There are many benefits that the cooperative society offers to its members. Here we take a look at the advantages of the cooperative form of organisation are as follows:
- Equality in Voting Status: Cooperative Society is governed by the principle of 'one man one vote' , irrespective of the amount of capital investment by a member, each member is permitted to equal voting rights.
- Limited Liability: The liability of members of a cooperative society is limited to the extent of their capital investment. The personal possessions and belongings of the members are, therefore, safe from being used to repay business debts.
- Stable Existence: The continuity of the cooperative society is not affected by Death, bankruptcy or insanity of the members. A society, therefore, functions unaffected by any change in the membership.
- Economy in Operations: The members normally offer honorary services to the society. As the focal point is elimination of middlemen, it helps in reducing costs. The customers or producers themselves hold membership in the society, and hence the risk of bad debts is low.
- Support from Government: The cooperative society insists on the idea of democracy thereby finding support from the Government in the form of low taxes, subsidies, and low interest rates on loans obtained.
- Ease of Formation: The cooperative society can be formed with a minimum of ten members. The procedure for registration of the firm is simple involving a few legal formalities. Its formation is governed by the provisions of Cooperative Societies Act 1912.