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When people with a mutual social, cultural, and economic interests join together to form an establishment, it is known as Cooperative Society. The fundamental objective of a Cooperative Society is to promote self-help and mutual help. The foundation of Cooperative Societies lies on the voluntarism and follows the philosophy of “All for each and each for all.” It implies that each member of the society voluntarily becomes the member and is not confined by any social, religious or political discrimination. Besides, anyone who meets the prescribed qualifications by the Cooperative’s By-laws can be a member of the society. A Cooperative Society was set up under the Cooperative Societies Act, 1912. This blog will underline the aim and objectives of the Cooperative Society.
Key features of a Cooperative Society
Let’s look at the essential aspects of Cooperative Societies for a better understanding:
- Voluntary Membership: It is the core principle of cooperation. An individual who posses common interest and abides by the set rules of a society has the right to be its member. Moreover, it’s in the hands of the members to either continue or leave the society. Apart from being voluntary, the membership of a Cooperative Society is open to all people irrespective of their caste, race, colour, or creed.
- Sources of Finances: All the members of a Cooperative Society contribute to finances through the purchase of shares. Generally, the accumulated funds are insufficient as the majority of members belong to weaker sections of the society. Also, there is a cap on the maximum shares which a member can purchase in the Cooperative Society. Hence, the Government provides financial support to the societies in the form of loans from the Central or Central Co-operative Banks.
- Purpose of the Cooperation- The central objectives of the Cooperative Society is to render useful services from credit to consumption goods and d input resources to its members as well as to the society. A Cooperative Society does not emphasize profits maximization at the cost of others. So the chief motive of the cooperation remains serving to its members and society.
- Democratic Control– Cooperative Societies are democratic in action. Cooperation conducts an AGM (Annual General Meeting) each year in which a managing committee gets elected by all the members that shall manage the affairs of the society.
- Separate Legal Entity- A Cooperative Society is compelled to register itself under the Cooperative Societies Act, 1912. Once registered, the society becomes a separate legal entity, which means its existence is different from its members.
Aims and Objectives of the Cooperative Society
The primary motto of any Cooperative Society is to refine the economic condition of its members. Thereby, it accentuates on better business and better living by carrying out operations that serve to the common economic interest and benefits to the members. Following are the objectives of cooperation:
- To develop cooperation, self-respect, and self-reliance amongst the members.
- To buy and produce quality goods, tools, equipments, and raw materials to the end customers.
- To associate with Government and other organizations of similar business.
- To undertake those activities that caters to the welfare and well-being of the members and society.
- To promote unity amidst the members and remove any sort of internal competition.
- To practice transparent and fair business dealings.
Different types of Cooperative Societies in India
There are various types of cooperative societies based on their unique objectives, such as:
- Consumer Cooperative Society – As the name suggests, the Consumer Cooperative ensures to protect the interest of consumers. After Consumer Cooperative Society Registration, its members focus on enabling reasonable goods to the consumers. Such societies directly buys good from manufacturers and supply them to consumers, thus eliminates the role of middleman in distribution.
- Producer Cooperative Society – The Producer Cooperative is created to safeguard the interest of small scale producers. The objective of this Cooperative Society is to facilitate the essential items to producers like machinery, raw material, equipment, etc.
- Marketing Cooperative Society – When small scale producers and manufacturers struggle in selling their products individually, they come together to form a Cooperative Marketing Society. The society collects the products from each member and initiates to sell those products in the market.
- Credit Cooperative Society – The Credit Cooperatives has the objective of providing financial support to the members. The Credit Society accepts deposits from its members and grants them loans at reasonable interest, when needed.
- Housing Cooperative Society – Housing Cooperatives purchases land, construct houses/flats and allot the same to its members. Some housing societies also offer credit or loan facilities to the members at a lower rate of interest to members to build their own houses.
- Farming Cooperative – The Agricultural Cooperative or Farming Cooperative Society is formed by small farmers who voluntarily work together and yield the benefits of large scale farming.
Procedure of Cooperative Society Registration
If you want to achieve the objectives of Cooperative Society, then it is indispensable to register your society under the Cooperative Society Act, 1912. Follow these steps for society registration:
- Firstly, you need to meet the requirement of minimum 10 Individuals who intends to form a society for mutual benefit.
- All the members will convene AGM to establish a provisional committee and elect a chief promoter for the society.
- The chief promoter and members will then mutually select the name of the society.
- The next step is to file an application to the registration authority, elaborating on the business operation of the proposed society and submit it along with the documents. If the concerned authority confirms the application, it will issue a certificate of name approval.
- After obtaining the name approval, collect the prescribed registration fees and share capital amount from each prospective member.
- Open a spate bank account in the name of your Cooperative Society. Thereby deposit the collected registration fees and share capital amount in that bank account so that the bank shall issue a certificate for the same.
- Now the chief promoter should apply for Society Registration in Form No. affixed with all the necessary documents. It is of utmost importance to get the consent of 90% of prospective members.
- Thereafter, the Registrar will verify the authenticity of the documents and if satisfied, you will get the Registration Certificate. However, in case of any discrepancy in the application, it must be resent for rectification.
- Further, the Registrar will issue a receipt for the submission of application using which you can check the status of your application from time to time.
- Registrar shall enter all the details of your newly formed Cooperative Society in the register.
The registering authority after being fully satisfied, will notify Society Registration in the official gazette and issue a registration certificate to you.
If you also have an urge to run a non-profit organization, then Cooperative Society is the most suitable business model for you. Accomplish all the objectives of the Cooperative Society by registering under the Cooperative Society Act with the assistance of Swarit experts.
Read, Also: How to Register as a co-operative society?.