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UPMSP Co-operative Studies study materials
UPMSP Co-operative Studies study resources

UPMSP Co-operative Studies: Nature, Scope and Principles of Co-operation

UPMSP Co-operative Studies · Work through your exam, one topic at a time.

All guide sections

Nature, Scope and Principles of Co-operation

Nature, Scope and Principles of Co-operation

This domain tests whether you can define a co-operative, distinguish it from a company or partnership, and apply the ICA principles to a village society.

A co-operative is an autonomous association of persons united voluntarily to meet common economic, social and cultural needs through a jointly owned and democratically controlled enterprise. Its identity rests on values-self-help, self-responsibility, democracy, equality, equity and solidarity-and on the ICA’s seven principles: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; co-operation among co-operatives; and concern for community.

Scope extends across credit, marketing, processing, dairy, consumer stores, housing, labour, health and social services. The test is not whether an activity is business-like but whether the society is member-owned and member-controlled.

Core rules

  • Membership is voluntary and open; no artificial restriction.
  • Voting is one member, one vote, not one share, one vote.
  • Surplus is distributed by patronage or to reserves, with limited return on capital.
  • The general body controls the managing committee.

Worked example

A milk society has 120 members. One member supplies 500 litres a day; another supplies 5 litres. At the AGM each has one vote. The society earns a surplus of ₹1,00,000. It keeps 25% as reserve, uses 10% for member education and returns the rest by patronage. The large supplier gets more refund because of patronage, not because of extra votes. Reasoning: democratic control sits with persons; economic benefit follows use.

Traps

Do not call a co-operative a company with a social face: companies use share-based voting and profit maximisation. Do not treat ICA principles as identical to statutory sections-law may add audit and registrar powers. Do not confuse service motive with no surplus; surplus is permitted but subordinated to member service.