What are the advantages and disadvantages of cooperative society?
· Advantages & Disadvantages of Cooperative Societies. Voluntary organization. Ease of formation. Democracy. Equitable distribution of surplus. Limited liability. Stable existence. Each for all and all for each. Greater identity of interests.
What is the importance or need of cooperative society?
The following are some of the important advantages of co-operative societies. 1. Voluntary organization The membership of a cooperative society is open to all. Any person with common interest can become a member. The membership fee is kept low so that everyone would be able to join and benefit from cooperative societies.
What are the advantages and disadvantages of cooperative?
Some of the advantages of a cooperative society are:-1. Easy to Form 2. Open Membership 3. Democratic Management 4. Limited Liability 5. Stability 6. Economical Operations 7. …
What are the advantages and disadvantages of cooperative businesses?
· Advantages of Cooperative Society Membership of the co-operative society is open to all, who have a common object of providing service without expecting returns on it. The member can join and leave society as per their wishes.
What are the advantages and disadvantages of a cooperative?
Many business cooperative advantages are disadvantages when the circumstances are slightly different.Advantage: Lower Costs. Marketing costs money. ... Disadvantage: Less Operational Control. ... Advantage: Further Marketing Reach. ... Disadvantage: Fixed Pricing. ... Competition Advantages and Disadvantages.
What is the most important advantage of a cooperative?
Cooperatives work toward the best interests of everyone. This advantage results in significantly better outcomes in time because everyone involves themselves at their highest capacity levels. Ownership almost always creates better efforts because there is a stake in the results.
What are the advantages of living in a co operative housing society?
A cooperative housing society is owned by the members of the society, who control the entire financial framework of the society. With minimal down payments, lower closing cost and longer mortgage term, cooperative housing societies are affordable than any other independent ownership.
What is the importance of cooperative in its members?
1) They aim to provide goods and services. 2) They aim to eliminate the unnecessary profits of middlemen in trade and commerce. 3) They seek to prevent the exploitation of the weaker members of society. 4) They aim to protect the rights of people both as producers and consumers.
What are the advantages of cooperation?
Specific Benefits of CooperationBonding, Support, and Playfulness. It is hard to maintain positive feelings about someone who is trying to make you lose. ... Teamwork and Shared Decision Making. ... Openness, Trust and Safety. ... Self Worth and Personal Power. ... Well-being.
What are advantages of corporation?
There are several advantages to becoming a corporation, including the limited personal liability, easy transfer of ownership, business continuity, better access to capital and (depending on the corporation structure) occasional tax benefits.
What are the benefits of staying in a society?
Benefits may include financial security and/or assistance for education, unemployment, birth of a baby, sickness and medical expenses, retirement and funerals. Often benefit societies provide a social or educational framework for members and their families to support each other and contribute to the wider community.
What cooperative society means?
A co-operative society is often a voluntary association of individuals who come together with the intention to work together and to promote their economic interest. These societies work on the principle of self-help as well as mutual help.
What are the disadvantages of cooperative?
Disadvantages of a Cooperative Society:Limited Resources: The financial strength of cooperative societies is low due to limited supply of capital. ... Incapable Management: ... Lack of Motivation: ... Rigid Business Practices: ... Limited Consideration: ... High Interest Rate: ... Lack of Secrecy: ... Undue Government Intervention:More items...
How can members contribute to the success of their co op?
An important factor in the success of a cooperative is the presence of capable and dedicated leaders. These are the people expected to provide guidance and support to the cooperative. Co-op leaders promote more activities membership participation.
What is the main purpose of a cooperative?
The purpose of a cooperative is to realize the economic, cultural and social needs of the organization's members and its surrounding community. Cooperatives often have a strong commitment to their community and a focus on strengthening the community they exist in or serve.
What is the purpose of cooperative societies?
The aim of cooperative societies is to serve and strengthen the weaker sections of the society. Therefore, the government helps them by offering them loans on easy terms and conditions. They also offer special grants and subsidies to the cooperative societies.
Why are cooperative societies so low?
The operational or administrative expenses of cooperative societies are low because the members offer their services in exchange for nothing. There is no loss due to bad debts because the goods and services are being sold in cash. Moreover, there is no need for massive advertisement to promote the stock. Absence of middlemen is another factor that regulates unnecessary expenditure.
Why are cooperative societies unable to afford services of expert professionals?
The cooperative societies are unable to afford services of expert professionals because they can’t pay high salaries or fees. The members, offering honorary services, are not professionally efficient to supervise the operations and management functions effectively.
