Cooperative Business Principles

Authors: Greg McKee, North Dakota State University, gregory.mckee@ndsu.edu, and Donald Frederick,
Rural Business-Cooperative Service, USDA

Cooperative Principles

Various writers over the past century have analyzed and observed the application of cooperative principles. Although slight differences in terminology appear on the various lists, three principles emerge as being widely recognized and practiced.

These principles are more than just good practices, policies or common sense. They distinguish a cooperative from other kinds of business. They are also recognized in state and …

Early Cooperatives

Authors: Greg McKee, North Dakota State University, gregory.mckee@ndsu.edu, and Donald Frederick,
Rural Business-Cooperative Service, USDA

In the early 1800s, cooperative businesses appeared on several fronts. In Britain, cooperatives were formed as a tool to deal with the depressed economic and social conditions related to the struggles with Napoleon and industrialization. In the United States, farmers began to process their milk into cheese on a cooperative basis in diverse places such as Goshen, Connecticut, and Lake Mills, Wisconsin.

Writers sometimes trace …

Duties of Members-Owners

Authors: Greg McKee, North Dakota State University, gregory.mckee@ndsu.edu, and Donald Frederick,
Rural Business-Cooperative Service, USDA

Members are the foundation of the cooperative. They organized it. Their needs are the reason for its existence. Their support, through patronage and capital investment, keeps it economically healthy. And their changing requirements shape the cooperative’s future.

Statutory law and the basic legal documents of a cooperative–articles of incorporation, bylaws and contracts between the cooperative and its members–give the members the tools to control the …

Basic Cooperative Principles

 

G. McKee.

Authors: Greg McKee, North Dakota State University, gregory.mckee@ndsu.edu, and Donald Frederick, Rural Business-Cooperative Service, USDA

Summary: This article provides a comprehensive summary of basic information on the cooperative way of organizing and operating a business. It covers the nature and extent of the use of cooperatives, compares cooperatives to other business structures, explains the roles various people play in a cooperative and discusses equity accumulation and income taxation. The purpose is to make available, in a