{"id":11576,"date":"2022-08-10T06:42:18","date_gmt":"2022-08-10T06:42:18","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=11576"},"modified":"2022-08-10T06:42:19","modified_gmt":"2022-08-10T06:42:19","slug":"different-features-of-cooperative-societies-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/different-features-of-cooperative-societies-in-india\/","title":{"rendered":"Different Features of Cooperative Society in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A cooperative society is a mutual accord between people where they come together to pool their resources to achieve a common economic objective. Members of a cooperative society usually consist of workers and small producers. Many people set up cooperative societies to safeguard their interests as one. There are  features of cooperative societies. This article aims to enlist such features.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3aa7878e06d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3aa7878e06d\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/different-features-of-cooperative-societies-in-india\/#Features_of_Cooperative_Societies\" title=\"Features of Cooperative\nSocieties:\">Features of Cooperative\nSocieties:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/different-features-of-cooperative-societies-in-india\/#Conclusion\" title=\"Conclusion:\">Conclusion:<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_Cooperative_Societies\"><\/span>Features of Cooperative\nSocieties:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Features of cooperative society signify how they differ from other forms of association.<\/p>\n\n\n\n<ol><li><strong>Membership in Cooperative society is\nVoluntary:<\/strong><\/li><\/ol>\n\n\n\n<p>The main feature of cooperative\nsocieties is that the membership is voluntary. The idea of cooperative\nsocieties is to get like-minded people together to achieve a common goal that\nis for the benefit of all the members. That\u2019s why membership in a cooperative\nsociety is voluntary. A person can be a part of it as long as he desires and\nleave it when he feels like it. However, when a member leaves a cooperative,\nhis shares are not transferrable to others. If a person dies, the shares are\nautomatically transferred to their heirs.<\/p>\n\n\n\n<ul><li><strong>It has Open membership:<\/strong><\/li><\/ul>\n\n\n\n<p>Another key feature of cooperative societies is that the membership is open to everyone irrespective of caste, colour, creed, race or sex. The cooperative can be made for a particular group of people. Still, there can be no discrimination inside that group, i.e. a cooperative can be made for employees of a government institution; here non \u2013government employees can be denied membership. Still, membership cannot be denied on any distinction among employees of the govt. Institution.\u00a0<\/p>\n\n\n\n<p>This does not mean that the membership cannot\nbe denied on any grounds. The membership can be denied if it is detrimental to\nthe group\u2019s ideas and objectives. The managing committee has the right to\nterminate membership on similar grounds.<\/p>\n\n\n\n<p>Further membership in a cooperative society is\nperennial, meaning it is not closed after a fixed period.<\/p>\n\n\n\n<ul><li><strong>Liability of members:<\/strong><\/li><\/ul>\n\n\n\n<p>This feature of a cooperative society is\nsimilar to that of companies, the liability of members in a cooperative society\ncan be of two types; Limited or unlimited. Limited liability societies are much\nmore common in India. Limited liability cooperative societies must mention the\nword \u201climited\u201d in their name.<\/p>\n\n\n\n<ul><li><strong>Investment of Capital:<\/strong><\/li><\/ul>\n\n\n\n<p>The cooperative society members contribute to\nthe capital through the purchase of shares. This is not the only source of\ncapital. The government and various banks also extend their financial\nassistance to cooperative societies. Generally, cooperative societies are\ncreated to cater to the economically weaker sections of the society, so their\ncapital is scant. On top of this, the regulations restrict the maximum shares a\nperson can buy in a cooperative society.<\/p>\n\n\n\n<ul><li><strong>Meager interest on capital:<\/strong><\/li><\/ul>\n\n\n\n<p>The cooperative society is heavily dependent on capital to function effectively. A <strong>cooperative society<\/strong><sup><a href=\"https:\/\/mscs.dac.gov.in\/\" class=\"text-primary\"><strong>[1]<\/strong><\/a><\/sup> always fosters the interest of its members, and its operations are capital intensive. Moreover, the cooperative is created for its members\u2019 betterment and service. Therefore, the dividend received on the capital is minimal. Laws require a cap to be put on the dividend rate given in case a profit has been generated. In India, this dividend rate is seldom more than 10%.<\/p>\n\n\n\n<ul><li><strong>Surplus distribution:<\/strong><\/li><\/ul>\n\n\n\n<p>The creation of a cooperative society is for the welfare of the people. So, when the cooperative society earns a profit, it is not disbursed to the members as per their capital contribution. Instead, regulations state that 25 percent of the profit must be infused back into society. Similarly, as stated in the point mentioned above, only a specific percentage of the profit is returned to the members, typically capped at 10 percent.