Merits of Cooperative Organisation

1. Easy to form: Registration formalities are comparatively simple and inexpensive — a minimum of ten persons can apply, and legal formalities are lighter than those for forming a joint stock company.

2. Democratic management: The "one member, one vote" rule ensures management stays broad-based and responsive to ordinary members, rather than being controlled by whoever holds the most capital.

3. Limited liability: Once registered, members' liability is generally limited to their capital contribution, so personal risk is contained.

4. State assistance: Because cooperatives serve weaker economic sections, governments extend various forms of support — financial assistance/subsidies, income-tax concessions, and priority in institutional credit — that help cooperatives establish and sustain themselves.

5. Stable existence (perpetual succession): As a separate legal entity with perpetual succession, a cooperative society's existence is not disturbed by the death, insolvency or resignation of individual members, giving it continuity that an unregistered or purely personal form of organisation lacks.

6. Elimination of middlemen's profit: By dealing directly — buying in bulk or selling collectively — a cooperative removes unnecessary middlemen from the chain, passing the benefit directly to members as lower prices or better returns. …