For numerous individuals, the aspiration of possessing a house is profound. The comforting sensation of warmth and joy accompanying having a place to call one’s own is unparalleled. It is like embracing a part of the world and making it the very epicentre of your universe. Every moment, from shared meals to friendly gatherings, becomes exceptionally meaningful. Owning a house equates to possessing a slice of serenity and safety. But when buying a home, a cooperative society emerges as your rescuer. Before we delve deeper, let’s grasp the concept of cooperative societies.
Table of contents
Definition of a Cooperative Society?
A cooperative society is an innovative real estate venture. The best part about a cooperative society is the collective ownership of a group of people who own a residential building or a community together. In this case, the collective manage and maintain the cooperative society, from upkeep and shared responsibilities to even decisions on how the building will be used.ย
Each member of the cooperative society shares the expenses of day-to-day maintenance and taxes, creating a safe and affordable way to own a home. Also, a cooperative society provides a unique opportunity to own a comfortable home without the worry and fear of rising rental costs.
What are the Primary Features of a Cooperative Society?
Following are some of the substantial features of a cooperative society:
Open to All – Since a cooperative society welcomes individuals from diverse backgrounds and religions, one can freely join or withdraw at any time based on their inclination.
A Separate Legal Identity – A cooperative society must get registered; thus, it becomes a legal entity by default.ย
Limited Liability of the Members – When it comes to a cooperative society, the members-only have limited liability to the extent of the capital amount they have contributed to the funds.ย
Members Have the Right to Vote – Members of the cooperative society also have the right to vote. Using this, they elect a managing committee with the power to make decisions for their betterment.ย
Mutual Help and Welfar – The cooperative society stands firm on the foundation of mutual help and welfare. Hence, the โprincipal of serviceโ is at work here by default. Also, if there is any surplus amount, it is distributed amongst the members as a dividend.ย ย
What are the Different Types of Cooperative Societies?
Following are the different kinds of cooperative societies:ย
Consumers Cooperative Societies
Consumer cooperative societies are majorly owned and governed by consumers who reside in a particular area. These are established to provide necessary daily commodities at the best price possible.
Producers Cooperative Societies
These societies primarily function keeping in mind the interest of small-scale producers. These cooperative society members can be farmers, landowners or other small-scale producers. Also, the producers work together, or if they want, they can also work as separate entities to augment the overall production efficiency. These people do several activities right, from processing, marketing and distributing their products.ย
Marketing Cooperative Societies
The objective of marketing cooperative societies is clear – they wish to help small producers sell their products to people looking for them at reasonable prices. Under this, the members eliminate the role of the middlemen. The collective also performs functions like packaging, warehousing, and transportation to sell the product at the most reasonable pricing.ย
Credit Cooperative Societies
The major objective of credit cooperative societies is to help others by giving credit. As the name suggests, they give credit and financial help to their members. Also, the members attend the society’s annual meetings and are given the right to elect a board of directors.
Housing Cooperative Society
The cooperative housing society works with people with limited income. The main objective of a housing cooperative society is to eliminate housing problems the members might face. Any one member procures the residential houses at lower costs. These members also have the option to pay in instalments and procure the house. These societies either build flats or otherwise give out plots to the members on which they build their homes.
What are the Advantages & Disadvantages of Cooperative Societies?
| Advantages | Disadvantages |
| Easy to Form- As a cooperative society is a voluntary affiliation, it is easy to form. It can be shaped from scratch with a minimum of ten grown-up contributors. The registration for a cooperative society is very simple and can be done without much process. | Limited Capital- One of the biggest disadvantages of a cooperative society is its limited capital. This is so as the funds are limited to the total capital invested by the members.ย |
| Open Membership- Anyone can easily get a membership in a cooperative society. Also, a member can easily take an exit. All he/she needs to do is return the shares held under him/her.ย | Inefficient Management- With too many members with equal power, management inside a cooperative society can be overwhelming.ย |
| Democratic Management- Democracy lies at the centre of a cooperative society. All cooperative society members have the same rights and can openly discuss any issue/topic. | Absence of Motivation – In a cooperative society, usually, the participants avoid putting their best efforts forward. It is because their individual interests are not satisfied.ย |
| Limited Liability – The members are only liable for the amount of share they have contributed in capital. | Differences and Factionalism amongst Members- As the enthusiasm among the members diminishes, more conflicts arise between the participants.ย |
| Stability- One of the best advantages of a cooperative society is its stability. It doesnโt get affected by the death or insolvency of its members.ย | Lack of Competition- The cooperatives normally avoid any major competition. It is because markets for their items and offerings are more or less assured. Hence, people need to put in more effort. |
| A Bit Expensive Operations- The operations of a cooperative society are relatively expensive. The operation of a cooperative society can be relatively expensive. This is owing to the removal of intermediaries. | Lack of Secrecy – The happenings inside a cooperative society are quite open in nature. This lack of secrecy can become a bit challenging to maintain the integrity of a business.ย ย |
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Wrapping Up
A cooperative society can dramatically improve the members’ overall economic well-being. This is majorly done by developing a sense of community and creating a democratic system. With all this place, cooperative societies have helped life and advanced economic development in marginalised sectors and communities.
FAQ’s about Types of Cooperative Societies
Q1. Who controls cooperative society in India?
A cooperative society is controlled by the โRegistrar of Cooperative Societiesโ It is responsible for controlling and supervising the cooperative societies in India. This organisation is appointed under the relevant cooperative act in the state, and he/she is usually the appointed authority for registering and overseeing cooperative societies.
Q2. What is the maximum number of members in a cooperative society?
The maximum number of members in a cooperative society in India registered with the Registrar of Cooperatives is not specified. However, at least 10 members are needed to register a cooperative society.
