What is the Difference Between Corporation and Cooperatives?

The main difference between corporations and cooperatives lies in their ownership, control, and purpose. Here are the key differences between the two:

1. Ownership: Corporations are owned by shareholders or stockholders, while cooperatives are owned by their members or the people who use the services of the cooperative. Some cooperatives are employee-owned.
2. Purpose: Cooperatives exist to serve their members or meet a particular need of their members, such as mutual, social, cultural, and economic benefits. For-profit corporations, on the other hand, aim to increase the wealth of their shareholders.
3. Control: Corporations have a separate legal entity status, which means they have legal rights and liabilities distinct from their shareholders. Cooperatives, on the other hand, are democratically controlled by their members, who share equally in the responsibilities, profits, and duties associated with the cooperative. Decisions are made by each member who casts their vote, often using a popular vote to elect members, including the treasurer, secretary, and chairman.
4. Share Transfers: In a cooperative, shares aren't transferable, and members can withdraw their capital with proper notice given to the society. A corporation's shares can be bought, sold, or transferred, and shareholders may reside in many areas.
5. Closure of Share List: A cooperative's share list is closed once capital is issued, which means membership is restricted. Corporations, however, can issue new shares to raise capital and admit new shareholders.
6. Profit Distribution: Profits in corporations are returned to investor-owners based on the amount of their investment. In cooperatives, any profit is distributed to members in proportion to their use or 'patronage' of the cooperative's services.

In summary, corporations are owned by shareholders and focus on increasing shareholder wealth, while cooperatives are owned and democratically controlled by their members and aim to serve their members' needs and interests.

Comparative Table: Corporation vs Cooperatives

Here is a table comparing the differences between corporations and cooperatives:

Please note that this table provides a general overview and specific characteristics may vary depending on the type of corporation or cooperative, as well as the jurisdiction in which it operates.