Co-Operative Organisation

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Questions:

Multiple Choice Question

5 x 1 = 5

Rochdale Society of equitable pioneers was started by_______.

(a)

Robert Owen

(b)

H.C. Calvert

(c)

Talmaki

(d)

Lambert

Consumers Co-operation was first successful in_______.

(a)

England

(b)

USA

(c)

Swiss

(d)

India

All Cooperatives are established with __________

(a)

Philanthropic motive

(b)

Service Motive

(c)

Profit motive

(d)

Reform motive

Cooperative fails because of _______.

(a)

Unlimited membership

(b)

Cash trading

(c)

Mismanagement

(d)

Loss-making

Membership in a Cooperative organization is :

(a)

Not open to all

(b)

Selective

(c)

Open to all

(d)

None of them

Generic 3

4 x 3 = 12

Explain the history of Co-operation.

Describe the features of co-operatives?

Write a note on Tamil Nadu warehousing Corporation (TNWC):

Write a note on Rural Credit.

Generic 2

5 x 2 = 10

10.

Define co-operation according to Co-operative Societies Act.

11.

What is a co-operative warehouse?

12.

Give examples of co-operative society.

13.

What do you mean by Delivery Order?

14.

Write a note on State Warehousing Corporation (SWC)?

Generic 5

4 x 5 = 20

15.

Distinguish between a joint-stock company and co-operative society.

16.

What are the steps involved in forming a co-operative society?

17.

Explain the functions of Warehouse: (Any Five)

18.

What are all the documents used in the process of warehousing?

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Answers Key:

Multiple Choice Question

5 x 1 = 5

(a)
Robert Owen

(a)
England

(b)
Service Motive

Generic 3

4 x 3 = 12

1. History of co-operation: The co-operative movement can be traced back to about 150 years. Robert Owen started the first ever co-operative movement in the year 1844 with 28 members called Rochdale society of equitable pioneers. It was a consumer's co-operative society.The father of this movement was Robert Owen.
2. In India, the poverty and rural indebtedness were predominant during the 19th century. As a fuel to the fire a great famine occurred in 1901.In order to find a solution to these problems the government brought out a statute known as Co-operative Societies Act 1904.But the scope of this Act was restricted to the credit facility only.A comprehensive Act was brought again in the year 1912 covering the formation management and regulation of the co-operative societies.
3. In 1914 a committee headed by Medagaon was appointed by the government to review the working of co-operatives. On the basis of this recommendation of the committee the governance of co-operatives was transferred from the central to the state governments. At present the state governments are monitoring these institutions under a separate ministry.

The features of co-operative societies are:
Voluntary Membership:
Any person can become the member of the society and can leave it any time.
Equal Rights:
Each member of the society has an equal right to vote and ownership. Each shareholder has one vote.
Democracy:
The principle of democracy is adopted while making the decisions. The decision of the majority is honored.
Honesty:
It is the basic principle of this society. Its members should be honest. Selfish people can not.run the business of cooperative society.
Mutual Confidence:
The foundation of Cooperative society is laid on mutual confidence. Members of the society should trust each other and work like a team.
Welfare Main Objective:
Its main objective is to provide goods and services to its members at lower price.
Cash Payment:
Credit team is prohibited and goods are supplied to its members on cash payment.
Economy:
The member of the society should act upon the principle of economy. They should not misuse capital of the society and always keep in view best interest of the society.
Distribution of Profit:
The profit can be distributed among the members according the cooperative act. One fourth (1/4)of the profit can be kept in reserve. Then (10%) of the profit can be used for providing facilities to the members.
Self Service:
All the business activities are conducted by the members themselves. All are the owner and all are the consumers. So self service rule is employed in the organisation.

It was established in 1959. The available storage capacity of TNWC is 6.83 Lakh MT with 7 Regional offices and 256 Godowns across the state. It is one of the biggest public warehouses operating in the state, offering logistic services to a diverse group of clients.

