A cooperative aims to provide the best possible service to its members and as long as possible. Unlike shareholders in conventional enterprises, cooperative members have equal voting rights regardless the amount of share capital subscribed (“one member, one vote”).
As in all types of cooperatives, surpluses are reinvested within the company and not used to remunerate shareholders (as it happens in conventional enterprises).
Surpluses are allocated for any or all of the following purposes:
- developing their cooperative, possibly by setting up reserves, a common property of the cooperative that cannot be divided during the lifetime of the enterprise and, in a number of countries, even after liquidation (this happens where reserves are made indivisible by law);
- benefiting members in proportion to their transactions with the cooperative: apart from reserves, a limited part of the annual surplus can be redistributed to members under the form of returns. The returns to worker-members in worker and social cooperatives are based on the work done (an adjustment of the of their remunerations). This financial instrument could be object of misunderstandings: actually, it is not a rent or a return on investment, but an adjustment of the price of the transactions between the cooperative and its members (the work done, precisely);
- supporting any other activities approved by the membership.