Page 1 - Lesson Note 6

SAI INTERNATIONAL SCHOOL

CLASSS XI

SUBJECT: BUSINESS STUDIES

CHAPTER -2, BUSINESS ORGANISATION,

CH 2 Lesson Notes 6co-operativesocieties, Features, Merits and Types

A co-operative society is a voluntary association of persons of moderate means who unite
together to protect & promote their common economic interests. Its object is to protect
and promote the economic and social interest of members.

FEATURES

Link: https://www.youtube.com/watch?v=q3fP0Qo1-cc (meaning and features video)

1. Voluntary association: Every one having a common interest is free to join a
cooperativesociety and can also leave the society after giving proper notice. Any person of
18 years of age can join a society as member. There is no bar or discrimination on the basis
of religion, caste or gender.

2. Legal status: Its registration is compulsory and it gives it a separate legal identity distinct
from its members. It can own or sell property in its own name.

3. Limited liability: The liability of the member is limited to the extent of their capital
contribution in the society.

4. Democratic control: Management & Control lies with the managing committee elected
by the members by giving vote. Every member has one vote irrespective of the number of
shares held by him. All members have equal voice in the management of the society.

5. Service motive: The main aim is to serve its members and not to maximize the profit.
The society earns nominal profit after covering administrative expenses.

6. Bound by govt.’s rules: They have to be tide by the rules and regulations framed by
govt. for them.

7. Distribution of surplus: The profit is distributed on the basis of volume of business
transacted by a member and not on the basis of capital contribution of members.