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  • 1.Nishant R. Nair
    • Class- 9-2
  • Roll No. - 28

2. 3. Co-operation

    • Derived from the Latin word co-operari
    • co means with and operari means to work
    • Co-operation means working together

4. Co-operative Society

  • Avoluntary associationof persons;
  • working together withcommon economic objective ;
  • providingsupportto the members;
  • self-helpandmutual help ;
  • non-profitmotive;
  • poolingindividual resourcesforgroup welfare;
  • forcommon benefit .


  • Render service, not for profit;
  • Mutual help, not competition;
  • Self help, not dependence;

6. Characteristics 7. Open membership

  • Membership open to all with common interest;
  • Minimum of ten members;
  • No restriction on the maximum number;
  • Members may specify the maximum number for their Society

8. Voluntary Association

  • Members coming together voluntarily;
  • by choice, not by force;
  • Continues for as long as he likes;
  • May leave at his will.

9. State control

  • Registration compulsory;
  • Statutes, Rules and Bye Laws to protect the interest of members;
  • Has to maintain books and records;
  • Subject to statutory audit of books by qualified Chartered Accountants;
  • Functions under the regulatory supervision of Registrar of Co-operative Societies

10. Sources of Finance

  • Capital contributed by all the members;
  • May raise loans and secure grants from government;
  • after its registration.

11. Democratic Management

  • Governed by aManaging Committee or Board of Directors elected by the members of the society;
  • Managed on democratic lines;
  • One member one vote, irrespective of no. of shares held;

12. Service motive

  • Co-operatives not to maximize profit but to provide service to its members;
  • A Consumer Co-operative Store sells quality goods to members at a reasonable price retaining a small margin of profit;
  • In a Housing Co-Operative, members reside by sharing expenses on maintenance and repairs.

13. Separate Legal Entity

  • Separate legal entity;
  • Limited liability of its members;
  • Continuity of existence;
    • Death, insolvency or lunacy of a member not to affect the existence of a society
  • Can enter into agreements;
  • Can purchase or sell properties in its own name;
  • Can sue and be sued.

14. Distribution of Surplus

  • Distributes Profits earned among Members on the basis of members participation in the business of the society;
  • Profits generated are not at the cost of its members;
  • Example:
    • in a Consumer Society, profit generated by sale of goods to general public is paid as purchase bonus to members on the basis of goods purchased by them from the society.

15. Self-help through mutual cooperation

  • Co-operative Societies thrive on the principle of mutual help;
  • They are the organizations of financially weaker sections of society;
  • converts Weakness to strength by self-help through mutual co-operation;
  • Fights exploitation and secure a place in society through Each for all and all for each.

16. Formationof a Society 17.

    • Governed by the Co-operative Societies Act, 1912;
    • Minimum of 10 persons having the capacity to enter into a contract with common economic objectives;
    • A joint application along with the bye-laws of the society containing the details about the society and its members to the Registrar of Co-operative Societies of the concerned state;
    • After scrutiny, the registrar issues a Certificate of Registration

Formation of a Society 18. Requirements for Registration

  • Application with the signature of all members
  • Bye-laws of the society containing:
    • Name, address and aims and objectives of the society
    • Names, addresses and occupations of members
    • Mode of admitting new members
    • Share capital and its division

19. Advantages 20.

  • Easy Formation
  • Open Membership
  • Democratic Control
  • Limited Liability
  • Elimination of Middlemens. Profit
  • State Assistance
  • Stable Life

21. Easy Formation

  • Formation easy compared to a joint stock company;
  • Any ten adults with common intent;
  • voluntarily forming an association;
  • Registered with the Registrar of Co-operative Societies.

22. Open Membership

  • Persons with common interest
  • voluntarily coming together
  • may become a member of the society at his will
  • And leave the Society at will.

23. Democratic Control

  • controlled in a democratic manner;
  • Elects representatives to govern the affairs of the Society;
  • One member, one vote;
  • Governing Council/ Committee accountable to members and the Regulators.

24. Limited Liability

  • liability of members limited to the extent of the capital contributed by them to the Society;
  • No personal liability to members for the liability of the Society

25. Elimination of Middlemens Profit

  • Combined strength of members;
  • to derive economies of scale;
  • for direct access to
    • manufactures and producers;
    • goods and services;
    • to markets and distribution channels ;
  • Eliminates middlemens profit

26. State Assistance

  • Central and State assistance;
    • in the form of capital contribution;
    • loans at low rates of interest;
    • exemption in tax;
    • subsidies in repayment of loans, etc .

* *Graph showing Government assistance to TDCC Tribal Development cooperation corporation 27. Stable Life

  • fairly stable life;
  • continuous existence;
  • existence not affected by death, insolvency, lunacy or resignation of members.

28. Limitations 29. Limited Capital

  • Source of capital limited, by limiting membership to a particular section of the society;
  • No incentive to members to contribute more to the capital due to low rate of return;
  • Governments assistance often inadequate for most Co-operatives

30. Problems in Management

  • lack of managerial talent due to
    • elected representatives lacking in managerial experience and expertise;
    • limited resources hampering outsourcing of professional managerial talent;

31. Lack of Motivation

  • Lack of motivation owing to
      • Societies being service oriented not profit oriented;
      • Extra efforts by any particular member not getting extra reward;
      • Being aloof and not involved does not result in denial of rewards.

32. Lack of Co-operation

  • Societies often suffer from
    • Personality differences;
    • Ego clashes;
    • Selfish attitudes;
    • Lack motivation;
    • Ignorance of or irreverence to principles of co-operation

33. Dependence on Government

  • Societies ften tend to be dependent on government patronage and support in terms of grants, loans subsidies,etc., owing to
    • inadequacy of capital;
    • Limited access to raw materials;
    • Lack of market and distribution of channels for products;
    • Vagaries of nature leading to financial burden on members, etc.

34. 35. Consumers Co-operative Society

  • For protecting interest of general consumers;
  • by making consumer goods available at a reasonable price;
  • Source goods directly from the producers or manufacturers;
  • eliminates middlemen in the distribution process.
  • Some examples :


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