Which term describes a business entity that is owned and controlled by individuals who share a common bond and operate for profit?

Which term describes a business entity that is owned and controlled by individuals who share a common bond and operate for profit?

• A. Private Limited Company (Ltd)
• B. Sole Trader
• C. Co-operative
• D. Partnership

Answer: (C)

A cooperative is a business owned and run by the people who share a common bond, such as workers, consumers, or producers who rely on or benefit from the business. The key idea is democratic control: each member typically has a voice in decisions, often with one vote per member, regardless of how much they invest. Profits (or savings) are returned to members or reinvested for the benefit of the community of members, rather than paid out solely to external shareholders. This differs from a private limited company, which is owned by shareholders who may have differing interests and where profits go to shareholders rather than a broad member base. A sole trader is owned by a single person with no shared ownership or democratic governance. A partnership is owned by two or more individuals who share profits and management, but it doesn’t necessarily revolve around a common bond and member-based democratic control like a cooperative.

A cooperative is a business owned and run by the people who share a common bond, such as workers, consumers, or producers who rely on or benefit from the business. The key idea is democratic control: each member typically has a voice in decisions, often with one vote per member, regardless of how much they invest. Profits (or savings) are returned to members or reinvested for the benefit of the community of members, rather than paid out solely to external shareholders.

This differs from a private limited company, which is owned by shareholders who may have differing interests and where profits go to shareholders rather than a broad member base. A sole trader is owned by a single person with no shared ownership or democratic governance. A partnership is owned by two or more individuals who share profits and management, but it doesn’t necessarily revolve around a common bond and member-based democratic control like a cooperative.