Cooperative vs. Corporation — What's the Difference?

An organization that operates for the benefit of those using its services.

A company or group authorized to act as a single entity and recognized as such in law.

A legal entity with less emphasis on capital investment for profit.

An organization where stakeholders invest money for a financial return.

A business entity owned and democratically controlled by its members.

Designed to maximize shareholder wealth, often at large scales.

A model prioritizing service over profit, reflecting member interests.

Features a hierarchical structure with a board of directors and executive management.

A group of people acting together to meet common economic, social, and cultural needs.

Legally a separate entity from its owners, liable for its actions and debts.

A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned enterprise". Cooperatives are democratically owned by their members, with each member having one vote in electing the board of directors.

A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and recognized as such in law for certain purposes. Early incorporated entities were established by charter (i.e.

Done in cooperation with others

An entity such as a business, municipality, or organization, that involves more than one person but that has met the legal requirements to operate as a single person, so that it may enter into contracts and engage in transactions under its own identity.

Marked by willingness to cooperate; compliant

Such a body created for purposes of government. Also called body corporate.

Of, relating to, or formed as an enterprise or organization jointly owned or managed by those who use its facilities or services

A group of people combined into or acting as one body.

An enterprise or organization that is owned or managed jointly by those who use its facilities or services.

(Informal) A protruding abdominal region; a potbelly.

A building or complex in which the residents buy shares of stock in a building corporation and are given a lease to a specific apartment.

A body corporate, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members.

An apartment in such a building or complex.

The municipal governing body of a borough or city.

Ready to work with another person or in a team; ready to cooperate.

(historical) In Fascist Italy, a joint association of employers' and workers' representatives.

Involving cooperation between individuals or parties.

A protruding belly (perhaps a play on the word corpulence).

Relating to a cooperative or cooperatives.

A body politic or corporate, formed and authorized by law to act as a single person, and endowed by law with the capacity of succession; a society having the capacity of transacting business as an individual.

A type of company that is owned partially or wholly by its employees, customers or tenants.

A business firm whose articles of incorporation have been approved in some state

Operating jointly to the same end.

Slang terms for a paunch

A jointly owned commercial enterprise (usually organized by farmers or consumers) that produces and distributes goods and services and is run for the benefit of its owners

An association formed and operated for the benefit of those using it

Involving the joint activity of two or more;

Done with or working with others for a common purpose or benefit;

Willing to adjust to differences in order to obtain agreement

Voting in cooperatives is generally democratic, one member-one vote, regardless of investment size; in corporations, voting power is proportional to the number of shares owned.

A cooperative aims to serve the needs of its members, while a corporation focuses on maximizing shareholder profits.

Cooperatives distribute profits based on members’ contribution or usage, while corporations distribute based on investment.

Yes, a cooperative can decide to restructure itself as a corporation if its members agree to change the business model.

Cooperatives can issue shares, but these often do not represent equity as in corporations; instead, they might represent membership or a patronage refund.

Cooperatives can be more suitable for small business owners looking for mutual benefit and community focus.

Members of a cooperative can be considered shareholders, but their rights and the nature of their shares differ significantly from those in a corporation.

Yes, globally, corporations are more common than cooperatives due to their focus on profit maximization and scalability.

Cooperatives often enjoy specific tax advantages, such as not being taxed on income passed through to members, unlike corporations which are taxed on profits.

Cooperatives are more likely to prioritize community benefits as they exist to serve member needs.

Corporations enjoy limited liability for their owners, protecting personal assets from business liabilities.

Success in a cooperative is measured by member satisfaction and service delivery, while corporate success is often measured by profit and shareholder value.

Cooperatives operate democratically, often with less hierarchy, whereas corporations have a more rigid hierarchical structure.

In corporations, stakeholders with more shares have more influence, while in cooperatives, every member typically has equal say regardless of their financial contribution.

It depends on the local regulations, but generally, starting a cooperative can be less complex in terms of initial capital investment.