Definition
The International Co-operative Alliance defines a co-operative as -

'an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise.'

In other words, co-ops are in business to provide what their members want, and they are controlled democratically by their members.

Co-ops compared to plcs

• A co-operative is set up to meet mutual needs whereas a plc exists to make a profit from being able to satisfy a need that exists.
• A co-operative belongs to its members. A plc belongs to its shareholders/ investors.
• A co-operative is run democratically on the basis of one member, one vote.
• In a plc the number of shares owned determines votes.
• Co-operatives share their profits with their members (the dividend) whereas plcs return profits to the holders of their capital.
• Shares that members have in a co-operative are of fixed value and withdrawable. Shares are non-withdrawable in plcs and their value fluctuates.
• Co-ops are constituted under the Industrial and Provident Societies Act whereas plcs are constituted under company law.