A business organization that is owned and operated by a group of individuals for their mutual benefit.

• A. Corporation
• B. Partnership
• C. Cooperative
• D. Sole Proprietorship

Answer: (C)

A business organization owned and operated by a group of individuals for their mutual benefit is a cooperative. In a cooperative, members contribute to the capital and actively participate in governance, usually with one vote per member regardless of how much each person has invested. The goal is to meet the members’ shared needs—such as buying supplies, selling products, or accessing services—at favorable terms, and profits are returned to members based on their use or patronage rather than based on ownership shares alone. This democratic, member-owned structure is what sets a cooperative apart.

For comparison, a corporation is owned by shareholders and operates as a separate legal entity; profits go to shareholders as dividends, and control sits with a board elected by those shareholders, not by the users of the organization. A partnership is owned by two or more individuals who share profits and liabilities, with control and profits distributed according to the partnership agreement, not necessarily tied to mutual benefit of a user-membership. A sole proprietorship is owned by a single individual who keeps all profits and assumes all liabilities, with no shared ownership or member-driven voting.