Definition of Patron
A patron is generally defined as an individual who regularly visits or supports a business. This term is most commonly used to describe customers or clients who consistently use the services of a particular business or organization. In the context of taxation, a patron refers to someone who engages in business with a cooperative but does not hold membership in it.
Examples
Business Context
- Retail Customer: An individual who frequently shops at the same grocery store can be considered a patron of that store.
- Restaurant Regular: A diner who routinely eats at a specific restaurant is a patron of that establishment.
Taxation Context
- Cooperative Customer: A farmer who purchases supplies from a local agricultural cooperative but is not a member of the cooperative.
- Energy Consumer: An individual who uses electricity from a cooperative energy company but does not hold a membership in the cooperative.
Frequently Asked Questions (FAQ)
What is a patron in business terms?
A patron is a customer or client who regularly uses the services of a particular business or organization.
What does it mean to be a patron of a cooperative in terms of taxation?
In taxation, a patron of a cooperative refers to someone who does business with the cooperative but is not necessarily a member.
How does patronage work in cooperatives?
Patronage in cooperatives often involves patrons buying products or services from the cooperative. Even if they are not members, patrons may receive certain benefits or part of the cooperative’s profits distributed based on their usage.
Can a patron become a member of a cooperative?
Yes, patrons can choose to become members of a cooperative if they meet the cooperative’s membership criteria and fulfill any associated requirements.
Is there a difference between a patron and a customer?
The terms are often used interchangeably, but “patron” can imply regular or habitual business, whereas “customer” is a more general term.
Cooperative (Co-op)
A cooperative is an organization that is owned and operated by its members, who share the benefits generated by the business. Unlike traditional businesses, cooperatives are typically driven by the interests of their members and can span various industries, including agriculture, retail, and utilities.
Membership
Membership refers to the status of being a part of a specific group or organization. In cooperatives, members often have voting rights and a share in the company’s profits based on their involvement and usage.
Patronage Dividend
A patronage dividend is a distribution of profits by a cooperative to its patrons based on the amount of business the patron did with the cooperative during a specific time period.
Online Resources
Suggested Books for Further Studies
- Understanding a New Co-operative Law Framework: A Source Book by Various Authors
- The Cooperative Business Movement, 1950 to the Present by Patrizia Battilani and Harm G. Schröter
- Co-operation, Values and the Democratic Ideal: Business for the Twenty-First Century by John R. Whitman and Dave Whitman
Fundamentals of Patron: Business and Taxation Basics Quiz
### Who is generally considered a patron in business terms?
- [x] A customer who regularly uses the services of a particular business
- [ ] Any individual who makes a one-time purchase
- [ ] A member of a political party
- [ ] An employee of a business
> **Explanation:** A patron is generally defined as a customer or client who regularly uses the services of a particular business or organization.
### In the context of taxation, who is a patron of a cooperative?
- [ ] Any member of the cooperative
- [x] Someone who does business with the cooperative but is not necessarily a member
- [ ] An investor in the cooperative
- [ ] The CEO of the cooperative
> **Explanation:** In the context of taxation, a patron refers to someone who engages in business with a cooperative but does not hold membership in it.
### Can a patron of a cooperative receive part of the cooperative’s profits?
- [x] Yes, as a patronage dividend based on their usage
- [ ] No, only members receive profits
- [ ] Yes, but only if they invest additional capital
- [ ] No, unless they are shareholders
> **Explanation:** Patrons may receive a portion of the cooperative's profits as a patronage dividend, based on the amount of business they conducted with the cooperative.
### Which term refers to the distribution of profits by a cooperative to its patrons?
- [ ] Share Distribution
- [ ] Dividend Yield
- [x] Patronage Dividend
- [ ] Revenue Share
> **Explanation:** A patronage dividend is a distribution of profits by a cooperative to its patrons, based on the patron's business activity with the cooperative.
### What can patrons of a business also be called?
- [x] Customers or clients
- [ ] Investors
- [ ] Employees
- [ ] Members
> **Explanation:** Patrons of a business can also be called customers or clients, as they frequently support and utilize the services of the business.
### What typically characterizes a patron's relationship with a business?
- [ ] One-time interaction
- [ ] Ownership
- [x] Regular and supportive interaction
- [ ] Employment
> **Explanation:** A patron typically has a regular and supportive interaction with a business, indicating consistent use or support of the business's services.
### Who can receive a patronage dividend in a cooperative?
- [ ] Only the members of the cooperative
- [x] Patrons based on their level of business with the cooperative
- [ ] Employees who meet certain criteria
- [ ] Local municipality
> **Explanation:** Patrons, based on their level of business with the cooperative, can receive a patronage dividend.
### In a cooperative, who decides the distribution of profits to patrons?
- [ ] Local government
- [ ] External auditors
- [ ] The CEO alone
- [x] The cooperative’s board according to policies
> **Explanation:** The cooperative’s board typically decides on the distribution of profits to patrons according to established policies.
### Can a patron also be a member of a cooperative?
- [x] Yes, if they meet membership criteria
- [ ] No, patrons and members are always distinct
- [ ] Only if they have been patrons for a specified time
- [ ] Only in agricultural cooperatives
> **Explanation:** Patrons can choose to become members of a cooperative if they meet the cooperative’s membership criteria and fulfill any associated requirements.
### Why might someone choose to remain a patron and not become a member of a cooperative?
- [ ] They do not benefit from any services
- [x] They may prefer the simplicity of patronage without membership responsibilities
- [ ] Membership is always more expensive
- [ ] Patroons are only recognized in certain regions
> **Explanation:** Some individuals may prefer the simplicity of patronage, enjoying the benefits of doing business with a cooperative without the responsibilities and obligations that come with membership.
Thank you for exploring the concept of “Patron” with us and tackling the challenging questions. Your dedication to understanding business and taxation terminologies is commendable!
