Question

State two features of cooperative societies.

Explain the features of cooperative societies.

Describe the characteristics of cooperative societies.

Answer 1

1. Voluntary Association: A cooperative society is a voluntary association of persons who join together to improve their economic status through joint action. Membership is open to anyone with a common interest, who can enter or leave the society freely, and shares cannot be transferred to another person.
2. One Man One Vote: Each member of a cooperative society has one vote, irrespective of the number of shares held. This ensures democratic management where all members have an equal voice, and no rich or dominant member can dictate terms.
3. Religious and Political Neutrality: Membership is open to all without discrimination based on caste, creed, religion, or political affiliation.
4. Separate Legal Entity: Once registered, a cooperative society becomes a separate legal entity independent of its members. It can own property, make contracts, sue, and be sued in its own name.
5. Service Motive: The primary objective is service to members, “each for all and all for each.” Although they may earn profits, these are mainly for the benefit of members.
6. Registration: Registration of cooperative societies is compulsory and is done by the Registrar of Cooperative Societies.
7. State Control: The government regulates and controls cooperative societies to ensure healthy growth.
8. Equitable Distribution of Surplus: Profits are distributed based on each member’s volume of business, not in proportion to share capital. A limited dividend (up to 10%) may be given on share capital, with the remaining surplus distributed equitably.