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 ?
"If we are to protect the sports we all love then we must continue to work openly and co-operatively, and the agreement is a clear example of just that."
"The two organizations worked co-operatively in 2009 when U.S.
The project, which is funded by the Welsh Government and the European Union, supports the centre's mission to develop sustainable businesses and strong inclusive communities by working co-operatively.
"We also are working co-operatively with other nations through the United Nations Convention on the Law of the Sea to establish various extended claims through the Arctic continental shelf and that work continues peacefully," he added.
South Korea will let China view the evidence and seeks to resolve the matter co-operatively, the official said.
The game is apparently built around "four player co-op online play", but Codemasters insists the game will be enjoyed in single-player modes as well: "whether playing solo or co-operatively, players will experience the tense and exhilarating tactical gameplay the series is famed for, expressed through a range of gameplay enhancements and an exciting new setting and narrative." The game will also feature a brand new XP reward system that will allow them to customise and upgrade their weapons and equipment, and, new player class roles will also be available to provide fighting styles that suit each type of user.
Under the agreement, the FTA and TfL have agreed to work co-operatively to promote the uptake of cycling as a safe and sustainable mode of travel and to promote sustainable and efficient logistics
"Contrary to one media report, there is no conflict whatsoever with the Egyptian Government; indeed we are working co-operatively and constructively with the Egyptian Government and the port authorities to immediately solve the issue.
"With so many issues affecting both WTTC and US Travel," said Roger Dow, the US association's president and CEO, "I am pleased that our two organisations, which share several of the same travel industry leaders as members, will work more co-operatively in sharing communications and research, as well as engaging more closely on future emergency preparedness issues to minimise the impact of future crises on travel and tourism.
Coventry City Council's Victoria Starritt, responsible extended services in the north west of the city said: "It's an excellent example of how a school can work co-operatively and in partnership with other schools and partners to offer opportunities for families and their communities."
"Since the threat of a tube strike started last week we have worked very co-operatively with all those parties involved," Watmore added.
"Our 2008 mission is to facilitate the growth and change reflecting the increasing economic, political and social leadership of diverse women, working co-operatively to leverage their aspirations, capabilities and opportunities."