Features of co operative society

Meaning:A Co-operative society is a voluntary association of people who come together on the basis of unity and equality to protect and promote their common economic interest.

Definition:“It is an association of the weak who gather together for a common economic need and try to lift themselves from weaknesses into strength through business organization”

Following is the features of co-operatives:

1. Service motive
2. Limited Liability
3. Stability
4. Voluntary associations
5. Equal voting rights
6. Open Membership
7. Lack of Secrecy


1.Service motive:The main aim of a co-operative society organization is to render service to the people. It is a service-oriented organization. It is mainly formed for promotion of welfare of the society.

2.Limited Liability:In a co-operative society, the liability of each member is limited. The liability of the member is limited to the face value of shares purchased by them.

3.Stability:The co-operative society enjoys a stable life. There is continued existence. The society survives even if some members resign or leave the society. as it is a corporate body.

4.Voluntary associations:co-operative society is a voluntary association of people who come together on the basis of unity and equality to protect and promote their common economic interest. The individual joins the cooperative society on his free will.

5.Equal voting rights:All members are treated equal. Equal voting rights are given to all. Every members has one voting rights only, as the society follows the principal of “one man one vote”. Voting by proxy is not allowed.

6.Open Membership:Normally, membership is open to all those who are willing to join the co-operative. There is no restriction of caste, creed, race, religion, etc. At Least 10 Members are required to form a Co-operative Society.

7.Lack of Secrecy:The co-operative Lacks secrecy. This is because, the account are made available to the members and others. It is difficult to maintain business secrecy in a cooperative organization.

Co-Operative

Introduction:
 
The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co-operative, and the first to pay a patronage dividend, forming the basis for the modern co-operative movement. Although other co-operatives preceded them, the Rochdale Pioneers' co-operative became the prototype for societies in Great Britain. The Rochdale Pioneers are most famous for designing the Rochdale Principles, a set of principles of co-operation that provide the foundation for the principles on which co-ops around the world operate to this day. The model the Rochdale Pioneers used is a focus of study within Co-operative economics.

Meaning of Co Operative Society:A co-operative society is a voluntary association started with the aim of service of its members. It is a form of business where individuals belonging to the same class join their hands for the promotion of their common goals. These are generally formed by the poor people or weaker section people in the society. It reflects the desire of the poor people to stand on their own legs or own merit. The philosophy of the formation of co-operative society is "all for each and each for all".

Section 4, of the Indian Co-operative Societies Act, 1912 defines a cooperative "as a society which has its objective the promotion of economic interest of its members in accordance with co-operative principles".

According to Calvert, a co-operative denotes a form of organisation wherein persons voluntarily associate together as human beings on the basis of equality for the promotion of economic interests of themselves.

A co-operative society has been formed behind the following broad objectives.

    To render service to its members instead of making profits.
    It encourages a state mutual help in the place of competition.
    It assures a state of self-help in the place of dependence.
    It develops a state of moral solidarity in the place of unfair business        activities.

Classification of Companies

Public Company: A company that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange or in the over the counter market. Although a small percentage of shares may be initially "floated" to the public, the act of becoming a public company allows the market to determine the value of the entire company through daily trading.

Public companies must meet stringent reporting requirements set out by the Securities and Exchange Commission (SEC), including the public disclosure of financial statements and annual 10-k reports discussing the state of the company. Each stock exchange also has specific financial and reporting guidelines that govern whether a stock is allowed to be listed for trading.

Private Company:A company whose ownership is private. As a result, it does not need to meet the strict Securities and Exchange Commission filing requirements of public companies.

Private companies may issue stock and have shareholders. However, their shares do not trade on public exchanges and are not issued through an initial public offering. In general, the shares of these businesses are less liquid and the values are difficult to determine. 

Companies Limited by Shares:A "company limited by shares" means a company formed on the principle of having the liability of its members limited by the memorandum to the amount (if any) unpaid on the shares respectively held by them. Most companies in Malaysia are companies limited by shares.

 

Thus when creditors give creditors to companies limited by shares, they are in theory giving credit to a fund made up of the amounts paid or payable by members for theirs. They do not have recourse against the members to an unlimited extent.

