UNIT: Medical Profession and Practice Assignment..

1.HB107/G/14739/21-Titus Roktok
2.HB107/G/14740/21-Willy P Mukuvi
3.HB107/G/14724/21-Adeola S Weche
4.HB107/G/14766/21-Ongesso Herrimah
5.HB107/G/14694/21-George Ngure Ndii
6.HB10/G/14700/21-Benson Njoroge Mugendi
7.HB107/G/15310/21-Amos Wachira
8.HB107/G/14702/21-Oscar Juma
9.HB107/G/14756/21-Njeru Loise
10.HB107/G/14699/21-Amos Mwangi Maina
COOPERATIVES

I. Characteristics of a Cooperative

Member-Owned: Cooperatives are owned and controlled by their members, who are also the

users of its services.

Members have a shared interest in the cooperative’s success, as they directly benefit from the

goods or services provided.

Democratic Control: Cooperatives operate on a “one member, one vote” principle, regardless of

the amount of capital each member has invested.

This promotes equality in decision-making and prevents dominance by larger shareholders.

not the amount of capital they contributed.

This promotes fairness and encourages active participation in the cooperative’s activities.

Service Orientation: Cooperatives focus on providing services or products to their members at

reasonable prices rather than maximizing profits.

Their primary goal is often to meet members’ needs rather than maximize returns.

Limited Liability: Members are generally only liable to the extent of their capital contributions.

This protects members' personal assets from business liabilities.

II. Formation and Management of a Cooperative

Formation:

Registration: Cooperatives are typically registered under specific laws governing cooperative

societies.

Minimum Membership: A cooperative generally requires a minimum number of members (often

10) to form, depending on the jurisdiction.

Articles of Association: Members draft a constitution or set of bylaws defining the cooperative’s

purpose, management structure, and operational guidelines.

Board of Directors: Elected by members, the board oversees the cooperative’s operations and

makes strategic decisions.

General Meetings: Regular meetings allow members to vote on key issues, ensuring democratic

control.

Committees: Specialized committees may be formed to handle specific areas such as finance,

marketing, and member services.

III. Sources of Capital for a Cooperative

Member Contributions: The primary source of capital comes from member fees and the purchase

of shares by members.

Members must contribute capital to join, which collectively supports the cooperative's financial

base.

Retained Earnings: Profits generated by the cooperative may be reinvested back into the

business.

Retained earnings help fund growth and ensure long-term sustainability.

Bank Loans and Credit: Cooperatives can seek external funding from banks and credit

institutions.
Loans are often secured based on the cooperative’s assets and revenue potential.

Government Grants and Subsidies: Some governments provide grants or subsidies to support

cooperatives, especially in sectors like agriculture or housing.

These funds aid development and expansion, particularly in rural or underserved areas.

Donations and Contributions: Non-members or supporting entities may contribute to the

cooperative, especially if it serves a community purpose.

Donations can support capital needs or special projects.

IV. Advantages and Disadvantages of a Cooperative

Advantages:

Democratic Control: Each member has an equal say in decision-making, promoting inclusivity

and preventing dominance by wealthier members.

Community-Oriented Goals: Cooperatives prioritize member benefits, often resulting in more

affordable goods and services.

Profit Sharing: Profits are distributed equitably based on member participation, encouraging

member loyalty.

Limited Liability: Members’ liability is limited to their investment, reducing personal financial

risk.
Disadvantages:

Limited Capital: Cooperatives may face challenges raising large amounts of capital, as they

cannot issue shares to the public.

Slow Decision-Making: Democratic decision-making can slow down operations, especially with

large memberships.

Lack of Incentive for Managers: Cooperatives may struggle to attract experienced managers, as

pay structures are often modest compared to for-profit businesses.

Dependence on Active Participation: Cooperatives rely heavily on member involvement, which

may wane over time, impacting efficiency.

V. Circumstances for Dissolution of a Cooperative

Member Decision: Members may vote to dissolve the cooperative if it is no longer viable or if it

has fulfilled its purpose.

A certain percentage of member approval, typically a two-thirds majority, is often required.

Insolvency: If the cooperative cannot meet its financial obligations, it may be dissolved through

insolvency proceedings.

This is often a last resort when liabilities exceed assets.

financial regulations.

Non-compliance with cooperative laws can lead to forced dissolution.

Merger with Another Cooperative: A cooperative may choose to merge with another, resulting in

dissolution of the original entity.

Mergers are often pursued for efficiency or to expand resources.

Completion of Purpose: If a cooperative was established for a specific purpose (e.g., building a

community center), it may dissolve after fulfilling that purpose.

This scenario typically applies to time-bound or project-based cooperatives.

Cooperatives foster community-focused business with democratic involvement but face

challenges in capital access and management efficiency, making them ideal for certain sectors,

particularly where member welfare is a priority