Question

7. Cooperative helps in the capital formation. Justify.​

Answer 1

Answer:

The Principle of User-ownership

This principle restricts ownership of the co-operative to the users. Persons, who do not use the services, are not allowed to be members and, therefore, the shares of cooperatives cannot be traded in a stock exchange for sale to any capital investor. The shares of the co-operative do not have a market and the member’s shares cannot be sold at a higher value, but the co-operative redeems the shares at their nominal or purchase value when the member withdraws from active use of the co-operative services. 

Answer 2

Answer:

So the capital required for the establishment of small and cottage industries are possible through cooperatives. Such organizations also contribute to the economic development in national periodic plans. The local level cooperation, coordination and investment environment has been created from these organizations