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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 ?
He further mentioned that co-operatives are formed for the sole purpose of benefiting members, noting that it would be against the co-operatives philosophy to find rich societies somewhere else and assist them, while its members remain poor.
The President presented the awards and certificates to the winners of the competitions organized in line with the International Co-operative Day.
The co-operative sector is particularly strong in the retail and agriculture sectors, with a prominent landowner and businessman from the North East among those backing the co-operative model.
The new figures show that the cooperative sector is a large, loved and successful part of the British economy' The biggest area of growth is in energy, an increase powered by the combination of a flourishing renewable energy co-operative sector and the start-up of Co-operative Energy in 2010, which now supplies 213,000 customers with energy.
Minister Ms Hart yesterday responded to the Welsh Co-operatives and Mutuals Commission Report which was published in February.
While the Knights of Labour encouraged both consumer co-operatives and worker co-operatives, the American Federation of Labor (AFL) limited itself to "bread-and-butter issues" (104) and supported the wage system as permanent.
According to Mashima, 2005 (in: Hekmat, 2011) the lack of professional possibilities for training and facilities necessary for the operation of co-operatives, the lack of committed leadership and expert employees, the lack of co-operational activities at the national level, the lack of specific policies and guidelines in the public and co-operative sectors for the co-operatives' development are some of the problems of co-operatives in Asia.
Research published in January by the Wales Co-operative Centre showed co-operatives in Wales generate an income of over pounds 1billion a year and offer a tried and tested way of developing a more sustainable economy, whilst tackling unemployment and inequality.
Urban Co-operative Bank, based in Odisha's capital Bhubaneswar, has been reporting red figures since 2001.
Co-operative Insurance Companies became the 66th company member of the Trusted Choice consumer-branding program for independent insurance agents and brokers.
Food is one of the most successful sectors for co-operative businesses.

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