The Denver Post recently published an article stating a renewed interest in cooperatives in Colorado. Below are excerpts from this article:
Colorado has a long history of cooperative businesses flourishing in agriculture and other rural industries. Now, as socially-minded employers start companies in other areas and with a champion of co-ops in the governor’s seat, cooperatives are seeing a revival.
” Colorado is the Delaware of cooperatives,” Schneider said. “We have some of the best co-op laws in the country.” Delaware’s lax corporate laws make it an attractive place for many companies to incorporate in.
“They are coming into fashion,” said Linda Phillips a longtime lawyer who works with cooperative businesses. The advantage for many of her clients is the ability to buy in volume, operate more efficiently, and invest jointly in marketing. With their history in Colorado and easy-to-use laws, Phillips has been busy incorporating more and more co-ops. Her workload has picked up in a particular sector: older business owners ready to retire.
a) Schneider credits supportive state laws for the cooperative development in Colorado. What is the most important federal cooperative law, who is covered and what activities does it regulate?
b) Phillips describes one of the key advantages of forming a cooperative for her clients. What is this economic concept and what economic rationale/purpose does it serve? Please also name and briefly describe how the two types of integration we discussed, and connect these concepts back to her remarks.
c) What economic development lead to Phillips increased workload in one particular area? Briefly explain.
