Cooperative company: The characteristics

A cooperative is a special legal form that is suitable for groups of people or companies that want to pursue mutual economic or social interests, such as the construction or purchase of housing. Its primary aim is to promote the economic interests of its members by way of collective self-help.

An entrepreneurial business may also take the legal form of a cooperative (Art. 828-926, Swiss Code of Obligations). In contrast to public limited companies or limited liability companies, cooperatives are people-centred enterprises. Profit is optimised, not maximised.

Inherent values such as direct democracy and the right to participate in decision-making (i.e. one member, one vote) also make a cooperative a good choice of legal form. A further positive aspect of a cooperative is the transparency at all levels of the hierarchy, which prevents excessively high salaries, for example.

A further difference with cooperative companies is what is known as the 'open door principle'. A cooperative is the association of an unlimited number of persons or trading companies, which means it must be possible for members to join (or leave) at any time if the specific criteria for joining, as set out in the articles of association, are met.

An unlimited number of members also means that a cooperative does not have a fixed share capital, and does not even necessarily have to have one (in contrast to a company limited by shares, for example).

However, due to the lack of a fixed share capital and thus a sufficient credit base, cooperatives have only limited access to the capital market.

Forming a cooperative in Switzerland

A minimum of seven partners are required to found a cooperative; these may be natural persons or legal entities. It is not necessary to have registered capital, but if there is registered capital, each member must hold at least one share with a fixed nominal value. The members are liable for the company’s assets.

Another special feature of the cooperative, which is also in line with the basic values of a sharing economy and the idea of self-help, is how the company's profits are used. In a cooperative, the net profit generally is allocated to the cooperative's assets. Distributing the profit to the members of the cooperative (similar to a dividend payment to shareholders) is only possible if the articles of association expressly provide for this.

  • The administrative bodies for a cooperative company are:
  • The general assembly of members
  • The board (with a minimum of three members)
  • The statutory auditor

Here are some examples of groups of persons for whom the legal form of a cooperative is particularly suitable:

  • Purchasers: Purchasing cooperatives unite people to buy materials jointly, for example, or to acquire customers.
  • Consumers: Consumer cooperatives are founded by consumers to represent their interests and benefit from joint purchasing opportunities. Examples of this are cooperatives in the retail sector, where members can buy products together and benefit from better prices.
  • Energy suppliers: Energy cooperatives enable their members to jointly develop, run and benefit from energy projects.
  • House builders: Housing cooperatives open up the possibility for their members to create and manage shared housing. Members benefit from lower rents and a pleasant living environment.
  • Banks: Members of cooperative banks are also partners in the bank. As a member, you can benefit from the bank's services and profits.
  • Farmers: There are numerous agricultural cooperatives. Farmers can join forces to pool production, share resources, gain purchasing advantages or make distribution channels more efficient.

The cooperative is an ideal choice for companies that consider openness, equality and collective self-help as basic principles of their entrepreneurial activity and do not measure success only by the distribution of profits.


Last modification 04.09.2023

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