A new cooperative must have enough members to start operation and justify its existence. Additional members may be needed to financially strengthen the association or increase its volume.
Cooperatives that provide supplies and services normally have open membership. Those that process and market or bargain for price and contractual agreement or offer limited services may have a selective membership policy. Members should feel a responsibility to recommend others believed to be qualified users. That’s why it’s important for members to understand what their cooperative is, how it operates, its benefits, and its limitations.
People join cooperatives primarily for economic benefits-services and increased income. Most people want to be shown the advantages of cooperative membership. If those benefits are not evident, few prospects will join and even if they do, they probably won’t regularly patronize the cooperative.
New members may be asked to join by purchasing stock or paying a membership fee and signing an application. The applicant should get a receipt for funds collected. The cooperative must follow-up with membership and stock certificates and related material.
Accurate accounting of money is an extremely sensitive issue. The cooperative should retain an independent accounting firm to assist in recording funds prior to any sale of stock or the collection of substantial amounts of money.