A cooperative is a private business organization that is owned and controlled by the people who use its products, supplies or services. Although cooperatives vary in type and membership size, all were formed to meet the specific objectives of members, and are structured to adapt to member’s changing needs. Cooperatives are formed by individuals who coordinate among themselves (horizontal coordination) to achieve vertical integration in their business activities.

Although people have been working together for their mutual benefit throughout human history, the cooperative form of business organization began during the Industrial Revolution. Cooperatives were useful for promoting the interests of the less powerful members of society. Farmers, producers, workers, and consumers found that they could accomplish more collectively than they could individually.

Co-operation is democracy in action. The business of co-operative society is generally managed by a committee elected by the members at annual general meeting. Since most of the co-operatives operate on a local scale, the meetings of the members are well attended, and this puts the managing committee under a lot of close supervision.

‘One man one vote’ is the basic element of co-operative democracy. But in a cooperative, one member may have 10,000 shares and the other only 1 share, but each would command one vote only and no proxies would be permitted.

This is the first cardinal principle of co-operation. A person who has a common interest and is prepared to be abide by the rules of the society has the right to join the society as and when he wishes to do so, continue in it as long as he likes, and leave it at his will. On leaving the society, shares are not transferable to other persons, although they are automatically transmitted to heirs on the death of a member.

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