Co-ops and you!

Contact Us

University of Wisconsin
Center for Cooperatives
230 Taylor Hall
427 Lorch Street
Madison, WI 53706
Phone: 608-262-3981
Email: reynolds@aae.wisc.edu

 

How do Co-ops differ from other businesses?

Cooperatives, like any other business, start with the recognition of a need or an opportunity. Cooperatives also operate very much like other businesses. They must serve a market efficiently and effectively, they must be well managed, and they must survive financially.
However, there are some distinctions that make co-ops unique:

  • Members own their co-ops. As owners, they provide the capital necessary for start-up and growth of the business.
  • Members control their co-ops. Each member usually gets one vote, regardless of the amount of equity they have invested or their use of the co-op. The board of directors is elected by the membership.
  • Members benefit from their co-ops. Profits are distributed to the members based on their use of the co-op. They also have access to better prices and/or services.

But how are they different from other businesses? In most cases, especially in an Investor-Owned Firm (IOF), each investor (or shareholder) has control over the firm only to the extent to which s/he has invested capital in it, that is, one vote per share of stock. S/He also has no direct control over the selection of the firm’s management/ Board of Directors.