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.
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