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Features/Characteristics of Co-operative Society
i. Voluntary organization: A co-operative is a voluntary association of persons
having common economic and social interests. It is an association of individuals
who have low income and want to improve their economic status through
mutual co-operation. Every person can become the member of co-operative
organization by contributing equal capital. An individual can freely join and
leave the organization by giving simple notice to co-operative society but cannot
transfer his membership to another person.

ii. Open membership: There are no criteria for membership of co-operative
organization. All the persons are eligible for its membership irrespective of their
age, sex, caste, religion, culture, financial status, etc. Generally it is formed by
the farmers, artisans and consumers having limited means who are victims of
middle men, money lenders and large business organizations.
iii. Service motive: The main objective of cooperative is to provide better services
and quality goods at reasonable price to its members rather than to earn profit.
Even though co-operative organization earns some profit by providing services
to its non members, it is done to manage its operational and administrative costs.

iv. Democratic management: Co-operative organization is managed by
management committee or Board of Directors (BOD). The BODs are elected
in Annual General Meeting (AGM). During the election all the members have
equal rights to nominate BOD i.e. one member one vote. The AGM formulates
the plans and policies of the co-operative organization and BOD executes them.
The decision of this organization is taken by majority of votes. So, it is known as
democratic organization.
v. Separate legal status: A co-operative organization is an artificial legal person
created by law. It is incorporated under the Co-operative Act 2048 B.S. It has a
distinct seal of its own which is used in all of its legal affairs. It can buy property
in its own name. It can also sue and be sued as an individual person in court.

vi. Distribution of profit: The main objective of co-operative is not to earn profit but
to provide services to its members but it can earn profit by extending their services
to non members. The earned profit will be transferred to reserve fund (for their
investment in education, health, sanitation, recreation, etc), distributed among the
workers as bonus and remaining portion is distributed as dividend to its members.
vii. Equality: A co-operative organization will operate on the basis of equality.
So that right of all the members will be equal “One man one vote” system will
prevail in this organization. No one can dictate or hold more shares. There will
be no discrimination on the basis of caste, religion or political affiliation.
viii. Fulfillment of community motive: A co-operative society is established by a
group of people having common interests. Its main motive is to fulfill interest of
community who involves in it. Agriculture co-operative has to supply all kinds

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