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Northwest Cooperative
Development Center

Cooperative Starter Series
by Andrew McLeod
December, 2006

Types of Cooperatives
Cooperatives are owned, controlled and operated for the benefit of their members. Most
corporations are controlled based on the number of shares owned, and distribute profits based
on investment. But co-ops operate on the basis of one member, one vote, and return dividends
based on patronage. But cooperatives take a number of forms.
As you begin to create a cooperative, it is important to reach agreement about what you are
trying to do. The form of the cooperative will depend greatly on which problem it is primarily
trying to solve. Are you primarily concerned with job losses or lack of access to certain types of
goods? Do you suffer from poor prices for your produce, or poor market access?
Common Cooperative Forms

Consumer cooperatives are owned by the people who do business there. One
particularly common business is in retail food sales. In the U.S. today, this is usually a
natural foods store, but historically food cooperatives have tended to operate
supermarkets and small grocery stores. Other examples include the sporting goods
cooperative REI and Group Health Cooperative.

Worker cooperatives are businesses which are owned by the employees. This is one of
the most versatile of cooperative forms, and can be used even by a small group of
business partners running, for example, a bakery or bookstore. However, they can also
run large industrial operations, including some of the world’s largest co-ops. Another
common form of shared ownership is the employee stock ownership plan (ESOP),
although this structure often does not give democratic control to the employees.

Producer cooperatives are owned by people who produce the same type of goods. Such
cooperatives will often operate shared facilities for processing or distribution. These are
generally agricultural co-ops, including...

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