(i) Co-operative societies have contributed significantly in freeing villagers from money lenders.
(ii) Earlier, money lenders used to charge high rates of interest and the earnings of the villagers were spent on payment on interest alone.
(iii) Co-operatives provide loans at cheaper interest rates and have benefited the rural community.

Generic 2

5 x 2 = 10

10.

The Indian Co-operative Societies Act 1912 defines a co-operative enterprise as "A society which has its objectives for promotion of the interests of its members in accordance with the principles of co-operation."

11.

Co-operative warehouses are mostly found in rural areas. It helps the members to get the facility of storing agricultural inputs. They will keep the finished goods, till they are despatched for sale through marketing co-operatives.

12.

Examples of co-operative society:
(i) Indian Coffee House .
(ii) Mother Dairy
(iii) Shri Mahila Griha Udyog Lijjat Papad
(iv) Indian Farmers Fertilizers Cooperative Limited
(v) The Indian Airlines (Cargo) C.G.H.S. Ltd.

13.

This is the document through which the depositor directs the warehouse keeper to deliver the specified goods either to the party mentioned in the document or to the bearer.

14.

Every state government is given power to establish its own Warehousing Corporation after getting approval from the CWC. 50% of the capital is contributed by the CWC and the balance 50% contributed by State Government.

Generic 5

4 x 5 = 20

15.

S.No		Joint-Stock Company	Co-operative Society
(i)	Meaning	It is mainly organised with the object of making profit. It is an association of people persons formed for the purpose of doing a business.	It is a voluntary association of the weaker section or the people It may make profit in the process of rendering services.
(ii)	Minimum Number	There must be at least two persons to form a private limited company and seven persons in public limited company.	But in the case of co-operative society, a minimum number of members is 25 as per the the Tamil Nadu Co-operative Societies Act of 1983.
(iii)	Maximum Number	In a private company maximum is 50 and in a public company there is no maximum limit.	There isno limit to the maximum number of members in a cooperative society.
(iv)	Local Membership	The members of a public limited company belong to different parts of the country and even different countries of the world.	But in a co-operative society the members belong to the same locality.
(v)	Registration	A company is formed and registered as per the Companies Act, 1956.	But a co-operative society registered as per the Co operative SocietiesAct of a state government.
(vi)	Management	In a joint company the management is entrusted to the Board of Directors elected by the shareholders	All the members are entitled to participate in the management of co-operative societies with the help of the Board of Directors.
(vii)	Object	Profit is the primary motto of a joint-stock company	Service is the primary motto of a co-operative
(viii)	Purchase of shares by member	In companies there is no limit in the purchase of maximum number of shares	In co-opera ti ve societies minimum number of purchase of shares is limited to the extent of utilisation of benefits
(ix)	Facilities	Government do not provide any concession to joint-stock companies as extended to co-operatives.	But a co-operative society enjoys concession like exemption from paying income tax stamp duty and registration fee etc.
(x)	Right to Vote	In joint-stock company one share one vote principle is followed.	But in a co-operative society one man vote principle is followed
(xi)	Feeling of self interest	In a joint-stock company the feeling of self interest and completion remain present	In co-operative societies 'Each for all and all for each' is the guiding principle.
(xii)	Repayment of shares capital	A shareholder' cannot get back his capital during the lifetime of the company	A member in a co-operative society can surrender his shares withdraw his capital and cancel his membership.
(xiii)	Distribution of profit	In joint-stock company the profit is distributed to the shareholders on the basis of their share value	In a co-operative society a minimum portion of the profit is distributed as dividend. A major portion of the profit is used for the development of the co-operative society.
(xiv)	Transfer of shares	The shares are freely transferable in a public limited company.	A member of a co-operative society cannot transfer his shares. But he can surrender his shares.
`(xv)	New shares	When a company wants to increase its capital the new issue of shares are offered to the existing share-holders if there is a right issue	In the caseof co-operativesociety capital is generally increased when new persons are admitted as members.
(xvi)	Exploitation	A joint-stock company is a capitalistic enterprise ..They try to exploit the public.	But in the case of co-operative society it protects the poor from the exploitation of unscrupulous traders.
(xvii)	Importance	In joint-stock company, money is more important than a man	In a co-operative society, man is more important than money
(xviii)	Registration of membership	A company close the list of shareholders as soon as the capital is fully subscribed. If anyone wants to buy shares he can buy them in stockexchanges	In co-operative society, the list of membership is not closed but open to all the members hailing from the society.
(xix)	Value of shares	The value of shares is generally greater in joint stock companies. It may sell shares either at par or at a premium and or at a discount.	But shares are offered only at par in a co-operative society.

