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What is a co-op?

How does a co-operative differ from a private company?

Co-operatives place considerable emphasis on the ethos of member benefit, member participation and member loyalty.  Transparency openness and democratic accountability are also a part of the co-operative ethos.  If, in the organisation of the new venture, practical measures and policies can be put in place to cultivate and sustain these values, the co-operative corporate form should yield competitive advantages over use of a company structure.

It is perhaps in the area of identity and ownership that both corporate forms differ most.  Co-operatives are uniquely associated with the idea of democratic control and being open accountable businesses accessible to all those who are able to use their services and are willing to accept the responsibilities that being a co-operative entails.  Thus singular emphasis is put on the idea that those members who actively used the services of the co-operative are the persons who should be in control and should benefit from its services.  A corollary to this idea is that these members should also contribute to the financing of the business in proportion to the use they are making of it.

What is a co-op?

  • A co-operative is an enterprise which is owned and controlled by its user members and operates for the benefit of its user members.
Item Co-operative Private Company
Limited liability Yes (value of the share capital given by the individual members) Yes
Membership No Limit 100
Perpetual succession Yes Yes
Can issue share capital Yes Yes
Can reduce & expand share capital Yes Yes, but with strict criteria
Minimum number of members 7 individuals 1 or 2
Compliance burden
  • Conduct an annual audit.
  • Submit annual / triennial returns.
  • Conduct an annual audit.
  • Submit annual return.
  • Submit returns in regard to changes of directors and officers.
Back-up services See below - Section 8. ICOS Back-up services and co-operative development Separate legal fees and consultant costs
Power of nomination of shares Yes, up to €15,000 No
Taxation status Same for both co-operatives and private companies Same for both co-operatives and private companies
Are model rules available? Yes No