Types of business structures in Alberta: Cooperatives

Types of business structures in Alberta: Cooperatives

A co-operative is owned and controlled by an association of members. It can be set up as a for-profit or as a not-for-profit organization. This is the least common form of business, but can be appropriate in situations where a group of individuals or businesses decide to pool their resources and provide access to common needs, such as the delivery of products or services, the sale of products or services, employment, and more.

Advantages:

  • Owned and controlled by its members
  • Democratic control (one member, one vote)
  • Limited liability
  • Profit distribution

Disadvantages:

  • Longer decision-making process
  • Participation of all members is required in order to succeed
  • Possible conflict between members
  • Extensive record keeping
  • Less incentive to invest additional capital