Limitation of Co-Operative Society and Meaning of Joint Stock Company (For CBSE, ICSE, IAS, NET, NRA 2022)

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Limitation of Co-Operative Society

Limitations of Co-Operative Society

Lack of Motive

The members do not work with full zeal and devotion as there is no profit motive.

Limited Capital

The amount of capital that a cooperative society can raise from its member is very limited because the membership is generally confined to a particular section of the society.

Problems in Management

A cooperative generally offers low scales of remuneration to the staff employed. that՚s why management of a cooperative may not be particularly competent.

Lack of Commitment

The success of a cooperative based on the loyalty of its members, something that is neither assured nor can be enforced.

Lack of Co-Operation

The co-operative societies are established with the objective of mutual co-operation. But it is generally seen that there is a lot of friction between the members because of personality differences, ego clash, etc. The selfish attitude of members may sometimes be an end to the society.

Meaning of Joint Stock Company

  • Indian companies are governed by the Indian Companies Act, 1956. According to this Act ‘A company means a company formed and registered under this act.’
  • Joint Stock Company is an artificial person created by law, having a separate legal entity, with perpetual succession and a common seal.
  • The capital of a company is divided into a number of shares of equal value. ‘Members of the company who holding one or more shares, are called the company՚s shareholders.’

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