What is a cooperative?

A cooperative is a company that is owned and controlled by its customers and operated for their benefit. (This compares with a private company that is stockholder owned and controlled.) Customers of Federated Co-ops gain ownership by doing business with the company and earning patronage. Patronage—the profit earned on the customers' business—is paid out partly in cash and partly in equities retained to operate the company. These equities are returned to the customer at a later date, as provided in the co-op's bylaws. Just one dollar of equity purchases a share of stock in the cooperative and a vote at the annual members meeting. Members elect the board of directors, who then hires the general manager of the cooperative.