While most small businesses are started by individuals for the benefit of those individuals and their families, co-operatives are started by groups of people, or in some cases entire communities for the benefit of everyone involved. If Co-operatives are set up in the right way, they can play a major role in providing jobs and fighting poverty. In this edition we will guide you through the steps of establishing a Co-operative. For your benefit we have divided all of the steps into modules for easy reference. Included are resources that will assist you with additional research.
The following training is conducted by Arise South Africa. If you are looking to establish a co-operative in a different country than the Republic of South Africa please use this module as a guideline only and refer to your country’s rules and regulations on establishing a co-operative.
What is a co-operative?
A co-operative is an autonomous association of persons united voluntarily to meet their mutual economic, social and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise organised and operated on co-operative principles.
The 7 co-operative principles
Voluntary and open membership
Autonomy and Independence
Education, Training and Information
Co-operation among co-operatives
Social aims alongside economic aims
What are the characteristics of a co-operativeß
It is an association of persons
Membership is voluntary
Mutual or common economic, social and cultural needs
Jointly owned and democratically controlled by the member
Operate according to co-operative principles
Based on trust and guided by the Co-operatives Act (South Africa) as well as the co-operatives constitution
Members must enhance their entrepreneurial capabilities and skills
They must take full control of the business
Governance and management especially financial management and control is important to the success of the business
What are the benefits of a co-operative?
A co-operative business assists persons to achieve in a group what they would most likely not be able to achieve on their own
It provides access to needed services
By pooling resources members pay less for input, marketing, distribution and selling of produce
Income for individuals, who previously did not derive any income
Social impact ; the improvement of the quality of life for members
Able to contribute to the economy of the country
How to start a co-operative?
Identify the co-operative Members
To find out whether there is enough interest in the proposed project
If there are enough people who are interested, you should :
Hold a formation meeting
Present the aim of the formation meeting
Identify the aims and objectives of the co-operative (exactly what the co-operative wants to do)
Once the members have been identify, the group will choose the Directors that will steer the process
The members will each fill out an membership application form.
Formation: The process further
Completion of the registration forms and constitution
Studying the Co-operatives ACT 14, 2005 (South Africa)
Filing documents with the Registrar of Co-operatives for consideration (South Africa)
Certificate of Registration acquired
Registered constitution acquired
How to register the co-operative (South Africa)
Go to the CIPC offices and they will assist you with the registration process
Make sure that you have the following details at had
Address of the Co-operative ( physical as well as postal)
Landline or cell phone number
On average it takes 2 to 6 weeks for the registration process to be completed, if all forms and the constitution are completed correctly.
When the co-operative is registered, the Secretary will receive the certificate of registration and the registered constitution, through the post.