Features of co-operative society

FEATURES OF CO-OPERATIVE

1)voluntary Association

  Cooperative organization is a voluntary association of individuals. There is no compulsion/force to become a member and to continue  as a member. The individual join the co-operative  society on his free will and can also leave the organization as and when he desires.

2)Equal voting right

There is equality in voting rights. The principle of "one member, one vote" is followed and not"one share, one vote". Thus,in a co-operative society all members are treated equally while providing services.

3) service motive 

 Co-operative organization differs from other form of organization. The  main motive of co-operative society is to provide services to its members and not to maximize profits. However, more weightage  is given to service factor rather than profit. Its objective is to work in the interest of members and to treat every member equally rather than exploiting them.

4)limited liability

 The liability of member in a co-operative organization is limited to extent of the unpaid amount of shares held by him I.e. if the business assets are not sufficient to pay off its debts the personal property of members cannot be utilized for the purpose.

5)Democratic management

The management of co-operative organization is based on Democratic principles and is managed by 'managing committee', which is elected body of represented. The principle of voting is 'one member, one vote', Again each member is given an opportunity to express his opinion.

6)Independent Existence

According to the co-operative societies Act; 1912 a co-operative society has an independent legal status different from its members. Therefore, it enjoy a stable and continuous life.

7)Return on capital

The members of co-operative organization receive a maximum dividend of 15% on the shares purchased by them . Bonus is paid to members on the basis of the purchase made by each member.

8)Registration

The Registration of a co-operative society is compulsory as per the  Relevant Act in the concerned state.

        E.g. A co-operative organization is in the state of Maharashtra has to be Registered under Maharashtra state co-operative societies Act,1960.

9) Surplus profit 

 After payment of dividend and bonus a part of the profit is transferred to the General Reserve and the remaining is utilized for the welfare of the locality where the co-operative society is situated. 

10)cash transaction

All transaction in the co-operative organization takes place on cash basis so that there is no risks of Bad Debts. Again, the society may not face problem of working capital.