Leadership and Advisers

Responsibility for starting a cooperative and seeing the project through rests mostly with the leadership group. Leaders begin by discussing their idea at one or more small group meetings with other prospective members or users. If the group supports the idea, the next step is to seek the advice of someone familiar with cooperatives.

Specialized help is needed throughout the various stages of starting a cooperative. Leaders need someone familiar with the cooperative-forming process to work with them step by step concerning legal, economic, and financial aspects.

Depending on the resources available and interest found among sources of specialized help, the group should request a person from one of the organizations to serve as an adviser

cdblball.gif (883 bytes) Business and cooperative specialists are needed. Most States have Rural Development offices and many have a cooperative development specialist on the staff who can help you get started. They can recommend other specialized services and talents that will be needed during organization stages.  

Other resource people are available from county Extension Service offices or land-grant universities, State cooperative councils, Centers for Cooperatives, National Cooperative Bank, area offices of CoBank, St. Paul Bank of Cooperatives, or an established cooperative in your area. USDA’s Rural Business-Cooperative Service in Washington, DC, also assists groups seeking to develop cooperatives by conducting feasibility studies, providing  educational services, and helping with implementation.

cdblball.gif (883 bytes)  Legal Counsel, preferably an attorney familiar with State cooperative statutes, is needed.  Among sources to check for one are State Extension specialists working with cooperatives, the State cooperative council, CoBank, St. Paul Bank for Cooperatives, National Cooperative Bank, National Society for Cooperative Accountants, USDA’s Cooperative Services, or an established cooperative in the area.

        An attorney prepares the organization papers or checks the legality of those written by someone else. Early expertise is needed to acquire property, make capitalization plans, borrow money, and write agreements and contracts. Even after the cooperative is operating, an attorney should be retained who can help ensure the organization conforms to applicable laws.

cdblball.gif (883 bytes)  Financial counsel from some financial institution should be sought early regarding anticipated capital needs and  methods of financing.

This institution can provide advice on designing the feasibility study to meet requirements of a lending agent. Staff specialists on finance and accounting matters can also advise the cooperative. An independent accounting firm that has the knowledge of cooperative operations should be hired to establish the bookkeeping system, tax records, and a plan for revolving capital prior to sale of stock or collection or handling of members’ money. Later, the board will need to hire an outside accounting firm to conduct the annual audit.

cdblball.gif (883 bytes) Technical advice may be needed periodically from a variety of technicians and persons experienced in cooperative business operations.

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