What is the primary difference between a cooperative and a partnership?

The distinction that defines a cooperative is its ownership structure, where members collectively own the organization and have a say in its governance and operations. This democratic control is a hallmark of cooperatives, which serve the needs and interests of their members rather than solely pursuing profits. In contrast, a partnership typically consists of two or more individuals who join together to manage a business, sharing its profits and responsibilities. Partnerships do not require member ownership or democratic participation like cooperatives; instead, they rely on the agreement among the partners.

The other options present aspects that may not accurately represent the characteristics of cooperatives and partnerships. While cooperatives often have a board of directors for management, having a board does not exclusively define them as separate from partnerships. Partnerships can have more than two owners as well, which broadens the understanding of their structure. The notion that cooperatives require government approval for formation lacks specificity and can vary by jurisdiction, while partnerships generally do not have such requirements. Furthermore, while many cooperatives strive for sustainability and community involvement, their primary focus can be aligned with member welfare rather than purely profit-driven motives, contrasting with the profit-oriented nature often found in partnerships.