Credit Co-operative Society

Objectives, Advantages Co-operative Society

A cooperative society is formed with the main objective to serve the people and develop the economic condition within society.

A cooperative society, also known as cooperation, is formed when a group of individuals comes together for a certain benefit.

A group of people that decide to form a co-operative society in India must register under the Cooperative Society Act, 1912.

The purpose behind a cooperative society is to provide goods and services to the consumers at a reasonable cost with the aim to encourage them towards productivity, savings, investments and equal distribution of surplus.

Co-operative societies have a lot of objectives:

• To provide services and not run to earn any profit,
• To help those who are in need, not compete
• To undertake all the activities with keeping in mind the aim which is, the benefit of others.

What is the Cooperative Society?

People come together, pool all the available resources, and utilize these resources to achieve goals. The main object of Society is to serve society and not to earn a profit. A society delivers and supports activities such as art, education, poverty relief, culture, religion, and sports. A foreigner can also become a member of a cooperative society.

Objectives of Cooperative Society

• To provide support and services to the members of the society and not to earn the profit
• To help each other mutually and not to have competition
• To practice fair and transparent business activities
• To deliver the quality goods and produce to the end customers

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 member can join and leave society as per their wishes.
• Capital Invested for the society is contributed by the member and various grants and subsidies are received from the government for the smooth processing of business.
• A cooperative society is registered under the Cooperative Societies Act, it is a separate legal entity where the liability of its member is limited. It can run the business under its name.
• Where the cooperative society earns more profit while conducting its business operation, it is distributed among the members based on their participation in business.

• Promotes Democracy
• Ease of formation
• Limited Liability
• Equal distribution of surplus
• Stable existence

Co-operative Housing Society in India

It is a legal entity that requires individuals to register as members for one or more residential buildings. A person becomes a member after buying shares from the housing society.

The objectives of a housing cooperative society

• Advance loans for the construction of buildings
• To promote economic interests
• Encourage savings

Agricultural cooperative society – The main objective of an agricultural cooperative society is to promote and process farm products and for optimum purchase and production of the products.

Advantages of agricultural cooperative society

• Economies of scale
• Improve product and service quality

Disadvantages of Co-operative Society

• Co-operative society targets small and medium-sized businesses.
• Due to lack of funds, it is difficult to promote the business operation and sales promotion
• Lack of management skills to control and monitor the members
• Management has to depend on Honesty, Integrity, and loyalty to the members

Registration of the Cooperative Society

• To form a society, a minimum of 10 Individuals shall be desirous of forming a society for mutual benefit.
• Once the group is formed, a provisional committee is established and they elect a chief promoter for the society.
• The name for the society is selected by the chief promoter and members mutually.
• An application has to be made to registration authority explaining the business operation to be conducted by the members. After submitting documents and confirming, the concerned authority issues a certificate of name approval.
• After name approval, the registration fees and the share capital amount has to be collected from prospective members.
• A separate bank account in the name of the society must be opened. Registration fees and share capital amount has to be deposited in that bank account. The bank will issue a certificate for it.
• Once the bank formalities are completed, the chief promoter has to apply for the registration process with all set of documents.
• The application for registration has to be made in Form No. A, which needs to be a consent of 90% of the members
• Once the documents are submitted, the concerned authority will cross verify the documents and decide whether to issue a certificate or not?
• The register of application is maintained by the registrar of the particular ward to enter the details of the newly forming society. An application has to be made in Form B.
• The Registrar issues a receipt for submission of application and provides the status of such application from time to time.
• If there is any discrepancy in the application, it must be sent for rectification.
• The registering authority after being satisfied will notify society registration in the official gazette and issue a registration certificate to its member.

Conclusion

A cooperative society is a special type of business organization. It’s a voluntary association of a person who comes together to achieve the goal. Where there is no desire to earn a profit. It is for the betterment of society.