Question:
Explain the meaning, features, merits and demerits of cooperative society.
Answer:
A cooperative society is a voluntary association of persons of moderate means, who unite together to protect and promote their common economic interests.
Features:
- Voluntary association: Everyone having a common interest is free to join a cooperative society and can also leave the society after giving proper notice.
- Legal status: Its registration is compulsory and it gives it a separate identity.
- Limited liability: The liability of the member is limited to the extent of their capital contribution in the society.
- Democratic control: Management and control lies with the managing committee elected by the members by giving vote. Every member has one vote irrespective of the number of shares held by him.
- Service motive: The main aim is to serve its members and not to maximize the profit.
- State control: They have to abide by the rules and regulations framed by government for them.
- Distribution of surplus: The profit is distributed on the basis of volume of business transacted by a member and not on the basis of capital contribution of members.
Merits:
- Ease of formation: It can be started with minimum of 10 members. Registration is also easy as it requires very few legal formalities.
- Limited liability: The liability of members is limited to the extent of their capital contribution.
- Stable existence: Due to registration it is a separate legal entity and is not affected by death, lunacy or insolvency of any of its members.
- Economy in operations: There is economy in operation due to elimination of middle man and voluntary services provided by its members.
- Government support: Government provides support by giving loans at lower interest rates, subsidies and by charging less taxes.
- Social utility: It promotes personal liberty, social justice and mutual cooperation. They help to prevent concentration of economic power in a few hands.
Limitations:
- Shortage of capital: It suffers from shortage of capital as it is usually formed by people with limited means.
- Inefficient management: Cooperative society is managed by elected members who may not be competent and experienced. Moreover it can't afford to employ expert and experienced people at high salaries.
- Lack of motivation: Members are not inclined to put their best efforts as there is no direct link between efforts and reward.
- Lack of secrecy: Its affairs are openly discussed in its meeting which makes it difficult to maintain secrecy.
- Excessive government control: It suffers from excessive rules and regulations of the government. It has to get its accounts audited by the auditor and has to submit a copy of its accounts to registrar.
- Conflict among members: The members are from different sections of society with different view points. Sometimes when some members become rigid, the result is conflict.
Forms of Business Organisation
Q 1.
X is interested in the floatation of a company. Briefly discuss the steps he should take.
Q 2.
What is the role of Karta in Joint Hindu Family business?
Q 3.
Compare the status of a minor in a Joint Hindu Family Business with that in a partnership firm.
Q 4.
What is meant by ˜partner by estoppel'? Explain.
Q 5.
Define promoter. What are the functions of a promoter?
Q 6.
Explain meaning, features, merits and demerits of Sole Proprietorship.
Q 7.
Explain different types of partners.
Q 8.
Explain procedure of registering a partnership firm.
Q 9.
Explain procedure of registering a partnership firm.
Q 10.
Explain meaning, features, merits and demerits of partnership firm.
Q 11.
What are the steps required for raising funds from public?
Q 12.
Explain meaning, features, merits and demerits of joint stock company.
Q 13.
What do you mean by incorporation of a company? What are the steps involved in corporation of a company?
Q 14.
State the important privileges available to a private company.
Q 15.
Discuss the characteristics, merits and limitations of the cooperative form of organization. Also describe briefly different types of cooperative societies.
Q 16.
For which of the following types of business do you think a partnership firm of organization would be more suitable, and why?
(i) Grocery store (ii) Medical store
(iii) Legal consultancy (iv) Craft centre
(v) Internet cafe (vi) Chartered accountancy firm
Q 17.
Define Articles of Association. What are its contents?
Q 18.
Explain the contents of Memorandum of Association.
Q 19.
Is registration of partnership firm compulsory? What are the consequences of non-registration?
Q 20.
Distinguish between a Joint Hindu family business and partnership.
Q 21.
What do you understand by a.sole proprietorship firm? Explain its merits and limitations.
Q 22.
Despite limitations of size and resources, many people continue to prefer sole proprietorship over other forms of organization. Why?
Q 23.
Distinguish between a Joint Hindu family business and partnership.
Q 24.
Explain the concept of mutual agency in partnership with suitable example.
Q 25.
For which of the following types of business do you think a sole proprietorship firm of organization would be more suitable, and why?
(i) Grocery store (ii) Medical store
(iii) Legal consultancy (iv) Craft centre
(v) Internet cafe (vi) Chartered accountancy firm
Q 26.
Explain the meaning, features, merits and demerits of cooperative society.
Q 27.
Explain different types of partners.
Q 28.
Explain the following terms in brief:
(i) Perpetual succession (ii) Common seal
(iii) Karta (iv) Artificial person
Q 29.
If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.
Q 30.
How does a cooperative society exemplify democracy and secularism? Explain.
Q 31.
Why is partnership considered by some to be a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.
Q 32.
Differentiate between:
- Memorandum of Association and Articles of Association.
- Private and Public Company
