What is a co-operative?

Co-operatives are enterprises that are owned by members who are workers or consumers in the organisations.
They are businesses and organisations, which operate in all sectors of the community, and they carry on a wide range of activities.
Some co-operatives have only 2 or 3 members, others have hundreds.
Those who work within them and who wish to become members of them share responsibilities,
profits and opportunities according to a set of internationally agreed principles.

Co-operation sounds obvious, but is in fact a radical break with traditional forms of organisation.
Instead of hierarchy, everyone who depends on the enterprise has one vote on how it is managed.
These are the six internationally agreed co-operative principles:

Different types of co-operative

Worker or Producer Co-operatives - companies that are owned and controlled by the people who work in them.
Only those who work for the co-operative may become members of the co-operative.

Consumer or Retail Co-operatives - organisations owned and controlled by members who are consumers,
such as the Co-op supermarkets.

Housing Co-operatives - in which the tenants of a housing organisation collectively own and manage their housing.

Credit Unions - financial co-operatives whose members save together to provide a collective loan fund from which
each may borrow as the need arises.

Secondary Co-operatives - for example a group of artists who have come together perhaps to market their work.

Social firms

Social Firms employ individuals with disabilities and trade in the open market place.
All employees are involved in the running of the business and are paid market-rate wages for their work.

Social Firms UK goes on to further define them through the following statements:

Social Enterprises

Social Enterprises trade primarily to meet social objectives. Any profits they make are re-invested to either better fulfil those objectives, or for the benefit of the community they operate within. The DTI Social Enterprise Unit write:

"A social enterprise is, first and foremost, a business. That means it is engaged in some form of trading, but it trades primarily to support a social purpose. Like any business, it aims to generate surpluses, but it seeks to reinvest those surpluses principally in the business or in the community to enable it to deliver on its social objectives. It is, therefore, not simply a business driven by the need to maximise profit to shareholders or owners.

"Social enterprises are diverse and operate at many levels. They include local community enterprises, social firms, mutual organisations such as co-operatives, and large-scale organisations operating nationally or internationally. What they have in common is a commitment to meeting the social and financial double bottom line, with some adding a third - environmental.

"While some social enterprises start off as businesses, most are in transition from their beginnings as voluntary sector organisations, dependant largely on grants and volunteers, and working to increase traded income. A recent National Council for Voluntary Organisations' (NCVO) report said that up to 35% of general registered charity income is derived from trading activities.

"There is no single legal model for social enterprise. They include companies limited by guarantee, industrial and provident societies, and companies limited by shares. Some organisations are unincorporated and others are registered charities.

"Whatever the size, origin or nature of a social enterprise, it will be pursuing one or more of the following activities:

"Social enterprises embrace a variety of ways of working and the Government believes that successful social enterprises embody the following characteristics:

( 'Social Enterprise: a strategy for success")