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Nishant R. Nair Nishant R. Nair

Class - 9-2

Roll No. - 28





¶¶CoCo--operation¶ operation¶

Derived from the Latin word µDerived from the Latin word µcoco--operarioperari¶¶

µ µcoco¶ means µwith¶ and µ¶ means µwith¶ and µoperari operari ¶ ¶ meansmeans µto work¶ µto work¶

µ µCoCo--operationoperation¶ means working together¶ means working together



¶¶CoCo--operative Societyoperative Society··

A A voluntaryvoluntary associationassociation of persons;of persons;

working together withworking together with common economiccommon economicobjectiveobjective;;

providingproviding supportsupport to the members;to the members;

self self--helphelp andand mutual helpmutual help;;

nonnon--profitprofit motive;motive;

poolingpooling individual resourcesindividual resources forfor groupgroupwelfare;welfare;

forfor common benefitcommon benefit..



OBJECTIVES R ender service, not for profit;

Mutual help, not competition;

Self help, not dependence;





Open membership

Membership open to all with common

interest; Minimum of ten members;

No restriction on the maximum number;

Members may specify the maximumnumber for their Society



Voluntary Association

Members coming together voluntarily;

by choice, not by force;

Continues for as long as he likes;

May leave at his will.



State controlState control

Registration compulsory;

Statutes, Rules and Bye Laws to protect the

interest of members;

Has to maintain books and records;

Subject to statutory audit of books by

qualified Chartered Accountants;

Functions under the regulatory supervision of

Registrar of Co-operative Societies



Sources of FinanceSources of Finance

Capital contributed by all the members;Capital contributed by all the members;

May raise loans and secure grants fromMay raise loans and secure grants from

government;government; after its registration.after its registration.



Democratic ManagementDemocratic Management

Governed by a µManaging Committee¶ or µBoard of Directors¶ elected by the members

of the society;

Managed on democratic lines;

One member one vote, irrespective of no. of

shares held;



Service motive

Co-operatives not to maximize profit but to

provide service to its members;

A Consumer Co-operative Store sells qualitygoods to members at a reasonable price

retaining a small margin of profit;

In a Housing Co-Operative, members reside

by sharing expenses on maintenance and

repairs.



Separate Legal Entity

Separate legal entity;

Limited liability of its members;

Continuity of existence; Death, insolvency or lunacy of a member not

to affect the existence of a society

Can enter into agreements;

Can purchase or sell properties in itsown name;

Can sue and be sued.



Distribut ion of SurplusDistribut ion of Surplus

Distributes Prof its earned among MembersDistributes Prof its earned among Memberson the basis of members part icipat ion inon the basis of members part icipat ion inthe business of the society;the business of the society;

Prof its generated are not at the cost of itsProf its generated are not at the cost of itsmembers;members;

Example:± in a Consumer Society, profit generated by sale

of goods to general public is paid as purchasebonus to members on the basis of goodspurchased by them from the society.



Self Self--help through mutualhelp through mutual

cooperationcooperation

Co-operative Societies thrive on the principle of mutual help;

They are the organizations of financially weaker sections of society;

converts Weakness to strength by µself-helpthrough mutual co-operation¶;

Fights exploitation and secure a place in societythrough ³Each for all and all for each´.





Governed by the Co-operative Societies Act,1912;

Minimum of 10 persons having the capacity

to enter into a contract with commoneconomic objectives;

A joint application along with the bye-laws of the society containing the details about thesociety and its members to the R egistrar of Co-operative Societies of the concernedstate;

After scrutiny, the registrar issues aCertificate of R egistration

Formation of a Society



R equirements for R egistration

Application with the signature of all

members

Bye-laws of the society containing: Name, address and aims and objectives of the

society

Names, addresses and occupations of

members

Mode of admitting new members

Share capital and its division





Easy Formation

Open Membership

Democratic Control

Limited Liability Elimination of Middlemen·s

. Profit

State Assistance

Stable Life



Easy FormationEasy Formation

Formation easy compared to a jointFormation easy compared to a jointstock company;stock company;

Any ten adults with common intent;Any ten adults with common intent;

voluntarily forming an association;voluntarily forming an association;

R egistered with the R egistrar of CoR egistered with the R egistrar of Co--operative Societies.operative Societies.



Open MembershipOpen Membership

Persons with common interestPersons with common interest

voluntarily coming togethervoluntarily coming together

may become a member of the society at hismay become a member of the society at his

willwill

And leave the Society at will.And leave the Society at will.



