Being cooperative
Why do Land O’ Lakes, Ocean Spray, and Sunkist retain the cooperative structure? Perhaps the primary reason is the tax advantage. Much like the LLC form of organization, cooperatives are not taxed on surplus earnings, which are distributed to members as patronage dividends. Thus, members of a cooperative are taxed only once on their earnings — at the individual level — and not on the cooperative level. By contrast, earnings of corporations are taxed twice — at the corporate level and as dividends to individuals.