Difference Between Cooperatives And Corporations. In this article, you will come to know about what are cooperatives, what are corporations, what is the main difference between cooperatives and corporations, and a comparison between cooperatives vs corporations.
Both the terms cooperatives and corporations are related to business. They are formed with the intention of doing business. Both have different meanings. Let us discuss the difference between cooperatives and corporations.
What Is The Main Difference Between Cooperatives And Corporations?
The main difference between cooperatives and corporations is that the:
-Cooperatives are referred to the group of people that cooperate with each other for their mutual, social, and cultural benefit and profit.
-Corporations refers to a separate legal entity. It is developed by various shareholders on legal rights and liabilities. It may work for profit or not for profit.
What Are Cooperatives?
Cooperatives is a non-profit organization. It does not keep the profit for itself, rather distributes all profit and benefits to its members. Cooperatives are referred to as the group of people that cooperate with each other for their mutual, social, and cultural benefit and profit. Every customer is a member and a part-owner in the cooperatives. The members of cooperatives build a better world through cooperation.
Cooperatives help their members to meet their needs by sharing ownership and democratic decision making. All the profit and non-profit work is done by the mutual and equal cooperation, duties, and responsibilities
What Are Corporations?
Corporation refers to a separate legal entity. It is developed by various shareholders on legal rights and liabilities. It may work for profit or not for profit. It is developed for making profits. There are shareholders that invest in the corporations. The invested profit is then divided between the stockholders as per the directions of the corporation’s president. If a corporation fails to make a profit from the invested money, the shareholders are not responsible for it. Other than shareholders, the board of directors are responsible for this.
Comparison Between Cooperatives Vs Corporations:
-Cooperatives is a group of people that voluntarily cooperate for their mutual benefit.
-Corporation is a legal organization that is separate from its owners.
-Cooperatives have customers, employees and residents as their members.
-Corporations have stockholders as their members.
-Cooperatives are formed by the people acting together and meeting their common needs.
-Corporations are formed under the laws with the Articles of Incorporation.
-Cooperatives are run by their members democratically and elected members.
-Corporations are un by a board of directors.
featured image source: istockphoto.com
Also check: Difference Between Dual And Duel