What is a Co-op?2018-09-25T15:03:40+00:00

What is a Co-op?

Cooperatives are businesses owned and controlled by the people who use them. Cooperatives differ from other businesses because they are member owned and operate for the benefit of members, rather than earn profits for investors. Like other businesses, most cooperatives are incorporated under State Law.

​In the United States there are more than 40,000 cooperatives that serve one out of every four citizens. The cooperative business structure provides insurance, credit, health care, housing, telephone, electrical, transportation, childcare, and utility services.

Why Cooperatives Are Organized:

  1. Improve bargaining power;
  2. Reduce costs;
  3. Obtain products or services otherwise unavailable;
  4. Expand new and existing market opportunities;
  5. Improve product or service quality; or
  6. Increase Income.​

Cooperative Business Principles

The differences between cooperatives and other businesses are often expressed as three broad principles that characterize all cooperatives and explain how they operate:

The User-Owner Principle. The member-users own and provide the necessary financing.  Members finance cooperatives in several different ways.

The User-Control Principle. The member-users control the business. They elect the board of directors and approve changes in its structure and operation. The board sets policy and is responsible for business oversight.

The User-Benefit Principle. Assures that the cooperative’s only purpose is to provide and distribute benefits to members based on their use. Benefits may include a service otherwise not available, advantages from volume purchasing or sales, or distribution of profits based on member use of the cooperative.

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