Name of Course: B.Com.

(Major in Business Administration)

Semester – I
Evolution of Business & Business Environment (BCBA 1.1)
UNIT 02
Co-operative Society: Meaning, Definition, Characteristics, Advantages & Disadvantages;
Principles of Cooperation.
Joint Stock Company: Meaning, Definition, Characteristics, Advantages & Disadvantages;
Formation, Role of Promoters; Difference between Joint Stock Company and Cooperative
Society.

Co-operative Society:-
A Cooperative Society is a voluntary organization of individuals who are mostly workers and small
producers. They are organized under joint management on democratic methods to improve their domestic
and business conditions and capital collection.

A Cooperative Society isn't a brand new concept. It prevails in all of the nations, that is almost a well-
known idea. The Cooperative Society is active in all international locations and is represented in all the
sectors such as agriculture, meals, finance, healthcare, etc. To protect the interests of weaker sections, a
Cooperative Society is formed. It is a voluntary association of people, whose motive is the welfare of the
contributors. Cooperative Society’ is intended to help each other. Thus, cooperatives are those institutions
which are formed for mutual assistance of its members. The cooperative movement is mainly the movement
of the poor. Cooperative organizations are formed to serve their members. The weaker sections of the
society can create such organizations to protect themselves from exploitation through modern means of
production and distributions.

Definition:-

01. A cooperative society is a voluntary association that started with the aim of the 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.
02. A cooperative is an autonomous association of persons united voluntarily to meet their common
economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled
enterprise.

Importance of Cooperative Society

Cooperative institutions that started mainly for the provision of debt have taken many forms today. There
are many cooperative institutions in the country with different sects of people as members.

Cooperative Institutions arrange loans and provide funds to their members at reasonable interest.

Cooperative organizations sell their offerings in Mandis at reasonable prices, thereby avoiding exploitation
by middlemen.

Cooperative milk laboratories collect milk from the villages and sell it in cities and provide the members
with the right price for their milk.
Cooperative stores save people’s money by providing them with the right kind of goods at a reasonable
price and curb arbitrary price collection by traders.

Similarly, Cooperative Housing Societies provide cheap houses to the people. Today, in almost every sphere
of life, cooperative institutions are engaged in the welfare of their members.

Functions of a Cooperative Society

 As it's far from a voluntary association, the club is likewise voluntary. a person is free to enroll in a
Cooperative Society and also can leave whenever as in step with his preference. no matter their faith,
gender & caste, the club is open to all.
 It's far more obligatory for the co-operative society to get registration. The Cooperative Society is a
separate legal identity from society.
 It does not get laid low with the entry or exit of its members.
 There's the restrained liability of the contributors of the co-operative society. liability is constrained
to the quantity of the amount contributed by way of individuals as capital.
 An elected managing committee has the electricity to make selections. contributors have the right to
vote, by way of which they go with the participants who will represent the dealing with the
committee.
 The Cooperative Society works on the precept of mutual assistance & welfare. Hence, the principle
of provider dominates its working. If any surplus is generated, it is dispensed among the contributors
as a dividend in conformity with the bye-laws of the society.

Types of Cooperative Societies

A committee is formed by the organization of people for the manufacturing of goods. This is appropriate at
a place where neither more capital is required nor more technical knowledge. The profit in it avoids going to
the capitalists. Although it is a democratic arrangement of industrial production, it has unfortunately not
been successful in India.

1. Producer Cooperative
To guard the interest of small manufacturers, these societies are set up. The co-operative society
participants can be farmers, landowners, proprietors of the fishing operations. To grow the
advertising and marketing possibilities and manufacturing performance, producers decide to work
together or as separate entities.They perform several sports like processing, advertising &
distributing their own merchandise. This allows for lower prices and traces in every region with a
mutual gain to each producer.

2. Consumer Cooperative Society:

This committee is more popular. Its purpose is to purchase goods directly from the manufacturer and
deliver it to the consumers at a reasonable price. In this way, the middlemen are eliminated through
this committee, benefiting the members of the society. Super-mount cooperative markets have been
opened in the cities to provide goods at reasonable and low prices by the Cooperative Society. They
were initially successful, but later, due to mismanagement, corruption and lack of experience, these
types of markets could not work satisfactorily in most cities.

