There is no compulsion to remain a member. Therefore, each member is allowed one vote regardless of the number of shares held by him or her and has equal say in the management. Moreover, there is no incentive to contribute more capital as it earns limited returns and is not considered for distribution of profits. In some States like Madhya Pradesh, the Registrar of Co-operative Societies even approves of appointments in managerial position and lays down terms of employment. Apart from rendering services to their members, cooperative societies also earn some profits, which are a by-product of their business activities. 9.4 Characteristics of Co-operative Society A co-operative society is a special type of business organisation different from other forms of organsation you have learnt earlier. The transactions of the society are above board; “the moral element in its aims is as important as the material.”. It’s not profit motive. Moral solidarity in place of unethical business practice 4. It also ensures continuous flow of capital and protects from short-term insolvency. Characteristics of cooperative management—its role, functions, and tools The nature and role of coopera-tive directors as policymakers and individuals Membership responsibilities Cooperative influences on public policy Relationships and linkages between independent, federated, Thus, it has perpetual existence. A cooperative society is a unit of business organization. Separate Legal Entity 4. As a form of organisation, the cooperative association is marked by the following distinctive characteristics: “A co-operative society is a voluntary association of persons and not of capital.” Any person, irrespective of his caste and creed, can join a co-operative society of his free will and can leave it at any time after giving due notice to the society. Any person who desires to become the member of the society can become a member. These common features enhance the effectiveness of cooperative learning groups. In India, the co-operative societies are registered under the Co-operative Societies Act, 1912, or the relevant State Co-operative Societies Act, as the case may be. It is a socio-economic movement inspired by the ideal of organising and uplifting the weaker sections of the society through collective action. Limited liability – The liability of the members of a cooperative society is limited in nature. A cooperative society is a union of weak and needy individuals who have equal rights and ... improves its cooperative character or features. The word cooperative means working together and with others for a common purpose. Management of Affairs of Co-Operative: Management of the affairs of co-operative is entrusted to directors elected by its shareholders in annual general meetings and they are responsible and accountable to the members. (4) The role of bank: The cooperative society cannot leave to itself. Thus, capital contribution does not enjoy the same importance as in case of other forms of business. Cash Trading 9. Democracy is the key-note of the management of a co-operative society. The management of the co-operatives is done in a democratic way. Shares held in a co-operative society … A cooperative society is formed with a service motive and for mutual welfare and not for maximisation of profits. Download Free PDF. State control 4. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. The death, lunacy or insolvency of its members does not affect its existence. Audit, 10. Primary agricultural credit society forms the base in the three-tier cooperative credit structure. 2. A co-operative society sells shares to its members. There are no entry or exit barriers. Perpetual Existence 16. 11. Every co-operative has to get its accounts audited by an auditor from the co-operative department and has to furnish returns of membership and annual report and accounts to the Registrar of Co-operatives. It can enter into contracts on its own. A cooperative society may also be defined … Co-operative Organisation is a voluntarily association of individuals seeking to improve their economic conditions through joint efforts. The basic motive of forming a cooperative society is providing service to its members through its activities rather than earning profit from these activities. Under no circumstances, its members can be asked to contribute beyond the extent of the amount contributed by them as capital in order to settle the claims of the third party. The liability of members of a cooperative society is limited to the extent of the capital contributed by them. With the passage of time, some of them have been modified in view of the peculiar needs and difficulties of certain types of societies. It encourages savings among the agriculturists, accepts deposits from them, gives loans to the needy borrowers and collects repayments. The capital of a co-operative society is raised from members by way of share capital. Thus, it helps the society to have a good working capital and to maintain short-term solvency. It is not so in the case of co-operatives. Share Your PPT File, Features and Characteristics of Cooperative Society: Voluntary Association, Open Membership, Service Motto and a Few Others, – 12 Important Features of a Cooperative Society, – 10 Primary Features of a Cooperative Society: Voluntary Association, Open Membership, Service Motive, State Control and a Few Others, ness activities on cash basis. Control – The management and control of a cooperative society is democratic in nature. However, these societies are not barred legally to sell goods on credit. It can make agreements as well as purchase and sell property in its own name. A cooperative society inherently denies exploitation of its members and consumers. Co-operative societies … The objective of cooperative society is not profit, but mutual gain, based on mutual trust. Coop­eratives are formed by relatively poorer sections of society; share capital is usually very limited. Members elect a board of Directors, who manage the affairs of the society on behalf of the members and are answerable to the members of the society. A person is free to join a cooperative society, and can also leave anytime as per his desire. After getting registered under the Cooperative Societies Act, a cooperative society becomes a separate legal entity with an identity of its own. This form of organization primarily protects and safeguards the economic interests of its members. Thus, it can hold property and carry on activities in its own name; it can sue others and can be sued by others in its own name. Profits, however, are not earned at the cost of the members’ welfare. Membership. We are trying to update it as much as possible. 4. The capital of a society is raised from its members through the issue of shares. The membership of a cooperative society is open to all. Earning profits is the most important objective of other forms of business organization. 7s. Thus, the maximum risk of members is limited to this extent. A Co-operative Society can be formed as per the provisions of the Co-operative Societies Act, 1912. As it is a voluntary association, the membership is also voluntary. 5. the multi-purpose cooperative society combines several functions within the sphere of commodity and money: the commerce, market, public catering, car service, etc. A voluntary consent of at least ten adult persons is required to form a cooperative society. Exceptions are made in case of some members. cooperative. 1. Each local associa-tion in a federated cooperative is a sepa-rate business entity that owns a membership share entitling it to voting rights in the affairs of the regional. This ensures that the opinions all members of the society are given equal weightage. 0000007579 00000 n The bonus may be paid to the members in proportion to purchases made during the year in the case of a consumers’ co­operative store, or in proportion to the goods delivered for sale to the society in the case of a producers’ co-operative store. Because cooperative society must keep at least 15% in reserve fund and 5% to keep in cooperative development fund then rest of profit distributed among shareholders. Thus, cooperative societies are truly democratic organisations. It may be noted that law requires that every co-operative society must transfer at least one-fourth of its profits to a general reserve, likewise, it is provided that a portion of the profit, not exceeding 10 per cent, may be utilised for the general welfare of the locality in which the society is functioning. There is no bar against an individual desirous of becoming a member. Besides, the organisation and control of a co-operative society tend to be perfectly democratic in so far as its bye-laws are approved by the members after it has been registered. A cooperative society, also known as cooperation, is formed when a group of individuals comes together for a certain benefit. In its name, sue and be sued in its aims is as important as the co-operative movement based! Shared amongst the members willing to form a society must be registered must fulfil the following:! Individuals comes together for a person is free to join a cooperative as purchase and sell in! 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