Democratic ControlDemocratic Control

controlled in a democratic manner;controlled in a democratic manner;

Elects representatives to govern theElects representatives to govern the

affairs of the Society;affairs of the Society;

One member, one vote;One member, one vote;

Governing Council/ CommitteeGoverning Council/ Committeeaccountable to members and theaccountable to members and theR egulators.R egulators.



Limited LiabilityLimited Liability

liability of members limited to theextent of the capital contributed bythem to the Society;

No personal liability to members forthe liability of the Society



Elimination of Middlemen¶s

Profit

Combined strength of members;

to derive economies of scale;

for direct access to ±

manufactures and producers;

goods and services;

to markets and distributionchannels;

Eliminates middlemen¶s profit



State AssistanceState Assistance

Central and State assistance;Central and State assistance;± in the form of capital contribution;

± loans at low rates of interest;

± exemption in tax;

± subsidies in repayment of loans, etc.

*

*Graph showing Government assistance to TDCC TribalDevelopment cooperat ioncorporat ion



Stable Life

fairly stable life;

continuous existence;

existence not affected by death, insolvency,

lunacy or resignation of members.





Limited CapitalLimited Capital

Source of capital limited, by limit ing membershipSource of capital limited, by limit ing membershipto a part icular sect ion of the society;to a part icular sect ion of the society;

No incent ive to members to contribute more toNo incent ive to members to contribute more tothe capital due to low rate of ret urn;the capital due to low rate of ret urn;

Governments assistance often inadequate forGovernments assistance often inadequate formost Comost Co--operat ivesoperat ives



Problems in Management

lack of managerial talent due to ±

elected representatives lacking in managerial

experience and expertise;

limited resources hampering outsourcing of professional managerial talent;



Lack of Motivation

Lack of motivation owing to ±

Societies being service oriented notprofit oriented;

Extra efforts by any particular

member not getting extra reward;

Being aloof and not involved does notresult in denial of rewards.



Lack of Co-operation

Societies often suffer from ±

Personality differences;

Ego clashes;Selfish attitudes;

Lack motivation;

Ignorance of or irreverence to principles of

co-operation



Dependence on Government

Societies ften tend to be dependent ongovernment patronage and support interms of grants, loans subsidies,

etc., owing to ± inadequacy of capital;

Limited access to raw materials;

Lack of market and distribution of channels for products;

Vagaries of nature leading to financial burden onmembers, etc.





Consumers¶ CoConsumers¶ Co--operative Societyoperative Society

For protecting interest of general consumers;For protecting interest of general consumers; by making consumer goods available at aby making consumer goods available at a

reasonable price;reasonable price;

Source goods directly from the producers orSource goods directly from the producers or

manufacturers;manufacturers;

eliminates middlemen in the distributioneliminates middlemen in the distribution

process.process.

Some examples

Some examples::

-- Kendriya Bhandar,Kendriya Bhandar,

-- Apna BazarApna Bazar

-- Sahkari BhandarSahkari Bhandar

-- Employees consumer coEmployees consumer co--operative societies; Etc.operative societies; Etc.



Producers¶ Co-operative Society

to protect interest of small producers;

By making available raw materials, toolsand equipments, machinery, etc.;

Arranging Marketing & Distributionchannels, etc.

Examples:

Amul

APPCO,

Bayanika,

Haryana Handloom,

Co-optex



Co-operative Marketing Society

Society of small producers and manufacturers;

collects the products from members

makes available better marketing & distribution

channels economically;

sells in the market.

Examples:

Anand Milk Union Ltd., (Amul);

Co-optex

UP Handloom



CoCo--operative Credit Societyoperative Credit Society

formed to provide financialsupport to members

accepts deposits from members;

grants loans to members atreasonable rates of interest

Examples: Village Service Co-operative Credit Societies, Employees co-operative credit societies, etc.



CoCo--operative Banksoperative Banks

formed to provide banking facilities to members;

accepts deposits;

grants loans at reasonable rates of interest

Examples:



Co-operative Farming Society

formed by small farmers;to pool small holdings and workto benefits of large-scalefarming;

Examples:Lift-irrigation Cooperative Societies;

pani-panchayats



Housing Co-operative Society

provide residential accommodation to

members

Constructs houses or apartments for

members;

Provides amenities;

Takes care of maintenance and repairs.



IFFCO IFFCO ± ±

Giant of a CoGiant of a Co--operativeoperative



CoCo--operatives¶ Share in Fertilizer operatives¶ Share in Fertilizer

ProductionProduction



BibliographyBibliography

Various Internet sitesVarious Internet sites

Acknowledgement: www.google.com

-- Nishant R. NairNishant R. Nair

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