3. Housing Cooperative Society:

To help human beings with constrained earnings assemble homes at affordable expenses, these
societies are hooked up. Their intention is to solve the housing issues of the participants. A member
 of this society, you obtain the residential residence at a decreased value. They assemble the houses
and provide the option to contributors to pay in installments to purchase the residence. They
construct apartments or offer plots to members on which the individuals themselves can assemble
the homes as in step with their preference. This committee is formed to help the members who need
lands and houses. The society has provided many facilities for these works.

4. Advertising Cooperative Society

With an intention of helping small manufacturers in promoting their products, those societies are
established. The producers who desire to reap reasonable prices for his or her output are the
participants of this society. For securing a favorable marketplace for the goods they cast off the
middlemen and improve the aggressive function of its individuals. It collects the output of character
individuals. diverse advertising features like transportation, packaging, warehousing, and many
others are executed by means of the cooperative societies to sell the product on the best viable
charge.

5. Lander Cooperative Society:

Its purpose is to provide financial assistance to poor and middle-class people in the form of loans.
They can invest that amount in some work which is beneficial for them. This loan is given at the rate
of interest.

6. Cooperative Agriculture:
Its objective is to increase the size of arable land by forming a Cooperative Society by a group of
farmers. In this way, the yield can be increased by using modern equipment in agriculture.

7. Credit Unions
Credit unions are generally member-owned financial cooperatives. Their principle is of people
assisting human beings. They offer credit and economic services to individuals at competitive costs.
each and each depositor has the proper to come to be a member. contributors attend the annual
meeting and are given the right to elect a board of directors.

Advantages of a Cooperative Society

The cooperative shape of enterprise gives the subsequent benefits:

 Smooth to shape- A Cooperative Society is a voluntary affiliation and can be fashioned with not
less than ten person participants. Its registration is very simple and may be executed without a good
deal of criminal formalities.
 Open membership- A club in a cooperative agency is open to everybody having a commonplace
interest. a person can grow to be a member at any time he likes and can depart the society at any
time by returning his stocks, without affecting its continuity.
 Democratic management- A Cooperative Society is controlled in a democratic manner. It's based
on the precept of ‘one man one vote. All contributors have identical rights and may have a voice in
their management.
 Restrained legal responsibility- The legal responsibility of the individuals of a Cooperative Society
is constrained to the volume of capital contributed through them. They must not bear non-public
legal responsibility for the money owed to society.
 Stability- A Cooperative Society has a separate felony existence. It is not tormented by the loss of
life, insolvency, lunacy, or everlasting disability of any of its participants. It has a fairly solid
lifestyle and maintains to exist for a protracted length.
  Low-cost Operations- The operation of a Cooperative Society is quite within your budget because
of the removal of middlemen and the voluntary offerings provided through its individuals.
 Government Patronage- government offers all varieties of assistance to cooperatives, inclusive of
loans at lower prices of hobby and comfort in taxation.
 Monetary blessings- Cooperative societies provide loans for productive purposes and financial
assistance to farmers and other decrease earnings-earning human beings.

Disadvantages of a Cooperative Society:

 The economic power of cooperative societies is low due to the restricted delivery of capital. The
club price is much less as most individuals belong to center and low-income groups. The face value
of shares is also very nominal. Similarly, the mortgage raising capability from nation cooperative
banks is likewise confined. Hence, cooperative societies are incapable of striving for enlargement
because of a shortage of funds.
 Incapable management- The managerial board of a Cooperative Society is elected by using the
contributors. These contributors may not own adequate qualifications and capabilities to run a
business company efficiently. This will show to be a chief drawback for the success of the
Cooperative Society.
 lack of Motivation- Honorary office bearers of the society might also lack the enthusiasm to carry
out their official duties as they get little or no incentive to work difficult. Due to the absence of
hyperlinks between efforts and fabric rewards, the participants may also lack the zest to serve the
agency to the high quality of their abilities. The outcomes of such negatives are sure to expose up in
the functioning of the Cooperative Society.
 inflexible enterprise Practices- Cooperative societies observe conventional modes of sale. They can't
include new-age selling methods which include credit sale, home delivery, discount income, and so
on. Therefore, their inflexible enterprise techniques fail them in competing with non-public
commercial enterprise establishments.
 confined consideration- The cooperative societies are set up for the reason of serving their
participants. income earned via them is very low. As a result, the low return on funding is a
component that demotivates human beings from becoming members of those companies.

