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.
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
Limited resources since capital is provided by members only.
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.