What are cooperatives? Types and features of cooperatives

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

People have been united in groups since ancient times. Primitive hunters hunted together, farmers cultivated the fields. They did not know what cooperatives were. But their associations may well be attributed to the modern concept of a cooperative.

Cooperative - what is it?

The word "cooperative" comes from two Latin roots co - "together", "together" and opus - "work", "work". Therefore, answering the question of what cooperatives are, the definition generally accepted at the international level in a simplified version is translated as joint action, cooperation.

A cooperative is an association of individuals or legal entities for cooperation in various spheres of life. This includes the production and marketing of products, the construction and operation of buildings, the purchase and consumption of services and goods. A voluntary association is recognized as a legal entity that develops through self-financing and self-government.

On the basis of the equity participation of each member of the cooperative, cooperative property is created. The result of the work of the organization is profit, jointnew property. A peculiar feature of the cooperative is the participation of each member in the work. Specific goals are set before the association, a common fund is created. Each member of the cooperative contributes to it a share (share). Shareholders manage the cooperative, are responsible for possible risks, and distribute profits.

Main types of cooperatives

Types of cooperatives are distinguished according to various criteria. By type of activity, production and consumer cooperatives are distinguished. What are the differences between them? The production type is characterized by the obligatory labor participation of each member of the association in production activities for profit. It is allowed to replace labor participation with a share contribution. SHPK (agricultural production cooperatives) have become widespread.

In a consumer cooperative, such participation is optional. Such an association is created as a non-profit organization to meet the needs of shareholders. Consumer cooperatives include consumer societies (PO), agricultural cooperatives (SHK) and other associations of members-shareholders.

Consumer cooperatives

The type of consumer cooperatives is represented by numerous types. First of all - consumer societies. They form citizens and legal entities for the procurement of agricultural and other products, provide for the needs of shareholders in the sale of their product and the supply of necessary goods. Selpo and raipo have turned into a recognizable abbreviation, which speaks of theirdissemination and significance.

Agricultural cooperatives united people leading personal subsidiary plots and agricultural producers. Personal labor participation in this case is mandatory. SHK unites gardeners or gardeners, processes agricultural products or sells them, is engaged in supply, insurance or lending.

Activity in co-op name

The purpose of their creation or the activities of its members are clearly visible by the names of cooperatives. The garage-building cooperative unites the owners of garages, the construction cooperative organizes the management of real estate objects, the dacha-building cooperative unites the owners of dachas and summer cottages. For the construction of housing, there are housing construction and housing savings cooperatives. For lending, housing savings cooperatives (CPCs) are formed. They attract the savings of shareholders to provide interest-bearing loans, provide material assistance to farmers, agricultural enterprises and personal subsidiary farms. The functions of the association are performed on the basis of a voluntary agreement of the members-shareholders.

Other types of cooperatives

It is possible to subdivide existing cooperatives according to other criteria. What are the types of existing cooperatives? It is difficult to give an unambiguous answer, since the interweaving of features leads to simultaneous similarity with the characteristics of various species. Several large blocks stand out.

By legal status. Cooperatives are formal (legislative) and informal. Initially, associations did not fix relations according to the law. Today, cooperatives operate according to the laws adopted in the country, register charters with state bodies.

By position in the hierarchy of cooperatives. There are primary, secondary, tertiary and so on. They differ in the structure of education. Primary ones are formed by individuals, secondary ones are created from primary ones, and then incrementally.

By location. This sign characterizes city, district, rural and other cooperatives.

According to the time of occurrence. Associations old, based on primary foundations, traditional, based on customer satisfaction, modern, providing a research perspective.

By activity. Small, medium, large organizations are distinguished according to different criteria: the number of shareholders, the territory covered, the scale of economic activity.

According to the time of existence. Cooperatives are created for a specified period or indefinite.

By field of activity. Production cooperatives produce tangible and intangible goods. The former include agricultural and industrial products, services for the transportation and sale of goods, tailoring, and much more. The second are those that provide services, such as medical.

According to the social composition of members. Proletarian, handicraft and peasant cooperatives stand out. The first are aimed at improving the living conditions of members, the second and third join forcesmanufacturers for the production and marketing of products, issue loans and accept deposits. There were unions based on caste and all-class attributes.

According to the complexity of the functions performed. Organizations for simple purposes are aimed at managing the enterprise, unions with complex tasks organize joint work.

Goal of cooperation

Like any social movement, cooperatives are set to achieve a specific goal. What is so important that underlies the desired goal? Organizational, educational, economic, legal and educational activity promotes the idea of cooperation. A beneficial effect on the economic side of life is achieved through the mutual assistance of united people, joint obligations for the prosperity of the cooperative, raising the legal culture and encouraging civil initiative.