 The affairs of a Cooperative Society are brazenly mentioned in meetings. The participants can
independently audit the books and data. Because of the loss of secrecy inside the enterprise affairs,
some loopholes are created inside the organization.
 Undue government Intervention- The daily operations of a Cooperative Society are challenged by
government policies and rules. normal ebook-maintaining, auditing, and inspection of accounts
through the authorities officers are mandatory components of the organization. The reports must be
submitted to the registrar. a majority of these criminal formalities take quite a little time and
therefore inhibit performance.
 Struggle amongst members- The participants of Cooperative Society come from one-of-a-kind walks
of life. often, their views on important issues may also fluctuate from every different, leading to
sturdy resentment and disharmony among them. A few formidable contributors also want to govern
the capabilities of the agency. Blinded by society, for that reason, crippling its efficiency.
Characteristics of Cooperative Society
Based on the above definitions, we can derive the
following characteristics of cooperative organizations.

01. Voluntary association

Everybody having a common interest is free to join a cooperative society. There is no restriction based on
caste, creed, religion, color, etc. Anybody can also leave it at any time after giving due notice to the society.
That is the specialty of any cooperative society. There should be a minimum of 10 members for a
cooperative society, but there is no maximum limit for the membership.

02. Separate legal entity

A cooperative society after registration is recognized as a separate legal entity by law. It acquires an identity
quite distinct and independent of its members can purchase, dispose of its assets, can sue, and also can be
sued.

03. Democratic management

Equalities are the essence of cooperative enterprises, governed by democratic principles. Every member has
got equal rights over the function management of that society.
As such, each member has only single voting right irrespective of the number of shares held or capital
contributed by them.
In the case of a cooperative society, no member detects the terms and conditions of the functioning because
“one man one vote” is the thumb rule.

04. Service motive

The main objective being the formation of any cooperative society is for mutual benefit through self-help
and collective effort. Profit is not at all on the agenda of the cooperative society.
But if members so like, they can take up any activities of their choice to generate a surplus to meet the day-
to-day expenses.

05. Utilization of surplus

The surplus arising from the operation of a business is partly kept in a separate reserve and partly distributed
as dividend among the members.

06. Cash trading

One exception in the cooperative society is that like other businesses; if never go for credit sales. It sells
goods based on cash only.
Hence, the cooperative society hardly comes across financial hardship because of the non-collection of sales
dues. Members can only purchase based on credit, which is an exception to the present rule.

07. Fixed-rate of return

All members are supposed to contribute capital for the formation of a cooperative society or at the time of
joining as a member of the cooperative society.

08. Government control

The government regulates all the cooperative societies of the country through its different rules and
regulations framed from time to time.
Cooperative societies of the country are required to register, and sometimes different State Governments
also frame laws regarding the registration and functioning of cooperative societies for their states.
09. Capital
The capital of the society is raised from its members by way of share capital.
However, the major part of finance is raised by the society by taking a loan from the government or by
accepting grants and assistance from the Central or State Government or from the apex cooperative
institutions like state and cooperative central banks operating in that state.

Principles of Cooperation.

The cooperative principles are guidelines by which cooperatives put their values into practice.

1. Voluntary and Open Membership

Cooperatives are voluntary organisation, open to all persons able to use their services and willing to accept
the responsibilities of membership, without gender, social, racial, political or religious discrimination.

2. Democratic Member Control

Cooperatives are democratic organisation controlled by their members, who actively participate in setting
their policies and making decisions. Men and women serving as elected representatives are accountable to
the membership. In primary cooperatives members have equal voting rights (one member, one vote) and
cooperatives at other levels are also organised in a democratic manner.

3. Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of
that capital is usually the common property of the cooperative. Members usually receive limited
compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for
any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of
which at least would be indivisible; benefiting members in proportion to their transactions with the
cooperative; and supporting other activities approved by the membership.

4. Autonomy and Independence

Cooperatives are autonomous, self-help organisation controlled by their members. If they enter into
agreements with other organisation, including governments, or raise capital from external sources, they do
so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

5. Education, Training, and Information

Cooperatives provide education and training for their members, elected representatives, managers, and
employees so they can contribute effectively to the development of their co-operatives. They inform the
general public - particularly young people and opinion leaders - about the nature and benefits of co-
operation.

