Cooperative society

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Cooperation means working together. So those who want to work together with some common economic objectives can form a society, which is termed as cooperative society.

  • Voluntary association of persons who work together to promote their economic interest.

  • It works on the principle of self-help and mutual help.

  • Primary objective is to provide support to the members.


The Section 4 of the Indian Cooperative Societies Act 1912 defines “Cooperative Society as “a society, which has its objectives for the promotion of economic interests of its members in accordance with cooperative principles.”

Characteristics of Cooperative Society:

Characteristics of Cooperative society

Characteristics of Cooperative Society

Characteristics of Cooperative society

Types of Cooperative Society:

Consumers’ cooperative societies: Formed to protect the interest of consumers by making available consumer goods of high quality at reasonable price.

Producer’s cooperative societies: Formed to protect the interest of small producers and artisans by making available items of their need for production.

Marketing cooperative societies: To solve the problem of marketing the products, small producers join hand to form marketing cooperative societies.

Housing cooperative societies: To provide residential houses to the members, housing cooperative societies are formed generally in urban areas.

Farming cooperative societies: Formed by the small farmers to get the benefit of large-scale farming.

Credit cooperative societies: Person accept deposits from the members and grant them loans at reasonable rate of interest.

Advantages and Disadvantages of Cooperative Society:

Advantages and Disadvantages of Cooperative society

Advantages and Disadvantages of Cooperative Society

Advantages and Disadvantages of Cooperative society

Suitability of Cooperative Society:

  • This form of business organisations is a voluntary association of person who are not financially strong and cannot stand on their own legs to start and run the business individually.

  • Suitable for:

    • To solve the common problem or to meet the common requirements.

    • Suitable for small and medium size business operation.

Formation of Cooperative Society

  • Formed as per the provisions of the Cooperative Societies Act, 1912.

  • Form under the Cooperative Societies Acts of the respective states.

  • Various common requirements prescribed for registration are as below:

  • At least ten persons having common economic interest and must be capable of entering into contract.

  • Suitable name should be proposed for the society.

  • Prepared draft bye-laws of the society.

  • After completing the above formalities, the society should go for its registration.

  • Application must be signed by every member of the society.

  • After scrutinising of the application and the bye-laws.

  • Society can start its operation after getting the certificate of registration.