A COOPERATIVE is an organization of individuals or businesses (“members”) that provides services that the members need. The goal of a cooperative is to provide services to its own members at a lower cost, and more efficiently, than if third parties were used. Unlike a corporation, members of a cooperative share equal control and ownership (“one member, one vote”).  Also unlike a corporation, a member’s interest in a cooperative is not saleable (however, an interest may be transferable, if allowed under the cooperatives articles of incorporation or bylaws).


In California, the Consumer Cooperative Corporation Law, enacted in 1982, regulates entities which operate as cooperatives. However, cooperatives may be organized as corporations, limited liability corporations (LLC), or even remain unregistered with the State.


The U.S. Tax Court has divided cooperatives into two categories: consumer and producer. In consumer cooperatives, the members are consumers, and the cooperative offers products to benefit the members. In producer cooperatives, the members are producers, and the product the members make is processed or marketed by the cooperative.


Cooperatives exist in many industries, including agricultural (e.g. Sunkist, Blue Diamond, Sun-Maid, various cannabis producers/retailers); utility (e.g. Palo Alto Park Mutual Water Company, Central Florida Electric Cooperative); housing; consumer goods (e.g. REI, ACE Hardware); education. Cooperatives can be established in nearly any industry, for any purpose, so long as they are organized and conduct business activities primarily for the benefit of its members, and not to make a profit.

ANAND LAW represents cooperatives and collectives of all types and sizes.  Our services include:


The information on this site is provided for informational purposes only and does not constitute legal advice. The information contained is not intended to be a complete recitation of the law, and is provided only as general information in an area—it may not contain all nuances of the law, and is not guaranteed to be correct or complete.  ANAND LAW PC (“ALPC”) expressly disclaims all liability in respect to actions taken or not taken based on the information contained in the FAQ.

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