Question

Features of co operative organization

Answer 1

A co-operative society is 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.

Features of a Co Operative Society :

• Voluntary Association- The membership of cooperative societies is voluntary. Anybody having a common interest is free to join a cooperative society. The member can also leave the society any time after giving a proper notice.

• Equal Voting Rights- A cooperative society is based on the principle of “one man one vote”. A member has only one vote irrespective of the number of share(s) held by him. Thus, a co-operative society runs on democratic principles.

• Separate Legal Entity- A cooperative society is required to be registered under the Co-operative Societies Act. Registration provides it a separate legal entity. Its existence is quite different from its members. The death, insolvency or lunacy of a member does not affect its existence.

• Service Motive- A cooperative society is based on the service motive of its members. Its main objective is to provide service to the members and not to maximize profits. Earning profits is their secondary motive.

• Elimination of Middlemen- The main object of the cooperative societies is to eliminate middlemen and to establish direct contact between members and customers. This ensures availability of goods at fair prices and minimizes unhealthy competition.

• Cash Trading- Generally, a co-operative society buys and sells goods on cash basis. Cash trading does not involve bad debts and credit collection expenses. Thus, it helps the society to have a good working capital and to maintain short-term solvency.