Explain any three advantage and three disadvantages of a cooperative society

cbse
formsofbusiness

#1

Following advantage are offered by the cooperative society:
(a)Easy formation : A cooperative society can be formed by any ten adults. The registration procedure is simple involving few legal formalities.
(b)Stable existence : Cooperative society enjoys a seperate legal entity from its members. Death, insanity, retirement and insolvency of any member do not affect continuity of cooperative society.
©Support from Government : The cooperative society exemplifies the idea of democracy and secularism promoting the value of welfare, hence finds support from the government in the form of loans at low interest rate, low taxes, subsidies etc. Three disadvantages/demerits of cooperative society are as follows:
(a)Limited Resources: A cooperative society is formed usually by the people with limited means. Secondly the lower rate of dividend offered on investment discourages members to invest large amounts in the society, therefore large scale operations can’t be feasible due to shortage of funds.
(b)Lack of skilled management : The members of the elected management committee may not have specialised professional skills and experience Tto run the business efficiently. Due to limited funids cooperative societies are not able to attract and employ expert managers or professionals.
©Lack of secrecy : There is no secrecy in this form of organisation because all the affairs of the society are openely discussed in the meetings of the society and every member can freely inspect the books of accounts as per the Cooperative Societies Act 1912.