It is not so in the case of co-operatives. The death, insolvency or lunacy of a member does not affect its existence. The membership is not restricted to a few persons only. But bureaucracy is common in cooperative departments. The basic motive of forming a cooperative society is providing service to its members through its activities rather than earning profit from these activities. History of Cooperative Principles One of the earliest cooperative businesses was the Rochdale Equitable Pioneers' Society, founded in England in 1844. Credit cooperative societies are two types: agriculture credit cooperatives and non-agriculture credit cooperatives. A cooperative society operates within a limited area, and so all the members can attend its meetings and exercise their control. A cooperative society is a group of individuals who have specific common needs.It is an economic enterprise,the purpose of which is to improve the economic status of owners or members.Most cooperative societies offer their products to their members and others do not serve non-members. The cooperative societies in Bangladesh are operating under several hurdles. A cooperative organisation always prefers (1) Service instead of profit maximization, Voluntary Association- The membership of cooperative societies is voluntary. The land is owned by the society. Since most of these societies operate on a local scale, the meetings of the members are generally well attended. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. Any person can join a cooperative society of his free will and can leave it at any time. As a result of this, the advantages of large-scale operations like Joint Stock Company are not available to this organization. Open Membership: The membership of a cooperative society is open to all i.e, membership is open to all, irrespective of their caste, creed and religion. i. To perform the managerial work, the members elect the honorary office bearers in a democratic way. It provides an effective means of pooling together the resources of the weaker sections of the society. 1. Government regulation and control: Society is regulated by the Bangladesh co-operative societies Act, 1984. In a cooperative society, a member has only one vote irrespective of a shares held by him. It does not store any personal data. The voluntary character of the co-operative association has two major implications- (a) none will be denied the right and opportunity to become its member, and (b) the co-operative society will not compel anybody to become a member. Limited liability: The members of a cooperative society will have limited liability. Control The management and control of a cooperative society is democratic in nature. 14. tive principles and explain the way a coop-erative operates. (b) Types of co-operative society are: (i) Consumer cooperative society is formed by consumers who pool their resources together to enable them to buy goods directly from manufacturers at a cheaper rate. According to Calvert, a cooperative denotes a form of organization wherein persons voluntarily associate together as human beings based on equality for the promotion of economic interests of themselves. Cooperative society leads a great role by providing a training program for improving the skill of uneducated poor and unskilled members. all information mentioned in easy and simple way. However, there is a possibility of withdrawal of capital. Cooperative is only one aspect of a vast movement that promotes the voluntary association of individuals having common needs who combine towards the achievement of common economic ends. Registration provides it a separate legal entity. Moreover, it promotes moral, social, and educational values. The members, in turn, pay some charges for this service rendered by society. It does not require long and complicated legal formalities at the time of formation. Cooperation work with the feeling of helping others. The cooperative organizations have perpetual succession because it is not affected due to the death or insolvency of members. Whatever little profit it earns is partly spent (10 % at the most) for the welfare of its members. It is very important that have full authority to manage and control their cooperative. The primary purpose of the agricultural cooperative society is to help its members in the rational organizing of agricultural production, the processing, and marketing of the cropping output as well as animal production also. It also proves better quality goods to its members and the general public. Many business organizations have the main motive to earn profit and also exploit customers. Commerce, Financial Accounting, Human Resource Management,, Cost Accounting, Principles of Business, May 7, 2016 By Salman Qureshi Leave a Comment. Marketing Cooperative Society: These societies are formed with the objective of providing small producers a platform to sell their products at affordable prices and also eliminate middlemen from the chain, thus ensuring adequate profits. So they arent conscious of right or wrong. The co-operative structure is designed on the principles of cooperation, mutual help, democratic decision making and open membership. Maharashtra State Co-operative Society Act 1960. This ensures that the opinions all members of the society are given equal weightage. This cooperation resulted in the emergence of cooperative form of organisations, commonly known as cooperative societies, for various activities, including business activities. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. The authority tends to cheat the uneducated members. The surplus if any, is shared amongst the members as dividend in compliance with the bye-laws of the society. Service Motto 22. (ii) A portion of the profits, not exceeding 10 percent, is used to pay dividend on share capital. A co-operative society is a special type of business organization, the different form of organization you have learned earlier. In joint farming, ownership lies with society. Some charities have also benefited from operating as a cooperative society, as charity members become more focused on their work, raising more money for the cause in question. The cooperative society has perpetual succession because it is not affected due to death, insolvency, or lunacy of any member. A cooperative society requires at least ten members to form a society. Voluntary Membership The membership of a cooperative society is voluntary in nature. Service motive: Co-operatives are not formed to maximize profit like other forms of business organizations. 