A cooperative society is a voluntary association of individuals who come together to achieve common economic objectives and solve common problems. The members jointly own and democratically operate the business to provide services to members. There are different types of cooperative societies that help consumers, producers, or provide financial services. Cooperative societies benefit from being voluntary organizations, having open membership, democratic control, eliminating middlemen profits, and providing stability for members. However, they also face limitations such as management problems, limited capital, lack of commitment from members, and lack of cooperation.

1. Cooperative Society

2. Meaning
It is a VOLUNTARY group of
people.
They have COMMON
problems.
They join together to solve
their problems.
Main aim is to protect the
members.

3. Characteristics of a cooperative society(VVOSSM)
a. Voluntary association : A member can join the society as and
when he likes.
b. Open Membership :Membership open to all who have common
interest.
c. Separate Legal Entity : A cooperative society must be registered
under the COOPERATIVE SOCIETIES ACT 1912 or
under the cooperative Societies Act of the State
government
d. Source of Finance : The capital is raised from the members in the
form of share capital
e. Motive : Main aim is SERVICE MOTIVE
f. Voting Power : Each member may hold many shares but he/she has
only one vote

5. Types of Cooperative Societies
• Consumer’s Cooperative Society:
It helps the consumers.
It makes consumer goods available at fair(not very high) prices.
Eg. Apna Bazaar, Super Bazar

6. • Producer’s Cooperative Society:
It helps the producers.
It makes available items needed for production
like raw materials, tools, machinery etc.
Eg APPCO, Haryana Handloom etc

7. • Marketing Cooperative society:
It helps producers and manufacturers
to sell their products.
They collect products from the producers.
Then they arrange to sell them in the market.
Eg. Gujarat Co-operative Milk Marketing Federation
that sell Amul milk products.

8. • Thrift and Credit Cooperative Society:
It gives financial help to its members.
It accepts deposits.
Grants loans at reasonable rates.
Eg. Urban Cooperative Bank.
• Cooperative Group Housing Societies:
These are residential societies.
They provide residential houses to members.
They purchase land, construct houses and allots the houses.

9. Consumer
Cooperative
Society
Producer
Cooperative
society
Marketing
Cooperative
Society
Thrift and
Credit
Cooperative
Society
Cooperative
Group Housing
Society
Help Consumers Help
Producers
Helps Producers
and
Manufacturers
Give
Financial
Help to
members
Helps Members
of a Housing
society
Makes goods
available at fair
price
Makes items
available for
production
Collect products
from producers
and sells them
in the market
Accepts
deposits
Grants loans
at
reasonable
rates
Provides housing
to members
E.G. Apna Bazaar E.G. APPCO E.G. AMUL E.G. Urban
Cooperative
bank
E.G. Any housing
Society

10. Advantages of a cooperative society (VO(T)DES)
• Voluntary Organisation
• Open Membership
• Democratic control (Voting system)
• Elimination of Middlemen’s Profit (No middle men)
• Stable Life

11. Limitations
• Problems in Management
• Limited Capital
• Lack of Motive
• Lack of Commitment
• Lack of co-operation

12. Fill in the blanks with suitable word(s) in the following statements:
i. A co-operative society is a _______ association of individuals who
come together to achieve common _______ objectives.
ii. The motive(aim) of cooperative society is to provide ________ to the
members.
iii. A cooperative society have separate ________ from the members.
iv. Consumers’ co-operative societies help to eliminate _______ in the
process of distribution goods.
v. Apna Bazar and Kendriya Bhandar are example of _____ co-operative
societies.
(i) Voluntary , Economic (ii) Services (iii) Legal entity (iv) middlemen (v)
Consumer

13. JOINT STOCK COMPANY

14. Meaning
The companies in India are governed by the Indian
Companies Act 1956.
A Joint Stock Company is an
- artificial person created by law,
- having separate legal entity, (company is separate
from its members)
- perpetual succession,(not affected by death of a
member
- and common seal 9being an artificial person it
cannot sign for itself)

15. • In a partnership, there can be a maximum of 20 people.
• Because of this limit, the amount of capital that can be generated is
limited.
• Also, because of the unlimited liability of partnerships, the partners
may be discouraged from taking huge risks and further expanding
their business.
• To overcome these problems a public or a private company may be
formed.
• Private and public companies are much better investments because
of “Limited liability”. This means that if an investor has invested
Rs.1000/- in a particular company, and the company goes bankrupt,
the investor only looses the money he has invested. To pay of the
debt, the investors property, bank accounts etc. are "not" used.
• Because of this limited liability, many investors are interested in
investing in these private or public companies. Hence, a large capital
can be generated and a huge business can be run.
• The major disadvantage of Private and Public companies, is that they
have a costly and elaborate process of setting up.
• They are also closely regulated by the government.

