There are two types of cooperative:
Trading cooperatives have share capital and they may distribute profits.
Non-trading cooperatives which do not distribute profits or surpluses to members; they may or may not have share capital.                      

A registered cooperative's functions and primary activities are included in its rules, which are a legal requirement. Those activities reflect the cooperative's involvement in areas such as primary production, manufacturing, trading, community or social activity.

What is a Trading Cooperative ?

A cooperative is an entity voluntarily owned and controlled by the people for whom it was established and who use its services. It may be formed for the provision of goods or services to its members or for the marketing of members' products, goods and services to the general public.

A cooperative is a corporation. It can be formed by five or more people or corporations and is registered under the Cooperatives Act 1997

A cooperative can deliver several advantages:

  • The cooperative form of enterprise is specially suited for meeting the collective needs of members, whether they are producers, consumers or workers.
  • Each member has an equal say in cooperative matters through the principle of one member, one vote.
  • A cooperative can deliver economies of scale by increased buying or selling power and reduced processing or handling costs.
  • There are also taxation benefits available.
Cooperatives are different from other business structures through seven principles of cooperation which are central to the operation and establishment of cooperatives:
  • Open and voluntary membership - to all willing to accept the responsibilities of membership; the member service criterion provides for a more localised focus of activity, perhaps explaining why there is a low failure rate for cooperatives.
  • Democratic member control - active cooperative members each have one vote.
  • Limited interest (if any) paid on shares - this ensures that the operations are focused on servicing the members' needs. In the case of a trading cooperative, surpluses are normally distributed to members in proportion to business done with the cooperative.
  • Autonomy and Independence - cooperatives are autonomous, self-help organisations controlled by their members.
  • Education, training and information - cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives.
  • Cooperation between cooperatives - at a local, state, national and international level to enhance the cooperative movement.
  • Concern for community - cooperatives work for the sustainable development of their communities through policies accepted by their members.

Further information in Queensland is available from: Office of Fair Trading:Department of Employment,Economic Development and Innovation

Kanjini Co-Op is a Trading Cooperative and as such is legally required to have a set of rules.

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What is a Cooperative?