Q.Define a Cooperative Society. Explain its essential features and the principles of cooperation on which it is based.

This is a three-part question: a definition, a list of features, and separately, the well-established principles of cooperation — keep the two lists distinct in your answer.

Definition. A Cooperative Society is a voluntary association of persons, usually of limited means, who join together on a basis of equality to promote their common economic interests through self-help and mutual help, and who get the society registered under the applicable Cooperative Societies Act.

Essential features:

1. Voluntary membership — any person may join or leave freely; no one can be compelled either way.
2. Open membership — membership is open to all who share the relevant common economic interest, subject only to reasonable bye-law conditions.
3. State control and registration — registration under a Cooperative Societies Act brings a degree of government supervision (audit, elections, administration) beyond what a partnership or JHF business faces.
4. Separate legal entity, with perpetual succession — once registered, the society is a body corporate, unaffected by changes in its individual membership.
5. Democratic management — one member, one vote — voting power does not depend on the capital a member has contributed.
6. Service motive, not profit maximisation — the society exists to serve members' economic needs rather than to maximise a return for outside investors.
7. Limited liability — a member's risk is confined to capital contributed (or a defined multiple under the bye-laws).
8. Capped return on capital, surplus shared as patronage — dividends on share capital are capped by the bye-laws; further surplus is generally shared in proportion to each member's actual transactions with the society, not purely as profit.

Principles of cooperation, traced back to the Rochdale Pioneers (England, 1844) and restated as the guiding principles of the cooperative movement worldwide:

1. Voluntary and open membership.
2. Democratic member control (one member, one vote). …

Students often blur 'features' and 'principles' into one undifferentiated list. Keep them distinct: features describe what a cooperative society IS structurally (legal entity, liability, voting); principles describe the philosop …