Entrepreneurship Development

ENTREPRENEURSHIP DEVELOPMENT FOR RURAL FAMILIES 4(1+3)

Lesson 7 : Types of Enterprises

Co-operative society

A co-operative society is an association of persons who join together on a voluntary basis for their common economic interest. The prime motive is to protect the welfare of members as well as to protect its members from exploitation.

Features:

• It is a voluntary association of persons. Members can voluntarily accept or end his or her membership.
• It is the formation of demographically controlled business organization.
• The representatives are elected by members of a co-operative society. It has separate entity as it is registered under co-operative society act.
• Its formation process is easy.
• Its membership is free. Any person can become its member without any discrimination.

Advantages

• Easy formation in comparison to joint stock company.
• Risk divided among members.
• More pooling of financial resources and skills.
• Credit position is stronger.
• Protects members from exploitation.
• Burden of taxes on co-operative society is lower.
• Liability of every member is limited.

Disadvantages

• Resources are limited to its members only.
• Lack of harmony of interest among members.
• Possibility of delay in important decision making.