Corporation vs. Cooperative
What is Difference between Corporation and Cooperative? Corporations and cooperatives are entities formed with the intention of doing business; however, they have very different structures. Below we show you the difference between corporation and cooperative.
Difference between Corporation and Cooperative
A cooperative is a non-profit organization, as it does not keep any of the benefits to itself. Distribute all profits among its members. You cannot even speak strictly of “profits”, as it usually provides other benefits and services to the members involved.
In a cooperative, a group of people meet voluntarily and cooperate for their mutual benefit, social, economic, cultural … The cooperative is operated for the benefit of those who use its service, each client is a member and each member is partly owner.
Cooperatives have as main objectives to meet the common needs and aspirations of their members, through the exchange of ownership and democratic decision-making. Each member shares responsibility, rights and profit (if any).
The leaders, as president, secretary and treasurer may be appointed by vote of the members.
A corporation is a legally separate entity owned by the shareholders. Actionists have legal rights and responsibilities. They can work with or without profit, but usually work with the intention of making a profit. The profits are first reinvested in the corporation and then in the shareholders in the form of dividends, as decided by the corporation president.
If something is not going well in the corporation, the fault does not fall directly on the shareholders; but on the board of directors. In conclusion, it can be said that cooperatives are analogous to Socialism, since they work for the common good; while corporations are analogous to Capitalism, since they almost always work for profit.
Key differences between Corporation and Cooperative
- Cooperatives are autonomous societies, while corporations are legally separate entities.
- Corporations are often for profit, while cooperatives seek the common benefit of each of their members.
- In cooperatives each member is responsible, while the corporations have primary responsibility for the board of directors.