Cooperative Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Cooperative, written in plain English, along with examples of how it is used.

What is Cooperative?

It is a non-profit organisation formed by a group or organisation who themselves owns and control it for their own benefit as services are offered to them. Usually the dairy farms, farmers, grocers etc forms the cooperative.

History and Meaning of Cooperative

A cooperative, also known as a co-op, is a type of legal entity that is owned and controlled by its members or customers for their mutual benefit. The cooperative structure has been used for centuries in various forms, but the modern cooperative movement is generally attributed to the Rochdale Society of Equitable Pioneers in England, which was founded in 1844.

Cooperatives can take on different legal forms depending on the country and industry, but they all share the core principles of democratic control, member ownership, and shared economic benefits. Common types of cooperatives include agricultural cooperatives, consumer cooperatives, housing cooperatives, and worker cooperatives.

Examples of Cooperative

  • The Ocean Spray cooperative is owned and controlled by over 700 cranberry farmers in North America who pool their resources to market and distribute their cranberry products.
  • REI is a consumer cooperative that is owned by its members and sells outdoor gear and clothing.
  • Mondragon Corporation is a massive worker cooperative network based in Spain that employs over 70,000 people across various industries.
  • The Park Slope Food Co-op in Brooklyn, New York is a cooperative grocery store where members work together to run the store and receive discounts on purchases.

Legal Terms Similar to Cooperative

  • Non-profit organization: like cooperatives, non-profits are focused on the mission of the organization rather than making profits for shareholders.
  • Mutual company: a mutual company is similar to a cooperative in that it is owned by its policyholders or customers, but it is typically used in the insurance industry.
  • Employee-owned company: unlike cooperatives where ownership is open to any member, employee-owned companies are typically only owned by their employees.
  • Social enterprise: a social enterprise is a business that has a social or environmental mission, but it may not have the same level of ownership and democratic control as a cooperative.
  • Community land trust: a community land trust is a type of cooperative that focuses on land and housing ownership and typically provides more affordable options.