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An association or corporation established for the purpose of providing services on a nonprofit basis to its shareholders or members who own and control it.

The nature and functions of cooperatives differ considerably—such as purchasing cooperatives, consumer cooperatives, and marketing cooperatives.

In the context of agriculture, a farmers' cooperative refers to an organization of farmers residing in the same locale that is established for their mutual benefit in regard to the cultivation and harvest of their products, the purchase of farm equipment and supplies at the lowest possible cost, and the sale of their products at the maximum possible price.

The term cooperative also signifies the ownership of an apartment building by a nonprofit corporation that holds title to it and the property upon which it is situated. Stock in the corporation is allotted among the apartment units on the basis of their relative value or size. The right of occupancy to a particular apartment is granted to each cooperative member, who purchases the shares assigned to the desired unit. The member subsequently receives a long-term proprietary lease to that unit. The rent payable pursuant to the lease is that member's proportionate share of the expenses the corporation incurs in operating the cooperative—such as insurance, taxes, maintenance, management, and debt service. The cooperative concept evolved in New York City during the early 1900s as a mode of accommodating the public's desire for home ownership; it subsequently expanded to other large urban centers.

In order to finance the purchase or construction of the cooperative building, the cooperative places a blanket mortgage on the property, which is pledged to support the given debt. Lenders usually are hesitant to accept an individual member's stock and proprietary lease as security for a long-term loan. The members' lien (a claim on property to satisfy a debt) on the lease would be subordinate to the blanket mortgage on the property. The purchaser of a cooperative apartment usually must have sufficient cash available to pay for the stock allotted to the unit he or she wishes to obtain. The initial price of the stock generally does not exceed the amount required for a down payment on a single-family residence. As cooperative members accumulate Equity (the value of property exceeding the total debts on it) in their stock, subsequent purchasers must either have a substantial amount of cash available or locate a seller who is willing to recoup the equity in installments over several years.

Cooperative members are also financially dependent on each other. The existence of a single blanket mortgage paid by rent receipts means that if several members default in their rent payments, the corporation might not have sufficient funds to pay a mortgage loan installment. Foreclosure will ensue in regard to the entire membership unless it acts to satisfy the default. Although special reserves and assessments are generally employed to cover such a contingency, the available funds might be inadequate to prevent default.


n. an association of individual businesses, farmers, ranchers, or manufacturers with similar interests, intending to cooperate in marketing, shipping and related activities (sometimes under a single brand name) to sell their products efficiently, and then share the profits based on the production, capital or effort of each. "Sunkist" oranges is an example of a large cooperative. Cooperatives include dairy milk producers, cotton gins, and thousands of other enterprises of all sizes. There are also cooperatives in which consumers form retail outlets like grocery stores and share the profits based on the amount of patronage of each member, but they have found it difficult to compete with the giant supermarket chains.


noun alliance, association, collective, communal business establishment, communal society, commune, concurrent effort, federation, guild, joint action, joint operation, joint possession, partnership, teamwork, union
See also: ancillary, associated, beneficial, benevolent, coadunate, collective, common, concerted, concurrent, consensual, constructive, favorable, harmonious, joint, mutual, synergetic, united
References in periodicals archive ?
But this third study showed those who played cooperatively also were likely to donate more money to opposing team members without any expectation the favor would be returned.
In addition to supporting OPT in the permitting process and power transmission for the project, PNGC Power will work cooperatively with OPT to pursue a power purchase agreement, under which PNGC Power would purchase the electrical energy output of the 2MW wave power park from OPT.
In addition, IBM and Hitachi will cooperatively design and manufacture selected servers that will be sold by both companies.
We worked real cooperatively with the city on the first annexation,'' said Marlee Lauffer, spokeswoman for Newhall Land.
Last year, John Dunlap, chairman of the state Air Resources Board, told a legislative committee that he and other administration officials were willing to work cooperatively with lawmakers to address complaints about Smog Check II.
Evans, CDI's newly appointed president and chief executive officer, said, "By working cooperatively, we can improve and enhance customers' entertainment experiences at the three racetracks that make up the New York franchise.
The 34th Street Partnership is working cooperatively with all relevant city agencies and community boards, including the Art Commission of the City of New York, the Department of Consumer Affairs, the Department of Transportation, the Department of Parks and Recreation, the Planning Commission, the Fire Department, the Landmarks Preservation Commission, and Community Boards 4, 5, and 6.
NPRA members are committed to work cooperatively with government at all levels to ensure an adequate supply of energy at reasonable prices.
In April, 1991, the courts decided shareholders of a defunct cooperative became subject to rent control as soon as the building was no longer cooperatively owned.
It is one of twelve FHLBanks, all cooperatively owned banks established to provide a steady stream of low-cost housing finance.
We have also received expressions of interest from specialty service providers to work cooperatively with us in applying processes to stimulate and reactivate the existing well bores in this field.
Over its ten years, EBS Council members worked cooperatively with our EBT Industry Council on a number of initiatives that contributed to the proliferation of EBT systems.

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