Characteristics/Features of Cooperative Society
The main characteristics of the cooperative business are as follow: Characteristics/Features of Cooperative Society
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Formation:
The cooperative society is formed and registered under the cooperative society Act 1925. If the cooperative society is formed to run the business in two or more provinces then it is formed and registered under the Multi-Unit cooperative society Act 1942. Characteristics/Features
2. Voluntary Association:
It is a voluntary association of persons where there is no restriction for its membership. Any person can become a member of society and can leave it at any time after due notice to the society)
3. Legal Entity:
A cooperative society after registration acquires a corporate personality with perpetual succession and common seal. It acquires an identity quite distinct and independent of its members. It is an autonomous, self governing, and self controlling organization Characteristics/Features
4. Membership:
(The membership of society is open for all adult and sound minded person.It is a voluntary association of persons where there is no restriction for its membership. Any person can become a member of society and can leave it at any time after due notice to the society.
5. Pure Democratic:
(In cooperative society, a member has only one votes irrespective of a shares held by him. The principle of one man one vote makes the society pure democratic
6. Cash Transactions:
(In order to safeguard against bad debts and to work with minimum capital,
the cooperative society generally trade on cash basis only. According to rules,
cooperative generally avoid to entertain credit transaction
7. Service Motive:
It is formed to provide certain essential services and facilities to its members. Every member works for the general interest of the society and not for himself.
8. Capital:
(The capital of the cooperative society is contributed by its members in the shape of membership fee or they purchase the share of the society or they may grant loan to the society. The persons, who contribute the capital, they are called the members of the society and are also owners as well as the employee of the society)
9. Division of Profit:
(The main purpose of the society is not to earn profit. But it there is any profit is spent (almost 10%) for the economic welfare of the members of the society. After reserving twenty five percent of the profit, the remaing amount is distributed among its members on the basis of purchases make by them in case of consumer’s cooperative society
10. Operational Area:
(The society is made by poor people living in particular area. The area of
11. Discussion of Profit:
loan to the society. The persons, who contribute the capital, they are called the
members of the society and are also owners as well as the employee of the society)
12. Self-help through mutual cooperation:
operation is limited. It is stutable for small size of business The capital of the cooperative society is contributed by its members in the shape of membership fee or they purchase the share of the society or they may grant
13. Liability:
The liability of the members of the cooperative society is generally limited. In (case of agricultural cooperative credit societies; the liability of the members is unlimited. Unlimited liability means the personal property of member is responsible to pay business loan
14. Transfer of Share:
A member can transfer his share according to rules. He can transfer his share only when he has held such share for not less than one year. The transfer can be made only to the society, or to the member of the society. According to the cooperative societies Act 1925, the minimum number of
15. Number of Members:
members is ten and there is no maximum limit. Any person who purchase one share
of the society, he becomes the member of the society. The members may increase or
decrease within the year)
16. Separate Legal Entity:
(The cooperative society has a separate entity from its members. It has a permanent life and a common seal. It can purchase property. It can enter into contract with other persons)
17. Management:
The management of society is elected by members. The rule of one man one vote is applicable. A member with one vote becomes head of society.)
18. Books of Accounts:
(The cooperative society has to maintain the proper books of accounts. The
accounts of the society are audited every year by an auditor nominated by the
registrar of the cooperative society.”
Conclusion:
A cooperative society is not merely a business, but a combination of
business and spirit of service, Dfa ho which evoke loyalty, fellowship and corporate. It,
therefore, appeals to self-interest as well as to social instinct.
