A Discussion on the Choice of a Business Structure Facilitating Marketing Choice (Alberta Agriculture, Food and Rural Development)

• The report looked at three basic structures:
  • A limited liability corporation;
  • A traditional co-operative; and,
  • A new generation co-operative.
• Assuming that the new entity would be primarily farmer-owned or controlled, the study concluded the new generation co-operative structure would be the preferred model.
• A new generation co-operative has several major features, including:
• Delivery rights that are tied to the level of equity invested;
• Selected, or defined, membership;
• Significant level of initial equity investment dependent upon the project;
• Transferability of equity and the opportunity for appreciation or depreciation in the value of delivery rights shares; and,
• Business expansion that is typically funded by new issues of investment of delivery rights shares.

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