Cooperative Societies/Cooperative Organisation

Meaning of Cooperative Organisation

Cooperation means working collectively.Cooperative organisation means a voluntary organisationn which is established by some persons on the basis of cooperation and equality to safeguard their common economic interest.

Features Of Cooperative Organisation

(1) Voluntary Membership:It is a voluntary association of persons,which means that no individual can be compelled to be a member of a cooperative society.Anybody can be its member as and when he desires and leave its membership after giving imformation to this effect.

(2) Legal Status:No association of members can use the word 'Cooperative' with its name unless it is registered under the Cooperative Societies Act 1912 or under the State Cooperative Societies Act.

(3) Limited Liability:The liability of the members in this organisation is limited to their shares or the guarantee given by them.

(4) Control:The controlling job is performed by the members themselves in a democratic way.A managing committee is formed for this purpose which is elected on the basis of voting in the general meeting.

(5) Service Motive:Their main purpose is to provide maximum possible held to the members.providing maximum possible help does not mean that the societies provide goods and services at cost price but help their members by earning proper profit.


Merits Of Cooperative Organisation

(1) Easy Formation:A cooperative society can be formed easily.Any ten can establish a cooperative society by getting it registered with the Registrar of Cooperative Societies.It does not require any difficult and expensive legal procedure.

(2) Limited Liability:The liability of the members in this organisation is limited to their shares or the guarantee given by them.

(3) Stability:Being a seperate entity,a cooperative society possesses the advantage of stability,which means that the death or bankruptcy of members have no effect on it.

(4) Democratic Management:In a cooperative organisation,the representatives are elected on the basis of 'one member one vote'.Its coverage being limited,almost all the members attend its meetings and give their ideas and no proxy is allowed on these meetings.

(5) Tax Advantage:Cooperative societies earning are exempt from income tax.These are also exempted from the payment of stamp duty,registration fee,etc.

Limitations Of Cooperative Societies 

(1) Lack Of Capital:The members of cooperative societies are generally economically poor and live in a limited area.Hence,they can invest only a limited capital in the cooperative society.

(2) Lack Of Secrecy:Cooperative Societies have to send their annual reports and accounts to the Registrar of Co-operative Societies.In this way the secrets of business become public.

(3) Lack Of Motivation:Since cooperative organisation is a collective enterprise of a group of  persons,no member takes personal interest in its activities.In the absence of individual motivation all keep quiet and do not want to work.

(4) Mutual Disputes:It has,generally,been observed that these societies are established with a lot of enthusiasm but enthusiasm disappears within short span of time. 

(5) Political Interference:Since the government also invests money in the cooperative societies,it has members nominated in the managing committee.As and when there is a change in the government ,the new government desires to have its own members.

Thanks For Reading!!!
-Sujal Juneja
(Juneja Technology)