6. Cooperation among Cooperatives

Cooperatives serve their members most effectively and strengthen the cooperative movement by working
together through local, national, regional and international structures.

7. Concern for Community

Cooperatives work for the sustainable development of their communities through policies approved by their
members.
 -: JOINT STOCK COMPANY:-

A joint-stock company (JSC) is a business entity in which shares of the company's stock
can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by
their shares (certificates of ownership). Shareholders are able to transfer their shares to others without any
effects to the continued existence of the company.

A joint stock company is a business entity where ownership is divided into shares,
allowing multiple investors to own a part of the company. This structure enables shared financial risk and
facilitates capital accumulation for larger-scale ventures.

The joint stock company is typically established to help a business grow. The company
could not fund itself if only a few shareholders engaged. However, by working together, the individuals can
create a successful firm, with each shareholder anticipating financial gain from the company’s success. Each
participant shares and receives a share of the profit in this way.

Definition :-

01. A company or association consisting of individuals organized to conduct a business for gain and having
a joint stock of capital represented by shares owned individually by the members and transferable without
the consent of the group.

02. “A Joint Stock Company is a voluntary association of individuals for profit, having a capital divided into
transferable shares, the ownership of which is the condition of membership.” —Prof. L.H. Haney.

03. A company is “An associations of many persons who contribute money or money’s worth to a common
stock and employ it in some trade or business, and who share the profit and loss (as the case may be) arising
therefrom.” —James Stephenson.

What is a Joint Stock Company?

A joint stock company is managed by its shareholders, who hold a share that may be freely transferred and
are subject to limited liability. It has a separate legal entity with its own name created by law. Due to their
low cost, joint stock companies were established to assist in the growth of businesses. Joint stock companies
must distribute profits to shareholders in proportion to their shares, unlike other business structures (such as
sole proprietorships or partnerships). Other names for joint stock companies are corporations, public
businesses, and limited companies.

Types of Joint Stock Company

1. Chartered Company
Chartered Companies used to be created before 1844; they are not created today. An organization
incorporated by the king or another head of state is a chartered company. These corporations are typically
found in monarchy-ruled nations; historically, chartered companies held special rights and benefits because
they were established with the aid of a king’s authority. The Bank of England, East India Company, and
British South Africa Company are examples of Chartered Companies.

2. Statutory Company
A particular act of the legislature establishes these companies, a prime minister’s order, or the general
president. The law specifies such an entity’s authority, duties, and responsibilities. These businesses exist to
conduct some important national business.

3. Registered Business
The Corporations Act governs the creation and regulations of companies incorporated under the Companies
Act.

Characteristic:-

Features of Joint Stock Company

01. Separate Legal Entity
The legal identities of a business and its members are distinct, in contrast to a proprietorship or partnership.
After incorporation, the company acquires its own legal identity. Therefore, a corporation’s member is not
responsible for the firm. Similarly, none of the company’s members will be relied upon for business
operations.

02. Limited liability

One of a joint stock company's most appealing qualities is its limited liability. The share price is the sole
limit on the liabilities of the stockholders. For instance, if a business experiences a loss and cannot pay its
creditors, shareholders will only contribute the value of their shares.

03. Incorporation
A company must be established to be regarded as a distinct legal entity and considered to exist. There is no
way around registering a joint stock company. A firm doesn’t exist without incorporation.

04. Perpetual Succession

A Joint Stock Company does not rely on any of its members, unlike a proprietorship business, which
depends only on its single owner. Many changes take place throughout the lifetime of the company. It
includes the arrival and departure of members, the purchase and sale of shares, dividends earned and paid,
etc. Its status as a separate legal entity is closely related to this concept.

05. Number of Members

Specific laws govern the number of members that a corporation may have. The minimum number of
members in a public company is seven, and the maximum number is unlimited. Two or more members are
required to incorporate a private limited company. The same limitations apply to partnerships; a partnership
firm may not have more than ten active participants.

06. Transferable Shares

Every stockholder has the option of trading their shares with other prospective investors.

