The need for the organization
- people's needs are limited by the available resources to satisfy them, since people's needs are limitless by nature and it is impossible to satisfy all these needs with relatively limited resources;
- the needof the people to unite into cooperatives is also caused initially by solving problems of how to satisfy the needs of people with these limited resources best;
- in conditions of disunity, it was impossible to solve this problem and the initiative arose to unite into cooperatives, based on the reasoning that rich merchants sell us goods for much more than their actual value, and we enrich them by buying these goods from them. Therefore, together we are much richer than these traders, since we overpay them. If we pool our money and buy these goods from manufacturers ourselves, for this money we will buy many more goods and, accordingly, a unit of goods will cost us much less.
Thus, the first cooperative enterprise appeared in Great Britain at the very beginning of the 19th century.
Basic principles of organization
- voluntariness: any capable citizen who has reached the age of maturity, recognizes the charter of the cooperative and has contributed the shares established by the charter to the authorized fund of the cooperative, could become a member of the cooperative, as well as withdraw from membership at any time at his own request.
The management of the cooperative was built on the principles of democracy - that means each member of the cooperative has the right to take part in the management of the cooperative by voting, to elect and be elected to the governing and supervisory bodies of the cooperative, to make proposals related to the activities of the cooperative, to monitor their implementation,
The charter also provides for the accountability of the management and supervisory bodies of the cooperative to the members of the cooperative
The difference from other commercial and business partnerships
The main principle of participation in management was considered: one shareholder - one vote, i.e. all members of the cooperative are equal regardless of their share (share amount) in the authorized capital, which is fundamentally different from the “power” of capital in the management of business companies