Features of a Service Co-operative Society

A service co-operative society shares the general features of every co-operative organisation, but a few of them take on a special colour because the society exists to render a bundle of services rather than to carry on one line of trade. The chief features are as follows.

1. Voluntary association. Membership is entirely voluntary — a person of the locality is free to join by buying at least one share and is equally free to leave after giving proper notice and completing the prescribed formalities. No one is forced to become or remain a member.

2. Service as the primary motive. The dominant aim is to serve the members, not to earn the largest possible profit. Any surplus that does arise is treated as a by-product of good management, and is used to strengthen the society and to benefit the members, not to enrich a few investors.

3. Separate legal status. Once registered under the Maharashtra Co-operative Societies Act, 1960, the society becomes a body corporate — a legal person separate from its members, with perpetual succession, a common seal, and the capacity to own property and to sue or be sued in its own name.

4. Democratic management — 'one member, one vote'. The society is controlled by its members democratically. Every member has one vote irrespective of the number of shares held, and the members elect a Managing Committee at the general meeting to run the society's affairs. Wealth does not buy extra control.

5. Multipurpose / variety of services. Unlike a single-purpose society, a service society typically provides several services together — credit, supply of seeds/fertilizers/implements, distribution of consumer goods, storage, and help in marketing — so that a member's many needs are met by one organisation.

6. Membership drawn from a defined area. The membership is generally confined to the residents of a particular village or a small group of neighbouring villages, which keeps the society close to the people it serves and makes mutual knowledge and trust possible.

7. Limited liability of members. The liability of members is limited to the face value of the shares they hold, so a member's personal assets are not put at risk beyond the amount unpaid on his shares.

8. Capital from members and co-operative sources. The working capital is raised chiefly from members' share capital, entrance fees, and deposits, supplemented by reserves built out of surpluses and by loans from the district central co-operative bank and government assistance, rather than from outside profit-seeking investors. …