A cooperative is another form of incorporated body. There are two forms of cooperatives: trading and non-trading. In the case of trading cooperative, the members receive a share of any surplus funds or a return on their capital if the cooperative is wound up. In a non-trading cooperative the members receive only the original value of their shares if the cooperative is wound up. A cooperative has similar attributes to those of a company, including limited liability for its members, separate legal identity, perpetual succession, and the ability to hold and dispose of property. A cooperative is run by an elected board of directors who have the same duties as those of a company.

A cooperative runs on internationally agreed principles (Cooperatives Act 1996 (Vic)s. 6), notably that it exists to provide a service, rather than a profit, to its members, and all members have only one vote regardless of the size of their shareholding. The cooperative is thus an ideal body for a group of businesses looking to pool their resources to achieve economies of scale.

To view a web page containing an overview of this topic go to the Consumer Affairs Victoria website - www.consumer.vic.gov.au