Co-operative societies are voluntary organizations formed by a group of individuals with common needs to achieve common goals. They operate according to democratic principles with open membership, one member one vote, and distribution of surplus among members. Co-operative societies work on the principles of self-help and mutual assistance. There are various types of co-operative societies formed to fulfill different needs like consumers' co-operatives, producers' co-operatives, marketing co-operatives, credit co-operatives, cooperative banks, farming societies, and housing societies. All co-operative societies are registered and regulated by the government.

1. CO-OPERATIVE SOCIETIES
Course: BBA I
Subject : Introduction to Business Organization
Unit: I

2. ‘Co-operation’
 Derived from the Latin word ‘co-
operari’
 ‘co’ means ‘with’ and ‘operari’ means
‘to work’
 ‘Co-operation’ means working together

4. Open membership
 Membership open to all with common
interest;
 Minimum of ten members;
 No restriction on the maximum number;
 Members may specify the maximum
number for their Society

5. Voluntary Association
• Members coming together voluntarily;
• by choice, not by force;
• Continues for as long as he likes;
• May leave at his will.

6. State control
 Registration compulsory;
 Statutes, Rules and Bye Laws to protect the
interest of members;
 Has to maintain books and records;
 Subject to statutory audit of books by
qualified Chartered Accountants;
 Functions under the regulatory supervision of
Registrar of Co-operative Societies

7. Sources of Finance
 Capital contributed by all the members;
 May raise loans and secure grants from
government;
 after its registration.

8. Democratic Management
Governed by a ‘Managing Committee’ or
‘Board of Directors’ elected by the members
of the society;
Managed on democratic lines;
One member one vote, irrespective of no. of
shares held;

9. Service motive
 Co-operatives not to maximize profit but to
provide service to its members;
 A Consumer Co-operative Store sells quality
goods to members at a reasonable price
retaining a small margin of profit;
 In a Housing Co-Operative, members reside
by sharing expenses on maintenance and
repairs.

10. Separate Legal Entity
 Separate legal entity;
 Limited liability of its members;
 Continuity of existence;
 Death, insolvency or lunacy of a member not
to affect the existence of a society
 Can enter into agreements;
 Can purchase or sell properties in its
own name;
 Can sue and be sued.

11. Distribution of Surplus
 Distributes Profits earned among Members
on the basis of members’ participation in
the business of the society;
 Profits generated are not at the cost of its
members;
 Example:
– in a Consumer Society, profit generated by sale
of goods to general public is paid as purchase
bonus to members on the basis of goods
purchased by them from the society.

12. Self-help through mutual
cooperation
• Co-operative Societies thrive on the principle of
mutual help;
• They are the organizations of financially weaker
sections of society;
• converts Weakness to strength by ‘self-help
through mutual co-operation’;
• Fights exploitation and secure a place in society
through “Each for all and all for each”.

14. Consumers’ Co-operative Society
 For protecting interest of general consumers;
 by making consumer goods available at a
reasonable price;
 Source goods directly from the producers or
manufacturers;
 eliminates middlemen in the distribution
process.
 Some examples:
- Kendriya Bhandar,
- Apna Bazar
- Employees consumer co-
operative societies; Etc.

15. Producers’ Co-operative
Society
 to protect interest of small producers;
 By making available raw materials, tools
and equipments, machinery, etc.;
 Arranging Marketing & Distribution
channels, etc.
• Examples:
• Amul
• APPCO,
• Haryana Handloom,
• Co-optex

16. Co-operative Marketing Society
 Society of small producers and manufacturers;
 collects the products from members
 makes available better marketing & distribution
channels economically;
 sells in the market.
 Examples:
 Anand Milk Union Ltd., (Amul);
 Co-optex
 UP Handloom

17. Co-operative Credit Society
 formed to provide financial
support to members
 accepts deposits from members;
 grants loans to members at
reasonable rates of interest
 Examples:
 Village Service Co-operative Credit Societies,
 Employees co-operative credit societies, etc.

18. Co-operative Banks
 formed to provide banking facilities to members;
 accepts deposits;
 grants loans at reasonable rates of interest
 Examples:

19. Co-operative Farming Society
formed by small farmers;
to pool small holdings and work
to benefits of large-scale
farming;
Examples:
Lift-irrigation Cooperative Societies;
pani-panchayats

20. Housing Co-operative Society
 provide residential accommodation to
members
 Constructs houses or apartments for
members;
 Provides amenities;
 Takes care of maintenance and repairs.

21. References
1. Fundamentals of Business
Organization and
Management by Y.K.Bhushan- Sultan
Chand publications
2. Principles & Practices Of
Management by L M Prasad –
Himalaya Publishing House

22. Thank You!!