Features & Sacco Leadership

Characteristics of cooperative societies

Characteristics of cooperative societies: Different Types of Cooperative Societies: Roles of a member in a cooperative society: How to Name Your Co-Op: How to Form a Steering Committee: responsibilities of a steering committee in a cooperative society: How to attract new co-op members

Cooperative societies are a unique type of business organization designed to benefit their members, especially those from less privileged backgrounds. These societies aim to protect their members from exploitation by wealthier segments of society. Here’s an overview of what makes cooperative societies distinct and how they operate:

To operate legally, cooperative societies must be registered under the Cooperative Societies Act of 1912. Members of the society contribute the capital needed to fund the organization.

Characteristics of Cooperative Societies

  1. Voluntary Association

Membership in a cooperative society is entirely voluntary. Individuals choose to join and can also leave if they wish, provided they give proper notice. This freedom allows people to engage with the cooperative at their discretion.

2. Open Membership

Cooperative societies are inclusive and open to all individuals, regardless of caste, creed, or religion. This open membership ensures that anyone who wants to participate can do so.

3. Registration

For a cooperative society to be recognized as a legal entity, it must be registered. Once registered, it can enter into contracts and own property in its own name.

4. Limited Liability

Members of a cooperative society have limited liability, which means they are only responsible for debts up to the amount they have invested. This limits their financial risk.

5. Democratic Management

Cooperative societies operate on a democratic basis. Members elect a managing committee to make decisions about the society’s operations. Each member has an equal vote, reflecting the cooperative’s commitment to democratic governance.

6. Service Motive

A cooperative society’s primary goal is to serve its members’ needs, particularly those from weaker sections of society. Any profits earned by the society are shared among the members as dividends.

7. State Supervision

The state government regulates and supervises cooperative societies to protect members’ interests. They are required to maintain proper accounts, which are audited by an independent auditor to ensure transparency and accountability.

 

Andrew Walyaula
Author: Andrew Walyaula

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

Andrew Walyaula

About Author

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

Leave a Reply

You may also like

Factors to consider before taking a loan in Kenya: The risks of being a guarantor: what you need to know: SACCO Loan Requirements
Features & Sacco Leadership

Factors to consider before taking a loan in Kenya

The surge in borrowing activities across Kenya highlights a growing inclination towards loans among its populace. With an array of
What is the importance of credit policy in Saccos: Benefits of Sacco membership for small business owners: How to increase Sacco membership: Why Sacco loans are cheaper: Factors contributing to member exits from SACCOs: How to exit from a SACCO
Features & Sacco Leadership

Why Sacco loans are cheaper and more accessible

Kenyan individuals and households are increasingly turning to Saving and Credit Cooperative Organisations (Saccos) and microfinance banks for loans, rather
error: Content is protected !!
×