QS Study

Differences between Cooperative Society and Joint Stock Company

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-

Cooperative Society

  • 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.
  • Formation: It is formed, operated, and controlled under the ordinance of 1984 and 1987.
  • Members: Capital can collect from the members of the cooperative society.
  • Conditions of members: Poor and low-income people of the society.
  • Purchase of share: Highest the worth of (money amount) share can be purchased.
  • Directing: Democratic process is maintained to direct the organization.
  • Voting right: One can give one vote only.

Joint Stock Company

  • Definition: According to 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.
  • Formation: It is established and controlled under the act 1994.
  • 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.
  • Purchase of share: Rich and educated people of the society.
  • Directing: Share can be purchased limitlessly.
  • Voting right: Democratic process are not maintained entirely rather partially. One can give more votes on the basis of different situations.

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 national economy and society of a country.