3. A cooperative society is a voluntary association that started with the aim of the service of its members. But in tenant farming, society members enjoy the output produced in the land owned by others and only pay a certain amount of charges for cultivating the land of others. Cash Trading- Generally, a co-operative society buys and sells goods on cash basis. Principle of Self and Mutual Help 11. Everybody having a common interest is free to join a cooperative society. Equal right contributes to establishing social order and justice. The importance is as follow: Creation of strong unity and self-realization: "Unity is strength" is the key point of cooperative society. 4) They aim to protect the rights of people both as producers and consumers. Persons having a common interest can join as members. Capitalism creates inequality of wealth, and cooperative society helps to reduce this as well as helps the equal distribution of wealth. The cooperative society is a voluntary association of persons, who join together with the motive of the welfare of the members. Separate Legal Entity- A cooperative society is required to be registered under the Co-operative Societies Act. So this organization will function under the mutual cooperative of all the members. Discuss the characteristics, merits and limitations of the cooperative form of organization. This ensures availability of goods at fair prices and minimizes unhealthy competition. This cooperation resulted in the emergence of cooperative form of organisations, commonly known as cooperative societies, for various activities, including business activities. Registration of the society under the relevant Act is necessary which gives it a status of distinct identity. Service before self, Service is of primary importance and Self Interest is of secondary importance. Due to the association of members of low income groups, the scope of raising capital is limited. Some of the disadvantages of cooperative societies are: 1. Generally, his liability is limited up to the face value of shares. Registration procedure is simple and not time consuming. Its main objective is to provide service to the members and not to maximize profits. The principle of one man one vote makes the society truly democratic. Thus, the maximum risk of members is limited to this extent. It can file and defend suits. Thus, it has perpetual existence. Limited Liability. By checking extravagance, it inculcates the habit of savings among the people. It is based on the principle of one man one vote. Cooperative societies are classified into the following six types. Many cooperative societies are essentially out to make a profit and believe that enhancing relationships will lead to high-profit levels. Essentially giving each individual within a firm a small piece of it raised productivity, as people gained the sense that they were very much part of the organization, rather than just somebody working for it. 3. Making the payment of fixed interest on paid-up capital definitely a first charge on the trading surplus, gave those who joined the society a solid reason for leaving their saving in deposit with it.. But they dont work without any interest. In other words to uplift economically weaker sections of society. The simple requirement is ten or more members have to make written application to the Registrar with four copies of Bye-laws. The trading operation of the cooperative society is done based on cash. Required fields are marked *. The co-operative societies are set-up by weaker sections of society to protect its members from the clutches of profit hungry businessman. 6. Dividend Distribution from the Surplus: In co-operative, return on capital investment to its members is given in the form of dividend from its surplus after meeting its trading liabilities. Simply speaking, we know that cooperative means to work together to improve their economic condition. A cooperative society is a voluntary association. Our cooperative is usually seen in low or middle classes. The philosophy of cooperative society is to serve the common man and to liberate him from the oppression of the economically strong people and organizations. If a cooperative starts and operates solely owned, from borrowed capital, it violates the managed, principle of self . Disposal of Surplus 23. When he leaves, he can withdraw his capital from the society. Transfer of shares: The shares of a co-operative society are not freely transferable. Profits earned by the society are distributed amongst its members according to the extent of business transacted by the member with the society. His philosophy of the formation of a cooperative society is all for each and each for all. There is cooperation among the members and not competition. So the success is impeded. Registered co-operative gets an independent status and can own its assets, enter into contracts can sue and be sued. 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. Students will be happier with their accommodation and the staff remembers will find their working life much easier. Nice article and also informative. 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 can also sue other people and organisation in a court of law. Co-operative Organisation is a voluntarily association of individuals seeking to improve their economic conditions through joint efforts. It creates self-employment opportunities and encourages the members to compete with others. Self-help through mutual cooperation: Co-operative societies thrive on the principle of mutual help. Any person irrespective of his/her religion, caste and gender is free to join or leave cooperative society anytime as per his/her desire. Producer Cooperative Society: Producer cooperative societies are formed with the objective of protecting the interests of small producers.
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