Co-operative societies operate with limited financial resources. he philosophy of the formation of a cooperative society is “all for each and each for all”. The Multi-state Cooperative Societies are registered under the Multi-State Cooperative Societies Act 2002. At the end of financial year members get some return on their capital investment. Cooperatives help people come together as a community. Social benefit: It helps in social welfare as it caters to the needs of the poor and middle sections of the society. Voluntary organization. Li… Therefore information relating to activities, revenues, members etc becomes public knowledge. From that period the every cooperative society came under the control and supervision of the government. Thus, a producers ‘ society not only provides money and materials to the small artisans but also undertakes to sell their products. The Cooperative Society act does not specify the maximum numbers of the cooperative society members. Features of a Cooperative Society – 14 Main Features of a Cooperative Society. Co-operation, work with the feeling of helping o… It implies that all members have equal rights in managing the affairs of the enterprise. Co-operative societies have limited membership and are promoted by the weaker sections. Co-operative societies are not able to raise their own resources. Housing Cooperative Society: This committee is formed to help the members who need lands and houses. Co-operative societies have contributed significantly in freeing villagers from money lenders. Advantages. The profits earned by the co-operatives have been used for providing basic amenities to the society. Co-operatives have benefited the rural rich and not the rural poor. Cooperative societies encourage the habit of savings and thrift among their members. Co-operatives, are formed to render service to its members than to earn profit. A co – operative society has a separate legal existence. Such societies are formed to provide financial help in the form of loans to members. co operative societies, features, advantages, disadvantages Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. There cannot be any compulsion for him to join or quit a society. The funds of these societies consist of share capital contributed by the members and the deposits made by them and outsiders. Co-operative societies are subject to excessive government regulation which affects their autonomy and flexibility. The membership fee is kept low so that everyone would be able to join and benefit from cooperative societies. The co-operative credit societies suffer from the burden of bad debts. It is a form of businesswhere individuals belonging to the same class join their hands for the promotion of their common goals. Many cooperative societies have faced financial troubles and closed down because of corruption and misuse of funds. हानियां (Disadvantages… There is no incentive for working efficiently. They do not have any surplus to market. Cooperative Society: Meaning, Features, Types, Advantages, Disadvantages Advantages and Disadvantages of Limited Liability Partnership Importance of Memorandum of Association are distributed by the government through the cooperatives. Protection from exploitation: One of the most obvious advantages of a co-operative society is the fact that the members are protected from exploitation from middlemen. They promote self help, moral value among the members. If they turn to other forms of organization to satisfy their economic needs, the cooperative society will collapse. But in India, the co-operative movement was initiated and established by the government. It is compulsory for the co-operative society to get registration. Since registration of cooperative societies became compulsory. The body is elected through ‘one-man-one-vote-system’. Their sources of financing are limited and they depend on government funds. 9. A workplace where members put their effort both at an individual and collective level Advantages and disadvantages of Cooperative Business. No legal formalities are […] They cannot be personally held liable for the debts of the society. When dealing with business on a fairly large scale, a joint stock company is the most suitable form of business organisation. They serve as a link between the government and agriculturists. Infographic on Advantages & Disadvantages of Cooperative SocietiesContentsAdvantages of Cooperative Societies1. They are usually cheaper, per square foot than condos in the same area, with the added benefit of lower closing costs. Earlier, money lenders used to charge high rates of interest and the earnings of the villagers were spent on payment on interest alone. Anypersonwithcommoninterest can become a member. The management of co-operative society is based on democratic lines. These are generally formed by poor people or weaker sections of people in society. To promote the co-operative movement and also because of the fact that it is a non-profit enterprise, government provides various exemptions and tax concessions. 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A cooperative society enjoys separate legal entity which is distinct from its members. 3. Therefore co-operatives are not able to plan their activities in the right manner. Therefore it cannot employ the best talent. Lander Cooperative Society: Its purpose is to provide financial assistance to poor … A consumer’s co – operative store purchase the consumers good either from the manufacturers or the wholesalers and then sells them to its members at reasonable prices. If you continue browsing the site, you agree to the use of cookies on this website. The reason is, in many of the co-operatives there is political interference and domination. Since the management is taken care of by the managing committee, no individual can be made accountable for in efficient performance. Cooperative housing societies are established to help people with limited income to construct houses or flats at reasonable costs. Among the mem… Cooperative societies are based on the principles of co-operation and therefore harmony among members is important. A housing cooperative is a legal mechanism for ownership of housing where residents either own shares reflecting their equity in the co-operative's real estate, or have membership and occupancy rights in a not-for-profit co-operative and they underwrite their housing through paying