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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 ?
Qantas has worked co-operatively with its employees in recent years and we would hope that this contingency training would not be required.
It said it had hoped to build up a substantial relationship with 3Com and that there is still a possibility that the two companies will work co-operatively on utilizing the 3Com Host Bus Adapter.
Though class divisions were much stronger then, Judy O'Grady came gently and co-operatively towards new partnership and played a good part in resolving the sex war.
The competition is designed to work co-operatively with Edison's Welcome Home and The Gas Co.
It enables employees to leverage their strengths in the workplace, work co-operatively and feel valued.
We have always said that we will work co-operatively, purposefully and methodically with other parties to pass our Budget measures, he said.
Cabinet member for community development, co-operatives and social enterprise, Councillor Peter Bradbury, said: "This is a great example of what can be achieved in Cardiff when the city council, local organisations and communities within the city work co-operatively.
Buamim met representatives of client companies and expressed his desire to work co-operatively and offered all necessary assistance for fuelling business growth.
Out now THERE are few things that Japanese gamers with hand-held consoles love more than meeting up and hunting monsters co-operatively.
A council spokesman said: "Euticals is working co-operatively with the agencies to finalise its plan to safely treat, and then remove from site the isosorbide dinitrate.
Alternatively, four mates can play alongside each other co-operatively.
The game plays out through the Lego franchise's endearing, amusing and perfectly pitched action formula, with a fab standalone storyline that also offers up the chance to complete it co-operatively with another one of the heroes at your disposal.