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Definition of Co-operative Society

It is defined as a business organization in which a group of individuals who have common interests mutually agree to come together to establish. It is a voluntary association of people who have common needs and interests. The welfare of their members is of paramount interest. The associations apply the democratic method in their dealings. It is owned and controlled by the members.

Formation of Co-operative Society

A cooperative society is an association of people who are pursuing defined goals and objectives. Society came into being as a result of many factors. Such factors include; the inability of individuals to access funds for their business interests, the absence of a joint market for the sale of farm produce, etc. People have always come together to work and achieve common social and economic interests together. Economic, social, and political changes gave rise to modern cooperative movements.

Characteristics of a Co-Operative Society

1. It has a perpetual life span: the death or illness of any member does not threaten the existence of the society.

2. It is a registered entity under cooperative law. 

3. The liability of the members is limited to the amount contributed by them.

4. The major aim of the society is to unite and promote the welfare, economic, and business interests of its members.

5. It operates democratically. Each member is entitled to vote despite the contribution.

6. At the end of each year, dividend is paid to each member in accordance with the level of patronage.

7. Contribution is made voluntarily by members to raise capital for the association.

8. Profit is shared based on patronage


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