A co-operative societies is a group of people who come together to meet mutual needs. Its goal is to serve the interests of the less fortunate members of society. The major goal is to provide assistance to the members. Nobody joins a cooperative society with the intention of making money.

Although the Cooperative Societies Act is a federal law, the term “cooperative societies” is a state subject.

A society can be registered if its purpose is to promote the economic interests of its members in accordance with cooperative principles. The Act also allows for the registration of a society formed with the purpose of assisting the operation of such a society.If a society has limited liability, no individual member can own more than one-fifth of the entire capital.


A legally recognised cooperative organisation can own property, enter into contracts, and defend itself against lawsuits and other legal actions. The Registrar may cancel the registration of a society following an inspection or investigation, or upon application from 75 percent of the society’s members. By making a general or special order, the State Government can prohibit or restrict any registered society or type of registered society from lending money on mortgages of immovable property.

Followings are different types of co-operative societies that exist in our country :

  • Consumers’ Co-operative societies are formed to protect the interest of general consumers by making consumer goods available at a reasonable price. Others are formed by small producers and manufacturers who find it difficult to sell their products individually. They buy goods directly from the producers or manufacturers and sell them in the market. Co-operatives are not formed to maximise profit like other forms of business organisation.
  • The main purpose of a Co-operative Society is to provide service to its members.
  • Each member has a single vote, irrespective of the number of shares held. Members can join and leave the society at will.

Profits are not earned at the cost of its members. They are distributed to members on the basis of their participation in the society’s activities. Co-operative Societies thrive on the principle of self-help through mutual co-operation. It is only by working jointly that members can fight exploitation and secure a place in society.

A Co-operative form of business organisation has the following advantages:

Formation of a co-operative society is very easy compared to a joint stock company.

Through co-operatives the members or consumers control their own supplies and thus, middlemen’s profit is eliminated.

Members elect representatives to form a committee accountable to all the members of the society.

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  • The number of credit societies decreased from 1.43 lakh in 2000-01 to 1.21 lakh in 2003-04. The membership of State Co-operative Banks increased from 0.17 lakh and 0.65 lakh to 0.19 lakh and 1.02 lakh.
  • The number of credit societies in India increased from 0.45 lakh in 2000-01 to 0.40 lakh in 2003-04. The total working capital of these societies increased from Rs.296.81 lakh to Rs. 390.13 lakh and the loans issued increased from ‘ 73.52 lakh to 59.10 lakh.

The following tables are included in this chapter:

  • Table 44.1 presents year-wise number and membership of credit and non-credit societies since 2000-01 and during 2003-04.
  • Table 44.4(A): presents number, membership and financial position of Primary Agricultural Credit Societies (excluding Grain-Banks) during 2002-03 and 2003-2004. Table 43.7(A) presents the positions of Primary Co-operative Agriculture & Rural and Development Banks during the same period.


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