Co-operative Co-operative EnterpriseEnterprise

Types of Co-Types of Co-operatives operatives

Retail Co-operatives: Formed to provide goods to members at reduced rates.

Marketing Co-operatives: Created to sell the produce of it’s members at the best rates possible.

Financial Co-operatives: Formed to arrange savings and loans for members than at local banks.

Service Co-operatives: Exist to provide special services such as housing.

OwnersOwnershiphipA co-operative is a business firm owned equally by it’s various members. Members of a particular co-operative must have a common relationship, goal, or economic purpose.

SizeSize

A co-operative business firm can vary in size depending upon what type of business you’re dealing with. It can be a large business with many members, or a small business with only a few members.

Ex: ‘Maple street co-operative’ is a small business consisting of only a few investors, where they sell whole foods and produce grown by local farmers.

Ex: ‘Co-operative Enterprise Council NB’ is a large business consisted of many members, that offer services to help facilitate the continued success, growth, and competiveness of co-operatives and credit unions in New Brunswick.

Decision MakingDecision Making

Each member is entitled to a single vote, and a majority vote is required to carry

out any decision big or small. To facilitate the day-to-day operation of the co-op,

members elect a board of directors annually. The one-vote-per-member rule allows each member an equal say in all

management decisions.

Personal/Investor Personal/Investor LiabilityLiability

Many co-operatives incorporate themselves under their provincial corporations act. This permits them to secure limited liability for their member while maintaining all other privileges of membership. The same goes towards investor liability. Each member invests into the business firm, but because there are various members the investor liability is small.

Profit Distribution

Profit is distributed to the members through patronage returns. The payments are based on the amount of business transacted by each individual.

Example: A member is responsible for purchasing one percent of the goods sold by a retail co-operative, then that member is entitled to one percent of the profits during that same time.

Factors Attracting Factors Attracting Investment and Investment and CapitalCapital

Patronage ReturnsEqual say in

management decisions

Members can obtain goods and services through their co-operative

They can also sell their own products at better price than those normally available

Limited personal liability for debts of co-op

Examples

•Retailers Co-operative: The Best Western international hotel chain.

•Marketing Co-operatives: United Farmers of Alberta

•Financial Co-operatives: Caisses populaires in Quebec

•Service Co-operatives: North End United Housing Cooperative

VideoVideoIntroduction to the Co-operative business model