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   /   m   o Question No.1 No.19: Defin Define e Co-opera Co-operative tive   c Society. Expl Explain ain the merits and Demerits Demerits of Co-operative Co-operative Society? ety? . Soci   e  An  A n s w er: er :   e Co-Operative Society:   r Introduction:    f   e   n    i    l   n “ALL FOR EACH AN A ND EACH EACH FOR ALL” LL   o”.    l Definitions:    l   a “The “The Co-operat Co-operat ion .is self self-he -help lp made mad e effec eff ectt ive by   worganization”.   w   w “A Co-operat Co-operat ive Soc Societ iet y is a form f orm of orga o rganizat nization ion w here a    / person person volunt vol unt ary ass associat ociat e t ogether as human beings on basis basis of equalit y    / for t he promot ion of economic economic int erest rest of   : themselves.”    p     t    t    h A Co-operative Society is a voluntary association of financial weak persons who join together voluntary for the common objective. It is formed on the basis of democracy, freedom and  joint performance to improve improve the financial and moral position of its members. members. In 1844 1844 the movement movement of Co- operative Society was started. A common concept of Co-operative society is In our country it is set up under co-operative societies act 1925.

According to PLUNKET:

According to CALVERT:

Simply we can say that:

   /   m “It “It is an ass associat ociat ion of i ndividuals w ho voluntary pool t heir heir   os for t he mut ual resourc resources es for carrying arryi ng on a cert certain ain busines business   celves”.”. w elfare elf are of t he members mem bers t hemselves hems .   e   e   r    f   e   n    i    l   n   o    l    l   a . Merits of Co-operative Society:   w  A Co-operative Society has the following merits:   w 1. Easy Easy Formatio For matio n:   w The formation of cooperative society is very easy. There is    / to form a Co-operative Society a need 10 adult persons    / limit of partners. The formation and it has no maximum expenses are normal,   :   p  2. Registration:    t    t    h

   /   m The registration of Co-operative Society is not compulsory but it is desirable to have its registration.   o As compared to   c of a society is limited company the registration procedure simple. These societies are registered under Cooperative . Society act 1925.   e 3. Requ Requir ire e Less Less Capital Capit al to Start: Start :   e   ris very easy because The formation of cooperative society Persons or workers with small capital can start business    f under Co-operative Enterprise.   e   n    i 4. Open Open Membersh ip: ip : Those persons who are willing    lto join the society can become the members of the  n society and can leave it when they want by returning their shares.   o    l 5. Democr Democr atic Management: Management:  A Co-operative Society    l is called as friend of democracy, because it is managed on democratic principles. There is   a a rule of one man one vote. .   w 6. Limited Limi ted Liabilit ies:   w is usually limited up to the amount The liability of members of investment made  w in the society. But imitation depends upon the members    /to decide about it.    / 7. Social Servic es: The cooperative  : society increases the fellow feelings   p  and imparts moral and educative among the members values which    tare essential foe better living.    t    h

   /   m   o 8. Increase in Confid Conf idence: ence:   c weak The cooperative society protects the financially persons of the society from cheaters and.makes them mentally strong.   e   e 9. Long Lon g Li fe:  A Co-operative Society has long life  r because a society has a legal status. The life of members does not affect the    f life of the Co-operative Society. It  e is an artificial person created under the law.   n 10. Government Protection:   i The Govt. looks after the Co-operative    l Society. The purpose of the society is not  n to earn profit but to help the poor members of the society. Therefore the govt. takes no   o fee in registration.    l    l 11. 11. Low Prices Commo dities: dit ies:   a  A Co-operative Society purchases goods form producers . at low prices. The profit of the wholesalers and retailers   w are saved by the society.   w 12. Employment opportunities:   w  A Co-operative Society plays a vital role to fight against    / unemployment. The members of the society seek    / employment in the society according to their ability and get the salaries.   :   p  13. Economic    tDevelopment:    t    h

