Co-operative societies do not maintain secrecy in their businesses because the affairs of the societies are openly discussed in meetings. In some cases, the society sells goods and or services to outsiders. Some of the advantages of a cooperative society are:-1. Is low taxes possible in Cooperative society? Many a times they strongly differs with one another on many important issues. Government provides special assistance to co-operative societies to enable them achieve their objectives though currently through Finance Bill 2013, the government is introducing excise duty of 10%. The Cooperative Society act does not specify the maximum numbers of the cooperative society members. 1. The profits are then transferred to the general reserve and used for the welfare of members. Procurement of products is done directly from the producers, which removes the middlemen, thereby generating more profit for the producers and consumers. 2. Easy to Form 2. There is no harsh rule regarding the number of people who can be part of a cooperative society. 1. Formation of a cooperative society also does not involve long and complicated legal formalities. | Co-operative Movement in Kenya, THE DEPARTMENT OF CO-OPERATIVE DEVELOPMENT AND MARKETING – RANGE OF SERVICES AT SUB-COUNTY (DISTRICTS) | Co-operative Movement in Kenya, Division of Co-operative Societies | Co-operative Movement in Kenya. Cooperative is a form of business ownership in which the profit is shared among the members of business only and not the stakeholders from outside. There is limited liability of the members of co-operative society. 2. What are the advantages of a co-operative society? Its registration is very simple and can be done without much legal formalities. All these people come together and cooperate on the formation of the society. Easy to form: The formation of a cooperative society is very simple as compared to the formation of any other form of business organisations. As it is a voluntary association, the membership is also voluntary. Hence, they are relieved from the fear of attachment of their private property, in case of the society suffers financial losses or goes bankrupt. Advantages of Cooperative Societies They sell cheap products because there is no advertisement cost. Post was not sent - check your email addresses! What are the types of Cooperative society? Advantages of Cooperative Society 1. 3. Cooperatives are democratically owned by their members, with each member having one vote in electing the board of directors. What is meant by Producers cooperative society? There are minimum 10 members needed to form a co-operative society.Life of the co-operative society is not affected by the life of its members. This is one of the most prominent objectives of all co-operative societies. Less Taxation. (funnyardstick.wordpress.com) […], […] Informations on that Topic: funnyardstick.wordpress.com/2013/08/04/what-are-the-advantages-and-disadvantages-of-co-operative-society/ […], What are the Advantages and Disadvantages of Co-operative Society? Though this can be overcome by increasing membership with the downside of minimal returns to its members. Rare occurrence in Kenya. 3. 2. ( Log Out /  Limited liability: The liability of the members in a cooperative society is limited to the extent of their capital contribution. Change ), You are commenting using your Google account. There are no special legal formalities required to form a co-operative society. Advantages of Cooperative Society. Economical Operations 7. … Change ), You are commenting using your Twitter account. Credit union co-operative society: This society formed by organizations that offer credit facilities to individuals and organizations. Create a free website or blog at WordPress.com. They can register themselves with the Registrar of Co-operative societies. Cooperative societies encourage the habit of savings and thrift among their members. The recurring and non-recurring expenses are minimized. 4. It sells quality goods at cheaper rates to the members by retaining a small margin for profit. Advantages: 1. Advantages of Co-operative Society 1. 1. In most cases, the liabilities of the members of the society is limited to the extent of capital contributed by them. « Co-operative Movement in Kenya[…], […] Read More here: funnyardstick.wordpress.com/2013/10/17/what-are-the-advantages-and-disadvantages-of-co-operative-society/ […]. They cannot be personally held liable for the debts of the society. Equal distribution of surplus: The surplus generated by the cooperative societies is distributed in an equitable manner among members. Any two adults can come together and join their hand and form a cooperative society. Goyal Bros. Prakashan - Video Lectures 277,922 views ( Log Out /  Open Membership 3. A person can become a member of a society at any time he likes and can leave the society if he does not like to continue as member. What are the advantages of cooperative society? Democratic Management 4. Cooperative society was originated from the word of co-operating which indicates assistance. 3. Cooperatives enable smallholders in partner countries to market products together and get a stronger voice in the global supply chain. It does not get affected by the entry or exit of its members. 5. 4. But secrecy is very important for the success of a business organisation. In working cooperatively with other grower-owners, your cooperative has a more prominent presence in the marketplace. A co-operative society is managed by the members only. Li… Society means association or collection of a group of people. Any ten persons can join together and voluntarily form an association. The society sells goods and services to its members on a nominal profit. Every member has equal rights through its single vote but can take active part in’ the formulation of the policies of the society. Stories of Various Sacco Societies in Kenya, Duties of the Management and Supervisory Committees, Stories of Various Sacco Societies in Kenya. Any ten adults can join together and form a co-operative society. It implies that all members have equal rights in managing the affairs of the enterprises. Cooperatives help people come together as a community. New members may join and old members may quit the society but the society continues to function unless all members unanimously decided to dissolve