Q.State any three limitations of the Co-operative form of business organisation.

The Co-operative Society trades scale and professional management for democratic control and service motive, and that trade-off is exactly where its limitations lie.

Three commonly cited limitations of the Co-operative form:

1. Limited capital — because membership is voluntary, the return on capital is deliberately capped, and shares generally cannot be traded openly, societies find it difficult to raise large amounts of capital, restricting the scale at which they can operate.
2. Less professional management — the managing committee is elected from among members, who may not have specialised managerial training or experience, unlike a company that can hire professional managers.
3. Lack of secrecy — because a society must file accounts and report to the Registrar, and its affairs are open to member scrutiny at general meetings, it is difficult to keep business plans and dealings confidential. …