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A co-operative is a voluntary organisation, open to all persons able to use its services and willing to accept the responsibilities of membership. Co-operatives are democratic organisations controlled by their members, who actively participate in setting policies and making decisions.
In theory, a co-operative is a voluntary trading organisation concerned with economic welfare and not the maximisation of profits. It provides a means for the economically weak to achieve a countervailing power against the strong, whether a marketing co-operative, buyers co-operative or workers co-operative.
Each member has equal rights and obligations by virtue of membership, and not according to the financial stake in the co-operative. Although members may have a proprietary interest by holding share capital, capital appreciation or depreciation of equity shares as applies to companies is not harmonious with the co-operative principles.
Co-operatives provide a democratic alternative to companies. The members are more involved in the co-operative form of enterprise and have more control over the activities. Voting is based on membership (one member, one vote) and not the amount of shares held.
Active membership is a prerequisite for democratic control. Members are required to have some form of ongoing relationship in connection with a primary activity of the co-operative. The principle that no one member should benefit at the expense of other members encourages the distribution of surpluses based on patronage.
Who can form a co-operative?
A co-operative is a body corporate. It can be formed by five people or corporations and is registered under the Act.What does a co-op do for its members?
A registered co-operative's functions are included in its rules as activities. Those activities reflect the co-operative's involvement in areas such as primary production, manufacturing, trading, community or social activity.The advantages of co-operation
- Services - The co-operative form of enterprise is specially suited for meeting the collective needs of members, whether they are producers, consumers or workers.
- Democratic control - Each member has an equal say in co-operative matters. That is, one member one vote.
- Economies of scale - A co-operative can mean increased buying/selling power and reduced processing/handling cost.
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Information on copyright for the Office of Consumer and Business Affairs website is provided on behalf of South Australia Central http://www.sacentral.sa.gov.au/site/page.cfm?u=60
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Information on the disclaimer for the Office of Consumer and Business Affairs website is provided on behalf of South Australia Central http://www.sacentral.sa.gov.au/site/page.cfm?u=61
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The South Australian Office of Consumer and Business Affairs (OCBA) is committed to protecting your privacy and the confidentiality of your personal information, consistent with the South Australian Government's Information Privacy Principles. If you would like to view the full privacy statement please visit: http://www.ocba.sa.gov.au/privacy.html
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