the society. Create a free website or blog at WordPress.com. The first thing cooperative societies do to individual members is development of savings culture. The middleman’s profit is eliminated as the consumers … Voluntary organisation: The membership of a cooperative society is open to all. Advantages of a Cooperative Organization: 1. Any 10 members who have attained majority can join together for forming a cooperative society by observing simple legal formalities. Government may influence the decision of the Board which may or may not be favorable for the interest of the society and its members. Derived from the principle of democratic member control. The benefit of coming together is that each society member can be the owner of an apartment with the reduced stress of maintaining sole ownership of the property. When you join a cooperative, it competes in the market on your behalf. Advantages of Cooperative Societies Ease of Formation. Write a note on Consumer cooperative society. It is an age long established fact that nobody can escape poverty without a … Nobody is obstructed to join on the basis of religion, caste, creed, sex, colour etc. Advantages of a Cooperative. Cooperative societies are built by collaboration among builders, government and house owners. 2. The products that are sold in the cooperative societies are cheaper than the market. Sorry, your blog cannot share posts by email. Some portion of the surplus is distributed as dividends or interest on deposit and some kept as reserve (i.e. In our next article, we will take a look at the advantages and disadvantages of co-operative societies. 16. A co – operative society is a voluntary association and may be formed with a minimum of ten adult members. Limited Liability 5. Advantages and Disadvantages of “Cooperative Society” are as follows: A cooperative society is easy to create. The management of the society constitutes the various types of personnel from different social, economical and academic background. Advantages. They may not possess any managerial and special skills. Therefore all the members of the cooperative society are benefited. Despite the many advantages, co-operative societies suffer from certain limitations or drawbacks. The procedure involves in the registration of a cooperative society is very simple and easy.… ( Log Out /  Proponents of cooperatives accentuate the overall psycho-social impacts created by the control parameters in these communities. The co-operative society is a separate legal identity to the society. Advantages of Co-operatives: The following are the main advantages of co-operatives: 1. The membership fee is kept low so that everyone would be able to join and benefit from cooperative societies. Easy formation: The formation of cooperative society is very simple as compared to the formation of other form of business organization. 1. Check-out my earlier post on registration procedure, http://www.preservearticles.com/201101193579/advantages-and-disadvantages-of-cooperative-society.html, Advantages and Disadvantages of Saccos co-operatives, Co-operative Legislation In Kenya | Co-operative Movement in Kenya, MODEL BY-LAWS FOR SACCOS | Co-operative Movement in Kenya, CO-OPERATIVE PRAYER | Co-operative Movement in Kenya, What and Why Co-operatives? What are the Advantages and Disadvantages of Co-operative Society? A co-operative society cannot be dissolved by the death, insolvency, lunacy, permanent incapability of its members. Unless and otherwise specifically debarred, the membership of cooperative society is open to everybody. Any ten adults can join together and form a cooperative society. Voluntary organisation: The membership of a cooperative society is open to all. The procedure involves in the registration of a cooperative society is very simple and easy. Advantages and guarantees of housing cooperatives. The procedure involves in the registration of a cooperative society is very simple and easy. This is considered as major drawback of this sector. The co-operative society is managed by the elected members from and among themselves. The operations carried on by co-operatives societies are economical due to the eliminations of middlemen. An established model, the ILO estimates that nearly 50% of the world's rural agricultural produce is marketed through cooperatives. It helped me while I was in class, to get an idea. It is compulsory for the co-operative society to get registration. Easy Formation: Compared to the formation of a company, formation of a cooperative society is easy. A cooperative is defined by the International Cooperative Alliance's Statement on the Cooperative Identity as "an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly … Ease of formation: Since it is a voluntary organisation it is easy to form by any ten members. Change ). In Co-operative societies members are provided with better good and services at reasonable prices. Therefore, members of a cooperative are only taxed once on their income from the cooperative and not on both the individual and the cooperative level. Advantages of Cooperative Society Membership of the co-operative society is open to all, who have a common object of providing service without expecting returns on it. The membership fee is kept low so that everyone would be able to join and benefit from cooperative societies. Answer (1 of 1): The formation of co-operative is simple as compare to the formation of Joint Stock Company. A cooperative society is different from other forms of business organization because other business organizations like partnership firm or private limited companies work with the sole objective of earning profits whereas in this form of business organization member’s voluntary join the society so to work for the benefit of the members of the society while doing business. The cooperatives society supplies goods and services to the members at the wholesale price. These advantages, which tend to tie the patrons to the organization by making them full partners, help build an assured volume of business. Together and form a co-operative society is very simple and easy click an icon to Log in: You commenting. These limitations are: -1 profit and loss are all on them general reserve and for... Limited so is the monthly contributions in case of Saccos as their.. 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