What are the rules and regulations of cooperative societies?
The daily operations of a cooperative society are subject to government rules and regulations. Regular book-keeping, auditing and inspection of accounts by the government officials are mandatory aspects of the organisation. The reports have to be submitted to the registrar. All these legal formalities take a lot of time and consequently inhibit efficiency.
How much of a profit does a cooperative society transfer to the general reserve?
Cooperative societies transfer a part of their profits to the general reserve every year. The dividend to the shareholders on profit cannot be more than 10 percent. Consequently, the ‘retained earnings’ are ploughed back into the company for diversification of its business.
How many members are needed to form a cooperative society?
1. Easy to Form- A cooperative society is a voluntary association and may be formed with a minimum of ten adult members. Its registration is very simple and can be done without much legal formalities.
What is open membership?
2. Open Membership- Membership in a cooperative organisation is open to all people having a common interest. A person can become a member at any time he likes and can leave the society at any time by returning his shares, without affecting its continuity. 3.
What are the objectives of cooperative society?
Objectives of Cooperative Society. To provide support and services to the members of the society and not to earn the profit. To help each other mutually and not to have competition. To practice fair and transparent business activities. To deliver the quality goods and produce to the end customers.
What is cooperative society?
A cooperative society, also known as cooperation, is formed when a group of individuals comes together for a certain benefit. A group of people that decide to form a co-operative society in India must register under the Cooperative Society Act, 1912. The purpose behind a cooperative society is to provide goods and services to ...
How many individuals are required to form a cooperative society?
Registration of the Cooperative Society. To form a society, a minimum of 10 Individuals shall be desirous of forming a society for mutual benefit. Once the group is formed, a provisional committee is established and they elect a chief promoter for the society. The name for the society is selected by the chief promoter and members mutually.
What are the objectives of a housing cooperative?
Agricultural cooperative society – The main objective of an agricultural cooperative society is to promote and process farm products and for optimum purchase and production of the products.
What is the object of society?
The main object of Society is to serve society and not to earn a profit. A society delivers and supports activities such as art, education, poverty relief, culture, religion, and sports. A foreigner can also become a member of a cooperative society.
Who selects the name of a society?
The name for the society is selected by the chief promoter and members mutually.
What is capital invested for society?
Capital Invested for the society is contributed by the member and various grants and subsidies are received from the government for the smooth processing of business.
What is the advantage of a cooperative society?
The first and foremost advantage of a cooperative society is that the liability of the members of the society is limited to the amount of capital invested by the members and hence any loss arising due to the business done by the society will be limited to the amount of capital invested by the members in the cooperative society.
How is cooperative society different from other forms of business organization?
A cooperative society is different from other forms of business organization because other business organizations like partnership firm or private limited companies work with the sole objective of earning profits whereas in this form of business organization member’s voluntary join the society so to work for ...
Why is the cooperative society losing competitive edge?
In simple words, due to lack of single decision-making authority all important decisions of the society gets delayed which in turn results in loss of competitive edge of the cooperative society.
Why are decisions delayed in cooperative societies?
Since members have equal rights all members put forward their opinions and views which results in decisions getting delayed due to constant quarrel among the members as not all members can agree on the same thing at the same time. In simple words, due to lack of single decision-making authority all important decisions of the society gets delayed which in turn results in loss of competitive edge of the cooperative society.
What do cooperative societies do to individual members?
The first thing cooperative societies do to individual members is development of savings culture. It is an age long established fact that nobody can escape poverty without a savings habit. Anybody that spends everything on consumption is just a step away from poverty and its various consequences, no matter how rich the person is today.
What are the benefits of cooperatives?
Corporate power is another benefit of cooperative to an individual. There are some things that a corporate body can achieve easily, which are near impossible for an individual. For example, if an individual buys a parcel of land, the land owners can go back and resell the same land to another person. The individual, especially a low income earner, most of the time loses out eventually or may have to repurchase the land. But if it was a corporate body, especially a cooperative, the land owners will not even try such mischief, because from the beginning, a legal expert and government is involved (remember cooperatives are regulated by government).
What is saving culture?
Savings culture means, irrespective of how much you earn today, and your needs, you put something aside for tomorrow, or invest, to make additional income. This, however, is a great challenge for many people, especially for low income people, whose needs are far more than what they earn. Some of them attempt to save, but because the saving is always within their reach, they find it difficult not to spend the money. Yet, everybody needs to save and invest to escape poverty. This is made relatively easy with cooperatives.
Why do people need to save and invest?
