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)

Networking
  • network interface card (NIC)

    A network interface card (NIC) is a hardware component, typically a circuit board or chip, installed on a computer so it can ...

  • User Datagram Protocol (UDP)

    User Datagram Protocol (UDP) is a communications protocol primarily used to establish low-latency and loss-tolerating connections...

  • Telnet

    Telnet is a network protocol used to virtually access a computer and provide a two-way, collaborative and text-based ...

Security
  • advanced persistent threat (APT)

    An advanced persistent threat (APT) is a prolonged and targeted cyber attack in which an intruder gains access to a network and ...

  • Mitre ATT&CK framework

    The Mitre ATT&CK (pronounced miter attack) framework is a free, globally accessible knowledge base that describes the latest ...

  • timing attack

    A timing attack is a type of side-channel attack that exploits the amount of time a computer process runs to gain knowledge about...

CIO
HRSoftware
  • employee resource group (ERG)

    An employee resource group is a workplace club or more formally realized affinity group organized around a shared interest or ...

  • employee training and development

    Employee training and development is a set of activities and programs designed to enhance the knowledge, skills and abilities of ...

  • employee sentiment analysis

    Employee sentiment analysis is the use of natural language processing and other AI techniques to automatically analyze employee ...

Customer Experience
  • customer profiling

    Customer profiling is the detailed and systematic process of constructing a clear portrait of a company's ideal customer by ...

  • customer insight (consumer insight)

    Customer insight, also known as consumer insight, is the understanding and interpretation of customer data, behaviors and ...

  • buyer persona

    A buyer persona is a composite representation of a specific type of customer in a market segment.

Close