Characteristics of a Cooperative
Characteristics of a Co-operative
A co-operative is broadly defined as a business that is owned and independently managed by its members who utilizes its services, and obtain benefits that are shared equally based on use of its services. Members gain in two ways from the cooperative: first, earnings are paid to members depending on the sum of businesses they conduct with the cooperative and second, members receive more services based on the frequency at which they use the cooperative. Normally, cooperatives are incorporated and receive the authority to conduct business under state law by filing articles of incorporation (Co-op 101: An Introduction to Cooperative, 2014), examples of cooperatives are:
• Business
• Consumer service
• Farmer http://www.rurdev.usda.gov/rbs/pub/cir55/cir55rpt.htm
• Financial
Forming a cooperative involves identifying hopeful members who have a consensus on a shared need and plan on how to meet this need; most cooperatives are incorporated and therefore are formed by completing these steps (Choose Your Business Structure, 2014):
1. File Articles of Incorporation, this legalizes the entity and provides valuable information about the cooperative including its name, location, capital structure, purpose, names of the incorporators and length of operation. This is submitted to the local registrar of companies for approval.
2. Create Bylaws, these are not mandatory, however, with them they contribute to the orderly flow of business of the cooperative. They state operational procedures such as duties, responsibilities and membership requirements.
3. Create a membership applications, this a legal document used to enlist members and validated their membership. They list the members’ rights, benefits and names along with the board of directors’ signatures.
4. Conduct a charter member meeting and elect directors, here the proposed bylaws are discussed, amended and voted on. If the article of incorporation did not include the board of
A co-operative is broadly defined as a business that is owned and independently managed by its members who utilizes its services, and obtain benefits that are shared equally based on use of its services. Members gain in two ways from the cooperative: first, earnings are paid to members depending on the sum of businesses they conduct with the cooperative and second, members receive more services based on the frequency at which they use the cooperative. Normally, cooperatives are incorporated and receive the authority to conduct business under state law by filing articles of incorporation (Co-op 101: An Introduction to Cooperative, 2014), examples of cooperatives are:
• Business
• Consumer service
• Farmer http://www.rurdev.usda.gov/rbs/pub/cir55/cir55rpt.htm
• Financial
Forming a cooperative involves identifying hopeful members who have a consensus on a shared need and plan on how to meet this need; most cooperatives are incorporated and therefore are formed by completing these steps (Choose Your Business Structure, 2014):
1. File Articles of Incorporation, this legalizes the entity and provides valuable information about the cooperative including its name, location, capital structure, purpose, names of the incorporators and length of operation. This is submitted to the local registrar of companies for approval.
2. Create Bylaws, these are not mandatory, however, with them they contribute to the orderly flow of business of the cooperative. They state operational procedures such as duties, responsibilities and membership requirements.
3. Create a membership applications, this a legal document used to enlist members and validated their membership. They list the members’ rights, benefits and names along with the board of directors’ signatures.
4. Conduct a charter member meeting and elect directors, here the proposed bylaws are discussed, amended and voted on. If the article of incorporation did not include the board of