A co-operative as a business entity
1. What Is A Co-Operative?
A co-operative is an independent association of persons who join forces to meet their economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise, organised and operated on co-operative principles.
The co-operative provides services and products to its members. Profits, known as surpluses in a co-operative, are divided among members in relation to the amount of the business each member did with the co-operative.
2. What Are The Characteristics Of A Co-Operative?
It is an association of persons
Membership is voluntary
Mutual or common economic, social and cultural needs
Jointly owned and democratically controlled by the member
Operate according to Co-operative principles
3. What Are The Principles Of The Co-Operatives?
Democratic member control
Voluntary and open membership
Autonomy and independence
Educational training and information
Co-operation among co-operatives
Concern for community
Member economic participation
4. What Are The Benefits?
Achieve what one cannot achieve on his own
Provides easy access to needed services
By pooling resources, each member pays less for inputs, marketing, distribution and selling of produce
Process products if necessary
5. How Do You Start A Co-Operative?
There are three main steps in the formation of a co-operative.
Hold a meeting to establish if there is enough interest in the proposed project.
The Chairperson reads part of the business plan which outlines the aims and objectives, as well as the business prospects to all present in the formation meeting
Answer all the questions arising
Invite everybody to join
Those interested should be given an Application Form For Membership to complete
Those that completed the Application Forms For Membership will then choose the Board of Directors
The co-operative is now legally formed
Have a formation meeting
Identify the objectives (Exactly what the co-operative wants to do)
Equipment, buildings, and other materials needed in the enterprise
Financial requirements (How are you going to obtain this?)
Premises (Where will the co-operative be located)
Choose a steering committee for the purpose of driving the formation process further
Draw-up an initial plan of operation
Obtain a constitution (statute) which will lay down the procedures to be followed by the co-operative in executing its aims and objectives. (see bottom of this page for models that could be used)
Furthering the process
First meeting of the board
Registration process
Completion of registration forms & constitution
Filing documents with the Registrar of Co-operatives for consideration
Certificate of Registration
Registered constitution
Start operating!
6. Who Can Be A Member?
Anyone who has completed a membership application form
Anyone who shares the same interests in the group (co-operative)
Any person above the age of eighteen
There are various forms that have to be lodged with the Companies and Intellectual Property Commission (CIPC) to register your Co-operative. For this information you can visit the Co-operatives category on the CIPC website.