What is Cooperative Societies?

Cooperative society

A cooperative society is not a new concept. Cooperative society prevails in all the countries, this is almost a universal concept. The cooperative society is active in all countries worldwide and represented in all the sectors including agriculture, food, finance, healthcare, etc.


  1. Voluntary Membership: Cooperative organization is a voluntary association of persons desirous of pursuing a common objective. Therefore they can come and leave the organization at their own will without any coercion or intimidation.
  2. Administration Motive: An agreeable society depends on the administration rationale of its individuals. Its primary goal is to give administration to the individuals and not to augment benefits.
  3. Legal Status: A co-operative society required to registered under the co-operative societies act. It has its separate legal entity and perpetual succession.
  4. Limited Liability: The cooperative society member’s liability limited to the extent of the amount contributed as capital.
  5. Control: An elected managing committee has the power to make the decision. Individuals reserve the privilege to cast a ballot. So, they choose the individuals who will establish the overseeing advisory group.

Merits of Cooperative Societies

  1. The simplicity of Formation: It framed much effectively when contrasted with an organization. So, any 10 individuals who have achieved the dominant part can combine for shaping an agreeable society by watching straightforward legitimate conventions.
  2. Constrained Liability: The risk of the individuals in a helpful society is restricted to the degree to their capital commitment. Therefore they can not be by and by at risk for the obligations of the general public.
  3. Stable presence: An agreeable society appreciates separate lawful element which is unmistakable from its individuals. Consequently, its duration is not the slightest bit influenced by the passing, madness or indebtedness of its individuals. It appreciates a never-ending presence.
  4. Backing from Government: The administration so as to advance the development of helpful social orders stretches out all help to them. anyway, It gives advances at modest financing costs, gives appropriations and so on.
  5. The economy in operations: It because of the end of centerman and willful administrations gave by its individuals.
  6. Uniformity in Voting Status: The rule of “exclusive one vote” oversees this society. But Irrespective of the measure of capital commitment by a part, every part is qualified for equivalent democratic rights.

Limitations of Cooperative Societies

  1. Lack of secrecy: In openly discussed in its meeting which makes it difficult to maintain secrecy.
  2. Government control: It suffers from excessive rules and regulations of the government. consequently, The accounts audited by the auditor and submit a copy of its accounts to the registrar.
  3. Inefficient in management: cooperative society managed by a committee consisted of office-bearers elected by the members. Likewise, office-bearers may not be capable and experienced. A helpful society can’t stand to utilize master proficient chiefs at significant compensations.
  4. Restricted Resources: Resources of a helpful society comprises of capital commitments of the individuals with constrained methods the low pace of profit offered on speculation likewise acts in drawing in enrollment or progressively capital from the individuals.
  5. Differences of Opinion: There are often internal quarrels due to differences in opinions and lack of cooperation among members. Likewise, it leads to difficulties in decision-making. Some members attempt to give preference to personal interest at the cost of welfare motive.

Types of Cooperative Societies

  1. Consumer’s Cooperative Societies: It formed by the consumĀ­ers to obtain their daily requirements at reasonable prices.
  2. Producer’s Cooperative Societies: Producers or mechanical cooperatives are deliberate relationships of little makers and craftsmen who hold hands to confront rivalry and increment generation.
  3. Marketing Cooperative Society: These are voluntary associations of independent producers who want to sell their output at remunerative prices. Likewise, The output of different members sold through a centralized agency to eliminate middlemen.
  4. Farmer’s Cooperative Societies: These are voluntary associations of small farmers who join together to obtain the economies of large scale farming. Certainly in India farmers are economically weak and their land-holdings are small.
  5. Credit Cooperative Societies: The objective of forming cooperative credit societies is to provide loans to members at reasonable rates of interest and to develop the habit of thrift among members.
  6. Cooperative Housing Societies: It formed by those who interested in acquiring a residential property. But They undertake activities relating to purchase of land, obtaining governmental approvals, development of the site, construction of houses or flats and allotment of houses/flats to its members.

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