/ m o c Question No.2 No.21: A) What is th e differe dif ference nce between between . Joint Joi nt Stock Company and Co-operative Co-operative society? e B) Write rit e the procedure pro cedure of formation for mation of a e COOPERATIVE SOCIETY. r An A n s w er: er : f A) Difference Between Joint Stock Company and Co-operative Co-operative e Society: n 1. Definiti Definiti ons i l “Joint “Joint St ock ock Comp Company any is i s a volunt vol n unt ary ass associat ociat ion of indivi ind ividual dualss for profit prof it , having having a capit capit al o divided int o trans t ransferable ferable shares shares,, t he ow nership nership of w hich hich is t he condit ion of membership” membership” l l aof organizati on, w here in persons “A cooperat cooperative ive is a form f orm persons volunt volu nt ary ass associat ociat e t ogether oget . her as human hum an beings, beings, on the t he basis basis of equalit y, for t he promot p w romot ion of t he ec economic int erest rest w themselves” wbetween JOI Other Diff erences erenc es between J OINT NT STO STOCK CK COMPANY COMPANY /& CO-OPERATIVE: CO-OPERATIVE: / STOCK CO-OPERATIVE : JOINT p COMPANY t t h JOINT STOCK COMPANY:
CO-OPERATIVE SOCIETY:
POINTS
/ m Company is While Cooperative o is controlled and society governed under the c controlled and Companies governed under . Ordinance 1984. ethe Society Act 1925. e The formation of Its formation is complicated and r society is very f easy and short depends upon long process. process. e The profits are n The 90% profit is divided into utilized for i shareholders in their promotion of proportion l of shares. soci societ ety y and 10% 10% to members. If n required. o The registration fee The registration l is paid to the fee is not paid. l i.e. Government can government atax, super exempt income income tax, stamp tax, super tax, . duty etc... stamp duty etc... w The basic purpose It is formed for the w or object of the promotion of self w is to earn help, social & company / profit. economic welfare /Minimum 2 and max ofMinitsnomembers. :50 members in Pvt. membersof are 10 p Ltd Co. but in Pub which should be t t h
2.Legislation or Act
3.Formation
4. Profit
5.Registration Fee
6.Objectives
7.No of Members
/ m Ltd Co. min 7 and above 18 years of o max No limit. age. The liabilities of the c The liabilities of members are limited the members may . upto the value of ebe limited or may shares which they be unlimited. e keep with them. r Cooperative Joint stock company f society cannot may issues debentures to e issue debentures borrow required for the purpose of n amount of money. borrowing money. i In the cooperative It is managed and lthe society every controlled by n board of directors. member has an equal right in the o management l (Executive l Committee, a Secretary). In joint .stock In the cooperative company middleman society middleman w plays very effective has no any w and important role. effective role. wpeople show People show less The / much confidence on confidence on JSC. Because it is cooperative /legally required for society because it :companies to is not legally p publish their annual required for t t h
8.Liabilities
9.Debentures
10.Management
11.Role of middleman
12.Public confidence
13.Audit
/ m accounts. societies its o accounts. c The audit of The audit of . accounts is made by accounts is made e an auditor appointed by the registrar or e by a person in the annual general meeting. r authorized in by the f writing registrar. e The owners and The members may n consumers are be producers and i consumers. different people. l can A member can A share holder purchase the shares purchase 1/5 of n upto any value. share capital or o There is no ban on Rs.10,000. But in l max purchase of case of housing l shares. cooperative society the limit is a Rs.20,000. . In JSC the shares The shares of w are easily cooperative w to any society cannot be transferred w person without transfer to the other any legal restriction. non-members but / can be transferred / to members after : 1 year. p t t h
14.Consumers
15.No of shares holding
16.Transferability
/ m It operates in a vast It operates within area so it is not a o limited area so possible for its share c its member can holder to attend the easily attend the . meeting. meeting. e The directo directors rs contro controll The managing e the company affairs committee in their respective r controls the f business affairs. areas. The company e The society charge more profit in basically acts as n this way the selling nonprofit activities. i So there is prices of goods are very high. l nominal profit is charged on the n daily necessities o of life l The face value of The face value of share l may e the shares afrom its remains the same different market.value due to due to unlimited limited numbers supply of shares. w shares. w Shareholders can Shareholders can wshares at buy buy shares at par / market value from value from society. /stock exchange. :If new capital is If new capital is p required then new increased only by t t h
17.Working areas & Attending Meetings
18.Division of Control
19.Price of commodities
20.Value of share
21. purchase of shares
22.New Capital
/ m shares will be admission of new o issued. members. c No income tax is Agriculture income exemption is is tax exempted . available. and other econcessions e also available.are It is convenient for r A member of the its shareholders f to co-operative withdraw their e society can capital from the withdrawal his n company by stock capital on giving i his short notice exchange. l but after 1 year. n There is complicated The process of and long procedure dissolution of o from from the the wind winding ing up cooperative l of JSC society is very l simple a . w w w / / : p B) FORMATION t OF A COOPERAIVE SOCIETY: t h
23.Tax Exemption
14.Withdrawal rights
25.Dissolution
CONCUSION: It is concluded that both types of organizations are performing their duties and functions according to their rules and regulations. Co-operative societies benefits benefits to their members which is the result of savings, growth and economic development. Whereas, joint stock companies earn maximum profits and provide to people new innovations & also different choices.