Companies Limited by Guarantee:The meaning of the term "company limited by guarantee" given in section 4 of the Companies Act is "a company formed on the principle of having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up."

A company limited by guarantee may be distinguished from a company limited by shares in that in respect of the former, a member is not required to pay in nay any capital while the company is in a going concern. If the company is wound up and its assets are not adequate to meet its liabilities, a member will be liable to pay the amount of the guarantee as specified in the memorandum of association. The amount may be made ascertainable by reference to a state of affairs existing when the company is wound up.

Companies Limited by Both Shares and Guarantee:It used to be possible for members to form a guarantee company with share capital. An

existing company limited by guarantee could also convert to a company limited both by shares and by guarantee.

The effect was that members would be liable to pay the issue price of their shares and to honor their guarantee if the company should be wound up. Guarantee companies with shares were rare. Indeed the Jenkins Committee were of the view that such companies should be abolished. Its rationale was that if a company was formed with the intention of making pro rata distributions of profits to its members, it was inappropriate that it should be able to register as a company limited by guarantee.

The Companies (Amendment) Act 1985 settled the issue by adding a new section 14A to the Companies Act, as /* mentioned above, which reads:"On or after the coming into operation of this Act, no company may be formed as, or become, a company limited by guarantee with a share capital."

Unlimited Companies:The definition of an "unlimited company" given in section 4 of the Companies Act is:"A company formed on the principle of having no limit placed on the liability of its members."In other words, in the event of a winding-up of an unlimited company, its members may be made liable for its debts without limit on their liability.

An unlimited company is similar to other companies in that it is also a corporation. As such, it can hold property, sue and be sued as an entity separate from its members. The unlimited company can create a floating charge on its assets and can deal freely with its assets in the ordinary course of business.

Features And Types

  Features of a Joint Stock Company:

1.Voluntary Association:Voluntary association no person because person can be compelled to become a member of a joint stock company.
 

2.Incorporate association:A joint stock company is an incorporated association of a person or company is not registered the liability of the member of an unicorporated association will be unlimited.
 

3.Specific objects:Is a formed for specific objects only and the specific objects for which it is formed are expressly stated in the constitution of association.
 

4.Artificial person created by law: Which as no physical or natural exsistence but in this eyes of law it is considered as an entity in the eyes it as to enjoy certain rights and privilages of a natural persons.
 

5.Separate legal entity:It can enter in to contacts acquire and dispose of properties sue and be sued in its own name.

6.Perpetual succession:A joint stock company has a perpetual successful it ahs continous exsistence it may be noted that this does not mean that a company can never come to end.

Tyes of companies:

1.Chartered Companies: A chartered company is a company which comes in to existence under a proclamation issued by a monarch or crown the document are of government.
 

2.Statutory Companies: Is a company which is incorporate under a special or separate act. This method of incorporation companies electricity, supply companies, water works.
 

3.Registered companies: Registered companies are companies which are brought in to exsisitence by registration with the register of companies undr the companies act.

 

Partnership Act

 The Indian Partnership Act was passed in 1932 to define and amend the law relating to partnership. Indian Partnership Act is one of very old mercantile law. Partnership is one of the special types of Contract. Initially, this was part of Indian Contract Act itself , but later converted into separate Act in 1932.

The Indian Partnership Act is complimentary to Contract Act. Basic provisions of Contract Act apply to contract of partnership also. Basic requirements of contract i.e. legally enforceable agreement,mutual consent, parties competent to contract, free consent, lawful object, consideration etc. apply to partnership contract also.

Partnership Contract is a ‘concurrent subject’ - ‘Contract, including partnership contract’ is a ‘concurrent subject, covered in Entry 7 of List III (Seventh Schedule to Constitution). Indian Partnership Act is a Central Act, but State Government can also pass legislation on this issue. Though Partnership Act is a Central Act, it is administered by State Governments, i.e. work of registration of firms and related matters is looked after by each State Government. The Act is not applicable to Jammu and
Kashmir.

Unlimited liability is major disadvantage - The major disadvantage of partnership is the unlimited liability of partners for the debts and liabilities of the firm. Any partner can bind the firm and the firm is liable for all liabilities incurred by any firm on behalf of the firm. If property of partnership firm is insufficient to meet liabilities, personal property of any partner can be attached to pay the debts of the firm.

