The document defines and describes cooperative societies. It notes that a cooperative society is a voluntary association of persons working together for common economic goals and mutual support. The key characteristics of cooperative societies are open membership, democratic governance, limited liability, and distribution of surplus funds to members. The document outlines different types of cooperative societies like consumer cooperatives, producer cooperatives, and agricultural cooperatives.

1. Nishant R. Nair Class - 9-2 Roll No. - 28

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

4. ‘ Co-operative Society ’ A voluntary association of persons; working together with common economic objective ; providing support to the members; self-help and mutual help ; non-profit motive; pooling individual resources for group welfare; for common benefit .

5. OBJECTIVES Render service, not for profit; Mutual help, not competition; Self help, not dependence;

6. Characteristics

7. 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

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

9. 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

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

11. 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;

12. 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.

13. 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.

14. 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.

15. 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”.

16. Formation of a Society

17. Governed by the Co-operative Societies Act, 1912; Minimum of 10 persons having the capacity to enter into a contract with common economic objectives; A joint application along with the bye-laws of the society containing the details about the society and its members to the Registrar of Co-operative Societies of the concerned state; After scrutiny, the registrar issues a Certificate of Registration Formation of a Society

18. Requirements for Registration Application with the signature of all members Bye-laws of the society containing: Name, address and aims and objectives of the society Names, addresses and occupations of members Mode of admitting new members Share capital and its division

19. Advantages

20. Easy Formation Open Membership Democratic Control Limited Liability Elimination of Middlemen’s . Profit State Assistance Stable Life

21. Easy Formation Formation easy compared to a joint stock company; Any ten adults with common intent; voluntarily forming an association; Registered with the Registrar of Co-operative Societies.

22. Open Membership Persons with common interest voluntarily coming together may become a member of the society at his will And leave the Society at will.

23. Democratic Control controlled in a democratic manner; Elects representatives to govern the affairs of the Society; One member, one vote; Governing Council/ Committee accountable to members and the Regulators.

24. Limited Liability liability of members limited to the extent of the capital contributed by them to the Society; No personal liability to members for the liability of the Society

25. Elimination of Middlemen’s Profit Combined strength of members; to derive economies of scale; for direct access to – manufactures and producers; goods and services; to markets and distribution channels ; Eliminates middlemen’s profit

26. State Assistance Central and State assistance; in the form of capital contribution; loans at low rates of interest; exemption in tax; subsidies in repayment of loans, etc . * *Graph showing Government assistance to TDCC – Tribal Development cooperation corporation

27. Stable Life fairly stable life; continuous existence; existence not affected by death, insolvency, lunacy or resignation of members.

28. Limitations

29. Limited Capital Source of capital limited, by limiting membership to a particular section of the society; No incentive to members to contribute more to the capital due to low rate of return; Government’s assistance often inadequate for most Co-operatives

30. Problems in Management lack of managerial talent due to – elected representatives lacking in managerial experience and expertise; limited resources hampering outsourcing of professional managerial talent;

31. Lack of Motivation Lack of motivation owing to – Societies being service oriented not profit oriented; Extra efforts by any particular member not getting extra reward; Being aloof and not involved does not result in denial of rewards.

32. Lack of Co-operation Societies often suffer from – Personality differences; Ego clashes; Selfish attitudes; Lack motivation; Ignorance of or irreverence to principles of co-operation

33. Dependence on Government Societies ften tend to be dependent on government patronage and support in terms of grants, loans subsidies, etc., owing to – inadequacy of capital; Limited access to raw materials; Lack of market and distribution of channels for products; Vagaries of nature leading to financial burden on members, etc.

35. 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 Sahkari Bhandar Employees consumer co-operative societies; Etc.

36. 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, Bayanika, Haryana Handloom, Co-optex

37. 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

38. 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 .

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

40. 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

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

42. IFFCO – Giant of a Co-operative

43. Co-operatives’ Share in Fertilizer Production

44. Bibliography Various Internet sites Acknowledgement: www.google.com - Nishant R. Nair