Significant Purposes of Forming a Cooperative Society
A cooperative society is a form of non-profitable organization where people with everyday needs and interests join together to serve each other. In this, the members of society help each other to improve their standards of living. In a cooperative business, people contribute together to fulfill the requirements of a different member of the society by offering products and other services. The prime purpose of cooperative societies is to serve the people rather than earning profits. To register in a particular type of cooperative society, you can check the procedure of Society registration online on relevant websites.
In cooperative societies, every member involved in it is treated equally. There is no room for discrimination when it comes to providing benefits and facilities to the associates. The membership to these organizations is open to all irrespective of caste, religion, gender, and economic status of the person. Every member in all types of cooperatives has a single individual voting rights.
For society registration online, you need to follow specific steps and consider some crucial factors. Such organizations require to get registered under The Society Registration Act, 1912. To register a cooperative society, the organization requires having at least seven members. Selecting a unique name is essential, and every member should sign the Memorandum of Association.
The idea of forming cooperatives has enabled substantial improvements in the social and economic developments of the members involved in the organization. It is a society where people can independently associate together to promote the financial interest of themselves as well as others. There are mainly four kinds of cooperative organizations- creditor, industrial, housing, agriculture, cooperative consumer and producer, and the marketing society.
The producer’s cooperative society is an organization where different kinds of producers ally to help each other in growing their businesses. This type of business usually has limited resources contributed by all the members of the association. Hence, none of the members can expand their business independently. The producer’s cooperative organization helps its associates to purchase new machines, improve the supply chain of raw materials, and enable recruitments of skilled laborers.
The industrial cooperatives are formed by manufacturers with limited resources. In an era of industrialization, surviving the competition created by large scale industries is difficult. In such situations, small enterprises find it tough to strengthen their position in the marketplace. The industrial cooperative society helps small manufacturing units to purchase raw materials and convert them into finished goods. They also help people develop the skills to improve the quality of the products and strategies to deal with the growing competition. Such organizations get in contact with government agencies to promote their products to a broader market.
Benefits and limitations of cooperative organizations
Voluntary membership is one of the crucial principles of every cooperative society. It does not depend on the abundance of resources, but the number of members involved in the business. The fundamental objectives of cooperation are helping the members at times of need.
You can join a cooperative association according to your convenience and leave it whenever you want. However, if you decide to be a member of these societies, you have to abide by their rules and regulations. If you leave the community, your shares cannot be transferred to any other person. But, the shares can be reassigned to an heir on the death of an associate.
In recent times, industrialization has created problems. Advancements have brought disparity between the rich and the poor. People with limited economic resources are often deprived of their necessities. However, with the development of cooperative societies, a significant group of people can fight financial problems with mutual help.
Besides the multiple benefits that it offers, cooperatives have some limitations too. As the cooperative society is formed by the weaker sections, it has limited resources. The fees collected from each member is minimal; hence, the fund raised is limited. Also, these societies cannot raise their funds individually, thus are dependent on government bodies.
In most rural areas, the rich people from these societies for their benefits and deprive the weaker section of their rights. The members who are economically stable elect themselves as a member of the administration board and manage the affairs of the society according to their convenience.