Co-operatives are organizations formed for the benefit of their members and local communities. They provide goods and services to members who are also customers, with profit-making not the main goal. Members buy shares and elect a board of management to govern activities. Co-operatives follow principles of open membership, democratic control, limited returns on shares and patronage refunds based on customer use. They also provide education and cooperate with other co-operatives.

1. Co-operatives
Features and Principles

3. Co-operatives Features
• The main features of these organisations are
– Formed for the benefit of their members and local communities
– Provide goods and services
– Profit making is not their main goal
– Owned by members
– Members buy a share in the business

4. Co-operatives Features
– Members are also customers
– An elected board of managements governs the activities of
the business
– Cooperatives are exempted from paying tax
– Yearly profits made are distributed among the members who
are also customers

5. Co-operatives Principles
• These organisations follow certain
principles which are contained in its bye
laws
• They principles include
– Open membership: membership is
open to anyone
– Democratic control: each member
has a say in the running of the
business

6. Co-operatives Principles
– Limited return on share capital:
small returns known as dividends
are given to members
– Patronage refund: a further returns
distribution to members based on
the amount or extent to which they
patronised the cooperative as a
customer
– Continuous education: cooperatives
provide education for its officers,
employees as well for members

7. Co-operatives Principles
– Cooperation among cooperatives: ideas
and experiences are shared with each
other locally, regionally and around the
world
– Compulsory capital: all cooperatives are
required to establish and maintain a
reserve fund from surpluses made each
year

9. Features and Principles