I am planning a business and based on my preliminary study, I feel cooperatives model may better suit the business.
Can you please suggest resources (book or contact) through which I can understand first level detailing on functioning of cooperatives?
I C Naik
Dear Bhavin
You are planning a business and based on your preliminary study, you felt cooperatives model may better suit the business.
97th Constitutional Amendment (w.e.f. 13 2 2013) provides constitutional framework to all cooperative societies across India. The States and Union territories are bound to abide by this frame work and modify their legal frame strictly as per this frame-work.
Were as a fundamental right to every citizen to form a cooperative society, has been reconfirmed the frame work has directive as per Article 43B as reproduced below.
43B. The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies
Besides this, Article 243ZI also mandates the States and Union territories as under:
“243ZI. Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the incorporation, regulation and winding up of co-operative societies based on the principles of voluntary formation, democratic member-control, member-economic participation and autonomous functioning.
The hallmark of cooperative business model is one member one vote (irrespective of shares bought by the member). If you set up your business as per cooperative model the control of business will vest in a Board of directors elected by members where in election you will have just one vote.
I suggest you give a thought to your findings that cooperatives model may better suit the business.