What is a Co-operative?

A co-operative (co-op) is a type of incorporated business that is owned by a group of people (known as members) with common needs and/or a common goal.

Some other differences include:

  • Each member has an equal vote regardless of their capital contribution (one member equals one vote)
  • The primary purpose of a co-op is to meet the common needs of the members, not to maximize profits for shareholders
  • At least two-thirds of the board of directors must be members that are elected at the general meeting
  • Payment of profit or surplus is often limited or distributed to the organizational reserve

Co-operatives are set up as either federal or provincial corporations. Your needs, the needs of the members and the business location can help you determine which option is best for your co-op.

Who is the Ontario Co-operative Association?

Co-operatives are a different kind of business model that are driven by people, planet and profit. The Ontario Co-operative Association (OCA) is the provincial trade association for Ontario’s 1,500+ English-speaking co-operatives. OCA ensures that people across the province understand the benefits and versatility of the co-operative business model, and to promote the member-owned co-operative businesses. OCA supports groups wanting to build new or develop established co-operative businesses.

How do I register a Co-operative?

Co-operatives are set up as either federal or provincial corporations. Your needs, the needs of the members and the business location can help you determine which option is best for your co-op.

Provincial Co-op Incorporation

If you plan on opening a location(s) only in Ontario, you may choose to incorporate your co-op provincially.

There are three major parts of applying for provincial incorporation:

  • Complete a NUANS name search, which will confirm if your chosen business name is available.
  • Send the appropriate forms and documents to the Ministry of Government and Consumer Services. The documents provide the co-op’s name, purpose, share structure, directors and incorporators. Approval is needed before you can start doing business.
  • Pay the appropriate fee.

What is a B-Corp?

The B-Corporation certification is a private certification issued to for-profit companies by B-Lab, a global non-profit organization with offices in the United States, Europe, Canada, Australia, New Zealand.

Companies must meet social sustainability and environmental performance standards, meet accountability standards, and be transparent to the public according to the score they receive on the assessment. Over 230 Canadian B Corps companies are leading the charge in using business as a force for good in this Canada.

What is a Social Enterprise?

Social enterprises are revenue-generating businesses (operated by a non-profit organization or by a for-profit company) having two goals: to achieve social, cultural, community economic and/or environmental outcomes; and, to earn revenue.

On the surface, many social enterprises look, feel, and even operate like traditional businesses. But looking more deeply, one discovers the defining characteristics of the social enterprise: mission is at the centre of business, with income generation playing an important supporting role.

It is essential to note that ‘social enterprise’ is not defined within Canada’s Income Tax Act. There is no certification or other program to enable a venture to be officially deemed a social enterprise.

Other definitions include:

Social enterprise applies an entrepreneurial approach to addressing social issues and creating positive community change.

  • A social enterprise is a business that uses entrepreneurial methods to accomplish social goals and/or feed profits to a parent charity or non-profit to enable it to fulfill more of its own social mission.
  • A social enterprise is a revenue-generating business with primarily social objectives whose surpluses are reinvested for that purpose in the business or in the community, rather than being driven by the need to deliver profit to shareholders and owners.

Are you running a Social Enterprise?

  • One test for a non-profit or charity that believes it is operating a social enterprise: what are you selling? It could be that you are operating with an entrepreneurial mindset within your organization, but if you are not selling a good or service into the marketplace, you aren’t running a business: you may be running a social program, but not a social enterprise.
  • A test for a traditional business that believes it is operating a social enterprise: to what degree do social / environmental goals steer your ship? If profit is paramount (and particularly if individual owners or shareholders are personally benefitting), you may be engaging in socially conscious purchasing or corporate social responsibility, rather than operating a social enterprise.
  • Another possible definition: A social economy enterprise operates like a business, produces goods and services for the market, but manages its operations and redirects its surpluses in pursuit of social and environmental goals.
  • An equally noble goal of social enterprise (aside from generating revenues to pursue a mission) is the training and/or employment of people who are typically excluded from the mainstream economy, thus creating capacity and self-sufficiency for individuals, and impacting their communities and lessening reliance on the social safety net. This element alone can denote a social enterprise.

Examples: Habitat for Humanity & the Restore – the Restore provides training and employment for people who are typically excluded from the main steam, it generate revenue from the donated products and materials, and redirects its surplus to address poverty and housing.