Cooperative

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Cooperative

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.

cooperative

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.

References in periodicals archive ?
? Central England Co-op is open for all your needs this Easter, so keep up to date with Easter products and offers by visiting www.centralengland.coop/mycoopdeals BAKERY CAKE is great any time of year and Central England Co-op has a delicious selection to grace your table.
CMS also said that it will ease up on enforcing a requirement that a CO-OP get at least two-thirds of its revenue from the sale of individual and small-group policies.
* A $275,000 first mortgage and $ 100,000 line of credit for a nine-unit co-op at 625 East 6th Street in Manhattan; and
Forestry (MSc) Geography (BA, BSc) Co-op, (MA, MSc, MNRES, PhD)
A written policy should require that CO-OPs set premium rates "with the intention of generating net income, and that a portion of the net income be set aside to meet projected risk capital requirements, before any such net income is used to lower premiums, to improve benefits or quality care, or is otherwise distributed to CO-OP members," Ripps said.
The Rhondda Cynon Taf group won the Social Enterprise Volunteer of the Year Award and is a thriving example of the 180 food co-ops across Wales.
The most successful group of black co-ops is the Federation of Southern Cooperatives/ Land Assistance Fund, which is a "network of rural cooperatives, credit unions, and state associations of cooperatives and cooperative development centers in the southern United States," says Nembhard.
Ownership of resort-location condos and co-ops also can leave clients vulnerable to geographical exposures.
Through its products and partnerships, West Central has become a world leader, an innovator, an inventor, an advocate, a crusader, a neighbor--and yes, still a local co-op. Its annual report needed to reflect this wide range of roles without overwhelming readers and underwhelming investors.
In fact, co-op nursery schools pulled mothers into a very tight and demanding community, potentially oppressive in its expectations, but generally construed as a great boon by those involved.
This is just a small sampling of the long list of films from a co-op that had its modest start in 1974 when a small group of Winnipeg filmmakers banded together to share resources, support each other's work, and gather together on Sunday nights.
Specifically, it appears that a co-op shareholder's portion of the real estate taxes paid by the co-op housing corporation is not required to be added back by the shareholder as an alternative minimum tax (AMT) adjustment under Sec.