1. Voluntary association and open membership
It is voluntary association in which membership is open for all people with common interest. People can come together to satisfy the needs with common effort. In Nepal at least 25 members are required for establishment of cooperative organization.
2. Equal voting right
It is based on democratic principle. It is based on equality of status of all members. Decisions and other bills are passed on the basis of majority votes.
3. Democratic management
Management is always in democratic lines. All member of organization elect its managing committee. One man can give only one vote. Managing committee will then work for common benefit of all members.
4. Service motive:
Its objective is to provide service to member. It’s not profit motive. Its aim is not to earn maximum profit as in all form of organization. Even though it can earn profit by extending their services to non members but they collectively work for service.
5. Legal existence:
In Nepal, these types of organizations are established under cooperative act. There must be at least 25 members and they all must be guided through common objective
6. Cash transactions
In this type of organization transactions are done only through cash. There are no credit transactions. It eliminates bad debt too.
7. Disposal of surplus:
It is service motive. Even though it can make surplus, the surplus amount is used for extending the surplus facility.
The success of organization depends upon the education of its members. They should be constantly educated with objectives.
Liability of member is limited. It should use the word “ltd” after its name.
10. Government control
The organization must follow the rules and regulations of the government.
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