Q.Discuss the merits and limitations of cooperative organisation.

The cooperative form offers real practical advantages to members, but also carries structural weaknesses that stem from the same features that make it distinctive. …

Merits of a cooperative organisation:

1. Easy to form: Formation requires only a minimum number of members (commonly ten) and simpler registration formalities than a company.
2. Democratic management: Control rests broadly with the membership through the one-member-one-vote rule, not with large capital contributors.
3. Limited liability: Once registered, members' liability is generally limited to their capital contribution.
4. State assistance: Governments extend financial assistance, subsidies and tax concessions to cooperatives, recognising their role in serving weaker economic sections.
5. Stable existence: Registration gives the society perpetual succession, so it survives changes in individual membership.
6. Elimination of middlemen's profit: By dealing collectively — bulk buying or joint selling — cooperatives cut out unnecessary intermediaries and pass the benefit directly to members.

Limitations of a cooperative organisation:

1. Limited capital: Membership is typically drawn from people of modest means, and low-denomination shares plus a deliberately capped interest on capital keep the society's own capital base small.
2. Lack of managerial expertise: Management by elected members, rather than trained professionals, can mean the society lacks the specialised business and financial expertise larger enterprises command.
3. Possibility of internal conflict: Because every member has an equal vote regardless of contribution, differing opinions among a large and varied membership can lead to friction and slow decision-making.
4. Excessive government control: The concessions and assistance cooperatives receive come with correspondingly close government regulation, audit and inspection, which can restrict operational freedom. …

A one-sided answer that lists only merits or only limitations, without weighing both, misses what this question speci …