First, let us be clear that the terms “Coop”, Co-op”, or “Cooperative” can be used interchangeably. However, these terms are umbrella terms that do not necessarily imply the particular legal structure of the business to which they are attached. For example, business and organizations sometimes use the term “coop” in their business name even though technically they are not a cooperative. How’s that for confusing? In Ohio, there is a very good reason for this.
Let me explain. For a long time in Ohio, the cooperative laws only allowed for the formation of agricultural (i.e., farm) cooperatives. So other individuals or business that wanted to come together and operate their enterprise under the cooperative principles could do so, but legally they could not organize as a cooperative in Ohio. So what did they do? Often they organized as corporations (nonprofits in particular) or LLCs. Then the cooperative laws changed in Ohio, but many of these existing enterprises have not gone through the legal conversion process to form a cooperative. Such a process takes time, money, and professionals with an expertise in cooperatives — all of which may be scarce, depending on the entity and where it’s located. These existing entities may not have the resources or even understand how to explore the benefits of converting to a cooperative structure. To this day, entities formed under nonprofit or cooperative laws in Ohio may use the word “cooperative,” “coop,” “co-operative,” or “co-op” in their business name. It’s still confusing though, right?