InterviewSolution
Saved Bookmarks
InterviewSolution
| 1. |
Explain the difference between the cooperative organisations and company form of business. |
|
Answer» Difference between the cooperative organisations and company form of business: 1. Objectives:There is a difference in basic objectives of cooperatives from companies. The basic objective of a cooperative organisation is to provide essential service for the benefit of members.On the other hand, a company is a business organisation with the objective of earning profit. 2. Membership:The membership of a cooperative society is generally drawn from a particular locality while the shareholders of a company are drawn from all over the country. The minimum number of members required for the registration of a cooperative is 10 while the Companies Act requires at least 7 persons for the formation of a public limited company and at least 2 persons for the formation of private limited company. 3. Members’ Liability:The liability of members of a company is limited but the liability of the members of cooperative society is generally unlimited. 4. Capital:A cooperative society may or may not have share capital. A member cannot transfer the shares of the society. On the other hand, a company must have capital divided into shares by its shareholders. The shares of a company are freely transferable. 5. Surplus:In a company, the profits are distributed among members by way of dividend which varies according to the amount of capital by individual members. But a cooperative society does not distribute its profit according to the capital held by the shareholders. The surplus or profit earned by a cooperative is given away to the members on tine basis of the purchase made by them. |
|