Co-operatives are enterprises that are owned by members. They are businesses which operate in all sectors of the business community, and they carry on a wide range of activities. Some co-operatives have only 2 or 3 members, others have hundreds.  Those who work within them and who wish to become members of them share responsibilities, profits and opportunities according to a set of internationally agreed principles.

These are the seven co-operative principles:

1. Voluntary and open membership - all those who qualify for membership must be allowed to join.

2. Democratic member control - one member one vote.

3. Member economic participation - members contribute equitably to and democratically control the capital of their co-operative, in order to prevent someone with a greater financial stake having more control. Members will usually receive a limited return, if any, on capital subscribed.

4. Autonomy and independence - if they enter into agreements with other organisations, it should be on terms that protect the democratic control of the organisation by members and protects the autonomy of the co-operative.

5. Education, training and information of members in the co-operative principles and practice.

6. Co-operation amongst co-operatives.

7. Concern for the community.

Worker or Producer Co-operatives - companies that are owned and controlled by the people who work in them. While they may employ staff who are not members of the co-op, only those who work for the co-op may become members of the co-op.

Consumer or Retail Co-operatives - organisations owned and controlled by members who are consumers, such as the Co-operative Group supermarkets are counted among this group.

Housing Co-operatives - in which the tenants of a housing organisation collectively own and manage their housing.

Credit Unions - financial co-operatives whose members save together to provide a collective loan fund from which each may borrow as the need arises.

Agricultural Co-operatives - organisations of farmers and growers who come together to increase their effectiveness in buying stock and equipment and in marketing and distributing produce.

Co-operative Consortia / Secondary Co-operatives - like agricultural co-operatives, collections of small businesses that have come together to buy or use services that would be beyond the reach of each as individuals.  A co-op consortium would not trade directly with the public, but would provide services to its members.

Care Co-operatives - a recent form of co-operative development which groups together care workers and often also users of that care so that they manage the provision of care services, usually under contract from a local authority.

What is a social firm?

Social Firms employ individuals with disabilities and trade in the open market place. All employees are involved in the running of the business and are paid market-rate wages for their work.

Social Firms UK goes on to further define them through the following statements:

• Social Firms are committed to the social and economic integration of disabled people through employment. A key means to this end is economic empowerment through the payment of market wages to all employees.

• Social Firms are supportive workplaces where the working environment is one that provides all employees with support, opportunity and meaningful work.

• Social Firms are businesses that combine a market orientation and a social mission ("businesses that support" rather than "projects that trade")

taken from Social Firms UK Progress Report 2002

What is a social enterprise?

Social Enterprises trade primarily to meet social objectives. Any profits they make are re-invested to either better fulfill those objectives, or for the benefit of the community they operate within.

The Social Enterprise Unit of the dti defines them in more detail:

"A social enterprise is, first and foremost, a business. That means it is engaged in some form of trading, but it trades primarily to support a social purpose. Like any business, it aims to generate surpluses, but it seeks to reinvest those surpluses principally in the business or in the community to enable it to deliver on its social objectives. It is, therefore, not simply a business driven by the need to maximise profit to shareholders or owners.

"Social enterprises are diverse and operate at many levels. They include local community enterprises, social firms, mutual organisations such as co-operatives, and large-scale organisations operating nationally or internationally. What they have in common is a commitment to meeting the social and financial double bottom line, with some adding a third - environmental.

"While some social enterprises start off as businesses, most are in transition from their beginnings as voluntary sector organisations, dependant largely on grants and volunteers, and working to increase traded income. A recent National Council for Voluntary Organisations' (NCVO) report said that up to 35% of general registered charity income is derived from trading activities.

"There is no single legal model for social enterprise. They include companies limited by guarantee, industrial and provident societies, and companies limited by shares. Some organisations are unincorporated and others are registered charities.

"Whatever the size, origin or nature of a social enterprise, it will be pursuing one or more of the following activities:

• offering social or environmental goods and services;

• trading to provide (or cross-subsidise) social or environmental goods or services; and

• using processes or ways of working that have a significant social benefit

"Social enterprises embrace a variety of ways of working and the Government believes that successful social enterprises embody the following characteristics:

• gaining independence and autonomy through trading;

• entrepreneurial, innovative, risk taking behaviour;

• flexible and adaptable practices;

• customers and community focus;

• stakeholder engagement;

• democratic and participative management;

• delivering socially and/or environmentally as well as financially; and

• financially viable, gaining their income from selling goods and services."

taken from 'Social Enterprise: a strategy for success"