THE

FUNDAMENTALS OF
COOPERATIVE
THE COOPERATIVE DIFFERENCE
COURSE OUTLINE:
• Comparison of Cooperatives with other business
enterprises.

OBJECTIVES:
• To differentiate cooperatives from other business models.
 WHAT IS THE DIFFERENCE

COOPERATIVES WITH
OTHER BUSINESS ENTEPRISES?
WHAT IS THE DIFFERENCE
COOPERATIVES WITH OTHER BUSINESS ENTEPRISES?

OTHER BUSINESS
COOPERATIVES
ENTERPRISE
A cooperative is an autonomous the primary focus of a business is to
association of persons united voluntarily generate revenue and maximize profits
to meet their common economic, social, for its owners or shareholders, rather
and cultural needs and aspirations than solely serving as a means of
through a jointly owned and providing jobs or livelihoods.
democratically controlled enterprise.
 BASIS OF
COMPARISON
PURPOSE
01 06 DECISION MAKING

GUIDING PRINCIPLES
02 07 VOTING RIGHTS

GRANT OF JURIDICAL
PERSONALITY 03 08 TAXABILITY

REQUIRED NUMBER OF ALLOCATION OF NET

MEMBERS 04 09 SURPLUS/INCOME

CAPITAL CONTRIBUTION EFFECT OF DEATH

05 10 OF MEMBER
BASIS OF COMPARISON

PURPOSE 01

OTHER BUSINESS COOPERATIVES

ENTERPRISE
SERVICE OVER
PROFIT PROFIT
BASIS OF COMPARISON

GUIDING PRINCIPLES 02

OTHER BUSINESS COOPERATIVES

ENTERPRISE
COOPERATIVE
BUSINESS VALUES &
PRINCIPLES PRINCIPLES
BASIS OF COMPARISON

GRANT OF JURIDICAL
GRANT OF JURIDICAL
PERSONALITY
PERSONALITY 03

OTHER BUSINESS COOPERATIVES

ENTERPRISE
Single Prop.- Must be registered MUST BE
with DTI registered
Partnership/Corporation- May be
registered with SEC with CDA
BASIS OF COMPARISON

REQUIRED NUMBER OF
GRANT OF JURIDICAL
MEMBERS
PERSONALITY 04

OTHER BUSINESS COOPERATIVES

ENTERPRISE
Atleast 15
Single Prop.- ONE natural persons
Partnership- Atleast 2 (for primaries)
Corporation- Atleast 1
BASIS OF COMPARISON

GRANT OFCAPITAL
JURIDICAL
CONTRIBUTION
PERSONALITY 05

OTHER BUSINESS COOPERATIVES

ENTERPRISE
Single Prop.- owner provides the capital Members contribute
capital up to 10% of
Partnership- partners provide capital Subscribed Capital
Corporation- Shareholders purchase stocks
BASIS OF COMPARISON

GRANT OF JURIDICAL
DECISION
PERSONALITY MAKING
06

OTHER BUSINESS COOPERATIVES

ENTERPRISE
General Assembly makes
Single Prop.- owner decides final decision, except those
Partnership- partners make collective decision delegated to the BOD
Corporation- board makes
final decision
BASIS OF COMPARISON

GRANT OF JURIDICAL
VOTING
PERSONALITYRIGHTS
07

OTHER BUSINESS COOPERATIVES

ENTERPRISE
One Member,
Single Prop.- No vote required One Vote. No to proxy
Partnership- vote proportional to interest voting in primary
Corporation- vote proportional cooperatives
to interest;
proxy voting is allowed
BASIS OF COMPARISON

GRANT OF JURIDICAL
TAXABILITY
PERSONALITY 08

OTHER BUSINESS COOPERATIVES

ENTERPRISE
Single Prop.- income is taxable Net surplus is not
Partnership- Business income considered profit,
taxable. Partners pay tax on share hence, tax exempt.
as partners
Corporation- Profit is taxable,
stockholders pay
tax on dividends
received
BASIS OF COMPARISON

GRANT OF JURIDICAL
ALLOCATION OF NET
PERSONALITY
SURPLUS/INCOME 09

OTHER BUSINESS COOPERATIVES

ENTERPRISE
Statutory Funds; Members
Single Prop.- owner gets the profit Share In The Surplus Based
Partnership- partners gets profits based on profit- On Capital And Patronage
sharing agreement.
Corporation- shareholders receive profit based on
sharegholdings
BASIS OF COMPARISON

GRANT OF JURIDICAL
EFFECT OF DEATH
PERSONALITY
OF MEMBER 10

OTHER BUSINESS COOPERATIVES

ENTERPRISE
Cooperative continues,
Single Prop.- heirs become member if
End of business operation unless an
heir/somebody takes over qualified
Partnership- Partnership is
automatically dissolved.
Corporation- continues,
heirs/transferees inherit shares
Cooperatives are business
organizations
• OF the members as owners ,
• BY the members as managers,
• FOR the members as customers ,
• TO achieve their social,
economic and cultural needs and
aspirations.
THANK YOU!