Q.What is meant by the organisation of a co-operative society? Explain its two-tier structure.

A registered co-operative society is a legal person that cannot act by itself, so it needs an internal set-up of persons and bodies to run it, and that set-up is arranged in two tiers.

Authority always flows back to the members: they elect the committee, the committee appoints the office-bearers, and both remain answerable to the general body.

Once a co-operative society is registered under the Maharashtra Co-operative Societies Act, 1960, it becomes a body corporate — a legal person. But a legal person cannot think, decide, or act on its own; it must act through human beings. The organisation of a co-operative society means exactly this internal set-up: the persons and bodies through which the society actually functions — who takes the broad policy decisions, who carries on the routine management, and who holds particular offices with particular duties. In short, it is the machinery of management inside the society, and what makes it distinctive is that it rests on democratic control by the members themselves, all of whom are treated as equals.

This machinery is arranged in two clear tiers. The first and higher tier is the general body, which is the assembly of all the members of the society. The general body is the supreme authority: it takes the most important decisions and keeps in its own hands the vital powers of adopting the annual accounts, disposing of the net profits, electing the committee, and amending the bye-laws. It exercises these powers through general meetings, in which each member participates directly and, under the one-member-one-vote rule, has an equal vote.

The second tier is the managing committee. Since the general body cannot meet every day to run the society, it elects from among the members a smaller group — the managing committee — in which, under Section 73 of the Act, the management of the society vests. The committee carries on the day-to-day management between general meetings, and it works through its office-bearers, principally the chairman, the secretary, and the treasurer, whom it elects or appoints.

The two tiers are linked by a chain of delegation that always runs back to the members. The members (general body) elect the managing committee; the committee elects or appoints the office-bearers; and both the committee and the office-bearers remain answerable, ultimately, to the general body. Every part of this structure — its composition, powers, and duties — is governed by the Maharashtra Co-operative Societies Act, 1960, the Rules of 1961, and the society's registered bye-laws. It is this two-tier, member-controlled structure that distinguishes the organisation of a co-operative society from that of a company.