Society

1. Easy to form:
The formation of a cooperative society is very
simple as compared to the formation of any other
form of business organisations. Any ten adults can
join together and form a cooperative society. The
procedure involves in the registration of a
cooperative society is very simple and easy. No
legal formalities are required for the formation of
cooperative society.
2. No obstruction for membership:
Unless and otherwise specifically debarred, the
membership of cooperative society is open to
everybody. Nobody is obstructed to join on the
basis of religion, caste, creed, sex and colour etc. A
person can become a member of a society at any
time he likes and can leave the society when he
does not like to continue as ; member.
3. Limited liability:
In most cases, the liabilities of the members of the
society is limited to the extent of capital contributed
by them. Hence, they are relieved from the fear of
attachment of their private property, in case of the
society suffers financial losses.
4. Service motive:
In Cooperative society members are provided with
better good and services at reasonable prices. The
society also provides financial help to its members
< the concessional rates. It assists in setting up
production units and marketing of produces c small
business houses so also small farmers for their
agricultural products.
5. Democratic management:
The cooperative society is managed by the elected
members from and among themselves. Every
member has equal rights through its single vote but
can take active part in' the formulation of the
policies of the society. Thus all member are equally
important for the society.
6. Stability and continuity:
A cooperative society cannot be dissolved by the
death insolvency, lunacy, permanent incapability of
the members. Therefore, it has stable life are
continues to exist for a longer period. It has got
separate legal existence. New members m< join
and old members may quit the society but society
continues to function unless are otherwise all
members unanimously decided to close the same.
7. Economic operations:
The operation carried on by the cooperative society
economical due to the eliminations of middlemen.
The services of middlemen are provided by the
members of the society with the minimum cost. In
the case of cooperative society, the recurring and
non-recurring expenses are very less. Further, the
economies of scale-ma production or purchase,
automatically reduces the procurement price of the
goods, thereby minimises the selling price.
8. Surplus shared by the members:
The society sells goods to its members on a
nominal profit. In some cases, the society sells
goods to outsiders. This profit is utilised for meeting
the day-to-day administration cost of the society.
The procedure for distribution of profit that some
portion of the surplus is spent for the welfare of the
members, some portion kept reserve whereas the
balance shared among the members as dividend on
the basis of this purchases.
9. State patronage:
Government provides special assistance to the
societies to enable them to achieve their objectives
successfully. Therefore, the societies are given
financial lo< at lower rates. Government also
extends many type of subsidies to cooperative
societies strengthening their financial stability and
sustainable growth in future.
Disadvantages of Cooperative Society:
Despite many an advantages, the cooperative
society suffer from certain limitations c drawbacks.
Some of these limitations, which a cooperative form
of business has are as follows:
1. Limited resources:
Cooperative societies financial strength depend on
the cap contributed by its members and loan raising
capacity from state cooperative banks. The
membership fee is limited for which they are unable
to raise large amount of resources as their
members belong to the lower and middle class.
Thus, cooperative^ are not suitable for the large
scale business which require huge capital.
2. Inefficient management:
A cooperative society is managed by the members
only. They do not possess any managerial and
special skills. This is considered as major
drawback of this sector. Inefficiency of
management may not bring success to the
societies.
3. Lack of secrecy:
The cooperative society does not maintain any
secrecy in business because the affairs of the
society is openly discussed in the meetings. But
secrecy is very important for the success of a
business organisation. This paved the way for
competitors to compete in more better manner.
4. Cash trading:
The cooperative societies sell their products to
outsiders only in cash. But, they are usually from
the poor sections. These persons require to avail
credit facilities which is not possible in the case of
cooperatives. Hence, marketing is a shortcoming
for the cooperatives.
5. Excessive Government interference:
Government put their nominee in the Board of
management of cooperative society. They influence
the decision of the Board which may or may not be
favourable for the interest of the society. Excessive
state regulation, interference with the flexibility of its
operation affects adversely the efficiency of the
management of the society.
6. Absence of motivation:
The members may not feel enthusiastic because
the law governing the cooperatives put some
restriction on the rate of return. Absence of
relationship between work and reward discourage
the members to put their maximum effort in the
society.
7. Disputes and differences:
The management of the society constitutes the
various types of personnel from different social,
economical and academic background. Many a
times they strongly differs from each other on many
important issues. This becomes detrimental to the
interest of the society. The different opinions and
disputes may paralyses the effectiveness of the
management.

What is a Co-
operative?
A cooperative is defined as an autonomous
association of persons united voluntarily to meet
their common economic, social, and cultural needs
and aspirations through a jointly-owned and
democratically-controlled enterprise .
A cooperative may also be defined as a business
owned and controlled equally by the people who use
its services or who work at it.
There are different types of co-operatives:
Housing cooperative
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.
Building cooperative
Members of a building cooperative (in Britain known
as a self-build housing co-operative) pool
resources to build housing, normally using a high
proportion of their own labour. When the building is
finished, each member is the sole owner of a
homestead, and the cooperative may be dissolved.
Retailers' cooperative
A retailers' cooperative (known as a secondary or
marketing co-operative in some countries) is an
organization which employs economies of scale on
behalf of its members to get discounts from
manufacturers and to pool marketing. It is common
for locally-owned grocery stores, hardware stores
and pharmacies. In this case the members of the
cooperative are businesses rather than individuals.
Utility cooperative
A utility cooperative is a public utility that is owned
by its customers. It is a type of consumers'
cooperative. In the US, many such cooperatives
were formed to provide rural electrical and
telephone service.
Worker cooperative
A worker cooperative or producer cooperative is a
cooperative that is owned and democratically
controlled by its "worker-owners". There are no
outside owners in a "pure" workers' cooperative,
only the workers own shares of the business,
though hybrid forms in which consumers,
community members or capitalist investors also
own some shares are not uncommon. Membership
is not compulsory for employees, but generally only
employees can become members. However, in
India there is a form of workers' cooperative which
insists on compulsory membership for all
employees and compulsory employment for all
members. That is the form of the Indian Coffee
Houses. This system was advocated by the Indian
communist leader A. K. Gopalan.
Consumers' cooperative
A consumers' cooperative is a business owned by
its customers. Employees can also generally
become members. Members vote on major
decisions, and elect the board of directors from
amongst their own number. A well known example
in the United States is the REI (Recreational
Equipment Incorporated) co-op, and in Canada:
Mountain Equipment Co-op.
The world's largest consumers' cooperative is the
Co-operative Group in the United Kingdom, which
offers a variety of retail and financial services. The
UK also has a number of autonomous consumers'
cooperative societies, such as the East of England
Co-operative Society and Midcounties Co-
operative.
Migros is the largest supermarket chain in
Switzerland and keeps the cooperative society as
its form of organization.
Coop is another Swiss cooperative which operates
the second largest supermarket chain in
Switzerland after Migros.
Agricultural cooperative
Agricultural cooperatives are widespread in rural
areas.
In the United States, there are both marketing and
supply cooperatives. Agricultural marketing
cooperatives, some of which are government-
sponsored, promote and may actually distribute
specific comodities. There are also agricultural
supply cooperatives, which provide inputs into the
agricultural process.
In Europe, there are strong agricultural /
agribusiness cooperatives, and agricultural
cooperative banks. Most emerging countries are
developing agricultural cooperative