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Process of cooperative formation in the country and role of leadership in cooperative management INTRODUCTION The cooperative societies can be defined as 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. Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Also believe in the ethical values of honesty, openness, social responsibility and caring for others. Why do co-operative societies matter? A flourishing network of co-operative societies improves the standard of living of the weaker and middle-income sectors of the society as agents of change and reformation. They provide an economic model with a higher level of entrepreneurial or social sustainability and often work as pressure groups to voice the views of its members in a larger market. Being a part of a co-operative improves your creditworthiness as a producer as well as a consumer. They are easy to join, ensure equitable distribution of profits, prioritise welfare over individual profits, are stable in their functioning and output, and receive a substantial amount of government support. The spirit of co-operation and unity in chasing common interests is the driving force behind co-ops. In a growing democracy, they are the symbol of meritorious collectivism. Importance of Cooperative sector for India The cooperatives play very important role in India because it is an organization for the poor, illiterate and unskilled people. The importance of cooperative sector for India is given below: 1. It provides agricultural credits and funds where state and private sectors have not been able to do very much. 2. It provides strategic inputs for the agricultural-sector; consumer societies meet their consumption requirements at concessional rates. 3. It helps to overcome the constraints of agricultural development
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There are different forms of business organisation which are discussed in this chapter. These include the following: Sole proprietorship Joint Hindu family business Partnership Joint-stock Company Cooperative Societies Holding & Subsidiary Companies International organizations MNCs
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1. Sole proprietorship 2. Joint Hindu family business 3. Partnership 4. Joint-stock Company 5. Cooperative Societies Sole Proprietorship It is a form of organisation owned, managed and controlled by an individual (also known as a sole proprietor) who is responsible for bearing all the risk and receiving all the profit. Features • The sole proprietor can establish and close the business without any legal formalities. • The liability of the sole proprietor is unlimited. • Being the sole owner, the sole proprietor bears all the risk and receives all the profits. • All the decisions are taken and implemented in the organisation by the owner. • Owners and businesses have no separate entity and are considered one in the eyes of the law. • Even in case of a lack of business continuity, the business can continue until the owner wants. Advantages • Prompt decision-making as all the decisions are to be taken by the owner. • Being a sole owner, it is easy to maintain business secrecy. • The owner enjoys all the profits as there is no one to share profits. • A successful business provides satisfaction to the owner and a sense of achievement. • No legal formalities are required for a business’s formation and closure, making it easy to start and end the business. Disadvantages • Due to limited resources, a business can be funded from the owner’s savings or money borrowed from friends or relatives. • The business’s continuity depends on the owner’s health and state of mind. • If the business fails to repay debts, the sole proprietor’s personal assets are at risk. • One person may not possess the ability to manage all the functions. Joint Hindu Family Business In this form of business organisation, the business is owned and managed by the members of an undivided Hindu family, with the possibility of three successive generations as members of the business. Features • The business is formed with at least two members of a Hindu Undivided Family having ancestral property. The Hindu Succession Act, 1956, governs it. • Except for Karta, all the family members have limited liability up to their share in the business property. • Karta has the right to control all the activities in the business organisation. • The business can be discontinued based on the consent of all the members of the family. • Membership in the organisation is by birth. Advantages • Karta has complete control of the business, thus effective decision-making is ensured. • The business continues till all the members wish to continue, and control is transferred to the next elder member in case of the death of ‘Karta’. • Members of the family enjoy liability limited to their share in the business party. • All the work is done with the common objective of growth as the family members have a sense of belongingness and loyalty. Limitations • Due to limited financial resources, businesses can be funded mainly from ancestral property.
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When a group of residents decides to invest their money in a plot of land to build a housing society, a cooperative housing society is created. These cooperative housing societies rely on member understanding to operate.
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Form of Organizations.pptx, Buisness strategies
Co-operative Societies
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IFFCO – Giant
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Co-operatives’ Share in
Fertilizer Production
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