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 to start a co-operative?
FORMATION: 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
FORMATION: 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)
FORMATION: The Process Further
- 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.
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