subscriptions or rent. Voluntarily Organisation: Co-operative Organisation is a voluntarily association of individuals seeking to improve their economic conditions through joint efforts. It is because there is very little link between effort and reward. The co-operative society is a separate legal identity to the society. Advantages and Disadvantages of co-operative societies . There is limited liability of the members of co-operative society. Any 10 members who have attained majority can join together for forming a cooperative society by observing simple legal formalities. It has a fairly stable life and continues to exist for a long period. The cooperative organisation is formed by the people who have limited resources and there is no compulsion to buy more than one share by each member. among members which may lead to disputes. A cooperative society is a voluntary association of persons of moderate means, who unite together to protect and promote their common economic interests. The members of the ruling party dictate terms and therefore the purpose for which cooperatives are formed is lost. A cooperative society is different from other forms of business organization because other business organizations like partnership firm or private limited companies work with the sole objective of earning profits whereas in this form of business organization member’s voluntary join the society so to work for the benefit of the members of the society while doing business. Members with money power cannot dominate the management by buying majority shares. It is based on the principles of collective effort, mutual self – help, equality, democracy, distributive justice and freedom. The members who offer honorary services on voluntary basis are generally not professionally equipped to handle the management functions effectively. The members of the ruling party dictate terms and therefore the purpose for which cooperatives are formed is lost. Therefore it need not depend on outsider’s funds to meet its future financial requirements. The term cooperation is derived from the Latin word ‘co-operari’, where the word “co” means ‘with’ and “operari” means ‘to work’. In multi-state cooperative societies the minimum numbers of member is 50 from each state in case the member are individuals. Members can give their suggestions, opinions and problems. The objective is to improve their economic status and protect themselves from exploitation by businessmen. A cooperative society is a voluntary association started with the aim of the service of its members. They cannot expand their activities beyond a particular level because of the limited financial resources. ADVERTISEMENTS: Read this article to learn about the definition, features, advantages and limitations of co-operative organization. After the establishment of co-operatives, the rural people were able to come out of the grip of money lenders. A minimum of 10 members are required to form a cooperative society. Irrespective of their religion, gender & caste, membership is open to all. There are Features and Advantages of Cooperative Society in 2020. types of cooperative society. 2. Co-operatives do not function efficiently due to lack of managerial abilities. 4. These stores are, in fact, associations organised by consumers […] Cooperatives societies can deal directly with the producers and with the ultimate consumers. प्रकार (Types) 4. Voluntary Association: It is a voluntary association. Co-operative societies buy and sell in bulk quantities directly from the producers or to the consumers. The surplus generated by the cooperative societies is distributed in an equitable manner among members. A co-operative society is managed in a democratic manner. The reason is, in many of the co-operatives there is political interference and domination. Therefore its continuance is in no way affected by the death, insanity or insolvency of its members. The agricultural produce of the small farmers is just sufficient to fulfill the needs of their family. Further there are legal restrictions regarding dividend and bonus that can be distributed to members. The societies are by the small producers to fight against the big producers. These societies procure land from the government and construct flats or provide plots to members on which the members themselves can construct the houses as per their choice. The principle of one-man one-vote and limited dividends also reduce the enthusiasm of members. Let us see why. Therefore the rural poor continue to depend on the money lenders for meeting expenses of marriage, medical care, social commitments etc. All members have equal rights and can have a voice in its management. The government with a view to promote the growth of cooperative societies extends all support to them. Co-operative societies cannot be introduced in all industries. Therefore they are not dependent on middlemen and can save the profits enjoyed by the middlemen. Hence , members are not inclined to put their best efforts . It can utilize the funds available in the general reserve. A person can join cooperative society anytime or leave as per his desire. i. Meaning Of Co-operative Society A cooperative society is a business organization and operated by a group of individuals for their mutual benefit. The liability of the members in a cooperative society is limited to the extent of their capital contribution. The advantages and disadvantages of cooperative business are as follows so don’t miss out any of them: Advantages: As the name suggests, cooperation is the biggest advantage of cooperative business. These companies are all joint stock companies. A co – operative society is a voluntary association and may be formed with a minimum of ten adult members. They also help to prevent concentration of economic power in few hands. Their object is to achieve economies of large scale farming and maximising agricultural output. The procedure involves in the registration of a cooperative society is very simple and easy. Further, reports and accounts have to be submitted to the Registrar of Co-operative Societies. It cannot always be assured. So those who want to work together with some common economic objectives can form a society, which is termed as cooperative society.eval(ez_write_tag([[300,250],'commercemates_com-large-mobile-banner-1','ezslot_1',172,'0','0'])); The membership of cooperative societies is voluntary.