A cooperative is an association of people who voluntarily cooperate for their mutual benefit (social, economic, cultural).The cooperative movement started in India as a result of economic and social imbalance caused by the Industrial Revolution.Cooperatives have occupied a special place in both capitalist countries like the United States and Japan and socialist countries.
The word 'cooperative' means 'working together'.This means that people who want to work together for a common economic purpose can form a committee.This is called ‘cooperative society’.It is a voluntary organization of individuals who work for their own economic interests. It operates on the principles of self-help and mutual aid.In a cooperative society, no member works for personal gain. All members pool their resources and maximize their profits,Which they divide among themselves.
A cooperative society is a type of organization in which individuals voluntarily work together on an equal basis for their economic interests. For example, students of a particular locality come together and form a cooperative society to provide books for different classes.They now purchase books directly from publishers and sell them to students at affordable prices. Because they purchase books directly from publishers, the profits of middlemen are eliminated.
Characteristics of cooperative societies
1. Voluntary Association: A cooperative society is a voluntary association of individuals. A person can become a member of a cooperative society at any time, can remain a member for as long as he wishes, and can leave the membership at any time.
2. Closed Open Membership: Membership of a co-operative society is open to all persons having similar interests. Membership is not restricted on the basis of caste, sex, colour or religion, but may be limited based on the number of employees in a particular organisation.
3. Separate statutory entity: A cooperative enterprise is required to be registered under the 'Cooperative Societies Act 1912' or the relevant Cooperative Societies Act of the State Government.A co-operative society has a separate legal existence from its members.A co-operative society has a separate legal existence from its members.
4. Financial Sources: Capital in a cooperative society is contributed by all the members.Furthermore, after registration, the committee can take loans and also receive grants from the government.
5. Service Objective: The primary objective of a cooperative society is to serve its members, although it also earns a reasonable profit for itself.
6. Closed franchise: A member has the right to cast only one vote, irrespective of the number of shares he holds.