/ m o Definition: c society come The process by which a cooperative into existence by filling prescribed form to. get registration form Registrar of cooperative society under e COOPERATIVE SOCIETY ACT 1925. e Formation of a cooperative society: r Cooperative society are formed and registered under the f cooperative societies Act 1925. Provision of the Act as to e formation of cooperative societies is explained below: n 1. Conditions of registration: i The registrar of cooperative l societies may grant registration registration to a cooperative cooperative n society, society, if the society fulfills fulfills the following conditions: o (i) Objects: lits objects the promotion of A society which has economic interest of its l members in accordance with cooperative principles may a apply registration. . (ii) Liability: The liability of w members of a society may be limited or unlimited. w How, ever liability of a society of which a member is a society shall be limited; and the liability of w the society of which the primary object is the creation of / funds to be lent to its members shall be unlimited. The / word limited shall be the last word in the name of every : society. society with limited p (iii) Members: t t h
/ m No society shall be registered unless it has its members at least ten persons above the o age of 18years. No such limit is prescribed for a society c of which a member is a society. It is further provided. that where the object of the society is creation of funds to be lent to its e members. It is necessary that all of the members should be residents of the same locality. e r f (iv) Restrictions on Share of Members: e Where Where the liabili liability ty of members members if the society society is n limited by shares no member, other than a member which i1/5 (one-fifth) of the is a society, shall hold more than share capital or the shares exceeding l Ten thousand rupees (10,000 Rs.) and in case of a housing society n share exceeding Twenty thousand rupees (20,000 Rs.) o l (v) Application for registration: For the purpose l of registration an application shall be made to to the registrar registrar a n the prescrib prescribed ed form in the the application following information are provided to the . registrar. wiet y. Name of propos pro posed ed soc societ b. Address Address t o w be regis r egistt ered. wit ed oror unlimit ed. c. Liabilit y limit lim d. Area of / operat ions. ions. e. Objec bj ectt / s of t he soc societ iet y. f. If t he : capit capit al is i s t o be raised raised by shares shares,, w hat is t he number num ber and value v alue of shares har es w hich is t o be propos pro posed ed to t o is i ssue? p t t h th
a.
/ mdeposit s, w hat g. If capit al is i s t o be raised raised by loans and deposit o is t he amount amount of cap capit it al? h. Language anguag e in w hich books and acc ac c count s w ill il l be kept. kept . . The application shall be signed by at least ten e prospective members in case where a prospective e signed by a member is a society society;; the applicatio application n must be signed rsociety and by at duly authorized representative of that least ten other members or by all f other members if the numbers of such other members e is less than ten. The application for registration shall be n accompanied by three copies of proposed bye-laws of the i society signed by the applicants l 2. Registration: n The registrar may be registering a society if he is o satisfied that the society has complied with the legal l provisions as to the registrations and its bye-laws are not l contrary to the law. Registration of a a cooperative society is discretion of the Registrar and not obligatory for him, even if the . society has complied with all the legal requirements. In w this respect the Cooperative Societies Act 1925. is w Ordinance 1984. The registrar of different from Companies companies has no w such discretion. / 3. Evidence of Registration: / On registration, a certificate of registration signed : by the registrar shall be issued to the society. The certificate shall p be the conclusive evidence that the society t in is duly registered. mentioned there t h
/ m o 4. Effective of registration: c it As soon as a society becomes registered becomes a distinct legal person it becomes entitled to . commence its business and to admit new members. e e r f e n i l n o l l a . w w w / / : p t t h
/ m o c . e e r f e n i l n o l l a . w w w / / : p t t h
