Co-operative: A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

Most co-operatives are incorporated or registered in Saskatchewan under
The Co-operatives Act, 1996, and operate according to the seven principles of co-operation which were endorsed by The International Co-operative Alliance in 1995. These principles are summarized as follows:
1. Voluntary and open membership,
2. Democratic member control,
3. Member economic participation,
4. Autonomy and independence,
5. Education, training and information,
6. Co-operation among co-operatives, and
7. Concern for community.

This glossary has been prepared to assist individuals and groups involved in developing and/or operating co-operatives. The glossary explains various terms and processes mentioned in The Co-operatives Act, 1996 and The Co-operatives Regulations, 1998, plus others that are common in co-operative and general business practice.

The glossary is a general guide and should be used with the Act, regulations, and appropriate legal, technical, and managerial advice and support. Comments are welcome and should be directed to the Saskatchewan Ministry of Enterprise and Innovation, toll free, at 1-800-265-2001.

In this document, Act refers to The Co-operatives Act, 1996 and Regulations refers to The Co-operatives Regulations, 1998.

Account Formal record that represents, in words, money or other unit of measurement, certain resources, claims to such resources, transactions or other events that result in changes to those resources and claims.

Accountant Qualified individual who carries out bookkeeping, auditing, and other financial reporting and analysis for the co-operative, who is a member of a recognized accounting professional association or approved by the registrar.

Account Payable Amount owed to a creditor for delivered goods or completed services.

Account Receivable Claim against a debtor for an uncollected amount, generally from a completed transaction of sales or services rendered.

Annual meeting A general meeting which all members are entitled to attend and entitled to vote. A co-operative must hold an annual meeting each year, and no later than six months after the end of its fiscal year.

Annual return Form required by the Registrar of Co-operatives setting out a list of current directors and other information; must be filed with the registrar within 30 days following the annual meeting.

Articles of Incorporation Official document required for incorporation; states the 
co-operative's name, purpose, share structure, directors and incorporators. Appendix B, Form A of the Regulations.

Assets Entire accumulated property of a co-operative that can be used to pay debts or expenses, including cash on hand and money owed by customers. Assets are those things a co-operative or business owns.

Current assets - Cash, plus property to be sold or converted to cash within one year.
Fixed assets - Real property or depreciable materials.
Liquid assets -Cash, plus property that can quickly and easily be sold for cash.

Audit Annual financial examination of a co-operative; conducted by an auditor using generally accepting accounting principles and in a form acceptable to the Registrar of Co-operatives, the co-operative's financial institution and its members.

Auditor Qualified individual (or firm) who prepares the annual financial statement; must be independent of the co-operative; appointed at the co-operative's first annual general meeting and each subsequent annual general meeting. Co-operatives with fewer than 20 members may, at a general meeting, resolve not to appoint an auditor. (Section 131 of the Act)

Balance sheet Statement that shows what a co-operative owns and what it owes at a given time. The difference between its property (including cash) and its debt is shown as its net worth or equity.

Board of Directors Body elected by the members to direct the business, policy and operations of a co-op; all members could be on the board, but usually the membership is too large to meet to consider all decisions

Break-even point Level of sales or production needed to meet all operating expenses.

Business plan Guide for managing the start-up and or operations of a co operative, including:
1. Estimate of amount and sources of start-up and operating capital;
2. Projection of revenue and expenditures for defined period of time; and
3. Identification of all requirements for the future operations.

Bylaws A document approved by the majority of members of a co operative and registered with the Registrar of Co-operatives. Bylaws set out the co operative's rules of operation in the relevant areas set out in Section 8 of the Act.

Capital Total funds invested in a co-operative to enable it to conduct business.

Cash flow Amount of money left in a given period after all income is accounted for and all cash expenses, after taxes and before depreciation, are paid.

Cash poor Financial condition when a profitable co-operative has little cash on hand (for reasons such as rapid expansion), so it cannot be supported by operating income alone.

Certificate of Incorporation Legal document issued by the Registrar of Co-operatives when incorporation has been approved. A co-operative legally comes into existence on the effective incorporation date stated on this certificate.

Consumer's co-operative Primary purpose is to purchase, procure, process, manufacture, exchange, hire and deal in goods or services for sale at retail to its members and patrons. Consumers' co-operatives are normally registered under Part XXI of the Act.

Co-operative Securities Board (check) Board consisting of not more than five members appointed by the Lieutenant Governor in Council; reviews and approves the issuing and management of securities by co-operatives, as set out in the Act. See Security.

Cost of sales The direct costs of acquiring and/or producing an item for sale, or of or cost of goods sold providing a service, without counting overhead costs.

Creditors Persons or organizations (such as suppliers and lenders) to whom money is owed.

Depreciation Expense allowance made for wear and tear on an asset over its estimated useful life.

Disbursements Money paid out by a co-operative to its suppliers and other creditors to cover operating expenses.

Employment co-operatives Provide employment to the worker-members who produce and/or market their goods or services through the co-operative; examples include bakeries, janitorial services, and printing/publishing plants. See Part XXIV of the Act.

Equity The difference between the value of assets and liabilities.

Equity capital The investment in a co-operative that represents member ownership, usually expressed in common shares owned by members.

Executive committee A committee made up of designated members of the board of directors typically consisting of a president, vice-president, secretary and/or treasurer.

Financial co-operatives Provide a variety of financial services such as savings, investments and loans; examples include credit unions, insurance and trust
co-operatives.

