What type of structure is a cooperative considered under Virginia law?

Under Virginia law, a cooperative is classified as a mutual organization. This designation reflects the fundamental nature of cooperatives, which are businesses owned and operated by a group of individuals for their mutual benefit. In a cooperative, members share in the profits and decision-making processes according to their level of participation or investment.

Cooperatives often serve specific purposes, such as housing, agriculture, or consumer goods, and are structured to promote the welfare of the members rather than to maximize profits. This is distinct from other business structures such as sole proprietorships, which are owned and run by one individual, and limited liability companies (LLCs), which provide liability protection for owners but do not necessarily operate on a mutual basis.

An unincorporated association, while similar in some respects, doesn’t fully capture the cooperative’s emphasis on mutual benefit and member ownership. Therefore, the classification of cooperatives as mutual organizations under Virginia law accurately encompasses the collaborative and communal principles foundational to their operation.