Cooperatives (co-ops) are distinct types of organizations structured around democratic control, member ownership, and the prioritization of shared benefits over profit maximization. Their structure varies somewhat by legal jurisdiction and sector (e.g., agriculture, housing, worker-owned, consumer), but there are core features that tend to define how most cooperatives are organized. Here’s a detailed breakdown of their typical structure:

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1. Ownership and Membership

• Owned by Members: The co-op is owned by the people who use its services or work for it. These members contribute to the capital and collectively benefit from the enterprise.

• One Member, One Vote: Unlike corporations where voting is based on shares, co-ops typically operate on democratic principles—each member gets one vote, regardless of their capital contribution.

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2. Governance Structure

General Assembly (or Annual General Meeting – AGM)

• Highest decision-making body.

• Composed of all co-op members.

• Meets at least once a year to:

  • Approve financial statements.

  • Elect the board of directors.

  • Make major strategic or structural decisions.

Board of Directors

• Elected by the general assembly.

• Responsible for strategic oversight and policy decisions.

• Represents the interests of members.

• Typically serves staggered terms (e.g., 2–4 years).

• Can include internal (member) or external (non-member expert) directors depending on bylaws.

Committees

• May include audit, governance, finance, membership, or ethics committees.

• Composed of board members or members-at-large.

• Assist in specialized oversight and decision-making.

Management Team

• Hired by the board.

• Responsible for day-to-day operations.

• Often includes a CEO, general manager, or executive director.

• Must implement board policies and manage staff or services.

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3. Legal and Financial Structure

• Incorporation: Co-ops are legal entities and can be incorporated under cooperative-specific laws or as nonprofits, depending on the region.

• Equity Contributions: Members usually buy a share to join; this can be symbolic (e.g., $10) or substantial, depending on the co-op type.

• Surplus Distribution:

  • Called “patronage dividends” in many contexts.

  • Profits (surpluses) are distributed among members based on usage or contribution, not on capital.

  • Alternatively, some surpluses are reinvested into the cooperative.

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4. Types of Cooperatives and Their Internal Differences

• Worker Cooperatives: Owned and controlled by employees. Workers manage and govern the co-op, often electing operational committees.

• Consumer Cooperatives: Owned by customers who use the co-op’s services (e.g., credit unions, food co-ops).

• Producer Cooperatives: Owned by independent producers (e.g., farmers, artisans) who band together for marketing, purchasing, or processing.

• Housing Cooperatives: Members own shares that entitle them to live in and govern the property.

• Multi-stakeholder Cooperatives: Include more than one class of member (e.g., workers, consumers, investors) with carefully balanced representation.

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5. Principles and Values (Guiding Framework)

Co-ops are generally guided by the Seven Cooperative Principles, adopted from the International Co-operative Alliance:

1. Voluntary and Open Membership

2. Democratic Member Control

3. Member Economic Participation

4. Autonomy and Independence

5. Education, Training, and Information

6. Cooperation Among Cooperatives

7. Concern for Community

These principles shape the bylaws, mission, and long-term strategies of most co-ops.