Financial statements Presentation of financial data including balance sheets, income statements, and statements of cash flow or any supporting statement that is intended to communicate an entity's financial position at a point in time and its results of operations for a period then ended.

First General Meeting A general meeting of members, required under Section 102 of the Act, to be held within four months of the co-operative's incorporation. The business at this meeting shall include:
1. adoption of bylaws,
2. election of directors; and,
3. the appointment of an auditor in accordance with Section 132 of the Act.

Fixed expenses Predictable and firm expenses that is generally ongoing, such as building and equipment rental, utilities and salaries.

Forecasting Predicting how many units of product or service will be sold in a given time frame, at what cost to the co-operative, and at what price to the buyer, in order to calculate the financial, material and human resources required to produce the goods or provide the service.

Gross income The total cash coming from a variety of sources such as customer payments, interest, tax credits, dividends and bonuses.

Income and expense statement A report detailing the source and amount of all income and the total costs to a co-operative, organized and displayed in sub-headings that can be compared month to month, season to season, or year to year.

Incorporation The legal process of establishing a corporation; in the case of a co operative; it requires submission of an incorporation package (containing the Articles of Incorporation, a Notice of Registered Office, and a proposed set of bylaws) to the Registrar of Co operatives.

Inventory The unsold stock, on-hand and available for sale immediately.

Invested share capital The money that shareholders/members put up initially to start the co-operative.

Legislation Laws approved by a legislative body such as The Co-operatives Act, 1996. Such laws can only be amended or repealed by the same legislative body.

Liabilities DEBTS or obligations owed by one entity (DEBTOR) to another entity (CREDITOR) payable in money, goods, or services.
• Current liabilities - Debts that are required be paid within one year.
• Long-term liabilities - Debts that will not be paid off within one year.

Liquidity The total value of assets that are readily convertible to cash.

Losses The amount of money by which expenses exceed income.

Market The potential buyers of a product or service, determined by geographic, economic, social and other characteristics.

Market analysis The process of identifying potential consumers of a product or service, the size of the group, and the percentage of the market that could be captured, considering costs and competition.

Marketing strategy Strategy to make potential customers/members aware of a co operative's goods and services; includes promotion, publicity, advertising and sales.

Marketing co-operatives Co-operatives established to support members' efforts to sell their products; examples include agricultural co-operatives.

Member An individual who has met the conditions of membership stated in the bylaws, and has been accepted as a member by the board of directors of a co-operative.
Negative cash flow Financial condition when expenses are greater than cash income, and additional funding is needed.

Net income Income left after expenses, depreciation and taxes are deducted. See Gross income.

Net worth The difference between the value of assets and liabilities of a co operative.

Operating costs Expenses incurred in conducting activities ordinary and necessary to the operation of a co-operative.

Patronage dividend Payments to members in the form of cash and/or additional shares in the co-operative proportional to the amount of business the member did with the co-operative.

Producer co-operatives Co-operatives owned by producers for their mutual benefit; examples include dairy, feeder, film, fishery, handicraft and worker (employment) co-operatives.

Registrar of Co-operatives Official appointed to oversee regulation and carry out regulatory duties set out in the Act. Maintains Saskatchewan's register of co operatives. Collects, approves, issues and files legal documents related to the registration, incorporation and operation of co-operatives. The offices of the registrar and deputy registrar are part of the Saskatchewan Ministry of Justice and Attorney General.

Registration Official record in the province's legal registry that an organization has been incorporated as a co-operative.

Revenue The total income a co-operative receives from all sources.

Request for Name Document requesting confirmation that the name chosen for a
Search and Reservation co-operative is available and may be used. Documents must be submitted to the Corporations Branch of Saskatchewan Justice and Attorney General before submission of incorporation documents.

Rochdale Pioneers A small group of people known as the Rochdale Pioneers established a retail co-operative in Rochdale, Lancashire, England in 1844. The policies and methods of developing and operating their co-operative enterprise became the foundation of current internationally-endorsed principles.

Sales forecast A prediction of the number of units of product or service a
co-operative will sell within a specified time period and at a given price.

Security Share or debt obligation of a co-operative to its members; includes a certificate stating the nature and amount of the share or debt obligation. See Co-operative Securities Board.

Service co-operatives Provide needed services, generally at improved quality, price and availability; examples include health care, child care, cablevision, farm machinery, housing and transportation co-operatives.

Share One of the equal parts into which a co-operative's capital is divided.

Start-up The initial period of operation of a co-operative or other business or service, usually the period before the enterprise begins receiving income.

Start-up capital The total amount of money, resources and property that a
co-operative needs to begin operating and to support it until income is received.

Statement of income A summary report of all forms of income generated over a specific period including sales, tax credits, dividends and receivables.

Target market A very specific group of potential customers, usually defined by one or more of: age, lifestyle, gender, socio-economic position, income, geography, needs and interests, et cetera.

The Co-operatives Act, 1996 An Act respecting the incorporation, registration and operation of co-operatives in Saskatchewan. The majority of Saskatchewan co-operatives are incorporated under this Act.

The New Generation Co-operatives Act Legislation established for the incorporation of agricultural value-added co-operatives.

Variable costs Expenses that vary with the volume of good or service provided by a co-operative.

Worker co-operatives Co-operatives owned and operated by members who work for the co-operative. See Employment co-operatives.

Working capital The difference between current assets and current liabilities.