Yet, everybody needs to save and invest to escape poverty. This is made relatively easy with cooperatives. As a member of a cooperative, you must contribute regularly, most times monthly.
Do you have to contribute to a cooperative?
As a member of a cooperative, you must contribute regularly, most times monthly. The contribution is usually deducted from your income, before you even receive it. So, irrespective of your needs, you save compulsory. Also, because the money is not within easy reach, you cannot easily access it to spend.
Does an individual have the opportunity to enjoy corporate power?
The individual also does not have the opportunity to enjoy corporate power. In fact, he may become a victim of corporate power. And because the individual does not participate in the management of the companies or his investment, he does not have opportunity to acquire business acumen.
Can you get a loan from a cooperative?
Even for those that can meet the conditions for bank loans, the loan may not come promptly as needed. But as a member of a cooperative, you can access loan promptly. Your contributions serve as collateral and fellow contributors are accepted as guarrantors. Also, the interest rate and repayment terms are not crushing as that of the banks. This easy access to loans has helped many people achieve improved welfare.
How do cooperatives help the economy?
True cooperatives keep your money local. The money that goes into the operations of the cooperative is distributed to grower-owners through dividends which go back into the farming operation and into other local businesses you patronize. Rural communities benefit from this economic cycle and are strengthened.
What is cooperative system?
The cooperative system provides you with true ownership of the business you participate in, whether the local gin or the regional marketing, warehousing, or cottonseed-processing cooperatives. The grower-owners of each cooperative elect a board of directors, making sure your business is run the way you see fit.
What is the purpose of cooperative farming?
The purpose of true cooperation is to provide grower-owners with the tools they need to keep their farming operations viable and profitable. Whether it is dividends that help carry you through a tough year or opposing detrimental farm legislation and regulations, cooperatives stand up for and protect their grower-owners.
What happens when you are a user and an owner of each level of the supply chain?
When you are a user and an owner of each level of the supply chain, or each level of the cooperative system, more value is added to your crop than would be otherwise. You will receive dividends from the gin as well as the warehousing, marketing and cottonseed-processing cooperatives.
What is cooperative society?
2. Simple to Form: A cooperative society is a voluntary association that may be formed by any 10 persons.
Why are the affairs of cooperatives so much exposed to the members?
The affairs of cooperatives are generally so much exposed to the members so that it becomes difficult to maintain business secrecy.
Why do cooperatives have limited capital?
Cooperatives have only limited amount of capital because the members usually come from poorer classes of people. The limit on dividends also discourages rich investors to be a member of a cooperative.
What will happen if the first wave of enthusiasm about cooperative ideals is exhausted?
Once the first wave of enthusiasm about the cooperative ideals is exhausted, quarrel and factionalism among members will arise. This will affect adversely the autonomy of management.
Why is specialised management not always possible?
Specialised management is not always possible because the management of a cooperative vests in the managing committee which generally lack efficient and experienced people. Highly qualified personnel are not generally attracted to cooperatives because of its limited capacity to pay.
How much dividend can a cooperative receive?
The law lays down that the dividend on share in any cooperative cannot exceed 6 1/4%, the balance of the surplus earned in any year can be utilised for its growth.
Is there exploitation under cooperatives?
There is no exploitation under cooperatives. It is a judicious compromise between communism and capitalism. It fits in with our govt. ideology.
Why is cooperation important?
One of the benefits of cooperation is that people can pool together their skills and creativity towards a common aim. Because of this, they have a higher chance of being more successful.
When you assemble a group of goal-oriented people, they somehow see each other as a rival?
When you assemble a group of goal-oriented people, they somehow see each other as a rival. A healthy balance of friendly rivalry within the team won’t do much harm, and could even benefit not just the organisation itself but even the team members.
Why is working in a team important?
Working within a team helps us to create an environment which inspires collective knowledge, resources and skills. Consequently, this allows us to pick some ideas and to reflect on our own way of thinking.
Characteristics of A Cooperative Society
Advantages of Cooperative Society
- 1. Easy To Form:The requirement for the formation of a cooperative society is the minimum of 10 members. Other requirements for its registration are neither demanding nor the process cumbersome. The amount required for its registration is usually not exorbitant. 2. Voluntary and Open Membership:Membership of cooperative society is not limited to an...
Disadvantages of Cooperative Society
- 1. Limited Capital:Members of cooperative society are purposeful people of low income class. Consequently, they are open to being faced with the problem of capital. Moreso, cooperative society attracts less investment since its primary objective is not to make profits. 2. Internal Conflict:The virtue of cooperative society is grounded on member’s co-operation. Whenever con…