How Cooperatives Work: Businesses Owned by Members
Imagine walking into a neighborhood grocery store to buy fresh apples. In most standard stores, a single owner, a family, or outside investors own the company. Those owners make the rules, pay the expenses, and keep the profits. But in some communities, the shoppers walking down the aisles are actually the owners of the store. This unique type of business is called a cooperative, or a "co-op" for short.
A cooperative is an enterprise that is jointly owned and democratically controlled by the people who use its services. To understand how a co-op works, it helps to distinguish cooperative ownership from ordinary teamwork. When classmates work together on a group project, they cooperate by sharing tasks and helping each other finish an assignment. However, nobody legally owns the classroom, and the students do not run a business together. In a cooperative, the cooperation goes much deeper. Members buy a share to join, which gives them legal ownership, shared financial responsibility, and an equal voice in major decisions.
- enterprise:
- A business, company, or organized project.
- investors:
- People who provide money to a business in hopes of earning a profit.
- corporation:
- A large business or company recognized as a single legal entity.
- stockholders:
- People who own shares of a company and receive part of its profits.
- surplus:
- An extra amount of something, such as money left over after all costs are paid.
- guidelines:
- Rules or instructions that show how something should be done.
- compromise:
- An agreement reached when each side gives up part of what it originally wanted.
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Preview questions from this passageShowHide
- 1How does the ownership of a cooperative grocery store differ from a standard grocery store?
- 2Why does the author compare a cooperative to classmates working on a group project?
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About this explanatory article passage for Upper Elementary
“How Cooperatives Work: Businesses Owned by Members” is a explanatory article reading passage about Cooperatives, written for Upper Elementary. It takes about 3 minutes to read (487 words) and comes with an interactive quiz and a printable worksheet with comprehension questions and an answer key.