It can hold property in its name. It can file and defend suits. A cooperative society requires at least ten members to form a society. The membership of cooperative society is voluntary. Any person have a common interest can become the member of a society. He can also leave the organization by giving due notice to the society. In a cooperative society, a member has only one vote irrespective of a shares held by him. The principle of one man one vote makes the society truly democratic. A cooperative society is primarily setup for rendering service to its members in a particular in a particular field.
A society is, however, not debarred to earn profit on the service provided to the non-members. The objective of cooperative organization is the provision of service to its members. The society also keeps one fourth one fourth of the profit as reserve. Each member has vote in a cooperative society. The members elect the managing committee to carry on day to day affairs of the society. The managing committee carries out the policies as laid down in the general meeting of the society.
According to rules, a cooperative society does transaction on cash basis and no credit transaction is entertained. This also leads to the corruption of power and money in society and may result in quarrels and disputes amongst the members. It has limited scope in the sense that it cannot cover the entire economic system. For example, a cooperative society is not suitable for organizing big industrial enterprises. It is also not suitable where the element of speculation plays a predominant role and where finer varieties with maximum skill are to be produced.
As a result of these internal quarrels, rivalries, and tensions, general body members cease to take any interest in the working of the organization. All this ultimately brings the cooperative society to ruin. Generally, people do not have faith and confidence in the cooperative society. Since many cooperatives have failed, the people are reluctant to become members of cooperative organizations.
The general apathy and indifference of people come in the way of development of a cooperative organization. This organization is very small in size. It does not have financial, managerial, and technical resources. As a result of this, the advantages of large-scale operations like Joint Stock Company are not available to this organization.
As per the prevailing legislation, cooperative society cannot be formed unless and until a minimum of 10 adult members is available. As a result of this, its growth is checked because less than 10 members cannot form a society. Cooperative societies may be classified into different categories based on the objectives, purposes, and nature of activities performed by them. When some cooperative units are formed for the achievement of specific economic objectives, others are formed either with the purpose of social upliftment of the members or to help consumers, small farmers, or small producers.
They purchase bulk goods and services directly from the manufacturers or wholesalers and sell those among the members in the small stalls. These societies engaged in acquiring the land from genera public, develop them, construct houses as per the choice of the members and then transfer the said houses in favor of the members.
In consideration that members pay the due price for the house may be on an easy installment basis spread over as long years. Credit cooperative societies are formed for providing finance to the poor farmer and needy members of the society at a lower rate of interest. The society collects funds from its members in the form of share capital as well as accepts deposits from the general public.
It also avails loans from state cooperative banks. The fund so collected are used in providing loans to the needy people, generally to the members as loans and advances on easy terms and conditions.
This process of financing people saves them from exploitation by the money lenders who usually charge a high rate of interest and stiff terms and conditions. Credit cooperative societies are two types: agriculture credit cooperatives and non-agriculture credit cooperatives. An agricultural credit cooperative society extends credit to the rural people both for productive and non-productive purposes.
A non-agricultural society is meant for urban masses and meets its short-term financial requirement. To achieve a higher rate of return from economies of scale, small farmers and marginal farmers of a particular area may join their hands, form a cooperative society, and go for mass farming instead of individual farming.
They contribute capital, land, and labor and jointly go for any farm activity. This becomes beneficial to the members in many ways like;. These societies are started to improve the methods of fanning among the members. They arrange the machinery, seeds, fertilizers for the farmers. Farmers get higher output by utilizing the same. The members, in turn, pay some charges for this service rendered by society. Thus, both the members, as well as the societies, are benefited by that.
In this type of society, the land of the individual members is taken by society, but the ownership remains at the members. The members are allowed to spare their labor in consideration of wages for doing work on the land.
The outputs are sold by the society, and any profits realized are distributed among the members in the ratio of their land values. This type of farming society takes the land on a leasehold or freehold basis. The members pay the rent for the utilization of the land. Landless laborers having manpower strength are more benefited by this type of society. In joint farming, ownership lies with society. Whatever products are produced belongs to society. But in tenant farming, society members enjoy the output produced in the land owned by others and only pay a certain amount of charges for cultivating the land of others.
The members are paid with the wages. Surplus of the society, if any, are distributed among the members in the ratio of their wages. Truly speaking, cooperation is a great moral movement. The movement is essentially moral and keeps in view the moral rather than the material sanction.
