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MODE OF BUSINESS OPERATION AND MANAGEMENT OF COOPERATIVES

With this article I will be sharing information on mode of business operation and management of cooperatives…

It is often said that when visited by a cash cow, don’t just take the cash, milk the cow as well! It is not enough to just have a house, you must know how things run in that house otherwise you will not enjoy the full benefits of living there.

That is what happens to people a lot of times when they join associations or cooperatives and have no idea how it is run.

Cooperators cutting the Cooperative Xmas Cake

Cooperators cutting the Cooperative Xmas Cake

You can’t be interested only in the opportunity to cultivate a savings culture or the financial benefits; you must also learn the administrative aspect and know what is obtainable there. That is one way to maximize all that the cooperative has to offer.

Realty Point Limited (www.realtypointltd.com) isn’t just about consulting for you on land and property issues and making your dream of owning a house come true, we also want to make sure you access all options available to you and make the most of the opportunities that you have to ensure this.

This is why we go out of our way to educate and inform you because we know that knowledge is important. However, having partial knowledge can still lead to wrong decisions hence we will be looking at the business operation obtainable in cooperatives.

The management of a co-operative is supposed to be done in a democratic way where the managing committee is elected by the members.

The general body of members determine rules and regulations for the management hence the managing committee functions within the outline of the principles stated by the general body.

Also, decision making is usually done by collective voting on the basis of one member one vote regardless of social and financial positions of the members and they all have equal opportunities.

In some cooperatives however, the Ad-hoc Committee and Sub Committee structure is set up for ease of administration and democratic settings so as to complement the effort of the management committee.

Another mode of business operation employed by cooperatives is the Strictly Cash Trading model where the trading operation of the co-operative society is done on the basis of cash.

It never allows the principles of credit in its trade practice and is restricted only to economic members. Also, the Owners are Users form of business operation – restricts ownership of the co-operative to the users only.

People who do not use the services are not allowed to be members. It is however worthy of note that there are cooperatives where all surplus (called profit in a private or other limited by shares companies) are given back to the cooperative’s members.

These refunds, also called “patronage dividends,” are paid to each member annually according to the proportion of business each member does with the cooperative for that year. This kind of structure is called Dividend Paid based on patronage

Others are also The Three Tier Organisation business operation model in which the business and administrative structure is based on the trustees, committees and general members.

The highest ruling authority is with the general members while The Trustees form of business operation on the other hand makes just the trustees which includes the president, treasurer and secretary the ones in charge of the assets and liabilities of the society and are jointly and severally liable for any lapses during their tenure in office.

It is also essential to note that a co-operative society is a self-governing institution that can enjoy the status of independence because it is a self-sufficient, self-renewing and self-controlling organization.

It has a continuous existence and is not affected by the death of any member of the society because it operates an Autonomous Structure of business operation.

Hence, as much as cooperative societies are dedicated to the needs of their members while operating the various modes of operations, they do not just dole out money.

They are a non-philanthropic organisation and have laws, policies and principles that guide their activities. It is vital to know these policies and use them to your advantage.

This, we will talk about in subsequent articles but until then, keep the dream alive. At Realty Point Limited, we know it can become a reality!

To your success!

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