A cooperative business is a legal business structure that is owned and governed by, and functions for, the benefit of those who use its services. Cooperatives are businesses owned by "member-owners" who democratically control the business, and each member gets a voice in how the business is run. Services or goods provided by the co-op benefit and serve the member owners, and earnings generated by the cooperative benefit the member-owners. Cooperatives are not non-profits, and they aim to earn profits. However, cooperatives are often more focused on services for members than for investments. The International Co-Operative Alliance defines a cooperative, or co-op, as "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".
Some key features of cooperatives include:
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Voluntary and Open Membership: Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities and meet the requirements of membership, without gender, social, racial, political, or religious discrimination.
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Democratic Member Control: Members have control over setting policies for the co-op and making decisions for the cooperative.
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Members Economic Participation: Members contribute to and democratically control the capital of the cooperative.
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Autonomy and Independence: Cooperatives are autonomous, self-help organizations controlled by their members.
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Education, Training, and Information: Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute to the development of their cooperatives.
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Cooperation Among Cooperatives: Cooperatives work together through local, national, regional, and international structures to serve their members most effectively and strengthen the cooperative movement.
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Concern for Community: Cooperatives work for the sustainable development of their communities through policies approved by their members.
There are three types of cooperative businesses: consumer co-ops, producer co-ops, and worker co-ops. Consumer co-ops are owned by those buying final goods/services as a larger group, producer co-ops are owned by those producing goods/services, and worker co-ops are owned by those working for the co-op.
