Sep 21,2022 | 9 min read

Types of Co-operative| Role Of Co-Operative Society | Merits & Demerits

Cooperative Society Types

Co-operatives fall under one of the following categories depending on the type of work they do:

Consumers' Cooperative Societies, to start.

  1. Societies of Producers' Cooperatives

  2. cooperatives for marketing.

  3. Housing cooperatives

  4. Cooperative Credit Societies

  5. Societies for Cooperative Farming

Characteristics of a Cooperative Society

  • A cooperative society must be based on voluntarism;

  • A cooperative society must be open to everyone, regardless of the members' caste, creed, or religion. This indicates that it shouldn't be established solely to serve the interests of a specific caste or religion;

  • A cooperative society must unavoidably have a democratic structure and be entirely run by its members.

  • A crucial component of a cooperative society is that all members must agree on the appointment or management of the organization's affairs;

  • According to their fundamental concept, every member of a cooperative organisation is entitled to equal voting rights;

The goals of cooperative societies

  • not to make a profit but to offer assistance and services to the people in society.

  • to cooperate with one another and avoid competition.

  • to conduct business in a fair and transparent manner.

  • to provide final consumers with high-quality products and items

Cooperative Society Formation

  • A society can only be formed if at least 10 people are interested in doing so for their mutual benefit. Once the group is organised, a temporary committee is formed, and members choose the society's top promoter.

  • The primary promoter and members mutually decide on the name of the society.

  • The registration authorities must receive an application outlining the members' intended business operations. A certificate of name approval is issued by the relevant government following the submission of paperwork and verification.

  • After the name has been approved, prospective members must pay the registration fees and the share capital amount.

  • It is necessary to open a unique bank account in the society's name. Deposits must be made to such a bank account for registration costs and share capital. The bank will issue a certificate for that. The principal promoter must submit an application for registration along with the required documentation as soon as the bank formalities are finished.

  • Form No. A must be used to submit the registration application, which requires the approval of 90% of the members.

  • After receiving the documents, the relevant body will cross-check the documents before deciding whether or not to provide a certificate.

  • The registrar of the local ward keeps a registry of applications where the information about a newly formed society can be entered. A Form B application must be submitted. The Registrar issues a receipt for application submission and occasionally updates applicants on the status of their applications.

  • The application must be turned in for correction if there is any inconsistency.

  • After being satisfied, the registering authorities will publish a notice of the society's registration in the official gazette and provide each member with a registration certificate.

Cooperative societies functions

  • Even while agriculture is the main source of revenue and employment in rural areas, the reality is that the majority of residents there remain hungry and destitute. The development of cooperative societies is essential for improving the impoverished conditions in rural areas. Let's look at the tips below to see how cooperative society aids in rural development:

  • Since agriculture provides a living for 65% of India's people, it has supplanted other sources of income in rural areas. People make money by farming, fishing, forestry, and raising cattle. The agricultural cooperative society works actively with both male and female agrarian producers to enhance the number of jobs available to underrepresented groups.

  • The cooperative organisation supports better facilities for product marketing, including storage, processing, and shipping, as well as access to contemporary growing methods. 

  • Numerous cooperative groups are frantically tackling various issues to build a sustainable economy in rural areas. 

  • Co-operative societies provide a range of services to those living in poverty, including access to cutting-edge technology, proper instruction in the management of natural resources, and an increase in the availability of goods that boosts agricultural production. The goal of a cooperative society is to give those who work in agriculture financial security in addition to other social benefits. Cooperatives therefore access financing through agricultural funds and credits to improve farmers' financial standing.


  • Everyone who shares the goal of offering a service without expecting payment is eligible to join a cooperative society. The membership has the freedom to enter and exit society as they see fit.

  • Members invest capital for the community, while the government provides grants and subsidies to ensure that commercial operations run smoothly.

  • A cooperative society is a distinct legal body with restricted member liability that is registered under the Cooperative Societies Act. It may operate the company under its own name.

  • When the cooperative organisation makes a larger profit from its operations, it is divided among the members according to their level of involvement in the firm.



  • SMBs are the primary focus of cooperative societies.

  • Lack of funding makes it challenging to promote business operations and sales promotions.

  • inadequate managerial abilities to oversee and supervise the members.

  • Honesty, integrity, and loyalty to the members must underpin management.

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