SEOUL, Nov. 5 (Yonhap) -- South Korea will permit the launch of cooperatives starting next month, providing additional channels for people to start small businesses leaning toward democratic ownership and public interest, the finance ministry said Monday.
A related law will go into effect on Dec. 1, and the central and municipal governments will immediately begin receiving applications and registrations for the launch of cooperatives, according to the ministry.
Under the law, five people or more can start "general cooperatives" or "social cooperatives." The former is similar to conventional enterprises, while the latter is focused on non-profit business activities.
A cooperative is an autonomous association of people who work together voluntarily for their mutual social and economic benefits. They include non-profit community organizations and businesses owned and run by people who use their services.
Unlike ordinary corporations where one share means one vote, cooperatives give one vote to each of its members, a difference that makes the business structure more democratic.
Cooperatives are also regarded as more safe from excessive influence wielded by a small number of shareholders. The world-class football club FC Barcelona and U.S. orange juice maker Sunkist are among globally well-known cooperatives.
Experts said that cooperatives will supplement the weaknesses of conventional capitalism such as monopolies and also provide jobs and social services to underprivileged people.
The government said that the soon-to-be-enacted law will help boost the starts of cooperatives, which it expects will lead to more job creation in the future.
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