Features of a Consumers Co-operative Society

A consumers co-operative society shares the general features of all co-operatives, but it also has some characteristics of its own that flow from its purpose of retailing goods to its members. The main features are set out below.

• Voluntary association — Membership is open and voluntary. Any consumer who accepts the society's rules may join by buying at least one share, and a member is free to leave after giving proper notice. There is no compulsion and no discrimination on grounds of caste, creed, religion or politics.
• Separate legal status — Once registered under the co-operative law, the society becomes a distinct legal body (a body corporate). It can own property, open bank accounts, enter into contracts, sue and be sued in its own name, quite separately from its members.
• Capital from members — The working capital is raised chiefly from the members themselves through the sale of shares, entrance fees and their savings, supplemented where necessary by loans from co-operative banks and government assistance.
• Aim of service, not profit — The primary aim is to serve the members by supplying honest goods at fair prices, not to earn maximum profit. Any surplus that does arise is used partly for reserves and partly returned to members.
• Elimination of middlemen — The society buys directly from producers or wholesalers in bulk, cutting out the chain of profit-taking middlemen, which is the very source of its ability to sell cheaply.
• Cash sales and fair prices — Goods are usually sold on a cash basis at prices at or near the market rate, so that the society avoids bad debts and passes on the saving to members.
• Democratic management — The society is managed by a managing committee elected by the members on the principle of 'one member, one vote', irrespective of the number of shares a member holds. This keeps control with the people, not with money.
• Distribution of surplus as dividend and bonus — The trading surplus, after reserves, is distributed as a dividend on shares and, importantly, as a patronage bonus to members in proportion to their purchases — so the one who buys more from the society receives a larger share of the saving. …