If you are also someone who wants to know more about the difference between Nidhi company and cooperative society then read on!
The Advantages of Forming a Nidhi Company
Those that register as Nidhi corporations are eligible for a range of perks. The following advantages can be summarised:
- A corporation gains legal existence when it is registered as a Nidhi Company. It has a separate legal existence as an officially recognised Mutual Benefit Society. As a separate legal entity from its members, the company has the authority to acquire and dispose of property in its own name.
- The duties of the company’s members will be limited by the amounts they have contributed or invested. Only their share of the corporation will be held responsible for the members. It is not feasible to pay off a company’s debts using a member’s personal commitments.
What Exactly Is a Cooperative Society?
Cooperative societies are for-profit organisations that aim to boost the marketability of items generated by labor-intensive sectors such as agriculture. Based on the recommendations of the Mirdha Committee and the Model Co-operative Societies Act, the Government of India approved the Multi-State Co-operative Societies Act in 2002, which provided for the democratic and autonomous operation of Co-operatives. This article discusses the essential components of cooperative societies in India.
A cooperative society is often a collection of individuals who get together voluntarily with the objective of collaborating and furthering their economic interests. These communities are based on the principles of mutual and self-help. The primary goal is to assist the members.
Nobody leaves a cooperative society without generating money. People who have an interest band together, pool their resources, use them as efficiently as possible, and get something mutually valuable. It is a collection of people who voluntarily pool their resources for the benefit of the members of the group. A cooperative organisation is formed to encourage its members to be thrifty, self-sufficient, and supportive of one another.
Cooperative societies may be governed by the Multi-State Co-operative Societies Act of 2002 or the Co-operative Societies Act of the appropriate state. The co-operative societies Act of that state oversees the societies in that state whose primary objective is to serve the interests of their members.
The Multi-State Cooperative Societies Act of 2002 oversees organisations whose primary objective is to advocate the interests of its members across many states. The National Co-operative Union of India (NCUI) and the National Co-operative Development Corporation (NCDC) are the two primary organisations in India that promote the cooperative movement (NCDC).
- Characteristics of a Cooperative Society
- • Membership in the organisation is entirely optional. An individual has the right to join and quit a cooperative organisation at any time. Everyone is welcome to join, regardless of caste, gender, or religion.
- • In order to operate, the cooperative society must be registered. The cooperative society is a separate legal entity from the society, and it is unaffected by its members’ joining or departing.
- • The members of the cooperative society have a restricted amount of duty. Members’ liability is limited to the amount they donated.
- • An elected governing committee has decision-making authority. Members with voting rights can select who will serve on the management committee.
The Advantages of a Cooperative Society
- Why Creating a cooperative group is less difficult than launching a firm. Any ten people can form a voluntary organisation and apply for cooperative registration with the Registrar of Cooperatives. Furthermore, the foundation of a cooperative society does not need any lengthy or complicated legal procedures.
- Members’ responsibility in cooperative groups is limited to the amount of their capital, comparable to corporate forms of ownership.
- A cooperative group is governed by a separate legal body. A cooperative society can survive the death, insolvency, or retirement of any of its members. Mutual and self-help are at the heart of cooperatives. Cooperatives foster a feeling of community among their members and instill moral ideas in them in order for them to live better lives.
- Anyone, regardless of caste, race, creed, or economic background, is welcome to join cooperative groups. There is no limit on the number of participants.
- Unlike the other three categories of corporate ownership, a cooperative society is exempt from income tax and surcharge on earnings up to a certain level. It is also exempt from registration fees and stamp taxes. The government has recognised cooperatives as a vital tool for socioeconomic reform. As a result, in order to improve the efficiency of cooperative societies’ operations, the government offers a variety of grants, loans, and financial assistance.