Definition — Cooperative Business Structure

When starting a new business, the first thing a business owner is supposed to decide is the type of business he wants. The important factors which can help a great deal in the decision-making process include your business type, capital needs, number of employees to be hired, pay distribution plan, liabilities, legal restrictions, and tax implications. In this article, we’ll be talking about cooperative.

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A cooperative is a business structure which is organised, owned and democratically managed by people who avail its products and services. Because of the relationship between the ownership and the users of the business, a cooperative is discrete in nature. A patron or user refers to a person who carries out business with the cooperative. The owner, apart from being the man-in-lead is also in one way or the other, a user of the cooperative.

Cooperatives, like investor-owned corporations, have elected boards of directors and appointed officers. Board members take vital decisions. The members exert their control through voting power that is attached to their membership.

Cooperatives are business enterprises that are owned and run by a group of individuals working for mutual benefit. It is an independent group of people who collectively own and democratically control an organisation that will meet the social, cultural and economic needs that are shared by all members.

Read this article to learn more about the cooperative business structure: https://www.smallbusiness.wa.gov.au/business-topics/planning-structures/business-structures/cooperative