Project Management Essay

3744 Words May 21st, 2013 15 Pages
Question 1(a)
“Cooperatives and other forms of organizations are established to serve the public”. In view of this statement, explain their notable similarities and differences.
The International Labour Organisation defines cooperatives thus; A “Cooperative is an association of person usually of limited means, who have voluntarily joined together to achieve a common economic, end through the formation of a democratically controlled business organisation, make equitable contribution to the capital required and accepting a fair share of risks and benefits of the undertaking".
Hubert Calvest (1972) defines the Cooperative as a form of organisation wherein persons voluntarily associates together as human beings on the basis of equality for
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The income of cooperative society is legally taxable as per the Income Tax Act, 1961. This characteristic is common to private limited companies and public limited companies which are also treated as legal person’s separate from their owners or shareholders. Partnerships and sole proprietorships however do not enjoy this status portraying a major difference with the cooperatives.
Democratic management:
Equality is the essence of cooperative enterprises, governed by democratic principles. Every member has got equal right over the function management of that society. As such each member has only single voting right irrespective of the number of shares held or capital contributed by them. In case of cooperative society, no member detects the terms and conditions of the functioning because "one man one vote" is the thumb rule.
This characteristic shows a major dissimilarity between the cooperatives and other forms of business organizations. For the others, the rights are tied to the amount of capital contributed in terms of shareholding. To these other forms of business organizations, voting power is proportional to the number of shares held. In a sole proprietorship, the owner has sole rights in all respects of decision making. Service motive:
The main objective being formation of any cooperative society is for mutual benefit through self-help and collective effort. Profit is not at all in the agenda of the cooperative society.

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