Combining signs of cooperatives

Along with the distinctive features, the cooperatives, the types and features of which are characterized, have common features. The nineteenth and twentieth centuries showed significant unifying signs. These include:

• personal member membership;
• understanding economic purpose;
• focus on mutual assistance;
• free entry and exit;
• members of the cooperative first of all become those in need;
• an unlimited number of shareholders can join the cooperative;
• unification occurs on the basis of management;
• members-shareholders participate in the management of the enterprise;
• componentselements are people.

Common features of modern cooperatives

The development of cooperation in the twenty-first century has led to the emergence of new commonalities. Changing the traditional signs did not change the essence.

Main feature: only cooperatives are characterized by the combination of economic and social activities. Performing a successful economic function, cooperatives (their types of formation may be different) have a beneficial effect on the social status of their members.

Additional feature: joint ownership of property. The formation of common property occurs at the expense of entrance fees and additional contributions. The entrance fee is non-refundable, it is spent on the creation of the material base of the association. An additional share is paid at will or in accordance with the provision prescribed in the charter. Both types are considered returnable. Profit is calculated as the difference between the income and expenses of the cooperative. It belongs to shareholders who distribute it at the general meeting. Losses are considered total.

An important common feature is demonstrated in the joint financial responsibility of all members for the results of economic activity. In case of bankruptcy of the association and lack of common funds, the funds of shareholders are attracted to satisfy the claims of creditors. With limited liability, the shareholder pays a share contribution or an amount that is a multiple of its size. Unlimited liability requires the members of the cooperative to be responsible with their property for the resultshis activities.

Another sign is democratic beginnings. Democracy in the management of the cooperative is manifested in the fact that only the general meeting of the members-shareholders has the functions of the supreme governing body. Intermediate structural units are elected at the meeting and report to it. The equality of members of the cooperative lies in the possession of one vote, regardless of the number of shares.

So, let's sum up what cooperatives are. These are voluntary associations of citizens united on an autonomous and democratic basis to meet their needs in the economic, social and cultural spheres. The basis of economic activity is the joint ownership of the enterprise.

History of cooperation in Europe

The first associations in the classical sense of what cooperatives are, arose in the middle of the nineteenth century in England. The experience of the weavers of 1830 failed. In 1844, their second attempt was successful. Twenty-eight weavers teamed up to create a shop that provided shareholders with food at discounted prices. In 1949 the membership increased to nine hundred. Following a successful experience, an insurance company, a cooperative of industrialists, and a mutual aid society arose. In the UK, consumer cooperatives unite seven million people into thousands of unions. They supply consumers with clothing and groceries, offer household goods and services, satisfy the need for legal and medical services. Europeans understand what cooperatives are for the well-being of the country and each of its inhabitants. ATSwedish consumer cooperatives have proven themselves in housing construction, agricultural development. In Denmark, half of the adult population are united in 2,000 consumer cooperatives. Cooperation spread among farmers. Milk production, meat processing and more belong to cooperatives.

Cooperation in the USA

Following the passage of the Cooperatives Act in 1926, farmers' associations such as cooperatives became widespread in the United States. The Service of Farmers' Cooperatives explained to farmers what cooperation is and what advantages it provides. The beginning of the twenty-first century confirmed the vitality of the cooperative movement. Today, half of the farmers are part of cooperatives.

Cooperatives in Russia

The history of the development of the cooperative movement in Russia begins in the nineteenth century. For the first time, the Luginin brothers from the Kostroma region created a loan and credit partnership in 1865. By the beginning of the twentieth century, Russia had taken a leading position in the world in terms of the number of cooperatives and the number of their members. The events of 1917 interrupted the further development of cooperation. The revival began in the nineties. In 1992, the law "On consumer cooperation in Russia" was adopted, in 1996 - the law "On the activities of production cooperatives in the Russian Federation." In addition to these federal laws, the activities of cooperatives are regulated by the Civil Code of the Russian Federation. Each cooperative develops and adopts a charter at the general meeting, which sets out the main regulators of the organization's activities (share contribution, participation of members, their responsibility andother). Today in Russia the number of cooperatives, the number of participants continues to increase.

Prospects for the development of the cooperative movement

The twenty-first century continues the established traditions. The concept and types of cooperatives have changed, but their essence has remained the same. Of the more than seventy thousand modern cooperatives, one hundred and twenty types can be distinguished. Species diversity indicates that the cooperatives have justified the hopes placed on them to improve the life indicators of cooperative members in different socio-economic conditions.