Features of a Cooperative Society

1. Voluntary membership: Any person able to use the society's services may join, and any member may leave by giving proper notice; no one is coerced into joining or staying.

2. Democratic management: The society is managed on the "one member, one vote" principle, described above, through a managing committee elected by members in the general body meeting. Control is genuinely spread across the membership, not concentrated with large capital contributors.

3. Service motive rather than profit motive: The primary object is to serve members' economic interests — cheaper goods, fair prices, timely credit, better wages — profit, where it arises, is incidental and is used to strengthen the society or is returned to members as patronage-based surplus, not pursued as an end in itself.

4. State control and regulation: Because a cooperative enjoys certain privileges (registration formalities are simpler, government often extends financial assistance and tax concessions), it is placed under closer government supervision than, say, a partnership — audit of accounts by a government-appointed auditor, and the Registrar of Cooperative Societies has powers of inspection and, in some circumstances, of winding up the society.

5. Limited liability: Once registered, the liability of members is generally limited to the extent of the capital they have contributed (some credit societies with unlimited liability exist, but limited liability is the general modern position), so a member's personal property beyond his investment is not at risk for the society's debts. …