Meaning and Definition of a Cooperative Society

A cooperative society is a voluntary association of persons — usually people of limited means, such as farmers, weavers, small traders, salaried employees or consumers — who join together not to maximise profit for its own sake, but to promote their common economic interests through mutual help. The guiding idea is simple: what one member finds difficult to achieve alone (buying inputs cheaply, getting fair credit, selling produce at a reasonable price, or securing decent housing) becomes possible when many such persons pool their resources and act together. This is why the cooperative form is often summed up in the phrase "each for all and all for each," and why cooperation is described as organised self-help through mutual help.

The cooperative movement in India traces back to the Cooperative Credit Societies Act, 1904, which was passed specifically to help indebted farmers escape the grip of moneylenders by forming credit societies. As the movement grew beyond pure credit into consumer stores, marketing, processing and housing, a wider law — the Cooperative Societies Act, 1912 — was enacted by the central legislature to give legal recognition to cooperative societies of every kind, not just credit societies. Under India's federal structure, cooperation is a State subject, so most states, including Tamil Nadu, have since enacted their own cooperative societies legislation (for example, the Tamil Nadu Cooperative Societies Act, 1983) that governs the actual registration and functioning of societies within the state, operating alongside the framework the 1912 Act originally established. A society formed under such an Act becomes, on registration, a distinct legal person separate from its members.

A cooperative society can therefore be defined as a voluntary organisation of persons, formed with the primary object of serving the common economic interests of its members and functioning on the principles of self-help and mutual help, rather than on the pursuit of profit as the dominant motive.

Tamil Nadu's own Commerce syllabus studies the cooperative form of organisation as part of the same broader study of forms of business — sole trader, partnership, joint stock company, and cooperative — that CBSE/NCERT Business Studies students also cover; the underlying cooperative-movement principles (self-help, mutual help, democratic control) are the same nationally, even though the registering statute differs state to state.