Partnership Firm is not a legal entity -  It may be surprising but true that a Partnership Firm is not a legal entity. It has limited identity for purpose of tax law. As per section 4 of Indian

Partnership Act, 1932, 'partnership' is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all. - - Under partnership law, a partnership firm is not a legal entity, but only consists of individual partners for the time being. It is not a distinct legal entity apart from the partners

 Partnership, partner, firm and firm name -  “Partnership” is the relation between persons who have agreed to share the profits of business carried on by all or any to them acting for all. - - Persons who have entered into partnership with one another are called individually “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm name”.

“Business” includes every trade, occupation and profes­sion. . Thus, a ‘partnership’ can be formed only with intention to share profits of business. People coming together for some social or philanthropic or religious purposes do not constitute ‘partnership’.

 Partnership at will  Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is “partnership at will”. Partnership ‘at will’ means any partner can dissolve a firm by giving notice to other partners (or he may express his intention to retire from partnership) - - Partnership deed may provide about duration of partnership or how partnership will be brought to end. In absence of any such term, the partnership is ‘at will’. In case of ‘particular partnership’, the partnership comes to end when the venture for which it was formed comes to end.

Determination of rights and duties of partners by contract be­tween the partners - Subject to the provisions of this Act, the mutual rights and duties of the partners of a firm may be determined by con­tract between the partners, and such contract may be express or may be implied by a course of dealing.  Such contract may be varied by consent of all the partners, and such consent may be express or may be implied by a course of dealing. Thus, partners are free to determine the mutual rights and duties by contract. Such contract may be in writing or it may be implied by their actions.

"Every partner has right to take part in business"

Partnership Deed

“A partnership deed can be defined as a document that is prepared to explain important points so that the chances of clash amongpartners are minimized to a great extent. ”Whenever a partnership is formed, the partners are bound in two kinds of responsibilities. One is the individual responsibility of each partner and the other is the collective responsibility of all the concerned partners.

The acts of partners in normal course of business unite the firm. If the partners work with understanding and collaboration, the company is sure to function flawlessly.

If there is mistrust among them, conflicts are bound to surface every now and then. It is because business is so complex a job that various kinds of decisions are to be taken almost on a daily basis.The past experience of partnership firms show that there are disputes among partners over countless things and this results in the shutting down of the business.

 

So, a partnership deed can be defined as a document that is prepared to explain important points so that the chances of clash are minimized to a great extent. Such a document consists of all the significant clauses like name of the business, contribution of capital, allocation of profit and the like.

Partnership is a document containing all the matters according to which mutual rights, responsibilities and duties of the partners in the carrying out and administration of the matters of the firm are determined. The deed is surely to be signed by all the partners.

A partnership deed can be effected by word of mouth or can be in black and white. In some countries a written accord among partners is indispensable to bind them lawfully whereas in USA such an accord can be oral or on paper.

A written accord should be favored because then nobody can create a row as regards the contents of the deed. There may be disagreements about what was agreed upon earlier if the contents are not presented in writing. A clause mutually agreed to by the partners

should only be made a part of the partnership contract.However if the point of allocation of profit is not addressed to in a deed, each

partner is deemed to get an equal share of profits and is also to bear equal burden in case of loss.

Contents of the Partnership Deed:

*Names of the partners of the firm and their addresses

*Duration of Partnership

*Capital contribution of each Partner and aspects relevant to it like introduction of additional capital, drawings that can be made etc.

*Interests to be paid on Capital, Loans given by partners to the firm, charged on Drawings and the relevant rates of interest

*Aspects relating to salaries, commissions, etc., to be paid to partners

*The ratio in which the profits and losses are to be shared among partners

*Goodwill valuation methodology at the time of incorporating changes in the partnership.

*Rights and Duties of Partners inter se among themselves.
  

*Name of the Bank/Banks where the business banking accounts should be maintained and the person/persons who are vested with the power to operate the accounts.
    

*The person/persons responsible for accounting for the business transactions and the place where the books of accounts are to be kept generally.

"Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.