Co-Operative Company

A very simple definition of a co-operative would be to say it is a business where a group of people get together voluntary to address their common needs. 

A co-operative is a distinct form of enterprise that provides services and/or 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.

By registering a co-operative, you are creating a legal entity with certain powers to act on its own and certain responsibilities. Before registering a co-operative, take note of the important record-keeping that need to be done by a co-operative.

Before you decide to register a co-operative you need to have a formation meeting to decide on common purpose and agree to register a co-operative.  At the formation meeting the members have to decide on the form and type of co-operative. There must be at least five founding members (people) in order to form a primary co-operative.  Co-operatives have certain principles, and are expected to include certain values in all the work that it undertakes.

Co-operatives: Formation meeting

Before registering a co-operative, a formation meeting needs to be held with all persons that are interested in establishing the co-operative.

  • The Chairperson outlines the aims and objectives of the proposed co-operative
  • The Chairperson answers all the arising questions
  • The Chairperson invites everyone to join
  • Those interested should be given an application form for Membership to complete
  • The persons that have completed the above-mentioned application form decide how many persons will be required to manage the co-operative
  • The members will then elect the board of directors (the board of directors will be the management or steering committee of the co-operative)

Also discuss and agree on the following:

  • The Objectives (exactly what the co-operative will do)
  • The equipment, premises and other materials needed by the enterprise
  • Where will the premises (co-operative office) be located
  • How will the co-operative be financed? How will the funds be obtained?
  • Draw-up an initial business plan
  • Choose a name for the co-operative (propose and choose at least 3 alternative names).

Types of co-operatives

Co-operatives may take the form of primary, secondary or tertiary co-operatives. Types of Co-operatives include agricultural, marketing, housing, financial services, consumer, service, crafts and burial societies and so on.

  • Primary
If you form a co-operative made up of a group of five or more individual members and your purpose is to provide services and employment for one another and promote community development, then you will fall in the category of a primary co-operative.

  • Secondary
Secondary co-operatives are formed when two or more primary co-operatives come together because they are involved in similar activities and want to promote their services in the sector in which they are active.

  • Tertiary
Tertiary co-operatives are formed by secondary co-operatives which come together to promote the interests of their members to government bodies, the private sector and other stakeholders.