It also promotes a sense of cooperation and brotherhood among the people of the locality. In addition to these economic, social, and moral benefits, it is also capable of educating the masses in citizenship and political life.
Cooperative organizations discourage monopoly, bring a better distribution of wealth, works on the principle of service, and controls exploitation.
Cooperative organizations work on the principle of open membership; therefore, many persons can become members. Cooperative organizations can make goods and services available at a reasonable cost as the profit margin of the society is very less. Another reason for a low price at a cooperative society is that it eliminates the middleman from a chain of distribution i. As pointed out earlier, basically, a cooperative society is a thrift institution.
Such mobilized financial resources reused for constructive purposes. This also inculcates the habit of saving among these members. All the members of the society are jointly known as the general body, whereas, the members who manage the cooperative organizations are jointly known as the managing committee. The cooperative organizations have perpetual succession because it is not affected due to the death or insolvency of members. Some of the members realizing this principle may offer their services on an honorary basis.
This brings a reduction in management expenses. The cooperative societies in Bangladesh are operating under several hurdles. Those hurdles create some problems as follows Cooperative Society, a mutual organization. So an efficient manager is badly needed to manage such an organization. But in some 3rd world countries, appointed managers are almost inefficient. So the success is impeded. Most people in Bangladesh are illiterate. Unity is strength, and each for all, all for each, is the guiding principle of cooperative society.
But there is a lack of unity and cooperation in poor people in Bangladesh. Planning is the base of success. The success of a cooperative society depends on the sincerity and sacrificing mentality of Its people.
For achieving the desired goal, the eagerness of the entrepreneur is very much important. It is equally true to a cooperative society. Our cooperative is usually seen in low or middle classes. But success depends on these principles. Cooperative society Act may sometimes obstacles the development of this organization in this country. The training facility is indiscernible for better results. But this facility is rare in this country.
Corruption and nepotism are common in every part of our life. The authority tends to cheat the uneducated members. Besides, nepotism in giving loans and employment hinds development. The government facility is essential for the development of any organization.
India lacks this facility govt; the law sometimes hinders the development. A realistic plan should be adopted immediately for a cooperative society. This plan should be adopted based on the socio-cultural environment of this country. For the development of a cooperative society, a great number of people must be acquainted with the curse of illiteracy.
Besides, they have to be studied in cooperative education. So, they can realize the importance of a cooperative society. Only then can they contribute spontaneously to the betterment of the organization. A cooperative society is a small organization. But in the market, it has to compete with big organizations. So for the betterment of a cooperative society, equal competition should be eliminated.
The old policy must be changed into modem and accurate accounting policy. So forgery will be removed. People should be informed about cooperative society through national media. They have to be informed about the problems and solutions to the problem of cooperative society. The success of a cooperative society largely depends on the satisfaction of the executives. It is very much important to remove corruption and nepotism from that org. For this standard, management should be implied.
Besides, high-level executives and govt should be more expert. In appointing employees and sanctioning a loan, a decision is to be made regarding their experience. A cooperative society is influenced by government law. So the govt, the law should be in favor of a cooperative society. Besides this, primary, central, and national cooperative societies must develop good coordination.
It is also important to co-ordinate the cooperative related ministry, other departments, and the working people. Cooperative departments are the leader of cooperative movements. But bureaucracy is common in cooperative departments. So it should be removed immediately. In comparison with other organizations, cooperative society is allotted a small amount of money.
So it is important to increase govt, cooperation in monetary and nonmonetary units. If the govt, patronizes the promoters with granting more capital and information, people will encourage in forming this org. To overcome the hindrance of cooperative society, there must be needed amendments of law and remarks on the law with easy description.
Its main purpose in improving the financial condition of members, not to earn a profit. The number of members in private company minimum two and maximum fifty, in public company minimum seven and maximum limited with many shares. In a cooperative society, the minimum is twenty, and the maximum is unlimited. The share of a public limited company is openly negotiable, but not in case of a private company.
The share of a cooperative society can be negotiable to take permission from the authority. A dividend is given from reserve funds or earned profit. In the case of society, a small portion of the earned profit is to be given as dividends. The directors who are elected by shareholders and appointed managers operate the company.
In a joint-stock company, there is a great divorce between owner and control and often a clash of interest. The joint-stock company is not directly interested in the promotion of the welfare or efficiency of its shareholders. This is not possible in a company as shareholders are scattered all over the country; only the inner group can control the affairs of the company.
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