Main advantages or benefits of cooperative organization can be studied as follows:
1. Easy To Establish
Cooperatives can be easily established when compared to joint stock company. It requires ten members, simple registration process and few legal formalities to form cooperative organization.
2. Limited liability
Members are not personally liable for the debt and loss of the organization. Their liability is limited to the extent of their share contributed. So, members' personal property will not be used to pay the debt of the cooperative society.
3. Open Membership
Cooperatives are voluntary organizations where any person can become a member or leave the organization without any barrier. There is no discrimination among the members of the society.
4. Democratic
Cooperatives are operated in democratic management style. All the members have voting right and there is no restriction to express opinions and to give suggestions.
5. Perpetual Life
Cooperative organizations are long-lasting and stable form of organization like a joint stock company. Single or few members cannot dissolve the organization as per their wish. Bankruptcy, death or insolvency of any member does not affect the continuity of the business.
Cooperatives are fully supported by the government of the country. Government provides financial support and protection to this type of organization.
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7. Tax Benefit
Cooperative societies enjoy tax benefit because of tax concession and exemptions provided by the government.
8. Social Welfare
Cooperative societies are established with the aim to provide quality goods at low price to the members at low price. So, there is very low profit margin in this type of business. The profit of the society is used for social welfare.
9. Elimination Of Intermediaries
Middlemen or business intermediaries are totally eliminated because products are supplied directly from producers to final customers.
