A cooperative finance is an association of persons, not capital. It starts with people who wish to provide themselves with services they need. Although capital and money is not the beginning of a cooperative, it is the very lifeblood of its successful operation…
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There is no magic in the cooperative way that makes it completely only in the way it is owned and in certain methods of operation.
But while cooperative financing is in many ways the same with financing other business, the method of capitalization, the use of capital, and the handling of finances generally in a cooperative have certain distinctive features that must reflect cooperative principles.
In other words, you can distinguish a true cooperative by its financial policies as well as other ways. Good financing of a cooperative does not come by chance or accident. It has to be well-planned, completely understood and mutually accepted.
The members of the cooperative have the responsibility for financing their own cooperative. This is how they acquire their ownership of the cooperative and the right to control it. Others cannot be expected to take the risk of financing an organization for them.
In addition, the members have the responsibility to study very well the financial policies presented to them by the board before approving them. In this connection, they must properly choose the persons who will constitute the memberships in various committees. These are the individuals who will protect the interests of the members.
Separate legal entity and Limited liability are not applicable for the ownership of cooperatives.
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