What is Co-operative Society?

A Co-operative society is an autonomous association of persons who voluntarily cooperate

for their common economic interest. Cooperatives are typically based on the cooperative
Values of self-help, self-responsibility, democracy and equality, equity and solidarity. A
Cooperative is a legal entity owned and democratically controlled by its members. Members
often have a close association with the enterprise as producers or consumers of its products
or services, or as its employees. In some countries, e.g. Finland and Sweden, there are
specific forms of incorporation for Cooperatives. Cooperatives may take the form of
companies limited by shares or by Guarantee, partnerships or unincorporated associations.
In the USA, cooperatives are often organized as Non-capital stock corporations under state-
specific cooperative laws. However, they may also be unincorporated associations or
business corporations such as limited liability Companies or partnerships, such forms are
useful when the members want to allow;
1. Some members to have a greater share of the control, or
2. Some investors to have a return on their capital that exceeds fixed interest,
Neither of which may be allowed under local laws for cooperatives. Cooperatives often
share their earnings with the membership as dividends, which are divided among the
members according to their participation in the enterprise, such as patronage, instead of
according to the value of their capital shareholdings.
Cooperatives are typically based on the cooperative values of self-help, self-responsibility,
Democracy and equality, equity and solidarity and the seven cooperative principles i.e.
1. Voluntary and open membership
2. Democratic member control
3. Economic participation by members
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperatives
7. Concern for community
Cooperatives are dedicated to the values of openness, social responsibility and caring for
others. Such legal entities have a range of social characteristics. Membership is open,
meaning that anyone who satisfies certain non-discriminatory conditions may join.
Economic benefits are distributed proportionally to each member’s level of participation in
the cooperative, for instance, by a dividend on sales or purchases, rather than according to
capital invested. The United Nations has declared 2012 to be the International Year of
Cooperatives (IYC) History and development of Co-operative society:
Cooperation dates back as far as human beings have been organizing for mutual benefit.
Tribes were organized as cooperative structures, allocating jobs and resources among each
other, only trading with the external communities. In alpine environments, trade could only
be maintained in organized cooperatives to achieve a useful condition of artificial roads such
as Viamala in 1472. Pre-industrial Europe is home to the first cooperatives from an Industrial
context. Robert Owen (1771 1858) was a social reformer and a pioneer of the Cooperative
movement. In 1761, the Fenwick Weavers’ Society was formed in Fenwick, East Ayrshire,
and Scotland to sell discounted oatmeal to local workers. Its services expanded to include
assistance with savings and loans, emigration and education. In 1810, Welsh social reformer
Robert Owen, from Newtown in mid-wales, and his partners purchased New Lanark mill
from Owen’s father-in-law David Dale and proceeded to introduce better Labour standards
including discounted retail shops where profits were passed on to his Employees. Owen left
New Lanark to pursue other forms of cooperative organization and develop co-op ideas
through writing and lecture. Cooperative communities were set up in Glasgow, Indiana and
Hampshire, although ultimately unsuccessful. In 1828, William King set up a newspaper, The
Co-operator, to promote Owen’s thinking, having already set up a Co-operative store in
Brighton. The Rochdale Society of Equitable Pioneers, founded in 1844, is usually considered
the first successful cooperative enterprise, used as a model for Modern co-ops, following
the ‘Rochdale Principles’. A group of 28 weavers and other artisans in Rochdale, England set
up the society to open their own store selling food items. They could not otherwise afford.
Within ten years there were Over 1,000 cooperative Societies in the United Kingdom. Other
events such as the founding of a friendly society by the Tolpuddle Martyrs in 1832 were key
occasions in the creation of organized labour and consumer movements.
Different Types of co-operative society:
According to Cooperative Societies Act 2001, we can form 29 types of co-operative society
in our country. However, various types of co-operative are functioning in our country to
meet the utmost requirements of the members. Some of them are stated below:
1) Industry Co-operative society: Related central and primary co-operative societies
with this sector are: Central and Primary weaver co-operative society, Central
spinning Co-operative society, central handicraft co-operative foundation, primary
ceramic co-operative society and other co-operative societies.
2) Now in country the numbers of this type of co-operative societies are 1168 and
Members of such kind of societies are 2,44,334.
3) Fishery Co-operative society: Primary fishermen co-operative society, central co-
Operative society and Bangladesh co-operative society are related with this sector.
Number of this type of societies are 3425 and human members of these societies are
2,87,920. For socio-economic development of fishermen as national co-operative
Society Bangladesh national fishermen co-operative society was formed in 1960.
4) Women co-operative society: Interrelated central and primary co-operative societies
with this sector are: central and primary women co-operative society, primary co-
operative society of baseless women etc. Number of this type of societies are 27,606
and human members of these societies are 8,25,244.
