A cooperative meeting in progress. Image credit newsday.co.zw

A cooperative meeting in progress. Image credit newsday.co.zw

ZIMSEC O Level Business Studies Notes: Features of Cooperatives

  • A cooperative is defined as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
  • A cooperative may also be defined as a business owned and controlled equally by the people who use its services or who work at it.
  • They are governed by the Cooperatives Societies Act of Zimbabwe.
  • They have open membership.
  • They offer services to members.
  • Members enjoy limited liability.
  • Sells goods and services to its members at cost or nominal profit.
  • Surplus is shared among the members
  • Governments often assists cooperatives achieve their goals, assistance often comes in the form of grants.
  • Labour is principally provided by the members
  • Every member has one vote (primary societies)
  • Education and training facilities provided by members.

Advantages

  • Easy to form since there are not that many legal requirements
  • No obstruction to membership.
  • Offer valuable services to members such as the provision of good and services at a reasonable prices.
  • Enjoy economies of scale.
  • Are democratically managed since members have equal voting powers.
  • There is continuity after the death of each partner.
  • Enjoy limited liability

Disadvantages

  • Limited resources since capital is provided by members only.
  • Inefficient management.
  • Lack of secrecy since all the financial information is known to all members.
  • Disputes can be difficult to solve given the structure of cooperatives.
  • Excessive government and political intervention.
  • Lack of motivation since there is no profit motive.

To access more topics go to the O Level Business Notes page.

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