Co-operatives Forms of Business Ownership. What is a co-operative? A co-operative is a business...
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Transcript of Co-operatives Forms of Business Ownership. What is a co-operative? A co-operative is a business...
Co-operatives
Forms of Business Ownership
What is a co-operative?
A co-operative is a business owned and run by its members who have a common bondTo become a member a person must buy at least one shareEach member has one voteThe profit is distributed among the membersMembers have limited liabilityCo-ops are managed by a management committee
Formation of Co-ops
Seven people are requiredApply to the Registrar of Friendly SocietiesCertificate of Incorporation is issuedThe co-op must report annually to the Registrar of Friendly Societies
Advantages of Co-ops
Members have limited liabilityOne vote per memberThe members own the co-op, which is a big incentive to do business with the co-opProfits are distributed among the members
Disadvantages of Co-ops
Lack of financeNo incentive to buy more sharesThe management committee may not have the business expertise to run a modern business
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
Types of Co-ops
Consumer Co-ops – these co-ops buy directly from the manufacturer and sell to members
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)
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
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