Co-operatives

1
Co-operatives

• Forms of Business Ownership

2
What is a co-operative?

• A co-operative is a business owned and run by its
  members who have a common bond
• To become a member a person must buy at least one
  share
• Each member has one vote
• The profit is distributed among the members
• Members have limited liability
• Co-ops are managed by a management committee

3
Formation of Co-ops

• Seven people are required
• Apply to the Registrar of Friendly Societies
• Certificate of Incorporation is issued
• The co-op must report annually to the Registrar
  of Friendly Societies

4
Advantages of Co-ops

• Members have limited liability
• One vote per member
• The members own the co-op, which is a big
  incentive to do business with the co-op
• Profits are distributed among the members

5
Disadvantages of Co-ops

• Lack of finance
• No incentive to buy more shares
• The management committee may not have the
  business expertise to run a modern business

6
Types of Co-ops

• Producer Co-ops mainly agricultural co-ops.
  They collect the raw material from the farmers,
  e.g. milk, process it and sell the finished
  product, e.g. cheese

7
Types of Co-ops

• Consumer Co-ops these co-ops buy directly from
  the manufacturer and sell to members

8
Types of Co-ops

• Worker Co-ops are set up where businesses close
  down and the workers decide to pool their money
  and set up a co-op, e.g. Carrigdhoun Pottery,
  Greencaps (Dublin Airport)

9
Types of Co-ops

• Financial Co-ops, e.g. credit unions set up by
  people sharing a common interest, e.g. live/work
  in the same area. They encourage saving and
  provide loans

10
Summary

• What is a co-op?
• How is a co-op formed?
• What are the advantages and disadvantages of a
  co-op as a form of business ownership?
• Outline the different types of co-ops in
  existence in Ireland