At its core, a Cooperative Society is driven by the fundamental goal of promoting self-help and mutual support. Its foundation rests on voluntarism and it embodies the idea that each society member willingly joins without being constrained by social, religious, or political distinctions. Moreover, individuals who meet the criteria outlined in the Cooperative’s By-laws can become members of the society. Cooperative Societies were established under the Cooperative Societies Act of 1912, forming the legal framework that governs their operation. This blog aims to mention the objectives of Cooperative Society model.
Key Features of a Cooperative Society
Before discussing the objectives of Cooperative Society, let us see its key features. The major features of a cooperative society are as follows:
1. Voluntary Membership
Cooperative Societies are built upon the cornerstone of voluntary membership, emphasising that individuals with shared interests and adherence to the society’s rules possess the right to become members. This inclusivity extends to all, transcending barriers of caste, race, colour, or creed. Members retain the independence to make a choice regarding their association with the society, whether to join, sustain their membership, or discontinue it at their discretion.
2. Sources of Finances
The financial foundation of a Cooperative Society is built upon the collective contributions of its members, primarily through the purchase of shares. However, since a significant portion of members often comes from economically disadvantaged backgrounds, the accumulated funds may be insufficient. To address this issue, the government extends financial support to these societies in the form of loans, typically facilitated by Central or Central Co-operative Banks. There are also limitations on the maximum number of shares a member can purchase.
3. Purpose of Cooperation
Cooperative Societies prioritise the provision of essential services, ranging from credit to consumer goods and input resources, to both their members and the broader society. Unlike profit-driven enterprises, Cooperative Societies do not focus solely on maximising profits at the expense of others. Their primary objective is to serve the interests of their members and contribute positively to society.
4. Democratic Control
Democracy forms a fundamental principle in the operational framework of Cooperative Societies. Annually, they convene an Annual General Meeting (AGM), providing every member with the chance to actively engage. Within this AGM, members partake in the election of a managing committee, which is then tasked with the responsibility of overseeing the society’s affairs. This democratic structure ensures that decisions are arrived at collectively, aptly representing the diverse interests and perspectives of all members involved.
5. Separate Legal Entity
A Cooperative Society is mandated by law to complete its registration under the Cooperative Societies Act of 1912. Upon successful registration, it attains the designation of a separate legal entity, distinctly separate from its individual members. This legal demarcation establishes the society’s unique legal identity, rights, and responsibilities, a pivotal aspect for its effective functioning and accountability.
Aims and Objectives of Cooperative Society in India
After having seen the features, let us now see the objectives of Cooperative Society, which include:
1. Sourcing and Manufacturing Superior Goods and Resources
One of the major objectives of Cooperative Society is that Cooperative Societies prioritise the acquisition and production of top-notch goods, tools, machinery, and raw materials. The objective is to guarantee members have access to exceptional products and resources, elevating their enterprises and general welfare.
2. Collaboration with Government and Similar Organisations
Another one of the important objectives of Cooperative Society is that Cooperative Societies often seek to establish partnerships and collaborations with government agencies and other organisations engaged in similar business activities. Such alliances can facilitate access to resources, knowledge, and support for the society’s members.
3. Undertaking Activities for Member Welfare and Community Development
Among the central objectives of Cooperative Society is to partake in activities that advance the welfare and prosperity of both its members and the larger society. These activities encompass vital services, educational and healthcare promotions, and efforts to tackle socio-economic challenges prevalent in the community.
4. Promoting Unity and Eliminating Internal Competition
Cooperative Societies aim to foster unity and solidarity among their members and this is also one of the important objectives of Cooperative Society in India. They actively work to eliminate internal competition, ensuring that members collaborate rather than compete against each other. This cooperative spirit enhances the overall success and sustainability of the society.
5. Practising Transparent and Ethical Business Dealings
Transparency and ethical conduct are core objectives of Cooperative Society. They are committed to conducting business with honesty and fairness, maintaining the trust of their members and stakeholders. Transparent operations contribute to the society’s credibility and long-term success.
Procedure for Cooperative Society Registration
After having understood the objectives of Cooperative Society, let us take a look at the process of cooperative society registration. Registering a cooperative society under the Cooperative Society Act, 1912 is a critical step in achieving its objectives. The registration process involves several steps, including:
1. Assemble a Minimum of 10 Individuals:
Gather a group of at least 10 individuals who intend to form a cooperative society for mutual benefit.
2. Convene an Annual General Meeting (AGM):
Hold an AGM with all the members to establish a provisional committee and elect a chief promoter for the society.
3. Select a Name:
The chief promoter and members should mutually agree on the name of the cooperative society.
4. Prepare and Submit an application:
File an application with the registration authority that outlines the proposed society’s business operations. Include all necessary documents.
If the application is accepted, the authority will issue a certificate of name approval.
5. Collect Registration Fees and Share Capital:
Collect the prescribed registration fees and share capital amount from each prospective member.
6. Open a Bank Account:
Open a separate bank account in the name of the cooperative society. Deposit the collected registration fees and share capital amount into this account to obtain a bank certificate.
7. Apply for Society Registration:
The chief promoter should submit the application for society registration in Form No. along with all the required documents.
Obtain the consent of at least 90% of prospective members.
8. Verification by Registrar:
The Registrar will review the authenticity of the documents provided. If satisfied, a Registration Certificate will be issued. Any discrepancies in the application must be rectified before approval.
9. Receipt for Application:
The Registrar will issue a receipt for the submission of the application. You can use this receipt to check the status of your application.
10. Entry in Register:
The registering authority will enter all the details of the newly formed cooperative society in the official register.
11. Notification and Registration Certificate:
Once the Registrar is fully satisfied and all requirements are met, the society’s registration will be notified in the official gazette.A Registration Certificate will be issued to the cooperative society, confirming its legal status.
Completing these steps ensures that the cooperative society is officially registered and recognised under the Cooperative Society Act, 1912, allowing it to operate within the framework of the law and pursue its objectives effectively.
Final Thoughts
The core objectives of Cooperative Society include voluntary membership, mutual support, and collective welfare. These societies, founded on principles of inclusivity and ethical conduct, prioritise providing superior goods and services, collaborating with various entities, promoting community welfare, and fostering unity among members. They serve diverse functions, from consumer protection to agricultural development, contributing to equitable growth. The registration process formalises their operations, enabling them to operate within the legal framework. Cooperative Societies play a pivotal role in promoting economic and social progress, embodying the spirit of “All for each and each for all” at their core.
