Question

Distinguish between a Co-operative Society and a Joint Stock Company.

Distinguish between cooperative societies and joint stock companies.

Answer 1

Sr. No.	Points	Co-operative Society	Joint Stock Company
1.	Meaning	A co-operative society is a voluntary association of individuals that is formed to provide services to its members.	A joint-stock company is an incorporated association created by law, having an independent legal status, owned by shareholders, and managed by a board of directors.
2.	Number of members	Minimum ten members, and the maximum number of members is unlimited.	A private company has a minimum of 2 and a maximum of 200 members. A public company has a minimum of 7 and no maximum limit of members.
3.	Capital	A co-operative society has less capital as compared to a joint-stock company.	A joint-stock company has a large capital base.
4.	Management	The managing committee manages the co-operative society.	The Board of Directors manages the joint-stock company.
5.	Act	Co-operative societies have to follow the Co-operative Societies Act, 1912. In Maharashtra, societies have to follow the Maharashtra State Cooperative Societies Act, 1960.	Companies have to follow the Indian Companies Act, 2013 (or 1956 in older versions).
6.	Formation	The formation of a co-operative society is comparatively cheaper and easier.	The formation of a joint-stock company is costly, difficult, and time-consuming.
7.	Voting right	The principle of “One member, One vote” is followed.	The principle of “One share, One vote” is followed.
8.	Motto / Objectives	The main purpose of a cooperative society is to provide services to its members.	The main objective of a joint-stock company is to maximize profit.
9.	Transferability of shares	Shares are not transferable. They can be surrendered to society.	Shares of a public company are freely transferable.
10.	Remuneration	Members of the managing committee work on an honorary basis.	The Board of Directors is paid a salary and given fees for attending board meetings.
11.	Area of Business	Normally, the co-operatives have a limited area of business.	Companies have a larger area of business operation.
12.	Proxies	In a co-operative society, proxies are not allowed in the meetings.	In a joint-stock company, proxies are allowed to vote at meetings.
13.	Distribution of profits	Limited dividend, paid on an equitable basis.	Dividend in proportion to the share in capital.
14.	Privileges	Special exemptions by the government.	No special exemptions.
15.	Return of capital	A member can demand his capital during the lifetime of the society.	No member can demand the return of his capital except at the time of winding up.