Cooperative Society

What is a cooperative society?

The cooperative society is a type of mercantile society made up of a group of people who, with common interests, satisfy individual and collective needs, through the realization of activities of production, distribution Y consumption of goods and services.

Cooperative values ​​are those of mutual help, equal rights between partners, equity in the distribution of surpluses, solidarity, honesty Y transparency, among others.

Characteristics of the cooperative society

The main characteristics of a cooperative society are the following:

• Has own legal status, different from that of its partners.
• Except as determined in the statute, the partners they will not respond jointly and severally with their assets to debts contracted by the company.
• All members have the right to one vote at assembly meetings.
• The cooperative society must be constituted by means of a Public deed.
• The company name of the cooperative society will be formed by the name of the company followed by "cooperative society", or its abbreviation "S. Coop. '
• The minimum capital of the cooperative must be established in the statute and paid by each of the partners, from the day of its constitution.

Types of cooperative societies

Cooperative societies can be classified as:

• Cooperative societies of the first degree: those where the partners are natural persons. Among the best known are cooperatives of associated work, housing, services, transport, etc.
• Second degree cooperative societies: they are called this way when the partners that make up the company are, in turn, other cooperatives (homogeneous). In some cases it may include the incorporation into the company of natural persons (heterogeneous).

Advantages and disadvantages of the cooperative society

Advantage

The advantages of a cooperative society are the following:

• They are democratically managed by their partners.
• The costs incurred by the company are shared by the partners, according to their capital contribution.
• All members are responsible for the society and must collaborate in its administration.
• The partners are involved in the production of goods and services, along with their sale and distribution, so communication tends to be effective and generate rapid adjustments in production and commercial processes, when necessary.

Disadvantages

The disadvantages of a cooperative society are as follows:

• They tend to have difficulties when accessing sources of financing, since the general organization of the company is shared between several partners.
• Decisions are shared by all partners instead of being centralized by one person. Although, a priori, this is a positive and democratic characteristic, when time is short, it tends to hinder the normal functioning of society.
• The partners usually have other paid jobs where they have to fulfill a fixed schedule, which sometimes makes it difficult to carry out the management of the company.
• If the company is not generating profits, the members of the cooperative will not be able to obtain income from the work carried out in it.

Examples of cooperative societies

Some examples of this type of organization are:

• Cooperative Society of electricity.
• Cooperative Society agricultural.
• Cooperative Society of insurance.
• Cooperative Society of emergency services and nursing.
• Cooperative Society of job (in activities such as fishing, metallurgy, transportation, food).
• Cooperative Society bank (Banco Credicoop in Argentina).