Advantages and Disadvantages

Advantages :-

 Limited Liability: Shareholders' liability is limited to the amount they have invested in the company.
Their personal assets are protected from the company’s debts and obligations.
 Access to Capital: Joint stock companies can raise significant amounts of capital by issuing shares to the
public. This is particularly beneficial for large-scale business operations requiring substantial investment.
 Perpetual Existence: The company’s existence is not affected by changes in ownership or the death of
shareholders. It continues to operate regardless of who owns its shares.
 Transferability of Shares: Shares in a joint stock company can be easily bought and sold, providing
liquidity and enabling investors to enter or exit the company without impacting its operations.
 Professional Management: With greater access to resources, joint stock companies can afford to hire
professional managers and executives to run the company efficiently, leading to better decision-making and
strategic planning.
 Economies of Scale: The large scale of operations in joint stock companies allows for economies of
scale, reducing costs per unit and increasing profitability.
 Public Confidence: Being regulated by government bodies and required to disclose financial information
enhances transparency and builds public trust, making it easier to attract investors.
 Diversification of Risk: The risk is spread among a large number of shareholders, reducing the impact on
any single investor.
 Expansion Opportunities: With greater access to capital, joint stock companies have more opportunities
for expansion and growth, both domestically and internationally.
 Credibility and Creditworthiness: Joint stock companies often enjoy higher credibility and
creditworthiness with banks and financial institutions, facilitating easier access to loans and credit.

Disadvantages:-

 Complexity and Cost of Formation: Establishing a JSC is more complex and costly compared to other
business structures. It involves lengthy legal procedures, regulatory requirements, and significant initial
capital.
 Regulatory Compliance: JSCs are subject to strict regulatory compliance and reporting requirements.
This includes regular financial disclosures, annual general meetings, and adherence to corporate governance
norms, which can be burdensome and expensive.
 Double Taxation: In many jurisdictions, JSCs face double taxation. The company's profits are taxed at
the corporate level, and dividends distributed to shareholders are taxed again at the individual level.
 Lack of Control: For the original founders, maintaining control can be challenging. Shareholders,
especially large institutional investors, can influence or even override management decisions.
 Disclosure of Information: JSCs are required to disclose a significant amount of information publicly,
which can lead to a lack of privacy. Competitors can access sensitive financial and strategic information.
 Management and Agency Issues: There can be a separation between ownership and management, leading
to potential conflicts of interest. Managers may not always act in the best interests of shareholders, a
problem known as the principal-agent issue.
 Complexity in Decision Making: With a large number of shareholders and possibly a large board of
directors, decision-making can become slow and complicated. Reaching a consensus on important issues
can be difficult.
 Vulnerability to Market Fluctuations: The value of a JSC is heavily dependent on market conditions.
Economic downturns, market speculation, and changes in investor sentiment can lead to significant
fluctuations in the company's stock price, impacting its stability.
 Legal Restrictions: JSCs are subject to a variety of legal restrictions and constraints, including those on
the types of business activities they can engage in and the ways they can issue and trade shares.

FORMATION OF Joint Stock Company

A Joint Stock Company (JSC) is a business entity where the capital is divided into shares, which can be
bought and sold by shareholders. The formation of a JSC involves several steps, typically including:

1. Preliminary Steps:
o Idea and Feasibility: Determine the business idea and conduct a feasibility study.
o Promoters: Identify promoters who will undertake the process of forming the company.
 o Name Approval: Choose a unique name and get it approved by the relevant authority (e.g.,
Registrar of Companies).

2. Drafting Documents:
o Memorandum of Association (MoA): This document outlines the company's objectives,
scope of activities, and the capital structure.
o Articles of Association (AoA): This document defines the internal rules and regulations for
the management of the company.

3. Filing with the Registrar:

o Application Submission: Submit the MoA, AoA, and other required documents to the
Registrar of Companies.
o Statutory Declaration: Provide a statutory declaration by a lawyer or director stating
compliance with all requirements.
o Registration Fees: Pay the required registration fees.

4. Incorporation:
o Certificate of Incorporation: Once the Registrar is satisfied with the documents, a Certificate
of Incorporation is issued. This certificate signifies the legal existence of the company.

5. Post-Incorporation:
o Share Allotment: Allot shares to the initial shareholders.
o Board of Directors: Appoint the first directors of the company.
o Bank Account: Open a corporate bank account.
o Compliance: Ensure compliance with ongoing legal and regulatory requirements, such as
holding annual general meetings and filing annual returns.

