CHAPTER – 20
Co-Operative Society
Introduction
Co-operative society is voluntary
association of small producers or consumers for their mutual benefits. It is
formed for producing and supplying goods in accordance with the needs and
requirements of the member who compose it. The members form and carry on the
business of co-operative societies themselves. They are the owners, workers and
mangers of the society. They have democratic control over its organization and
management. It is formed for the purpose of achieving economic, social and
educative benefits. Profit making is not the man aim of such organizations. Its
aim is to eliminate the services of middlemen. It brings benefits for the
welfare of the members with the help of applying the principals of all for each
and each for all into practice. Its success depends on how much mutual
co-operation in between the members has been developed.
Characteristics
of Co-Operative Society:
The following are the main features
of the Co-operative society:-
1. Object
Its main aim is to bring mutual
benefit to the members who compose it. Money making is not the main aim of the
Co-operative Society. The Society looks after the welfare of the members. It
aims producing and supplying goods to meet requirement of the members.
2. Capital
It collects capital from the members.
The members purchase shares in the cooperative society and provide necessary
capital to it. The cooperate society is divided into fix number of shares. To
become a member of the society one must purchase at least one share.
3. Membership
There must be at least 15 members in
a cooperative society. But one cannot become a member of the society unless he
attains the age of maturity.
4. Democratic
Principle
The co-operate society is based on
the principle of democracy. Every member enjoys rights. Everyone has got only
one vote. Policies of the society can be criticized by the members. So the
members have a democratic control over the affairs of the society.
5. Transferability
of Share
The shares of the cooperative society
can be transferred to the members of the society. They cannot be transferred to
nonmember.
6. Division of
Profit
Although it is not the main idea of
the cooperative society to earn profit at any cost yet it often earns a
handsome profit. The profit of the society is distributed to the members on the
paid up capital but the profits of the consumers cooperative society are
distributed in proportion to their total purchases during the trading period.
7. Entity
The cooperative society has a
separate artificial entity. Thus its entity is independent of the members.
Advantages of Cooperative Society
1.
Elimination of Middleman
The consumers get their requirements
direct from the producers or they supply their own requirements. hence the
cooperative society eliminated middleman and makes the goods available to the
consumers at cheaper rate.
2. Economy
Certain economies can be enjoyed by
the members of cooperative society in the field of production an distribution.
The society has not to bother from marketing the goods. the members are its
regular customers and it need not advertise its good in the market.
3. Capture
Market
The cooperative society sells goods
at a cheaper rate. hence it can easily attract a good number of customers.
4. No Surplus
Stock
The society has got regular customers
so it has not to keep any surplus stock in hand.
5. Saving of Management
Expense
Sometimes the members render free
services to manage the affairs of the society. They do not demand any
remuneration.
6. Educative
Value
The members are able to learn the
principles of cooperation. They learn how to render services for the mutual
benefits of themselves. They learn about economic and social aspects of human
life.
7. Provision for
The Maintenance of The Poor
Poor people accumulate and invest
their small saving in the society which brings for them a better standard of
living particularly it increases the income of agriculturists and the people
who have been engaged in small and cottage industry.
8. Social
Benefits
It develops self-confidence and self
-reliance among the general people. They learn the principal ‘Self-help is the
best help’. At the same time it develops them a sense of cooperation and
sacrifices.
9. Provision for
Employment
It solves unemployment problems of
the under developed countries. People find employment in small and cottage
industries to earn their livelihood.
10. Integration
Under this system of production and
distribution a complete integration between the manufacturers wholesalers and
the retailers is possible.
11. Equal
Distribution of Wealth
Under the system of production and
distribution wealth cannot be concentrated in few hands. Equal distribution of
wealth takes place under this system.
12. Equal
Status
There is no master servant
relationship in between the members of cooperative society. All are the owners
managers, and workers of the cooperative society.
Disadvantages of Cooperative Society
1. Lack of
Capital
It suffers from lack of capital
because it is an organization of poor people. They cannot afford large amount
of capital so they cannot afford to expand the size of the business.
2. Lack of
Interest
As the market for the products of
cooperative society has been guaranteed so the organizers and managers do not
pay keen interest in the management of cooperative society.
3. Lack of
Efficient Person
It fails to accommodate men of
talent, skills and initiative because it requires free services from them. Such
people may not be interested to join the cooperative society.
4. Lack of
Cooperation
It requires cooperation and
selflessness and other facilities which are rarely found in the general people.
There is no scarcity of mean minded people living within individuals of the
society. The society remains for its success.
5. Un-Education
Most of the members of the
cooperative society are uneducated and unskilled. So the management of the
society may fall in the clutches of selfish people.
6. Frequent
Change in Demand Of Goods
The cooperative society cannot be
carried on successively in the fields where the demand for goods changes
frequently.
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