unmet need. For example, artisans in a downtown area might see the need for a conveniently located market; freelancers might identify the need for a co-working space. Potential members then conduct cost and feasibility studies and explore financing possibilities.

A cooperative may or may not incorporate but should draft a document stating membership requirements and responsibilities. The purchase of shares confers membership and members may vote on business issues on a vote-per-member basis. Cooperatives are usually run by elected directorial boards.

Profits and losses typically flow through to members in accordance with the number of shares they hold and are reported on the tax returns of the members. As is the case with partnerships, sole proprietorships and some other business structures, a cooperative is not considered a separate legal entity and, as such, is not required to pay taxes.

Cooperatives are common in the agricultural, energy, financial, arts, healthcare and retail sectors but they can be established to serve just about any consumer need provided by other types of businesses. Examples of well-known cooperatives include Ace Hardware, Associated Press (AP), Bob’s Red Mill, Land O’Lakes, Piggly Wiggly, U.S. Central Credit Union and Whole Foods.

Cooperatives can be seen as an early expression of the current trend toward collaborative consumption.

See also: entrepreneur, startup, C corporation, S corporation, limited liability company (LLC)

 

This was last updated in December 2015

Continue Reading About cooperative (co-op)

SearchCompliance
  • pure risk

    Pure risk refers to risks that are beyond human control and result in a loss or no loss with no possibility of financial gain.

  • risk reporting

    Risk reporting is a method of identifying risks tied to or potentially impacting an organization's business processes.

  • risk avoidance

    Risk avoidance is the elimination of hazards, activities and exposures that can negatively affect an organization and its assets.

SearchSecurity
  • script kiddie

    Script kiddie is a derogative term that computer hackers coined to refer to immature, but often just as dangerous, exploiters of ...

  • cipher

    In cryptography, a cipher is an algorithm for encrypting and decrypting data.

  • What is risk analysis?

    Risk analysis is the process of identifying and analyzing potential issues that could negatively impact key business initiatives ...

SearchHealthIT
SearchDisasterRecovery
  • What is risk mitigation?

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • fault-tolerant

    Fault-tolerant technology is a capability of a computer system, electronic system or network to deliver uninterrupted service, ...

  • synchronous replication

    Synchronous replication is the process of copying data over a storage area network, local area network or wide area network so ...

SearchStorage
  • MRAM (magnetoresistive random access memory)

    MRAM (magnetoresistive random access memory) is a method of storing data bits using magnetic states instead of the electrical ...

  • storage volume

    A storage volume is an identifiable unit of data storage. It can be a removable hard disk, but it does not have to be a unit that...

  • storage capacity planning

    Storage capacity planning is the practice of assessing current data storage needs and forecasting future storage requirements.

Close