Drawbacks and Benefits of Co-operative Society in Nigeria

PROs and CONs of Co-operative Society in Nigeria.

Here are some of the advantages and disadvantages of cooperative societies in Nigeria and around the world.

Advantages of Co-operative Society.

Below are the advantages of co-operative societies:

  • Stability of trade due to patronage rebates and need to finance one’s prestige and safeguard the society.
  • It engenders democratic principles.
  • It encourages thrift and capital formation. There is also savings in advertisement, as members know when and where to buy and sell.
  • Some cooperative societies pay dividends to co-operators. This increases income of members.
  • It plays social and educational roles.
  • It may lead to international co-operation and gains of international associations.
  • It is easy to obtain loans and at little interest.
  • It increases the power of members to bargain for business.

Disadvantages of Cooperative Society.

The following disadvantages are inherent in cooperative enterprise, they are:

  • Limited capital for business expansion and transactions.
  • Lack of business experience and knowledge.
  • May lead to misappropriation of funds.
  • Poor and inefficient management.
  • Tax evasions as dividends are tax deductible.
  • They may cause political mayhem with their excess funds.



Joint stock company is a business organization owned by 2 to 50 persons (for private) and 7 persons to infinity for public. When small business grows, it tends to metamorphose into Limited Liability Company or Joint Stock Company. Members of a joint stock company are called shareholders. The management of Joint Stock Company is in the hands of directors who are usually appointed democratically at Annual General Meeting (AGM). Accounts of joint stock companies are usually audited and the final accounts published.

A joint stock company must register under the Companies and. Allied Matters Act of 1990 in Nigeria.