This is a business firm owned and run by a particular group of people who have similar interests and come together to achieve a common economic and social objective. Each of the members has one vote during general meetings irrespective of the value of shares held. Cooperative societies are registered in accordance with the cooperative act of the country.
Nigerian Co-operative Societies Act is a Federal Law that grants powers to the Governor of each state to establish a Directorate for Cooperatives which will be in charge of registering and regulating cooperatives
Characteristics of Co-operative Society
1. Profit is shared on patronage basis.
2. Members have equal voting rights
3. They can be sued and can sue.
4. There is continuity
5. They are exempted from the payment of tax
6. It is registered under cooperative law.
7. Members can withdraw capital when leaving
Types of Co-operative Society
1. Consumers cooperative society
2. Producers cooperative society
3. Credit and thrift society
4. Multi-purpose cooperative society
Importance Characteristics of Co-operative Societies
1. To raise the standard of living of members
2. Membership is open to all members of the public.
3. Motivates members to save more
4. They set up warehouses in which they deposit goods bought directly from manufacturers to members
5. They sell goods to members at moderate prices
6. They act as referees and guarantors to members in securing loans from financial institutions.
7. They give advisory services to members periodically
8. They grant loans to their members
Advantages of Cooperatives Society
1. The society enhances loyalty and unity among members
2. They assist members to sell and buy goods in bulk
3. They make loans available for members
4. All the members have equal rights
5. They purchase goods directly from the producers
6. They give room for training and research for members in necessary areas
7. The society encourages members to develop the habit of saving
Disadvantages of Cooperative Society
1. Lack of commitment among some members
2. Some members are Illiterate
3. Lack of discipline among members
4. The rate of growth is very slow
5. Inadequacy of capital