We explain what a cooperative is, its structure, values and principles. We also explain what types of cooperatives there are and more.
Cooperatives promote access to decent work.
What is a cooperative?
A cooperative is a type of commercial company for goods or services that is controlled by its members. It consists of a company jointly owned by natural persons who join together voluntarily to satisfy economic, social or cultural needs What do they have in common.
A cooperative is a type of company in which the objectives are oriented to the good of all partners and the same people who work are the ones who run the organization. This is how it differs from other types of companies, which have as their objective to satisfy only the interests of the owners or shareholders (for example, in a public limited company).
At a global level there is the International Cooperative Alliance (ICA), founded in London in 1895. It is a non-governmental organization that represents cooperatives around the world, assists them and shares updated information with them. cooperative of the americas It is the organization that represents ACI in the American continent since 1990, with headquarters in Costa Rica.
Key points
- A cooperative is a type of goods or services company formed by partners who have a common economic, social or cultural objective.
- The difference with other commercial companies is that the partners cooperate in the work of the organization.
- Cooperatives conduct their business on the basis of democratic principles: all members must participate and vote in the organization’s decisions.
Values and principles of cooperatives
Cooperatives are autonomous organizations in which Partners join voluntarily to satisfy economic, social or cultural needs, through the commercial activity of the cooperative, which is characterized by certain common values and principles:
- Values. Member responsibility, mutual aid, equality and solidarity.
- Beginning. Democratic control in which all members must vote on decisions and the economic participation of members. Each partner has the right to one vote, unlike other types of commercial companies, such as the Public Limited Company, in which the weight of the partners’ vote depends on the number of shares each partner has.
Types of cooperatives
Among the main types of cooperatives are:
- Worker cooperatives. These are organizations in which members work to produce goods or services, through a collective self-employment structure in which everyone contributes capital, everyone must perform tasks and everyone must participate in administrative management.
- Social cooperatives. These are organizations that promote the social integration of heads of households who live in vulnerable situations, people with disabilities or minorities who live excluded from the labor system.
- Consumer and user cooperatives. These are organizations in which workers carry out an economic activity to be a source of goods or services for their partners and members. In this way, cooperatives provide quality products at a good price compared to market offers.
- Agri-food cooperatives. These are organizations made up of small rural producers who join together to obtain better conditions, such as the quality of seeds, supplies or machinery, and at the same time they can market the food produced at more competitive prices.
- Health cooperatives. These are insurance organizations that provide services to cover risks related to the health of partners, that is, members of the cooperative.
Differences between cooperatives and other commercial companies
In cooperatives, all members vote on executive and economic decisions.
A commercial company is an organization that has commercial objectives to obtain monetary profits, for example: Public Limited Company (SA), Limited Liability Company (SRL) and Simplified Joint Stock Company (SAS).
The cooperative is a type of commercial company, but it differs from the others mainly in the following aspects:
- The cooperative members work to provide service and obtain a common benefit, not just to obtain individual benefits.
- The profit or surplus from work done in a cooperative is returned to the members in proportion to the position each one holds; it is not distributed only among the shareholders.
- All members have the right to vote on the executive and economic decisions of the cooperative, not only those who own shares in the company.
- All members participate in the decisions of the cooperative’s management, unlike other companies in which only the shareholders represent the Board of Directors.
Structure of cooperatives
Cooperatives are characterized by having a horizontal structure, that is, each member is located at the same level of hierarchy even if they occupy different positions.
The structure of the cooperative may vary depending on the size of the organization and is generally characterized by being made up of:
- PartnersThey are the basis of every cooperative, they pursue common interests rather than individual interests and must be willing to accept the responsibility of being a member of the cooperative.
- DirectorsThey are partners who hold executive positions, call meetings and make specific decisions regarding the operation and direction of the organization.
- Administrative. They are partners who perform accounting, tax and monetary tasks. Management must be informed of the different accounting and tax situations in order to make decisions.
- EmployeesThey are partners appointed by the Board of Directors to carry out various tasks depending on the sector in which the organization operates, such as workers who prepare food orders to be dispatched or who work the land to harvest vegetables, among many other possible activities.
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References
- National Cooperative Business Association, CLUSA international (2022). What is a co-op? from: NCBA
- Co-operatives of the Americas (2022). Co-operative identity, principles and valuesfrom: ACIAmericas
- Hispacoop (2021). How does a consumer and user cooperative work? (video) from YouTube