What is a Co-operative and what are its Salient Features? What are the types of Co-operative?

What is a Co-operative?

According to the International Co-operative Alliance, cooperative has been defined as 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.

Salient Features are as follows:

1. The membership to any co-operative is voluntary and a person is free to join a co-operative society and can also leave at any time as per their convenience. The membership into a co-operative society is open to all irrespective of gender, religion and caste. 
2. It is mandatory that the co-operative is registered to initiate its operations. The legal identity of a co-operative society is different from that of a society.
3. The functioning of a co-operative is not affected by the entry or exit of its members.
4. With a limited liability of the members of co-operative,they are liable only to the extent of their amount contributed by the members as capital.
5. The Managing Committee elected has the power to take decisions. Each member of the Co-operative has the right to vote to elect members constituting the managing committee. 
6. The cooperative society works on the principle of mutual help & welfare. Hence, the principal of service dominates it’s working. If any surplus is generated, it is distributed amongst the members as a dividend in conformity with the bye-laws of the society.

Types of Co-operative:

1. Retail Co-operatives or Marketing Co-operatives

Retail Co-operatives are established with an aim of helping small producers in selling their products, who wish to obtain reasonable prices for their output are the members of this society. Elimination of middlemen to improve the competitive market position of the products for its members, it collects the output of its individual members. Various marketing functions like transportation, packaging, warehousing, etc. are performed by the cooperative societies to sell the product at the best possible price.

2. Producer Co-operatives

A Producer co-operative is set up to protect the interest of small producers. The co-operative society members maybe it farmers, landowners, owners of the fishing operations. Producers decide to work together or as separate entities, to increase the marketing possibilities and production efficiency. They perform several activities like processing, marketing and distributing their own products. This helps in lowering costs and economic strains in each area with a mutual benefit to each producer. 

3. Service Co-operatives or Consumer Co-operatives

A Consumer Co-operative is owned and governed by the consumers of a particular area for their mutual benefit with a view to provide daily necessary commodities at an optimum price. Their aim is to provide services to the consumers rather than earning pecuniary profit.

4. Housing Co-operatives

Housing Co-operatives are established to help people with limited income to construct houses at reasonable costs. A member of this society aims to procure the residential house at a lower cost. In order to purchase a house, the co-operative construct the houses and give the option to members to pay in instalments. 

5. Credit Unions

Credit Unions are member-owned financial co-operatives. They provide credit and financial services to the members at competitive prices. Every depositor has the right to become a member. The democratic function of electing a Board of directors also lay in the hands of the members during the annual meeting.