Co-operative is a voluntary association of persons who join together to safeguard their own interests. The primary object of forming a society is to protect economically, the weaker section of the society the following principles of cooperative society should be followed:
Principles of cooperative society
- Unity: Unity is strength” is the main principle of co-operative society and based on this principle a society is formed. Each and every member should have the mentality to work together to serve their own interest.
- Co-operation: Members help each other. Every member is requiring working in such way that his efforts should provide maximum benefit to other members.
- Honesty: For the development of the organization every member should be sincere and honest. The members of the managing committee should be dedicated to the development of the society.
- Trust and confidence: Trust and confidence are related to honesty. The members should have mutual trust in others.
- Democracy: The members should have respect for democratic rules and regulations of the organization. For this reason, they elect the board of directors for running the society.
- Equality: Equality is the essence of co-operative undertakings, irrespective of the number of shares held.
- Friendship: The members should have friendly mentality among themselves. They should minimize unhealthy competition.
- Economy: It is an organization of people of lower income. It cannot raise its capital in huge amounts like other business organizations. It should follow the principle of economy to control the cost of the organization.
- Peace and discipline: The members should maintain peace and discipline for the development of the organization.
- Stability: A co-operative organization is for poor and lower class people. The organization should be stable in nature to earn the profit for the society.
- Service: The co-operative society provides service to the members of the society. The formation of a co-operative organization is based on service motive rather than the profit motive.
- Voluntary association: A co-operative organization is totally based on voluntary membership. Persons having common interests can join as members.
- Distribution of surplus: A co-operative society does not distribute its entire surplus in the form of a dividend on shares held by its members. One-fourth of the surplus is transferred to the statutory reserve fund and the other three-fourths are used to pay a dividend on share capital.
- Neutrality: The membership of a co-operative society is open to all, irrespective of religion, caste, political affiliation and beliefs.
Other Content of Co-operative Society:
- Definition of Co-operative Society
- Characteristics / Features of Co-operative Society
- Objectives of Co-operative Society
- Different Types of Co-operative Society