Skip to main content
Business LibreTexts

3.3: Participation in Ownership

  • Page ID
    4254
  • As members, customers who use the cooperative are expected to have ownership in the cooperative. In economic terms, this means that the equity of the cooperative is owned by the members. The easiest way to think about equity investment is direct investment through purchase of equity shares. As discussed in the next chapter, most members accumulate equity investment through the retention of patronage refunds or per unit retains in a year, which may be redeemed in the future subject to policies set by the board of directors. This is why customers are often called equity holders. The equity can only be properly valued upon liquidation, an outcome the cooperative members do not intend to have happen as long as the cooperative is achieving its economic purpose and satisfying its customers.