16.

Formation of a co-operative society:
It must be registered under the co-operative societies Act 1912 or any other state co-operative law.
A co-operative society can be started with a minimum of 25 persons, having a common interest. An application has to be submitted to the Registrar of co-operative societies expressing their intention.
The application form is known as 'Memorandum of Association'. It should contain the name and address of the society its objectives, the capital and liability of the members. A copy of the bye-laws slating the rules and regulations of the society should be attached along with the application form.
The system of management procedure with regard to meetings resolutions are stated in the bye-laws. The Registrar will carefully scrutinise the documents in order to ensure that they are in accordance with the provisions of the Act. When he is fully satisfied he will enter the name of the society in his register and issue the 'Certificate of Registration'. By issue of this certificate the society comes into existence as a body corporate having a separate legal entity.

17.

The following are the functions of warehouses:
Storage:
There is a time gap between the time of production and the time of consumption and a gap between demand and supply. The surplus goods are stored properly for the purpose of supplying them at right place and the right time.
Price Stabilization:
Warehousing ensures price stabilization by supplying goods as and when demanded. It acts as a cushion to absorb price fluctuations and supplies the goods at more or less uniform prices throughout the year.
Equalization of Demand and Supply:
Warehousing equalizes the demand and supply of goods by storing the goods when they are not demanded and releasing them when there is a demand. Thus the consumers get the commodities regularly even during the off-season periods.
Business Finance:
Based on the goods deposited in a warehouse, the depositor can get finance from banks and other financial institutions by showing the receipt issued by the warehouse keeper.
Risk bearing:
In case of damage to the goods, warehouse keeper compensates the loss caused to the owner of the goods. Thus, warehouses bear the loss of risk involved in storage of goods.

18.

The following are used in connection with the warehousing:
Warehouse Warrants:
It is a document issued in favour of the owner or depositor of goods by the warehouse keeper. This is a document of title of goods and can be transferred by simple endorsement and delivery To transfer all the goods the warehouse warrant is sufficient. If only a part of the goods are to be transferred then delivery order is needed. The delivery order is to be accompanied by the warehouse warrant.
Warehouse Keeper's Receipt:
It is a document issued by the warehouse keeper, which acknowledges the receipt of goods from the depositor of goods. It also shows the existence of an agreement to keep the goods in the warehouse subject to certain conditions. This is not a document of title of goods and is not transferable.
Dock Warrant:
Dock is a place in the harbor where the goods are kept for loading into the ship. Dock warrant is a document of title of goods issued by dock authorities. This document certifies that the dock authorities hold the goods. To take delivery of the goods this certificate should be given back to dock authorities. The right of getting delivery of goods can be assigned to third parties too.
Dock Receipt:
Dock receipt is an acknowledgement of receipt of goods issued by dock authorities to the owner of the goods. It is not a document of title of goods. Therefore, the right of taking of delivery of goods cannot be transferred.
Delivery Order:
This is a document through which the depositor directs the warehouse keeper to deliver the specified goods either to the party mentioned in the document or to the bearer. The warehouse keeper delivers the goods as per the instruction. Transfer of ownership takes place through this document.