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There is no one definition of cooperative but a cooperative enthusiast might say that any organization that is committed to and practices the 7 cooperative principles is a coop. Cooperatives can manifest in many ways and there is no one right way to start or structure a coop. In this section we will focus on the basics of how cooperatives work and how they are structured.
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How Cooperatives Are Structured
Cooperatives are member-owned and democratically controlled businesses that distribute profits based on an equitable patronage system. Cooperatives are structured by type of cooperative, the tax status and the legal entity that is chosen by its members. The decision depends on the mission and needs of the co-op. Difference between Co-op Type, Legal Entity and Tax
The 7 Cooperative Principles
There are seven core principles that cooperatives around the world generally subscribe to. These principles were developed by the International Cooperative Alliance to create consistency and unity among the world’s many co-ops In addition to ownership, control, and patronage-based profit sharing, most cooperatives adhere to the seven internationally-recognized cooperative principles: Voluntary membership – coops are voluntary organizations
How Cooperatives Work
While there are many similarities to traditional businesses, cooperatives operate differently both legally and in practice. According to the International Cooperative Alliance, a cooperative “is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.” Cooperative businesses are often based on