   /   m  A Co-operative Society can contribute towards the   o business economic development of a country like other   c opportunities of units. It increases the output, and provides employments to the society. The development of villages . is possible through such societies.   e   e 14. 14. Savin Saving g Expendi tures: tu res: The members generally carry on a   r Co-operative Society, so there is no heavy expenditure    f on management. It reduces the Co-operative Society  e of production.   n 15. 15. Equ Equal al Rights: Right s:    ihave equal rights and each  Alt the members of the society member has one vote. Each   l member has right of management and auditing of  n accounts.   o 16. 16. Impr Improve ove the Standard Standard of Living Liv ing:: The Co-operative Society   l provides the goods to the    lthe members on on low price. So the purchasing purchasing power power of the people and their standard   aof living also improve. . 17. 17. Elimi Elimination nation of Middleman: Middleman:   w eliminates the profit of the The Co-operative Society middleman because  w it purchases goods directly from the producers and provides it on whole sale price to its   w members.    /    / 18. Financial Assistance:   :Society provides financial assistance to The Co-operative   p instance in case of house building for the its members. For purchase of   t inputs these provides loans.    t    h

   /   m   o 19. 19. Control Contro l ove ov er Monopo ly:   cwelfare of The Co-operative Society is formed of the people. So these societies eliminate the monopoly in the . country. It is said that the start of society is the end of   e monopoly.   e   r 20. 20. Less Chances of L oss: os s:  A Co-operative Society store knows the requirement of the    f members and as such there there is no  e risk of loss on speculative.   n    i Society: Demerits of Co-operative    l Followings are the demerits   n of Co-operative societies: 1. Lack of o f Capi Capital: tal:   o  A Co-operative Society has limited capital. The members of the society are actually   l poor and the borrowing powers    lassets of the society. So society are also limited up to the is in a weak position to arrange the further fund for running   a itself. .   w 2. Poor Management:   w of the society are the managers. Basically the members Due to untrained staff they have to fail to manage the Co  w operative Society   / according to proper rules and requirements.    / 3. Absence of   : Prof it:   p profit is a handicap in the progress of a The absence of    t    t    h

   /   m Co-operative Society. The members have no keen interest   o due to this reason.   c 4. Lack of o f Secr Secrecy: ecy: . The secrecy is not possible in Co-operative Societies. All   e members of society live in same area and daily discuss the problems of society. All members  e know all the secrets.   r 5. Delay Delay in Decis Decisio ion: n:    f The management committee makes decision in Co  e operative Society. Thus control and authority passes too   n marry persons. So it cannot act with promptness.    i 6. Non Applic App lica able:    l Co-operative Society principles can’t be applicable in   n those industries in which highly skilled persons are   o required and in which goods are usually sold on credit    l basis.    l 7. Lack of Public ubl ic Confidence: Conf  a idence: It is not required for Co-operative Society to publish . annual accounts and the accounts are not audited. So people do not rely on  w such societies.   w 8. Lack at Spi Spiri rit: t:   w There is lack of spirit of mutual cooperation among the    / members of society. They don’t know the principles of    / cooperation the result of which is not better.   : 9. Lack of Skilled kil  p  led Perso Persons: ns: The Co-operative    t Society can’t hire the service of skilled    t    h

   /   m and educated persons due to   o shortage of amount of capital.   c 10. 10. Government Government Control ont rol:: . The cooperative department of provincial govt. supervises   e the work of all Co-operative Societies. So the govt.   e Society interference in the affairs of the Co-operative lowers the pace of performance.   r    f   e 11. 11. No Inn Innov ovation ation :   n  A Co-operative Society can’t introduce innovation and the    iand non-professional technology due to small capital management.    l   n 12. 12. No No Leaders Leadershi hip: p:   o The leaders are not born but they are made the training in necessary for making the   l leaders. While business    lOnly the able management depends upon competition. competes in all circumstances.   a . 13. No Legal Pressure:   w Act 1925 is not comprehensive The Co-operative Society   wlegal enforceable. and contracts are not   w 14. Instability:    / Frequent chances takes place daily in the members of the    / society, it makes the business instable.   :   p  Kn owledge 15. 15. Lack Lack of Basic owl edge::    t    t    h

   /   m Generally the members don’t know the principles and   oproblem for it. rules of co-operative society so they create   c CONCLUTION: . We concluded concluded t hat Co-operat ive Soc Societ iet ies are t he need need of   e deve developing loping countr countr ies like Pakist akist an and t he main aim in Co-  Co-    e operat ive Soc Societ iet ies is t o impro im prove ve the th e ec economic onom ic condi conditt ions of   rsuc low -income groups group s. It can be operat opera t ed succcess essf ully ull y under und er    ft y is t he base effec eff ectt ive cont cont rol , since sinceri ritt y and honest hones base of it its success.   e   n    i    l   n   o    l    l   a .   w   w   w    /    /   :   p     t    t    h