Co-Operative Organizations

Co-Operative Organizations

You are aware of the importance of co-operation and team spirit in every sphere of life. One form of business organization which truly practices co-operative efforts is Co-operative organizations.
The Co-operative organizations are formed on the basis of equality for the promotion and furtherance of common economic interest.
The International Labour Organisation had defined a Cooperative organization as “an association of persons who have voluntarily jointed together to achieve a common economic end through the formation of a democratically controlled organization, making equal contributions to the capital required and accepting a fair share of risks and benefits of the undertaking”.
Service, Co-operative joint action and Self-help are the essence of a co-operative organization. Co-operative Societies must have at least ten members and must be registered under Cooperative Societies Act’. Examples of Co-operative organizations are Credit Co-operative societies, Consumers’ Cooperative organizations, Producers’ Co-operative organisations .


1. This is a democratic and secular form of business organisation. Poor and Persons of limited means can improve their economic conditions
2. Co-operative organizations remove the evils of monopoly and concentration of wealth and power
3. The liability can be limited and separate legal status may be enjoyed.
4. Privileges and exemptions in the form of tax concessions, lower stamp duty etc., are accorded to this form of business organisations.


1. Co-operative organizations can not raise capital for large scale operations
2. Since the very basis is democratic way of managing, business secrecy can not be maintained.

Public Enterprises

Public enterprises aim at public service in the public utility areas. They are expected to stabilize the supplies of essentials. The strategic and basic industries are taken care by Government only.
Public sectors are there in the industrial line to have rapid and balanced economic development. I am sure that you would be able to imagine the evils, if only non-governmental organizations whose aim is only profit maximization, are there.
Public Enterprises are managed in the following ways:
1. Government Department
2. Public Corporation
3. Government owned Joint Stock Company
4. Mixed-ownership Corporations
1. Government Department – A separate department in the government manages this form of organization which normally caters to the public utility. Examples of this type of organizations are Post and Telegraph, Broadcasting, Railways and Defence industries etc. The minister in-charge of the particular department controls the enterprise. This form is adopted where secrecy and strict control are needed in the areas like defence and strategic industries.
2. Public Corporation – A public corporation is an artificial legal person created by a special Act which sets out the powers and functions. Public Corporations have financial independence and clear jurisdiction over a specific area, industry or commercial activity. A chosen Governing board manages the affairs of the organization. It enjoys the internal autonomy with no interference from government. Not only its formation is elaborate, any amendment also to be done by amending the Special Act and hence rigid. Public corporations are presently found in insurance, finance, industry, mining, transport, trade etc.
3. Government owned Joint Stock Company – The entire capital or 51 per cent or more of the share capital is owned by the Central and/or State Government. The concerned ministry performs the functions of shareholders and exercises control over the operations of the company. All or majority of the directors are nominated by the Government.
One or few shares are in the name of the officials to take care of legal needs. This form of organization is more autonomous than Public Corporation
4. Mixed ownership corporations – This is a form of partnership between public sector and private sector