What is a Co-operative Society?

What is a Co-operative Society?

A cooperative society is a group of people that forms a voluntary society to benefit its members and work to enhance the society especially for the weaker section of the society.  

A cooperative society's members purchase the shares that are issued by the cooperative society as a means of raising capital.

 

Table Of Content

• What is a Cooperative Society?

• Document Required for Cooperative Society Registration?

• Cooperative Society Registration Process

• Features Of Cooperative Society 

• Types Of Cooperative Society 

• Merits Of Cooperative Society 

• Conclusion 

• Frequently Asked Questions (FAQs)

 

What is a Cooperative Society?

A Cooperative Society is a society which has its objective for the promotion of economic interests of its members in accordance with cooperative principles. For better functioning of a cooperative society “The Cooperative Societies Act, 1916”, was formed. 

Each Cooperative society is governed by the rules and regulations of the act. A cooperative society required the agreement of at least 10 adult members for forming a Cooperative Society. 

 

Documents Required For Cooperative Society Registration 

 

Cooperative Society Registration Process

The process of registering a cooperative society involves several steps, which may vary depending on the jurisdiction and specific laws of the country. 

Step 01. Formation of Group: 

A group of individuals who share a common goal or objective come together to form a group. In a Cooperative Society minimum 10 members are required. 

Step 02. Selecting Unique Name:

The group must select a unique and appropriate name of their cooperative society, which is not similar to any other organization. The name should reflect the nature and objective of a society. 

Step 03. Drafting a Rules & Regulation:

The group needs to draft rules and regulations of a society that will govern the smooth functioning of the society. 

Step 04. Application Submission:

The group needs to submit an application for registration to the designated government authority responsible for cooperative society registration. 

Step 05. Verification: 

The government authority reviews the application and supporting documents for verification of the society. 

Step 06. Certificate:

If the application is approved then the government will issue the certificate of registration.

Step 07. Bank Account & Operation: 

With the registration certificate, the Cooperative society can open a bank account with the society's name. 

Step 08. Compliance & Reporting: 

Registered cooperative societies are required to comply with the ongoing reporting and regulatory requirements outlined by the relevant government authority. 

 

Features Of Cooperative Society 

Features of Cooperative Society are given below: 

Separate Legal Entity:

As registration of a Cooperative Society is compulsory, it has a separate legal entity that is distinct from its members

Democratic: 

Cooperative Societies major decision handled by elected managing committee. However, the members can elect their representative as they have voting rights. 

Limited Liability:

In Cooperative Society, the liability of any member is limited to the extent of capital contributed to them. In this way with minimum risk, any member can protect their economic interest through a cooperative society. 

Free Entry & Exit:

An individual is free to join and leave the society according to its will, as cooperative society is a voluntary association. 

Social Welfare: 

Cooperative society works for the poor section of the society, in this way Cooperative Society works for the welfare of society. 

 

Types Of Cooperative Society 

Producers Cooperative Societies:

Producers Cooperative societies established for those producers who want to work on a large scale but they don’t have enough resources. In that case, Producer Cooperative societies provide all these small producers a platform to sell their products on a large scale. 

In Producers Cooperative societies, all the members are the producer, they work as a supplier and buyer both for raw material and other equipment.  The profit is distributed among all the producers according to their investment in the resources. 

Consumers Cooperative Societies:

The primary objective of Consumers Societies is to obtain better quality products at a reasonable price. Consumers Cooperative society formed for the welfare of its consumers. 

If there is any profit or loss it is divided among all its members depending on their capital contribution and purchase made by them individually. It reduces individual risk and enhances their bargaining skills. 

Farmers Cooperative Societies:

Farmers Cooperative societies formed by those farmers who are willing to increase productivity at a larger scale. The primary goal of Farmers Cooperative society is to earn profit by increasing productivity within minimum cost. Modern methods including HYV Seeds, fertilizers, machinery,  and other equipment are mainly focused by Farmers Cooperative societies. 

Credit Cooperative Societies:

Credit Cooperative Societies, also known as credit unions, provides savings and credit to their members. It protects loan seekers from the exploitation of money lenders, who charge high interest and fool them. 

Cooperative Housing Societies:

Cooperative societies work for those sections who do not have enough money and resources for construction who want to construct a house for themselves. Cooperative Housing Societies provide them their desired plot and land for construction and allow them to pay the amount in installments. 

Marketing Cooperative Societies:

Producers form Marketing Cooperative Societies to collectively market and sell their product. The main aim of Marketing Cooperative Societies is to help those small producers who want to get reasonable amounts for their product. The main aim of Marketing Cooperative Societies is to remove the middleman between the chain of consumer and producer. 

 

Role Of Cooperative Society

Following are the roles of a Cooperative Society: 

• Economic Empowerment: Cooperative Societies help in promoting goods and services. They often enjoy better pricing and quality due to collective bargaining power.

• Democratic Participation: Members have rights to contribute in the decision making process, apart from their financial contribution. 

• Wealth Distribution: Profit or surplus distributed among all the members depending on their level of engagement, rather than being concentrated among a few stakeholders.

• Local Development:Cooperative Societies help the local economy by creating jobs and investing in community development. 

 

Conclusion 

Cooperative societies play a significant role in fostering community engagement, economic empowerment, and sustainable development. They continue to evolve and adapt to changing societal and economic needs while remaining rooted in their principles of cooperation. 

To know more about Cooperative Societies, consult with Professional Utilities Experts.