Ways in which business is conducted…

• Proprietorship
• Partnership
• Corporation
• Cooperative

There are a number of formal organizational structures a business may operate under. These include:

• Proprietorship - where one person owns the entire business. That person stands to reap all the profits as well as all the risk.
• Partnership - two or more persons own the business. Profits are generally shared based on level of ownership. However, risk is shared by all.
• Corporation - There are a number of types of corporation. The main feature of a corporation is that it limits risk of the owners to their actual investment. Corporations are regarded as legal entities. Among other salient features, deciding the appropriate corporate structure depends on the number of owners, the size of the corporation, and tax considerations.
• Cooperative - See below.

What is a Co-op?

A business voluntarily controlled, operated at cost, which is owned, capitalized and controlled by member-patrons, sharing risks and benefits proportional to their participation.

The definition of a cooperative is a business voluntarily controlled, operated at costs, which is owned, capitalized and controlled by member-patrons, sharing risks and benefits proportional to their participation.

Cooperative Principles

• Open membership
• Democratic control
• Limited return on capital
• Net surplus belongs to the owners
• Continuous education
• Cooperation among cooperatives
• Politically non-partisan
• Members earn only from the sale of his/her own products
  

Cooperatives have many interesting features. These include:

• Open membership - generally cooperatives do not discriminate based on race, gender or other
• Democratic control - one member/one vote
• Limited return on capital
• Net surplus belongs to the owners - owners reap the net surplus
• Continuous education - cooperative often offer training courses to members
• Cooperation among cooperatives - cooperatives often link up with other cooperatives
• Politically non-partisan - they attempt to refrain from taking a political position
• Members earn only from the sale of his/her own products - you earn what you put into it.

Types of Cooperatives

• Consumer Co-ops
• Worker Co-ops
• Producer Co-ops

There are commonly three kinds of cooperatives.

Consumer co-ops are the most common. Generally, these are groups of consumers that join together to get a better price for products.

Worker co-ops are not as common. An example of a worker cooperative is a kubbutz or Jewish commune.

Producer co-ops - A group of producers who join for purposes of marketing, lobbying, transportation or other.

There are a number of producer cooperatives. Most revolve around agricultural products, but some move nicely into other areas. Some examples include:

• Blue Diamond - Almond and other nuts
• Land O’ Lakes - Dairy/butter products
• Group Health - Large health insurance provider
• Yellow Cab - nationwide taxi cab service
• REI - outdoor recreational equipment provider
• Ocean Spray - cranberry producers
• Sunkist - orange producers
• Seafood Producers Cooperative - seafood, mainly salmon, producer with operations in Southeast Alaska.

Trade/Producer Associations

Along with cooperatives, producers may form alliances or associations.

• Produce Marketing Association
• Maverick Ranch Producers Alliance