Cooperatives 2

8/8/2019 Cooperatives 2

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Cooperatives

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FORWARD


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Involving the joint activity of two or more; concerted

action. Done with or working with others for a common purpose

or benefit; a cooperative effort.

Willing to adjust to differences in order to obtain

agreement.

Literal Meaning-Cooperative


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Cooperatives-Business Organisation

The representative body for cooperatives, the

International Cooperative Alliance (ICA),defines a

cooperative as:

An autonomous association of persons united

voluntarily to meet their common economic, social

and cultural needs and aspirations, through a jointly

owned and democratically controlled enterprise.


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Cooperatives: FeaturesFormation under Act 1925Formation with at least 10

members

Voluntary and open

membershipDemocratic member control

Member economic

participation

Autonomy and independence

Education, training and

informationCooperation among

cooperatives

Concern for community


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Cooperatives DifferenceSole Proprietorship/Partnership

A business owned by one or more people, usually to provide employment and a returnon investment to the owners.

Investor-Owned Corporation

A business whose stock is traded publicly by any number of investors.

Cooperative

A member-owned and member-controlled business that operates for the mutual

benefit of all members.


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Co-operatives are business enterprises and thus can bedefined in terms of three basic interests:

User owner User control

User benefit

Only in the co-operative enterprise are all threeinterests vested directly in the hands of the user.

The 3 Unique Principles


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The people who

own and finance thecooperative are

those who use it.

User-

Owner Principle


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As owners, a

cooperative's memberscontrol its activities.

User-

Control Principle


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The cooperatives sole

purpose is to provideand distribute

benefits to members

on the basis of their

use.

User Benefit Principle


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Consumers Cooperative Society

Agricultural Cooperative Society

Marketing Cooperative Society

Credit Cooperative Society

Distribution Cooperative Society

Capital Cooperative Society

Insurance Cooperative Society Producers Cooperative Society

House Building Society

Miscellaneous Cooperative Society

Types Of Cooperative Societies


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Purchase of consumersgoods at wholesale price.

Provision of necessities oflife at cheaper price to its

members. Eliminates the services of

middleman.

Promotes the welfare of itsmembers.

To divide profit among itsmembers.

To increase the purchasepower raising the standardof living of its members.

Consumers Cooperative Society


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Provides consultancy services to its memberfarmers.

Provides financial assistance to its members.

Arranges for machinery used in the field ofagriculture.

Introduces the improved method ofcultivation for its members.

Arranges for storage of agricultural produceof its members.

Arranges for sale of agricultural produce ofits members.

Provides improved seeds and other necessarymaterial used in agriculture.

Improves the irrigation system.

Combines the small price of land forcollective mechanized farming

Improves the living of standard of themember farmers.

Agricultural Cooperative Society


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Arranges fair return to

their agriculturists fortheir production.

Removes middleman

profit.

Provides storage

facilities

Marketing Cooperative Society


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Boost up the saving of itsmembers.

Provide short term credit

facilities to its members. Promote the economic

welfare of its members.

Creates the habit of mutual

aid. Provides investment to its

members from whomsociety gets the loans.

Credit Cooperative Society


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Wholesale and retail sale

of goods.

Divide profit amongst the

members in proportion tothe amount of their

purchases.

Distribution Cooperative Society


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Gets land for

construction on low rates

and provides to society

members at no profit

basis.

Provides the facility of

water, gas, electricity andtransportation.

Capital Cooperative Society


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Provides insurance

facilities to its members.

Promotes saving and

investment.

Promotes economical and

social welfare of its

members

Insurance Cooperative Society


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Purchase of raw material at the possible lower price.

Provision of effective works and employees.

Provision of most efficient management.

Eliminates middleman. Provision of goods and services to its member at cheap prices.

Provision of goods and services to non-members at reasonable priceto earn profit.

Provision of employment to its members.

Division of profit amongst its members

Producers Cooperative Society


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Provides financial assistanceto its members for buildingtheir houses at low rate ofinterest.

Provides land to build housesat reasonable price.

Provides constructed houses

to its members.

Provides building materials atcheaper rate.

Renders technical services

for the construction of houses.

Promote economic and social

welfare of its members.

House Building Society


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Provides financial

assistance and

technical and

consultancy servicesto its members in their

specific field of life.

Promote economicand social welfare of

its members

Miscellaneous Cooperative Society


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Facility of information

Democratic management

Limited Liability

Scope for internal

Financing

Continuity

Tax Concessions

Coordination

State Assistance

Limitation of Capital

Excessive StateRegulation

Inefficiency ofmanagement

Intrigue and bickeringamong members

MERITS DEMERITS

Merits and Demerits


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LEGISLATION-It is controlled and supervised

by the Cooperative Society Act 1925.

NUMBER OF MEMBERS-It must be formed atleast by ten members above the age of

eighteen years.

LIABILITY-It may be established with or

without limited liability.

OBJECTIVES-Its main aim is not to maximize

its profit. Service and welfare of themembers are regarded as its motto.

RIGHT OF TRANSFERABILITY-The shares of

the cooperative society cannot be transferred

to the non-members.

BORROWING POWERS-It has no power to

sell debentures and borrow money fromnon-members.

LEGISLATION-It is governed by the

companys ordinance 1984.

NUMBER OF MEMBERS-Public company isformed at least by 7 members and private

company is formed by at least by 2 members.

LIABILITY-It may be established with limited

liability.

OBJECTIVES-Its main aim is to earn

maximum profit at any cost. RIGHT OF TRANSFERABILITY-The share of

the public company can be transferred freely.

BORROWING POWERS-Public Company has

power to borrow money from any source. It

can also issue debentures for this purpose.

Cooperatives Joint Stock Company

Cooperatives vs.

Joint Stock Company


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PURCHASING LIMIT-It shares cannot bepurchased for more than thousand rupees.

EXEMPTION FACILITIES-It enjoys certain

concession given by the state i.e. exemptionfrom income tax, duty and registration fee.

MANAGEMENT-As it is formed on the basisof democratic principle, every member hasequal right in the management of business.

OWNERSHIP POSITION-There is nodifference between man and man in thesociety. All members enjoy equal rights ofownership and control.

ROLE-It eliminates the middleman andcapitalist group and it thus equalize thedistribution of wealth in the society.

WITHDRAWAL RIGHT-A member canwithdraw his capital on short notice.

PURCHASING LIMIT-Its members canpurchase its share of any amount.

EXEMPTION FACILITIES-It does not possess

certain concessions and privileges by thegovernment.

MANAGEMENT-It is managed by the Boardof Directors and actual owners are notallowed to participate in the management.

OWNERSHIP POSITION-There is masterservant relationship between the ownershipand management.

ROLE-It creates evils of monopoly andcapitalism in the society and it thusconcentrates the wealth into few hands.

WITHDRAWAL RIGHT-It is not convenientfor its shareholders to withdraw their capitalfrom the company.

Cooperatives Joint Stock Company

Cooperatives vs.

Joint Stock Company


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Get access to great products and services.

Be heard. Your voice counts your co-op truly cares what you think.

Be part of a values-based organization that puts people ahead of profit. Share in the financial success of the organization.

Contribute to a thriving local economy.

Invest in a business that is locally owned and democratically controlled.

Be part of a strong and proud cooperative tradition.

Help change the way business is conducted in America and around theworld.

Reasons to Join

Cooperatives 2

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