What Is A Co-op?
The ownership structure of a business determines its type. When a single person owns and operates a company, it is typically classified as a sole proprietorship. If there are two or more owners, it is usually considered a partnership. A business can also incorporate, resulting in the formation of a corporation. There are two types of corporations: an S-corporation, which can have fewer than 100 owners, and a C-corporation, which can have hundreds or even thousands of owners.
When the individuals who use a company’s products and services also own and operate the business, it is referred to as a cooperative. Besides the ownership structure, cooperatives have several unique features that distinguish them from other types of businesses.
The International Co-Operative Alliance defines a cooperative, or co-op, as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise.” In other words, cooperatives are created by people who have a specific need and who are willing to work together to operate and organize a company that will meet that need.
