About Co-operatives

            Cooperatives are a type of Business Corporation established under the law. Unlike ordinary corporations, the cooperative corporation exists only to serve as an agent for its member owners. Through their membership in the cooperative, the members are in the business of serving themselves. They are both owners and users of the cooperative's services. The principal objective of cooperatives is to afford benefits to its members, rather than a return on the member's capital investment (Birchal 85).

Consumer Cooperatives

            A consumer co-op may be formed for any lawful purpose. It should only occur if it is organized and conducts its business principally for the mutual benefit of its membership as corporation’s patrons. If the co-op is organized to provide goods or services to its members, its patrons are those who purchase those types of goods from, or use those types of services of, the corporation. If it is organized to process, market, or otherwise handle its members' services, or products its patrons are those persons whose products or services are marketed, processed, or handled by the co-op. Although these organizations are termed as consumer cooperatives, there is no requirement that their members must actually be consumers. Consumer co-ops are democratically controlled and are not organized to make a profit for themselves or for their members. Rather, they are operated principally for the mutual benefit of its membership as patrons. The savings, earnings, or benefits of the co-op must be used for the general welfare of the members. They may also be proportionately and equitably distributed to some or all of its members or patrons. The distribution ought to be based on patronage in the form of property, cash, and evidence of indebtedness, memberships, capital credits or services (92).

Agricultural Cooperatives

            An agricultural co-op is organized to make profits only for its membership as producer of agricultural goods. An agricultural good includes any horticultural, vita-cultural, aqua-cultural, forestry, dairy, livestock, poultry, bee, or farm product. The co-op may engage in any activity connected with the production and marketing of its products. It may also engage in the purchase, use, or financing of supplies or equipment. The co-op may undertake marketing contracts with its members. This may require members to sell all or part of their products exclusively to or through the association. The association may establish reserves, commonly structured as revolving funds, and invest the funds from the reserves. An agricultural association may be organized with or without shares of stock. Most agricultural co-ops are organized without stock so that the property interests of members will be tied solely to the members' contribution to production (102).