A mutual is an organisation where there is a complete identity between the participants in the enterprise and its members, and where the entity's income is derived from members.

A mutual can be broadly defined as an enterprise that is formed by a group of individuals or businesses who seek to provide a service to themselves.

A mutual has the characteristics of a 'Club', in that the enterprise continues to exist long after the present membership has ceased to use its services, and that members neither expect nor get a share of the assets of the mutual when they cease membership or upon the mutual's dissolution.

Credit unions, for example, are mutuals - only savers can be members, all savers must be members and income is derived from investing member deposits. Similarly, rental housing co-operatives are mutuals - only tenants may be members, all tenants must be members and income is derived from tenants.

Many Australian co-operatives are not fully mutual because they provide services to both members and non-members. For example, co-operatives which run retail outlets are not fully mutual as some customers may not be members. Similarly, a health care co-operative would not be fully mutual if it provides health services to both member and non member patients.