Q.'A co-operative differs from a joint-stock company in the way control is exercised.' Explain this with reference to the principle of Democratic Member Control.

The contrast turns on what decides voting power — the person or the capital.

The principle of Democratic Member Control states that a co-operative is a democratic organisation controlled by its members, who actively set its policies and make decisions. Its central rule is 'one member, one vote' — every member has exactly one vote, no matter how many shares he or she holds or how much capital he or she has contributed.

The contrast with a joint-stock company:

• In a joint-stock company, voting power depends on the number of shares owned — 'one share, one vote'. A person holding more shares has more votes and therefore more control. Here, in effect, capital controls the company.
• In a co-operative, voting power does not depend on shareholding — 'one member, one vote'. A member with a single share has exactly the same voting power as a member with many. Here the person controls the society, not the size of their money.

How democratic control operates in a co-operative:

• The general body of all members is the supreme authority; it approves accounts and budgets, frames and amends bye-laws, and takes major decisions.
• The general body elects a managing committee to run day-to-day affairs, and that committee is accountable to the members and can be voted out. …