Aishwarya Lakshmi
Amul, Aavin, Indian Coffee House, Indian Farmers Fertilizer Cooperative Limited (IFFCO), Urban and Rural Cooperative Banks, Housing Cooperative Society, etc. are names we hear on a regular basis. What is common about them is that they are all Cooperative Societies. This article attempts to give an outline understanding of the characteristics of a Cooperative Society.
A cooperative as defined by the International Cooperative Alliance is “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”
A society which has its object to promote economic interests of its members may be registered under the Cooperative Societies Act, 1912. In India, ‘Cooperative Society’ is a state subject under Entry 32 of List II of the Seventh Schedule. Hence, every state has its own Cooperative Society laws. If the Cooperative Society is a part of multiple states it is governed by the Multi-State Cooperative Societies Act, 2002.
The following are the main characteristics of these Cooperative Societies:
Open Membership for all those with common interests.
‘One Member, One Vote’ principle is followed i.e., every member is entitled to one vote irrespective of the number of shares held by them.
Service motive more than profit motive.
‘Each for all and all for each’ principle enshrining mutual benefit.
Independent Juristic Personality to the Cooperative Society.
State Control (audit of accounts) and Assistance (loans at lower interest rates, tax benefits).
Education and training to the members, elected representatives, and employees.
It is an enterprise, but not a charitable association.
Capital is contributed by all the members.
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