The sale proceeds are distributed in proportion to the contribution of the members to the pool. Therefore the rural poor continue to depend on the money lenders for meeting expenses of marriage, medical care, social commitments etc. Li… Further, reports and accounts have to be submitted to the Registrar of Co-operative Societies. Their scope is limited to only certain areas of enterprise. When dealing with business on a fairly large scale, a joint stock company is the most suitable form of business organisation. Co-operative marketing societies are voluntary associations of small producers, who find it difficult to individually sell their products at a profit. They do not have to bear personal liability for the debts of the society. It is based on the principle of one – man-one-vote. The following are some of the important advantages of co-operative societies. Bulk purchases and sales ensure fair prices and good quality. The funds are used in giving loans to needy members on easy terms. There is a tendency to shift responsibility among the members of the managing committee. Let us see why. The societies are by the small producers to fight against the big producers. The body is elected through ‘one-man-one-vote-system’. Therefore the funds available with the co-operatives are limited. A minimum of 10 members are required to form a cooperative society. Cooperatives can be formed much easily when compared to a company. Further there are legal restrictions regarding dividend and bonus that can be distributed to members. A cooperative society enjoys separate legal entity which is distinct from its members. A cooperative organization is owned and controlled by members. In cooperative organisation , there is no direct link between efforts and reward. Infographic on Advantages & Disadvantages of Cooperative Societies Its registration is very simple and can be done without much legal formalities. Voluntary organisations.2. A co – operative society is a voluntary association of persons of moderate means , who unite together to protect and promote their common economic and social interests. Its objects to serve their members and not to maximize the profits. At the same time, any member who wants to leave the society is free to do so. The advantages and disadvantages of cooperative business are as follows so don’t miss out any of them: Advantages: As the name suggests, cooperation is the biggest advantage of cooperative business. It is because there is very little link between effort and reward. The members of the ruling party dictate terms and therefore the purpose for which cooperatives are formed is lost. All members have equal rights and can have a voice in its management. The following are some of the important advantages of co-operative societies. Co-operative societies are managed by the managing committee elected by its members. A cooperative society is different from other forms of business organization because other business organizations like partnership firm or private limited companies work with the sole objective of earning profits whereas in this form of business organization member’s voluntary join the society so to work for the benefit of the members of the society while doing business. लाभ (Advantages) 5. Since it has limited financial resources, its ability to compensate its employees is also limited. The reason is, in many of the co-operatives there is political interference and domination. A co-operative society is run on the principle of ‘one man one vote‘. 2. They provide loans only for productive purposes and not for wasteful expenditure. Advantages and Disadvantages of co-operative societies . The objective is to improve their economic status and protect themselves from exploitation by businessmen. Co-operatives have not been successful in freeing the rural poor from the clutches of the money lenders. It is compulsory for the co-operative society to get registration. A co – operative society has a separate legal existence. Therefore information relating to activities, revenues, members etc becomes public knowledge. co operative societies, features, advantages, disadvantages Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. It is an association of persons united voluntarily to meet their economics, social and cultural needs aspirations through jointly owned enterprise. A consumer cooperative is a retail business which is owned by the consumers themselves. It represents an attempt by poor and weaker persons to protect themselves against the exploitation and oppression of the economically strong . After the establishment of co-operatives, the rural people were able to come out of the grip of money lenders. 2. Its registration is very simple and can be done without much legal formalities. In the Western countries, co-operative societies were voluntarily started by the weaker sections. The aim is to solve the housing problems of the members by constructing and giving the option of paying in installments. Therefore members contribute their efforts to promote their common welfare. If you continue browsing the site, you agree to the use of cookies on this website. They also help to prevent concentration of economic power in few hands. A body of members is elected to conduct and control the business. A cooperative society is a voluntary association started with the aim of the service of its members. Disadvantages of Co-Operative Society: As against the above merits, there are sate draw­backs or limitations of co-operative associations. 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