4.4 Specialized Forms of Business Organization

Cooperatives

When you eat a Sunkist orange or spread Land O’Lakes butter on your toast, you are consuming foods produced by cooperatives. A cooperative is a legal entity with several corporate features, such as limited liability, an unlimited life span, an elected board of directors, and an administrative staff. Member-owners pay annual fees to the cooperative and share in the profits, which are distributed to members in proportion to their contributions. Because they do not retain any profits, cooperatives are not subject to taxes.

There are currently 3 million cooperatives with one billion members employing nearly 300 million employees in more than 145 countries worldwide. Cooperatives operate in every industry, including agriculture, education, financial services, food retail, healthcare, insurance, and utilities. They range in size from large enterprises such as Fortune 500 companies to small local storefronts and fall into the following categories: consumer and purchasing, financial, producer and processing, housing, and worker.⁴

Cooperatives are autonomous businesses owned and democratically controlled by their members—the people who buy their goods or use their services—not by investors. Unlike investor-owned businesses, cooperatives are organized solely to meet the needs of the member-owners, not to accumulate capital for investors. As democratically controlled businesses, many cooperatives practice the principle of “one member, one vote,” providing members with equal control over the cooperative.

There are two types of cooperatives. Buyer cooperatives combine members’ purchasing power. Pooling buying power and buying in volume increases purchasing power and efficiency, resulting in lower prices. At the end of the year, members get shares of the profits based on how much they bought. Obtaining discounts to lower costs gives the corner Ace Hardware store the chance to survive against retailing giants such as Menards and Home Depot.

Founded in 1924, Ace Hardware is one of the nation’s largest cooperatives and is wholly owned by its independent hardware retailer members in stores spanning all 50 states and 70 countries. In August 2017, Ace opened its 5,000th store. In the second quarter of 2025, the company reported revenues of $2.8 billion, which was an increase of 3.9 percent from the second quarter of 2024. The net income for the second quarter of 2025 was $119.1 million, an increase of $4.7 million (4.1 percent) from the second quarter of 2024. Ace Hardware's revenue has nearly doubled since the second quarter of 2017, showing significant growth during the time period.⁵

Seller cooperatives are popular in agriculture, wherein individual producers join to compete more effectively with large producers. Member dues support market development, national advertising, and other business activities. In addition to Sunkist and Land O’Lakes, other familiar cooperatives are Calavo (avocados), Ocean Spray (cranberries and juices), and Blue Diamond (nuts). CHS Inc., the largest cooperative in the United States, sells energy, supply, food, and grain.

Cooperatives empower people to improve their quality of life and enhance their economic opportunities through self-help. Throughout the world, cooperatives are providing members with credit and financial services, energy, consumer goods, affordable housing, telecommunications, and other services that would not otherwise be available to them. There are several principles that cooperatives should follow according to the National Cooperative Business Association CLUSA International. They include (1) voluntary and open membership, which means that cooperatives are open to all people to use their services; (2) democratic member control, which means that organizations are controlled by their members; (3) members’ economic participation, which means that members contribute equally to the capital of the cooperative; (4) autonomy and independence, which means cooperatives are self-help organizations controlled by their members; (5) education, training, and information, which means that cooperatives provide education and training for their members while also electing representatives, managers, and employees; (6) cooperation among cooperatives, which means that individual cooperatives work together for the betterment of all members; and (7) concern for community, which means the cooperatives' work takes into consideration both local and global community concerns.⁶

Joint Ventures

In a joint venture, two or more companies form an alliance to pursue a specific project, usually for a specified time period. There are many reasons for joint ventures. The project may be too large for one company to handle on its own, and joint ventures also afford companies access to new markets, products, or technology. Both large and small companies can benefit from joint ventures.

In 2025, Hyundai and General Motors (GM) announced a strategic alliance to jointly develop five vehicles with production to begin in 2028. The venture allows sharing both the costs and benefits of new technological development in the sector. The companies will sell the vehicles with their individual brand names and will have some brand-specific design elements. Hyundai is gaining access to GM's expertise in the truck market, whereas GM is benefiting from Hyundai's expertise in hybrid and EV technologies.⁷