CO-OPERATIVE ORGANISATION / CO-OPERATIVE SOCIETIES

CO-OPERATIVE ORGANISATION / CO-OPERATIVE SOCIETIES

It is an organisation which is working on the basic objective of service than profit . they function under the principle of mutual help.

Characteristics or Principles of  Co-operative Societies

F Voluntary Association : every individual is free to join or not to join in co-operative society.

F Association of persons : individuals join co-operatives as human beings and not as capitalists.

F Unrestricted Membership : any one who is major can become member of co-operative society.

F Equal Voting Rights : one member one vote is the principle of co-operative society and not one share one vote.

F Democratic Management : Each for all and all for each is the principle of management in a co-operative society.

F Service is the Motto : A co-operative is formed to give maximum service to its members.

F Limited Distribution of Surplus : only limited portion of profit is given to the members.

F Cash Trading : business in co-operative society is done on cash own basis.

F Corporate Status and State Control : co-operative society in India are registered under co-operative society Act 1912. On registration it become a body corporate enjoying separate legal entity.

F Liability : liability of a co-operative society is generally limited

Advantages of a co-operative society

v Easy of Formation

v Perpetual succession : not affected by the death or insolvency of members.

v Democratic management : one man one vote helps for democratic management

v Mobilisation of Savings : Small savings are mobilised for constructive purposes.

v Economy of operation :  expense for working co-operative society is minimum

v Saves Members From Exploitation : By giving loans at reasonable interest rate , by providing consumer goods at fair prices.

v State Assistance : exempted from tax, stamp duty and registration fees, etc 

v Social Importance : co-operative society render services without profit motive.

Disadvantages of a Co-operative Society

·        Inadequate Capital : non availability of capital for large scale operations.

·        Inefficient Management : they have no financial stability to appoint specialists.

·        Lack of business secrecy : there will periodical discussions in general body about all facts.

·        Lack of Motivation : remuneration is very low

·        Excessive State Control : excessive state control affects successful functioning of co-operatives.

·        Internal Conflict : local politics adversely affects the smooth functioning of co-operatives .

Types of Co-operative Societies

1.    Co-operative Credit Societies : it gives short term finance at reasonable interest . there are four types of credit societies ;

a.  Rural Banks : provides loans at lower rate to buy seeds, fertilisers, agricultural implements,etc.

b.   Urban banks : formed in district towns for providing facilities to small traders and artisans.

c.   Employees Credit Societies : formed by employees in govt., semi govt. ,banks, etc. to meet financial problems.

d.  Wage Earner’s Societies : formed by workers in and around town areas.

2.   Co-operative Marketing Societies : these are formed for helping farmers, artisans, and small producers for marketing their products .

3.   Co-operative Farming Societies : formed by farmers for maximise production and secure benefits of large scale cultivation.

4.   Consumers Co-operative Societies : formed by low and middle income groups , to ensure supply of consumer goods at fair prices.

5.   Producer co-operative societies : organised by small scale producers and craftsmen that helps them conduct small scale business.

6.   Co-operative housing Societies : to solve housing problems. It includes land societies, finance societies , house building societies and  tenancy co-operative societies.