<\/p>\n\n\n\n<ul><li><strong>Democratic in nature:<\/strong><\/li><\/ul>\n\n\n\n<p>All cooperative society\u2019s operations are\ncarried out with the members\u2019 assent. While electing the committee members who\nshall look after the working of cooperative society- each member has \u2018one\u2019 vote\nirrespective of their shareholding capacity. The meetings of the cooperative\nsocieties are conducted locally and are attended positively by most\nmembers.&nbsp;<\/p>\n\n\n\n<p>There is a cap on the maximum shareholding in a\ncooperative society. This ensures that one person cannot have undue influence\non the working of society. Therefore no member can threaten or force an action\ncontrary to the consensus because of his shareholding capacity.<\/p>\n\n\n\n<p>Similarly, like in various government\ninstitutions, the meetings take two-thirds\/three-fourths majority to finalise a\ndecision. Also, frequent meetings are conducted, and members are educated on\nvarious aspects of the committees.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Such actions show how much democratic values\nare imbibed in a cooperative society.<\/p>\n\n\n\n<ul><li><strong>Legal Status and registration:<\/strong><\/li><\/ul>\n\n\n\n<p>A cooperative society must be registered under\nthe Cooperative Societies Act, 1912 or through the cooperative society acts of\ndifferent states. The following conditions must be met to get your cooperative\nsocieties registered:<\/p>\n\n\n\n<ol><li>Minimum\nof 10 members.<\/li><li>A\nduly filled application with all the relevant information.<\/li><li>The\napplication should accompany documents that entail the company\u2019s name, address,\nshareholding, rules and bye-laws.<\/li><\/ol>\n\n\n\n<p>If the registrar is satisfied with the application,\nhe shall issue a certificate to the cooperative society. This shall enable the\ncooperative society to have a legal existence.<\/p>\n\n\n\n<p>A cooperative society has the right to take in\nnew members and issue shares. Cooperative societies need to abide by various\nregulations. They are periodically required to submit audited documents and\nrecords to the registrar, and in some instances change in managerial position\nrequires prior approval from the registrar.<\/p>\n\n\n\n<ul><li><strong>Service motive:<\/strong><\/li><\/ul>\n\n\n\n<p>A cooperative society is created to serve the people. The objective can vary from housing Cooperative Society, Marketing cooperative society, Agriculture cooperative<strong><a href=\"https:\/\/swaritadvisors.com\/society-registration\" class=\"text-primary\"> Society<\/a><\/strong>, Credit cooperative society, Producer and Consumer cooperative society. A cooperative never functions to maximise profit; instead, it is created to work for the well-being of its members and society.<\/p>\n\n\n\n<ol><li><strong>Elimination of intermediaries:<\/strong><\/li><\/ol>\n\n\n\n<p>The cooperative society directly serves the\ncustomers. There is no involvement of middlemen. This feature of a cooperative\nsociety makes it distinct from other entities involved in selling\ngoods\/services. As soon as the role of intermediaries is negated, cooperative\nsocieties can deal with customers directly. This enables the customers to get\nthe goods at a fair price. and the seller gets more profit out of their sale\nand honest feedback. This results in the creation of healthy competition.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Cooperative\nsocieties are not created to earn huge profits. They are created to serve and\nsafeguard the interest of their members. There are various features of a\ncooperative society that enable us to understand how it differs from other\ncompanies and entities. These features often describe the sense of community,\ncollective efforts and democratic nature that the cooperatives imbibe.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A cooperative society is a mutual accord between people where they come together to pool their resources to achieve a common economic objective. Members of a cooperative society usually consist of workers and small producers. Many people set up cooperative societies to safeguard their interests as one. There are features of cooperative societies. This article [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":11577,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[450],"tags":[1065],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11576"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=11576"}],"version-history":[{"count":6,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11576\/revisions"}],"predecessor-version":[{"id":11585,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11576\/revisions\/11585"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/11577"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=11576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=11576"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=11576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}