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ACCA Applied Knowledge · Business and Technology · The purpose and types of business organisation

A cooperative society is owned by its farmer members, who share in the surpluses in proportion to their trade with it. Into which category does it most clearly fall?

A cooperative society is a private sector organisation owned by and run for the benefit of its members, who share its surpluses. It is not controlled by government, so it is neither public sector nor a government agency, even though it has no outside shareholders.

  1. AA public sector organisation, because it serves a community
  2. BA private sector organisation owned by and run for the benefit of its membersCorrect
  3. CA government agency, because it has no shareholders

Explanation

A cooperative is a private sector organisation owned by its members, who benefit from its trading surpluses. It is not owned or controlled by government, so it is not public sector or a government agency. The absence of external shareholders does not make it a state body.

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