6. Public Offering (if applicable):

o If the company plans to go public, it must comply with additional regulations, such as
registering with the securities exchange and preparing a prospectus.

Role of Promoters:-

Key Roles and Responsibilities of Promoters

1. Conception and Planning:

o Idea Generation: Promoters are often the originators of the business idea. They identify a
market need or opportunity and conceptualize a viable business model.
o Feasibility Study: They conduct initial research to determine the feasibility of the business
idea, including market research, financial analysis, and risk assessment.
2. Formation and Registration:
o Legal Formation: Promoters take the necessary steps to legally form the company. This
includes drafting the Memorandum of Association (MoA) and Articles of Association (AoA),
and filing these documents with the relevant regulatory authorities.
o Regulatory Compliance: They ensure that all legal and regulatory requirements are met for
the establishment of the company, such as obtaining necessary licenses and permits.
3. Raising Capital:
o Funding: Promoters are responsible for securing the initial capital required to start the
business. This can involve personal investment, securing funding from investors, or
arranging loans from financial institutions.
 o Issuance of Shares: They may also be involved in the issuance of shares to the public if the
company is going public. This includes setting the initial share price and managing the Initial
Public Offering (IPO) process.
4. Setting Up Operations:
o Infrastructure: Promoters oversee the setup of the company's infrastructure, including office
space, manufacturing facilities, and technology systems.
o Recruitment: They often play a key role in hiring the initial team, including key executives
and employees.
5. Strategic Direction:
o Vision and Mission: Promoters establish the company’s vision, mission, and long-term
strategic goals.
o Business Development: They are actively involved in business development activities,
including forming strategic partnerships and alliances.
6. Corporate Governance:
o Board of Directors: Promoters may appoint the initial board of directors and set up
governance structures.
o Policy Formulation: They help in formulating key policies and procedures for the company.

Types of Promoters

1. Professional Promoters: These are individuals or entities that specialize in promoting companies.
They are often hired for their expertise in starting and developing businesses.
2. Occasional Promoters: Individuals who promote a company occasionally, often entrepreneurs who
start companies based on their own business ideas.
3. Financial Promoters: Entities such as venture capitalists or private equity firms that provide the
necessary capital for the establishment of the company.

Legal Responsibilities and Liabilities

Promoters have certain legal responsibilities and can be held liable for their actions during the formation of
the company. These include:

1. Fiduciary Duty: They must act in the best interests of the company and its future shareholders.
2. Disclosure: They must fully disclose any personal interests or conflicts of interest in transactions
involving the company.
3. Misrepresentation: Promoters can be held liable for any misrepresentation or fraud during the
promotion of the company.

Difference between Joint Stock Company and Cooperative Society.

Aspect Joint Stock Company Cooperative Society

Ownership Owned by shareholders who hold shares Owned by members who contribute capital
in the company. and share the benefits.
Objective Primarily profit-oriented. Service-oriented with the aim of mutual
benefit for members.
Membership Open to the public; shares can be bought Open membership; anyone can join based on
 by anyone common interests.
Control Controlled by shareholders through Democratic control; each member typically
voting at general meetings. has one vote regardless of capital
contribution.
Profit Profits are distributed as dividends to Profits are distributed among members based
Distribution shareholders based on their shareholding. on their participation or patronage.
Management Managed by a Board of Directors elected Managed by a Board of Directors elected by
by shareholders. members.
Liability Limited liability; shareholders' liability is Limited liability; members' liability is limited
limited to their shareholding. to their capital contribution.
Legal Status A separate legal entity distinct from its A separate legal entity distinct from its
shareholders. members.
Formation Requires registration under the Requires registration under the Cooperative
Companies Act. Societies Act.
Capital Raised through the sale of shares to the Raised through member contributions and
public. sometimes borrowing.
Voting Rights Proportional to the number of shares One member, one vote regardless of the
held. capital contributed.
Transfer of Shares can be freely transferred in the Transfer of shares usually requires approval
Shares stock market. from the society and is often restricted.
Purpose To maximize shareholder wealth. To provide services and support to members.
Regulation Governed by the Companies Act and Governed by the Cooperative Societies Act
other related laws. and other related laws.

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