The cooperative society suffers from the following limitations:
- Limited Resources: Sources for a cooperative society are capital investment of the members with limited means. The low rate of dividend provided on investment also acts as a deterrent in attracting members or more capital from the members.
- Inefficiency in Management: Cooperative societies are powerless to attract and employ expert managers due to their inability to pay high pay packages. The members who tender honorary services on a voluntary basis are by and large, not professionally set to handle the functions of the management effectively.
- Lack of Secrecy: In consequence of open discussions in the meetings of members as well as disclosure of obligations as per The Societies Act (7), it is intricate to maintain secrecy about the operations of a cooperative society.
- Government Control: In return of the privileges offered by the government, cooperative societies have to abide by several rules and regulations related to auditing and submission of accounts. There will be interference and control exercised by the state cooperative departments in the functioning of the cooperative organisation which negatively affects its freedom of operation.
- Differences of Opinion: Quarrels arising internally due to contradictory viewpoints may pave way to poor decision making. There can possibilities for the domination of personal interests and personal welfare motive which takes a backseat in the benefit of other members.