A co-operative is a type of business structure. A co-operative is owned by its members. The members control and own the co-operative. 

Co-operatives exist to benefit their members. They can be an effective business structures for creatives.

Unlike a company, members:

• have equal voting rights
• must actively contribute to the main activities of the co-operative. 

Member benefits are based on:

• the purpose of the co-operative
• its rules, and
• the activities it undertakes.

Depending on the co-operative, members may be individuals or businesses or a combination of both. 

Co-operatives may be made up of members who are:

• Customers — Members jointly purchase goods and services, lowering the cost of accessing the goods and services.
• Employees — The co-operative provides work for its members who are employees of the co-operative.
• Producers — Members can group together to process, market or distribute their goods and services or share other supply chain costs in reaching new markets.
• Multi-stakeholder — The governance of the co-operative involves representation from different stakeholders within the co-operative membership who may have different interests (e.g., creative producers and consumers).

Depending on the co-operative, members may be individuals or businesses.

Two types of co-operatives 

There are 2 types of co-operative structures. Understanding both may help with decisions about the best type of co-operative to set up or join. 

Both types of co-operatives require a minimum of 5 members. 

Before setting up a co-operative 

There are lots of things to think about in setting up a co-operative, including:

• the purpose of the co-operative
• the benefit the co-operative will provide to its members
• how members will use or contribute to the main activities of the co-operative
• the required skills and responsibilities members will need
• the financial and business planning for the co-operative, including the cost of registering and running the co-operative
• how directors of the co-operative will manage their legal duties
• the rules of the co-operative, including who can become a member
• applying to register the co-operative.

There are laws that apply to the setting up and running co-operatives. 
 

Laws, registrations and approvals

A co-operative needs to be registered in accordance with relevant laws. Each state and territory has their own legislation regulating co-operatives, but these are generally uniform laws under the Co-operatives National Law. 

Before registering your co-operative, you need approval from the relevant State or Territory authority. You will need approval for the co-operative’s:

• name
• draft rules
• disclosure statement (if required).

A co-operative may also need to hold a formation meeting before it can be registered.

Keep learning

• Australian Capital Territory – Co-operatives
• New South Wales – Co-operatives national law
• Northern Territory – Co-operatives
• Queensland – Co-operatives
• South Australia – Co-operatives
• Tasmania – Co-operatives
• Victoria – Consumer Affairs Victoria
• Western Australia – Consumer Protection - co-operatives
• Register your co-op - BCCM

Before joining a co-operative 

There are lots of things to think about before deciding whether to become a member of a co-operative. This includes:

• whether there are benefits to you or your business if you join the co-operative
• whether you can become a member under the co-operative’s rules
• understanding what the main activities of the co-operative are
• whether you can actively contribute to the activities of the co-operative
• whether you need to pay a membership fee or financially invest in a certain number of shares of the co-operative when joining.

You may consider joining either as an individual or as a business.