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Flip to reveal answersDefine a cooperative.
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Question
Define a cooperative.
Answer
A business owned and run by its members for their mutual benefit.
💡 Hint
Owned by members.
Question
What is the main ownership feature of a cooperative?
Answer
It is owned by its members, who use the business and share the benefits.
💡 Hint
Member ownership.
Question
What does "one member, one vote" mean in a cooperative?
Answer
Each member has equal voting rights regardless of how much money they invested.
💡 Hint
Democratic control.
Question
Give one advantage of the cooperative structure.
Answer
Members are often highly motivated because they directly benefit from the cooperative’s success.
💡 Hint
Motivation comes from shared benefits.
Question
State two features of a cooperative.
Answer
It is owned by members, and decisions are made democratically (one member, one vote).
💡 Hint
Give 2 features: member ownership + democracy.
Question
Give one disadvantage of cooperatives linked to decision-making.
Answer
Decision-making can be slower because members must be consulted and voting is democratic.
💡 Hint
Democracy can slow decisions.
Question
Why is raising finance often a weakness for cooperatives?
Answer
They have limited ability to attract external investors compared with companies that can issue shares.
💡 Hint
Harder to access external equity.
Question
How are profits typically used in a cooperative?
Answer
Profits are shared among members or reinvested to improve benefits and services for members.
💡 Hint
Profits benefit members.
Question
Why can cooperatives find it harder to raise finance than companies?
Answer
They cannot easily sell shares to external investors, so access to capital is more limited.
💡 Hint
Limited access to external equity.
Question
State one key exam takeaway about cooperatives.
Answer
Cooperatives combine business activity with democratic member control, which can increase motivation but reduce speed and access to finance.
💡 Hint
Balance: motivation vs speed/finance.
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Topic 1.2 hub
Types of business entities
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