Welcome to Class !!
We are eager to have you join us !!
In today’s Commerce class, We will continue learning about Co-operative Societies. We hope you enjoy the class!
FEATURES OR CHARACTERISTICS OF CO-OPERATIVE SOCIETIES
- Perpetual existence
- Minimum of two members and no maximum limit to the number of members
- Liability to the members is limited to the shares held
- Members buy shares to contribute the initial capital; extra capital may be raised in from members in the form of loans
- Shares are not transferable but can be withdrawn or added to at any time
- Democratic in nature
- Profit (surplus) is shared based on patronage
- It is a separate legal entity
- Control is in the hands of a management committee elected by members
- The objective of co-operative society is to promote members interest.
ADVANTAGE OF CO-OPERATIVE SOCIETIES
- It encourages thrift and saving habits among members
- There is democracy inherent in its control and management
- Loans are more easily obtained by members
- Perpetual existence: i.e. death of members cannot bring the society to an end
- It facilitates improvements in member’s standard of living
- Helps in marketing members products
- They encourage investments
- They encourage the production of high standard products
- They could easily obtain loan facilitates from banks or government agencies
- They are very prominent in consumer protection activities
DISADVANTAGES OR PROBLEMS OF CO-OPERATIVES SOCIETIES
- Problems of loan recovery – Loan recovery is difficult and in some instances even impossible.
- Inefficient Management – Member elected to manage the business may lack experiences.
- Inadequate Capital – This occurs as a result of the prevalence of low-income earners in their membership
- Misappropriation and embezzlement of funds
- High level of illiteracy among members
- Indiscriminate enrolment of members
SIMILARITIES BETWEEN CO-OPERATIVES SOCIETIES AND LIMITED LIABILITY COMPANIES
- Both are legal entities
- Members buy shares
- They hold Annual General Meetings (AGM)
- Both are registered
- The shareholders (members) receive dividends
- Both have perpetual existence
DIFFERENCE BETWEEN CO-OPERATIVE SOCIETIES AND LIMITED LIABILITY COMPANIES
|Points||Co-operatives Societies||Limited Liability Companies|
|1.||Formation||Registered under Co-operative law of the ministry of commerce||Incorporated under CAMA 1990
|2.||Management||By elected Management committee||By elected Board of Directors|
|3.||Distribution of Profits||On Patronage basis||In proportion to the number of shares held|
|4.||Members voting rights||Equal||On the basis of their shareholding|
|5.||Aim||To promote members welfare||To maximize profits|
SOURCES OF CAPITAL/FINANCE FOR A CO-OPERATIVE SOCIETY
- Voluntary contributions of members
- Retained profits (ploughed – back profits)
- Fines and other special levies
- Loans from banks
- Loans from government agencies and independent agencies (e.g. N. G. O’S)
- Loans from umbrella bodies such as credit unions etc
- State and explain five services rendered by co-operative societies to their members
- Give five main similarities and differences each between a retail co-operatives society and a public limited company
GENERAL EVALUATION QUESTIONS
- Explain five benefits that would be derived when a sole trader admits other partners
- State five features common to both public and private limited companies
- State five provisions of a memorandum of association
- State five disadvantages of international trade
- Explain five measures a country can take to solve its balance of payments problems
- Name the five major types of business units
- State four problems of retail co-operative in Nigeria
Essential Commerce for SSS by O. A. Longe Page 166 – 172
We have come to the end of this class. We do hope you enjoyed the class?
Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.
In our next class, we will be learning about Public Societies. We are very much eager to meet you there.
LEARN TO CODE IN 8 WEEKS. Pay Only ₦25000 To Join Class💃
Access Fun Video Lessons to Pass WAEC, NECO, JAMB, POST-UTME in One Sitting💃