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40 BUSINESS  STUDIES Cooperatives: “A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs, and aspirations through a jointly-owned and democratically-controlled enterprise.” International Cooperative Alliance 2.5 C ooperative S ociety is voluntary. A person is free to join a cooperative society, and can also leave The word cooperative means working together and with others for a common anytime as per his desire. There cannot purpose. be any compulsion for him to join or quit a society. Although procedurally A cooperative society is a voluntarya member is required to serve a notice association of persons who join before leaving the society, there is together with the motive of welfare of the members. They are driven by no compulsion to remain a member. Membership is open to all, irrespective the need to protect their economic of their religion, caste, and gender. interests in a democratic way. A cooperative society is required to be (ii) Legal status: Registration of a registered under law. After registration,ooperative society is compulsory. This accords a separate identity to it acquires a distinct legal identity, can enter into contracts, hold property the society which is distinct from its in its own name, and its members’ members. The society can enter into liability is limited to the amount contracts and hold property in its name, sue and be sued by others. As a they contribute as capital. In India, cooperative societies that operate result of being a separate legal entity, within a single state are governed by it is not affected by the entry or exit of the Cooperative Societies Act of that its members. state, while those that operate in more (iii) Limited liability: The liability of than one state are governed by the the members of a cooperative society Multi-State Cooperative Societies Act, is limited to the extent of the amount 2002. The Multi-State Cooperative Societies Act has also been updated contributed by them as capital. This defines the maximum risk that a through recent amendments. member can be asked to bear. Features (iv) Control: In a cooperative society, the power to take decisions lies in The characteristics of a cooperative the hands of an elected managing society are listed below. committee. The right to vote gives (i)  Voluntary membership: The the members a chance to choose membership of a cooperative society the members who will constitute the Reprint 2026-27