16. • What this means is that, the company “is
different” from the investors. The investors
put in money and capital is raised. But the
company is treated as a virtual person. The
company is treated as a person who is
different from it’s investors. The company has
an identity of it’s own. If some one sues the
company, he does not sue the investors, he
sues the virtual person that is the company.
http://www.indiahowto.com/understanding-joint-stock.html

17. Types of Companies

18. • On the basis of ownership companies are of
four types:-
• i) Private Limited Company
• ii) Public Limited Company
• iii) Government Company
• iv) Multinational Company

19. Features of Private Limited Company
Capital - Has a minimum capital of 1 lakh.
Members - Maximum 50 members
- Does not allow its members to transfer their
shares.
- Cannot raise money from the public.
- Can accept deposits only from its members,
directors or their relatives.

20. Features of Public Limited Company
Shares - Its shares can be transferred freely.
Capital- Has a minimum capital of 5 lakhs.
Members have limited liability.
Members : Minimum number of shareholders
is 7
Maximum number of shareholders
up to the number of shares issued.

21. Private Limited and Public Limited Company
Basis Pvt Ltd Public Ltd
1. Membership Min 2 Max 50 Min 7 Max unltd
2. Capital Min 1 Lakh Min 5 Lakh
3. Share Transfer not allowed freely transferable
4. Raising Funds cannot raise can raise
5. Directors Min 2 Min 3
6. Time of Commencement after getting cert after getting
Of incorporation cert from ROC
7. Statutory meeting no need to hold must hold
meeting and
file statutory
report
8. Attendance 2 must be present 5 must be present

22. Features of a Joint Stock Company
a. Artificial Legal Person – Its birth, life and
death are regulated by law.
b. Separate Legal Entity – It can own property.
- It can enter into contracts
in its name.
- It can sue and be sued.
c. Perpetual Succession - Its life not affected by
anything that happens to
the members.
d. Limited Liability – Liability of members is
limited to the shares they
own.

23. e. Common Seal – It has common seal as it
cannot sign for itself.
f. Transferability of shares – Shares of a Public
Limited Company are freely
transferable.
g. Separation of ownership and management – All
the members cannot take part in
running the company.
The board of directors take care of
the company.

24. Advantages of Joint Stock Company
a. Limited Liability – Liability of members is limited to the shares they own.
b. Large Financial Resources – The capital of the company is divided into
shares.
- Each share is of a very low value.
- People with small income can also buy it.
- Hence it is possible to raise huge funds.
c. Continuity – Company lives as long as it follows the law.
Life not affected by anything that happens to the members.
d. Transferability of Shares – Shares of a Public Limited Company are freely
transferable.
e. Diffused Risk – Risk is shared by a large number of members.
f. Social Benefits – Savings of people are used to buy shares.
Savings are used to invest in industry.
This leads to industrial development.

25. Limitations of a Joint Stock Company
a. Difficulty of Formation – There are lots of legal rules and
expenses to form a company.
b. Excessive Government Control – Government controls
everything a company does.
c. Oligarchic Management – The company is run by a few.
d. Delay in Decision – Too many levels of management.
Fast decisions cannot be taken.
e. Lack of Secrecy – A company must inform the public
about its working.
This is as per the Companies Act, 1956.

26. Extra info….
• A basic difference between an LLP and a joint stock
company lies in that the internal governance structure
of a company is regulated by statute (i.e. Companies
Act, 1956) whereas for an LLP it would be by a
contractual agreement between partners.
• The management-ownership divide inherent in a
company is not there in a limited liability partnership.
• LLP will have more flexibility as compared to a
company.
• LLP will have lesser compliance requirements as
compared to a company.

