In which business structure are a board of directors elected by member-owners and a manager hired to oversee day-to-day operations?

In which business structure are a board of directors elected by member-owners and a manager hired to oversee day-to-day operations?

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

Answer: (A)

In a cooperative, governance is democratic and built around the people who actually use the business. Those member-owners elect a board of directors to set policy and steady the strategic direction. The board then hires a manager to handle the daily operations, decisions, and running of the business. This separation—owners electing the board, and the board hiring management to run the day-to-day work—defines the cooperative structure. It differs from a sole proprietorship, where one person runs everything; a general partnership, where partners jointly manage; and a C corporation, which has shareholders elect a board but isn’t described as “member-owners” in the cooperative sense.

In a cooperative, governance is democratic and built around the people who actually use the business. Those member-owners elect a board of directors to set policy and steady the strategic direction. The board then hires a manager to handle the daily operations, decisions, and running of the business. This separation—owners electing the board, and the board hiring management to run the day-to-day work—defines the cooperative structure. It differs from a sole proprietorship, where one person runs everything; a general partnership, where partners jointly manage; and a C corporation, which has shareholders elect a board but isn’t described as “member-owners” in the cooperative sense.