Cooperative association is an organization formed by a group of individuals to serve their purpose. It is owned by the members responsible for forming it and falls under the purview of general business laws or specific laws of cooperative associations. Cooperative organization is different from a charitable organization formed to do something good for the society.
It is formed for the mutual benefit of the members and may be formed to serve economic, social or cultural needs. The rights and duties of the members are clearly stated in the charter of the organization and members cannot exceed their authority or claim something that is not according to the charter or laws of the cooperative association.
Each shareholder has equal ownership in the control of the organization which is irrespective of the number of shares held by the shareholder. Profits will be divided among the members proportionately on the basis of the patronage held by the members for the period during which profit was earned. A cooperative association will continue to work even if after the withdrawal or expulsion of individual members and individual members won’t have any present interest in the organization until liquidation.
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