A cooperative, or a co-op, is another type of business entity. In the U.S., there are an estimated 65,000 co-ops, and one-third of people are members of at least one cooperative.
What sets a cooperative apart from other types of corporations is who the owners of the company are. While other types of corporations are owned by shareholders or stockholders, co-ops are owned by its members or the people who use the services of the cooperative. Some cooperatives are employee-owned.
To become a member of a cooperative, a person makes a financial contribution. Since the focus of co-ops is on building and maintaining community, most exist to meet the specific needs of their members.
Any profits the cooperative earns are either re-invested in the company, similar to a nonprofit corporation, or distributed among its member-owners, as with a for-profit corporation.
IN WHAT SECTORS CAN COOPERATIVES BE FOUND?
You’re likely to find the co-op model in a variety of economic sectors, including:
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