What type of entity is a cooperative?

A cooperative is best defined as an unincorporated entity owned by its users. The primary characteristic of a cooperative is that it is formed and operated for the mutual benefit of its members, who are also the users of its services or products. This ownership structure ensures that each member has a say in the management and decision-making processes, often on a one-member, one-vote basis, regardless of the amount of capital they have invested.

This structure distinguishes cooperatives from other business entities, which might have different ownership models such as corporations with shareholders, where the focus is primarily on profit maximization for shareholders. In a cooperative, the emphasis is placed on collaboration and community benefit rather than profit for outside investors.

Additionally, the attributes of partnerships without shared responsibilities or joint ventures with limited partners do not apply to cooperatives. Partnerships typically involve shared duties and liabilities among partners, while joint ventures often focus on specific projects and can include a mix of different entities. Cooperatives stand out due to their commitment to serving the needs of their members collaboratively.