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Discuss the characteristics, merits and limitations of cooperative form of organisation. Also discrible briefly different types of cooperative societies. |
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Answer» According to The Indian Co-operative Societies Act, 1912, “Co-operative organization is a societywhich has its objectives for the promotion of economic interests of its members in accordance withco-operative principles.” Features of a Co-operative Society `(i)` Voluntary Membership :The membership of a co-operative society is voluntary. There is nocompulsion for anyone to join or quit a society after serving a notice procedurally. Membership isopen to all, irrespective of their religion, caste and gender. `(ii)` Legal Status Registration of a co-operative society is compulsory. This accords a separate identityto the society which is distinct from its members. The society can enter into contracts and holdproperty in its name, sue and be sued by others. As a result of being a separate legal entity, it is notaected by the entry or exit of its members. `(iii)` Limited Liability: The liability of the members of co-operative society is limited to the extent of theamount contributed by them as capital. Merits of Co-operative Society: `(i)` Equality in Votes Co-operative society is governed by the principle of ‘one man one vote’. Eachmember is entitled to equal voting rights irrespective of the amount of capital contributed by amember. `(ii)` Limited Liability: The liability of members of a co-operative society is limited to the extent of theircapital contribution and hence, the personal assets of the members cannot be used to repaybusiness debts. `(iii)` Continuity Death, bankruptcy or insanity of the members do not act continuity of a cooperative society. Limitations of Co-operative Society: `(i)` Limited Resources :Capital contributions in a cooperative society are from the members withlimited means. `(ii)` Inefficient Management :The members of co-operative societies are not professionals and arehonorary services on a voluntary basis. `(iii)` Internal Conflicts Internal conflicts arise when personal interests start dominating the welfare. Types of Co-operative Societies `(i)` Consumer’s Co-operative Societies The consumer co-operative societies are comprises to protectthe interests of consumers as its aim is eliminating middlemen to achieve economy in operationsand provide good quality products at reasonable prices. It purchases goods in bulk directly from thewholesalers and sells goods to the members. `(ii)` Producer’s Co-operative Societies These societies are comprise to protect the interest of smallproducers and are set up to provide the supplying of raw materials, equipment and other inputs tothe members and buying their output for sale. Profits among the members are distributed on thebasis of their contributions to the society. `(iii)` Marketing Co-operative Societies Such societies consist to help the small producers who wish toobtain reasonable prices for their output and want to market their products. Its members jointlyperform marketing functions like transportation, warehousing, packaging, etc to sell the output atthe best possible price and profits are distributed according to each member’s contribution to thepool of output. |
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