A cooperative is a business or organization owned and operated for the benefit of people who use their services. Earnings and profits generated by the cooperative are distributed among members, also known as user-owners.
Usually, a board of directors and elected officials run the cooperative, while regular members have voting power to control the direction of the cooperative. Members can become part of the cooperative to buy shares, and the amount of shares they hold will not affect the weight of their vote.
Cooperatives are common in the sectors of health care, retail, agriculture, arts and restaurants.
Creating a cooperative
The creation of a cooperative is different from creating any other business entity. For the launch, a group of potential members must agree on a common need and a strategy on how to meet that need.
Each state has slightly different laws governing cooperatives. Consult an attorney, the Secretary of State or the State Commissioner of Corporations for more information about the specific laws of your state.
Advantages of a cooperative
Disadvantages of a cooperative.