27. • Fill in the blanks with suitable word(s) in the following
statements:
• 1. There should be at least __________________ members
in a Private
• Limited Company.
• 2. Freely transfer of shares from one member to another is
not possible in
• case of _____________ Limited Company.
• 3. Hindustan Machine Tools is _______________ Company.
• 4. Minimum amount of capital required to start a private
limited company
• is Rs _____________.
• (i) two (ii) private (iii) Government (iv) one lakh

28. • Fill in the blanks with suitable word(s) in the following statements:
• i. The liability of members of a joint stock company is limited to the
• extent of the ____________.
• ii. A joint stock company form of business organization is managed
by
• ____________.
• iii. The cost of formation of a company is very ____________.
• iv. Indian Oil Corporation and ONGC are the example of
____________.
• v. The risk of loss in a company is spread over a large number of
• _____________
• (i) face value of shares held by them (ii) Board of directors (iii) high
(iv) Indian multinational companies (v) members

29. Government Company
A Government Company has been defined
by the Indian Companies Act 1956
as one of which not less than 51 per cent
of share capital
is held by the Government (Union or State)
Examples
• Hindustan Machine Tools (HMT),
• Coal India,
• SAIL,
• NTPC,
• MTNL,
• ONGC etc

30. Characteristic of a Government company
1. Separate Legal Entity : It has a separate legal existence.
2. Share percentage : Either the whole or at least 51 per cent
of the total share capital is held by the
Government.
3. Directors :The Directors are appointed by the
company.
4. Employees :Its employees are not civil servants.

31. MULTINATIONAL COMPANIES

32. Multinational company (MNC’s)
It is a company which has its head office in one country
and also has offices and business in other countries.
They may produce goods and services in one country
and sell them in other countries also.
• i. Philips
• ii. LG
• iii. Coca Cola
• iv Mcdonalds
• v Cadbury

33. Advantages of a Multinational Company
a. Investment of foreign capital – Investment of multinationals
helps under developed countries.
b. Generation of Employment – Gives jobs and raises the standard
of living.
c. Use of Advanced Technology – These companies do research and
development.
- Results in better methods of
production and better quality goods.

34. d. Growth of Ancillary Units – Suppliers of materials and
services grow in host countries.
e. Increase in Exports and - Goods produced in host
Foreign Exchange countries may be exported.
- This increases foreign exchange
of host country.
f. Healthy Competition - Makes the producers of host
country improve their products
& services
.

35. Disadvantages (limitations) of a Multinational
Company
a. Least concerned with priorities of host countries -
- They invest in profit making industries only.
- Do not develop backward areas in host country.
b. Adverse effect on domestic enterprises -
- Their large scale operation and technological skills – gives rise
to monopoly.
c. Change in tradition -
- Goods of multination companies clash with culture of host
country.
- This results in change from tradition.

36. I. Given below are some statements about Multinational Company. State
which of them are true and which are false :
(i) Multinational Companies slow down the economic development
of the under developed countries.
(ii) Multinational Companies help to earn foreign exchange for the
host countries.
(iii) Domestic producers improve their performance because of
Multinational Companies.
(iv) Generally Multinational Companies invest money in profitable
industries.
(v) Multinational Companies never dominate the markets of the host
countries.
I. (i) False, (ii) True, (iii) True, (iv) True, (v) False

37. II. Multiple Choice Questions
i. Cooperative societies do not have the following characteristics
a) Open Membership (b) Separate legal entity
(c) Profit Motive (d) Voting Power
ii. Which of the following is not an example of consumer cooperative society?
(a) Apna Bazar (b) Kendriya Bhandar,
(c) Super Bazar (d) Narain Group Housing Society.
iii. Liability of the members of a cooperative society is
(a) Limited (b) Unlimited (c) Joint (d) Joint & Several.
iv. The success of a cooperative society depends on
(a) Loyalty of its members (b) Central Government
(c) State Government (d) Local Self Government
v. In a Private Limited Company, capital is contributed by:
(a) Central Government (b) Public and Government only
(c) Its own members only (d) Issue of shares to Public only.
II. (i) c, (ii) d, (iii) a, (iv) a, (v) c