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Posted by / 28-Oct-2017 18:45

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Ø Democratic Control: A co-operative society is controlled in a democratic manner.

The members cast their vote to elect their representatives to form a committee that looks after the day-to-day administration.

Unlike sole proprietors and partners the personal properties of members of the co-operative societies are free from any kind of risk because of business liabilities.

Ø Elimination of Middlemen’s Profit: Through co-operatives the members or consumers control their own supplies and thus, middlemen’s profit is eliminated.

Ø Stable Life: A co-operative society has a fairly stable life and it continues to exist for a long period of time.

Its existence is not affected by the death, insolvency, lunacy or resignation of any of its members.

Ø Lack of Motivation: Every co-operative society is formed to render service to its members rather than to earn profit.

This does not provide enough motivation to the members to put in their best effort and manage the society efficiently.

Ø Dependence on Government: The inadequacy of capital and various other limitations make cooperative societies dependant on the government for support and patronage in terms of grants, loans subsidies, etc.

Limitations of Co–operative Society Besides the above advantages, the co-operative form of business organisation also suffers from various limitations. Ø Limited Capital: The amount of capital that a cooperative society can raise from its member is very limited because the membership is generally confined to a particular section of the society.

Again due to low rate of return the members do not invest more capital.

Advantages and Disadvantages of Co-operative Society Advantages of Co-operative Society A Co-operative form of business organisation has the following advantages: Ø Easy Formation: Formation of a co-operative society is very easy compared to a joint stock company.

Any ten adults can voluntarily form an association and get it registered with the Registrar of Co-operative Societies.

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