Question

Distinguish between a cooperative organisation and a partnership.

Answer 1

Sr. No.	Basis of Distinction	Cooperative Organisation (Cooperative Society)	Partnership
1.	Main Objective	Service to members.	Earning profits.
2.	Number of Members	Minimum 10, no maximum limit, membership usually restricted to a locality or group.	Minimum 2, maximum 50.
3.	Registration	Compulsory under the Cooperative Societies Act.	Not compulsory but desirable under the Partnership Act, 1932.
4.	Management	Managed by a Managing Committee (executive committee).	Managed by the partners themselves.
5.	Governing Law	Cooperative Societies Act, 1912, or State Cooperative Societies Act.	Partnership Act, 1932.
6.	Legal Status	Separate legal entity after registration.	Not a separate legal entity; the firm and the partners are one and the same.
7.	Voting Rights	One member, one vote (democratic, equal voting irrespective of share capital).	Partners may share profits and losses as per the agreement; voting is usually proportional to capital or as agreed.
8.	Transfer of Interest	Shares are not transferable but returnable to society.	Transfer of interest is generally not allowed without the consent of other partners.
9.	Distribution of Profits	Limited dividend on share capital; distribution mostly based on member activity (volume of business).	Profits are shared according to the partnership agreement.
10.	Objective Focus	Cooperative movement is based on mutual help, service, and self-help.	Profit motive primarily.