Cooperative society means assistance of the society where a few people create a democratic institution voluntarily. Earning profit is not the main goal of cooperative society, rather prosperity of the members, ensuring the rights and dignity, develop, the worse situation, change the fate, believes, honesty, economic as well as increase the aides are the main goals of this society. A joint-stock company is a business entity in which shares of the company’s stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership).
Both institutions are the legal institution as well as both are collected capital by selling shares. There are various differences between these two institutions which are following-
- Definition: According to the Ordinance 1984 poor and same people collectively establish a cooperative society to preserve their rights is called cooperative society
- Goal: Financial solvency and ensure social facilities is the main goal. Co-operative society major purpose is to develop the economic conditions of the members. Providing services to members and fulfilling the social, economic and cultural needs of the society.
- Formation: It is formed, operated, and controlled under the ordinance of 1984 and 1987. Cooperation society structure is simple. Formation procedure is less time consuming and less expensive because of less legal formalities.
- Members: Capital can collect from the members of the cooperative society.
- Conditions of members: Poor and low-income people of society. Cooperative society shares cannot be transferred to the nonmembers.
- Purchase of share: Highest the worth of (money amount) share can be purchased. Co-operative society profit is distributed among the members according to their purchase from the store.
- Directing: Democratic process is maintained to direct the organization. In a cooperative society, every member has an equal right in the management.
- Voting right: One can give one vote only. Co-operative society audit is not essential except co-operative farming.
- Role of middleman: In the cooperative society middleman has no responsibility.
Joint Stock Company
- Definition: According to the Company Act 1994 few people collectively establish a business organization to make a profit with limited liabilities is called Joint Stock Company.
- Goal: Profit maximization, as well as shareholders’ prosperity, is the main goal. To earn a large amount of profit. Joint-stock company basic objective to earn the utmost profit.
- Formation: It is established and controlled under the act of 1994. Joint-stock company structure process is complicated. It is multifarious, time-consuming and expensive procedure because of numerous steps and various legal formalities.
- Members: For a private company at least 2 and highest 50 members. For public ltd., a company at least 7 and the highest number is limited to the numbers of shares.
- Conditions of members: Capital can collect from the promoters and shareholders of the joint-stock company. Joint-stock company shares can be transferred liberally.
- Purchase of share: Rich and educated people of the society. Joint-stock company profit is distributed among the shareholders according to the paid-up capital.
- Directing: Share can be purchased limitlessly. A joint-stock company is managed by the Board of directors.
- Voting right: Democratic process are not maintained entirely rather partially. One can give more votes on the basis of different situations. Public limited company accounts Audit is essential.
- Role of middleman: In the joint-stock company middleman plays a very effectual role.
From the above discussion few differences may be in between Cooperative Society and Joint Stock Company but both are a highly important part of the development of the national economy and society of a country.