What is mutual association?

Mutual Association is primarily an organization, usually a company that is owned by its members or customers. This differs from a privately held company, which is usually owned by several higher employees or a publicly traded company owned by shareholders. Generally, the association will not simply work on achieving the greatest options, although it is sometimes the case. This is the ownership of customers rather than shareholders. Theoretically, customers who are all policyholders in the company have a final word about how the company is operated. In practice, many companies operate as any other business, while higher leadership and executives take most of the main decisions. This is because any remaining money is not recorded as a profit or paid as a dividend of shares. Instead, it is divided among members, either as a cash payment or as a service fees, such as lower insurance for insurance customers. Suddenly some of the takeThe association could avoid paying the tax on the money they earned. Today, most mutual associations pay taxes on the basis of a formula taking into account their market share and total taxes paid in the relevant industry.

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Mutual Association, which is based on mortgage loans, is known as Savings & Loan Company in the United States and a construction company in the UK. Many former mutual associations in this category have decided to become publicly commercial banks, which is a process known as demutualization. Another variation on mutual association is a friendly society. In most cases, such a group came from a small scale and worked for social purposes; For example, the protection of members against lost income from disease or providing funeral expenses. Today some friendlycieties have grown to companies in fullby joining the members.

It is important to realize that the primary definition and explanation of the mutual association in this article concerns the United States. In some other countries, the term and described concept are used. However, there are differences in what this term means in a legal context and how this concept works in various countries in practice. This term should not be confused with a mutual fund, a type of investment that manages a group of money from multiple investors.