Definition
Cooperative is a form of business firm that
is owned and run by a group of individuals for their mutual benefit.
Worker or Producer Cooperatives
They are businesses owned and managed by
their employees who share in the net profit of the company.
Wholesale Cooperatives
They are businesses whose membership
comprise of multitude of small independent retailers. The prime objective of
such a group is to use its combined bulk-buying power to obtain discounts and
concessions.
Consumer or Retail Cooperatives
They are businesses that are run in the
interest of customers holding membership rights that entitle them to receive an
annual dividend or refund in proportion to their spending at the Cooperative’s
shops. Consumer Cooperatives are characterized by the following;
v Its
members are free to join and leave at any time
v Its
members are paid cash dividends at regular intervals
v Its
members get ‘one member, one vote’ voting rights
v Its
members receive a fixed rate of interest on their share capital
