List of Pros of Cooperatives 1. All the members then participate in the running of the cooperative business and share the responsibilities involved. They are often forced to sell their produce to the middlemen at cheap prices. That means investors can purchase as many shares as they need to gain a certain level of control in the business. Open Membership: The membership of cooperative societies is open to all irrespective of caste, colour, creed and economic status. Each member gets only a single vote, creating equality of voting rights.
Cooperation dates back as far as human beings have been organizing for mutual benefit. If a lack of participation becomes an ongoing issue for a cooperative, it could risk losing members. Further the society is also benefited because a sum not exceeding 10 per cent of the surplus can be utilized for promoting the welfare of the locality in which the cooperative is located. Both Marxism and anarchism , for example, have been influenced by utopian socialism , which was based on voluntary cooperation, without recognition of class conflict. When purchasing through a cooperative, you will be sharing the same prices with your competitors. These trends are becoming more popular in grocery stores.
As you can see, this business model can be applied in a variety of industries. Others are large Fortune 500 companies. Under these circumstances the importance of the cooperative movement for the improvement of agriculture can hardly be denied. Therefore the rural poor continue to depend on the money lenders for meeting expenses of marriage, medical care, social commitments etc. Draft the legal documents: All cooperatives are legal individuals and need to be incorporated. Weinbren reports that by the end of the 19th century, over 80% of British working age men and 90% of Australian working age men were members of one or more Friendly Society.
Quite often disputes arise among the managing committee and the members. Non-transferability of interest: The shares of a cooperative society are not transferable. Easy formation: The formation of cooperative society is very simple as compared to the formation of other form of business organization. There is no inter personal discrepancy as managers and labourers. In a country like India, cooperation is almost indispensable in the field of agriculture. Lower input and distribution costs due to greater economies of scale. Principles of Cooperative Form of Business: In analysing the above two definitions, we discover some principles or characteristics of cooperation.
Other factors to consider Rules for co-operatives Specific rules forming a contract must be developed to register a co-operative. Disadvantages : In spite of its numerous advantages, the cooperative also has some disadvantages which must be seriously considered before opting for this form of business ownership. It is handicapped by the fact that there is often need to seek help from experts. For example fertilizers, seeds, machinery, credited are not timely available to the society societies. Co-operatives provide loans at cheaper interest rates and have benefited the rural community. This is thus a clear advantage over capitalist economy.
Marxists, who as socialists have likewise held and worked for the goal of democratizing productive and reproductive relationships, often placed a greater strategic emphasis on confronting the larger scales of human organization. Another weakness of cooperation is that the mass of members may lose interest in running the organization and let a small group take it over and manage it for their own benefit. They can limit your choice of external finance. It may eventually lead to dissolving the partnership. Disadvantage: Generic Marketing The disadvantage of marketing through a cooperative is you may lose control of your unique branding for your business. This form of organization primarily protects and safeguards the economic interests of its members.
You and your partner s would then share in the profits of the business according to any legal agreement you have drawn up. Thus they try to free themselves from the grip of the middlemen and make the goods available to consumers at lower prices. The reason many co-operative societies face financial crisis is because of the fact that their main source of funds is through the cap contributed by members and through membership fees which are not very high. This is one of the biggest challenges facing many co-operative societies today. Owen left New Lanark to pursue other forms of cooperative organization and develop co-op ideas through writing and lecture. Because you are personally liable, a creditor can make a claim against your personal assets as well as your business assets in order to satisfy any debts.
Cooperative Linux does not currently support 64-bit Windows systems, which are becoming increasingly common. Anybody wishing to enjoy the fruits of a co-operative can join it. In most cases, due to remoteness of the markets the farmers do not get a fair price for their products. All profits are yours to keep. The members of a cooperative society join hands, not as owners of capital but as ordinary people. With cooperative businesses, all of the members need to be involved, which makes it more time-consuming.