For the outsider, the operation of a cooperative is related for the operation of a for-profit corporation. In actual fact, the typical consumer wouldn't be capable of distinguish a cooperative organization from a for-profit corporation.
By way of example, from a legal point of view, cooperatives (like corporations) hold frequent meetings on the board plus the members, and they elect their officers and board members. From the standpoint of operations, goods are bought and sold, the cooperative enters into contracts and may be sued, and it performs other functions just like a corporation. In actual fact, unless some distinct legal provision exists, cooperatives and their officers, directors, and agents do not delight in the identical sorts of state and federal exemptions from liabilities which might be bestowed on charitable nonprofits.
A significant distinguishing characteristic among corporations and cooperatives is the fact that a cooperative requires to help keep meticulous records of its dealings with its members in order that it may accurately distribute its margin just after the close of every single fiscal year.