5) Transport co-operative society: Interconnected central co-operative society with
Transport sectors are: central truck driver co-operative society, central maxi driver
co- operative society. And interconnected primary co-operative society with
transport sectors are: auto rickshaw driver co-operative society, primary maxi driver
co-operative society, primary MISHUK driver co-operative society. At present
 number of this type of co-operative societies are 769 and human members of this
co-operative are 56,020.
6) Housing co-operative society: Primary building construction is related to this sector.
The number of this type of societies is 117 and human members it has are 23,533.
Apart from this Bangladesh co-operative housing foundation is also linked with it. For
developing and supervising the activities of primary societies, this federation was
formed in 1983. Now it has 41 organizational members.
7) Milk co-operative society: Primary milk co-operative society and Bangladesh milk
producing co-operative union (Milk Vita) are interrelated with this sector. At present
there are 1404 primary milk producing co-operative.
8) Saving and Credit co-operative society: The co-operative credit union league of
Bangladesh, Credit co-operative and primary savings and credit co-operative society
are associated with this sector. The number of this type of societies is 2,912 and
Human members it has are 3,16,817.
9) Accommodation co-operative society: Correlated co-operatives with this sector are:
Shelter co-operative society and accommodation co-operative society. These
societies are organized and directed by the projects generalized with direct
supervision of Government and Prime minister’s office. 632 accommodation co-
operative societies have been formed throughout the country and these societies
have membership of 69,776 people. Member’s share capitals are 31.55 lacs taka and
savings deposits are 217.32 lacks taka.
Advantages of Co-operative Society:
1) Easy to form: The formation of a cooperative society is very simple as compared to
the formation of any other form of business organizations. Any ten adults can join
together and form a cooperative society. The procedure involves in the registration
of a cooperative society is very simple and easy. No legal formalities are required for
the formation of cooperative Society.
2) No obstruction for membership: Unless and otherwise specifically debarred, the
membership of Cooperative society is open to everybody. Nobody is obstructed to
join on the basis of religion, caste, creed, sex and colour etc. A person can become a
member of a society at any time he likes and can leave the society when he does not
like to continue as members.
3) Limited liability: In most cases, the liabilities of the members of the society are
limited to the extent of capital contributed by them. Hence, they are relieved from
the fear of attachment of their private property, in case of the society suffers
financial losses.
4) Democratic management: The cooperative society is managed by the elected
members from and among themselves. Every member has equal rights through its
single Vote but can take active part in’ the formulation of the policies of the Society.
Thus all members are equally important for the society.
Disadvantages of Co-operative Society:
Despite many advantages, the cooperative society suffers from certain limitations
drawbacks. Some of these limitations, which a Cooperative form of business has, are as
follows:
1) Limited resources: Cooperative society’s financial strength depend on the cap
contributed by its members and loan raising capacity from state cooperative banks.
The membership fee is limited for which they are unable to raise large amount of
resources as their members belong to the lower and middle class. Thus, cooperative
are not suitable for the large scale business which require huge capital.
2) Inefficient management: A cooperative society is managed by the members only.
They do not possess any managerial and special skills. This is considered as major
drawback of this sector. Inefficiency of management may not bring success to the
societies.
3) Lack of secrecy: The cooperative society does not maintain any secrecy in business
because the affair of the society is openly discussed in the meetings. But secrecy is
very important for the success of a business Organization. This paved the way for
competitors to compete in better manner.
4) Cash trading: The cooperative societies sell their products to outsiders only in cash.
But, they are usually from the poor sections. These persons require to avail credit
facilities which is not possible in the case of cooperatives. Hence, marketing is a
shortcoming for the cooperatives.
Limitations of Co-operative Societies:
It however suffers from the following limitations.
1) Limited resources: Societies cannot raise huge amounts as capital because the
members may not be able to invest more.
2) Limited scope: As the resources are limited the chance of expansion is limited.
3) Inefficient management: It is usually managed by members and the members may
lack experience and managerial capacity.
4) Lack of co-operation: Sometimes the members may not have unity among
themselves which might affect the business of co-operatives.
Conclusion:
Thus from the above given statement, we have a large potentiality and reason to expand co-
operative society because of mass people’s enthusiastic participation though there are lots
of problems. Government initiatives like financial support like NGO, training, monitoring,
removing evil persons from management, co-operative campaign and enacting modern law
can ensure the success of co-operative society. By forming co-operative society among low-
income people we can ensure their food, housing, medical and educational facility. This can
decrease the gap between poor and rich. We can elevate the income level of the middle
class and lower class through co-operative which will ensure ultimate economic prosperity.