The merits of a Co-operative Society are as follow: 

(i) E asy Formation: It is easy to form a Cooperative organisation. Minimum ten members are needed to form the organisation. It does not involve much legal formalities. It is compulsory to register the organisation. However, the procedure for registration is simple and the fees are nominal.

(ii) Tax Concession : Co-operatives always get support of the government. As they play an important role in economic and social development, government gives them concessions in payment of tax.

(iii) Open Membership : Membership of a Cooperative organisation is open to all. A person can become a member by purchasing shares. No difference is made on the basis of language, religion, caste, etc. A person can become a member whenever he wants and terminate membership at his own will. Membership is voluntary.

(iv) Stability : A Co-operative organisation enjoys a long and stable life. The life of the organisation is distinct from the life of its members. If any member dies, becomes insolvent or insane, business is not closed.

(v) Self Financing and Charity : After providing 15% dividend to members, surplus amount is used for self-financing by the Co-operative Societies. Some amount of leftover profit is used for charity, social activities and for the growth of the cooperative society.

(vi) Less O perating Expenses: Cost of operation is low as salary is not paid to members who manage business. Members of Co-operative organisations work on honorary basis. They are not given any remuneration for their services. There are no expenses on advertising and publicity. This helps to increase profit.

(vii) Limited Liability : The liability of members is limited. It depends upon the value of shares purchased by members. Therefore, people are interested in investing in a Co-operative organisation.

(viii) Democratic Management: Democracy is followed in the management of co-operative organisation. All members are equal. The principle of “One member One vote” is followed. Members elect representatives who form the managing committee. They work according to bye-laws. The managing committee looks after day to day administration. Decisions are taken collectively in meetings. 

(ix) Supply of Goods at Cheaper Rate : Goods are sold at lesser price through a Co-operative store. This is because the organisation is service – oriented. The store does not make use of services of middlemen and there are no expenses on advertising. So goods are sold at cheap rates.