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Using Corporations and Cooperatives

Explore the functions, advantages, and disadvantages of corporations and cooperatives in agriculture and business. Learn about ownership, management, taxation, and more.

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Using Corporations and Cooperatives

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  1. Using Corporations and Cooperatives

  2. Next Generation Science / Common Core Standards Addressed! • CCSS. ELA Literacy. RST. 11.12.2 Determine the central ideas or conclusions of a text; summarize complex concepts, processes, or information presented in a text by paraphrasing them in simpler but still accurate terms.

  3. Agriculture, Food and Natural Resource Standards Addressed! • CRP.02.01. Use strategic thinking to connect and apply academic learning, knowledge and skills to solve problems in the workplace and community. • CRP.02.01.01.c. Apply academic knowledge and skills to solve problems in the workplace and reflect upon the results achieved.

  4. Bell Work / Student Learning Objectives • What is the function of a corporation. • Identify the advantages of a corporation. • Identify the disadvantages of a corporation. • What is the function of a cooperative. • Identify the advantages of a cooperative. • Identify the disadvantages of a cooperative.

  5. Terms • Cooperative • Corporation • Dividends • Patronage payments • S corporation • Shareholders

  6. Interest Approach • Show the students a copy of an annual report of a local cooperative. • Ask the students why such a document is printed. • Ask the students to determine the objective of the cooperative.

  7. What is a Corporation? • There are several characteristics of a corporation. • The corporation is treated as a single entity; it can own property.

  8. What is a Corporation? • The corporation is owned by Shareholders. • Capital is raised by selling shares of stock. • The corporation is separate from the operator. • Different classes of stock may be sold. • The corporation is taxed as a legal entity.

  9. What is a Corporation? • The corporation pays Dividends to the shareholders to distribute profits. • Stock is limited to one class. • It is taxed as a partnership.

  10. What are the advantages of a corporation? • Agricultural corporations have numerous advantages.

  11. What are the advantages of a corporation? • Raising capital is easier than in partnerships and sole proprietorships. • There is a separation between ownership and management. • The business continues smoothly, regardless of illness or death. • Ownership is easily transferred.

  12. What are the advantages of a corporation? • Liability of owners is limited to the stock purchased. • Corporations provide a good way to pool resources of numerous individuals.

  13. A Few Corporations!

  14. What are the disadvantages of a corporation? • A corporation may pose several disadvantages.

  15. What are the disadvantages of a corporation? • Organizing a corporation can be complicated and costly. • They usually have additional bookkeeping and accounting costs. • Freedom of actions and changes to the business is limited. • It is expensive to end the business.

  16. What are the disadvantages of a corporation? • There are considerable legal aspects to consider. • Double taxation may occur; the corporation’s income is taxed as is the dividend paid to stockholders is also taxed. • May be less of a personal business.

  17. How does a cooperative work? • A Cooperative is a business organization where the owners are the customers. Growmark, Inc.

  18. How does a cooperative work? • Cooperatives emphasize member control. • Members with a mutual interest organize cooperatives. • Cooperatives are operated on a non-profit basis. • Patronage payments are the profits paid to members based on their use of the cooperative.

  19. How does a cooperative work? • Most cooperatives operate on one-member, one-vote basis. • Its members elect the board of directors. The board is composed of cooperative members. • Cooperative stock does not increase or decrease in value.

  20. What are the advantages of a cooperative? • A cooperative offers numerous advantages to its members.

  21. What are the advantages of a cooperative? • The cooperative’s philosophy centers on member services. • Liability is limited to the amount of the investment. • Numerous people pool resources to start the cooperative.

  22. What are the advantages of a cooperative? • All members share control of the business; no one or two people can control the company. • Long life of the cooperative is likely.

  23. What are the disadvantages of a cooperative? • Few disadvantages of a cooperative are apparent. • Legal formalities can be numerous. • A large share of ownership is impossible. • Management of the business is limited to the general manager.

  24. Review / Summary • What is the function of a corporation. • Identify the advantages of a corporation. • Identify the disadvantages of a corporation. • What is the function of a cooperative. • Identify the advantages of a cooperative. • Identify the disadvantages of a cooperative.

  25. The End!

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