A cooperative (also referred to as a co-op)is a form of business ownership that consists of a group of people who have joined together to perform a business function more efficiently than each individual could do alone. The purpose of a cooperative is not to make a profit for itself, but to improve each member's situation. However, members of certain types of cooperatives do make a profit by selling their product and/or service to customers who are not co-op members.

Cooperatives can take many forms. For example, a group of single parents may decide to band together to provide a child-care facility so they will have reliable day care for their children. Each parent contributes a certain amount of money and/or time, and in exchange they all have a safe place to leave their children. A credit union is also a type of cooperative. The...