Advantages of the Cooperative Society
Following are the important advantages or merits of cooperative society Advantages of the Cooperative Society
1. Easy Formation:
The formation of cooperative society is very easy as compared to Joint Stock Company. There are no complicated formalities for its formation. The only ten persons who have attained the age of majority can apply for registration of cooperative society. As the purpose of the society is to promote the economic welfare of its members, so government also encourages its formation)
Elimination of Middlemen’s Profit:
The consumer’s cooperative society is formed to eliminate the services of middlemen in the distribution process of goods and services. The members of the society themselves purchase the goods in bulk and sell them to its members and other persons at whole sale price)
Benefits of Large Scale:
The members of cooperative society are of small income group. They individually cannot produce the goods and services on large scale. So when they form a productive cooperative society and pool their resources, they are able to produce the goods and services on large scale and in this way, avail the economies of large scale production)
4. Employment Opportunities:
The society employs its own members for the performance of its functions. So
the members of the society are also its employees. Either it is consumer’s society or producer’s cooperative society it creates job opportunities for its own members as well as for the general public.)
5. Discourage Monopolies:
Sometimes, one firm or some firms collectively get the monopoly position and earn high profit from the poor customers. The consumers and producers cooperative societies discourage and eliminate the monopoly in the country and goods and services at low rates.
6. Low Managerial Expenses:
(Cooperative society enjoys some economics in the field of management due
to voluntary services performed by the members themselves. Thus, it is possible to minimize the expenses of management and supervision.
7. Minimum Stock:
Society Purchases the same goods which are actually demanded by its members. Thus there is need to have minimum stock at hand due to constant and regular demands.
8.Equal Status:
It is a democratic organization where members enjoy equal voice in the management of the cooperative business 9.
Limited Liability:
(Generally, the hability of the cooperative society is limited up to the amount of their investment. In case of loss, the personal property of members cannot be used for the payment of society’s debts)
10. Equal Distribution of Wealth:
(The members of cooperative society belong to low income group of the society helps in equal distribution of wealth)
11. Improvement of Standard of Living:
provides job opportunities and increases the income of the members. In this way, the living standard of its members is improved country The profit earned by the society is divided among its members. In this way the profit goes into the hands of general public instead of capitalists. So, cooperative (The purpose of cooperative society is the economic and social welfare of its members. It provides goods and services to its members at lower rates and also
Tax Exemptions:
(Government provides certain concessions to this form of organization i.e. exemption from stamp duty, super tax, income tax and registration fees.
13. Stable Life:
(The cooperative societies, as compared to other business organization like sole proprietorship or partnership, exists for a longer period. It has a fairly stable life
14. Vast Market:
As the goods are supplied to its members at cheaper rates, the general public is attracted to become the shareholders of the society
15. Promotion of Saving:
(The cooperative society gives the incentive to Dfa Ho its members to promote their savings. These savings are used for productive purposes, which is not only beneficial for its members but also for the country
