Production cooperative as a form of non-profit organizations

1. Production cooperative: definition, basic principles. 

Production co-op – it is a voluntary Association of citizens (membership) to make a joint economic activity. Production cooperative operates on the basis of the Charter, which fully reglamentary its activities. As a rule, all members of the organization in varying degrees, participate in its activities (own labor, financing, providing transportation or financial resources). Periodically the General meeting of shareholders, which is attended by all its members. Each member of this Association has one vote in the decision. 

In Addition, all members of the organization regularly make equity contributions, which form a mutual cooperative Fund. If, for any reason, the property of cooperative organizations is not enough to compensate for its debts, the members shall reimburse the missing cash at the expense of own means. In short, all members of the Association bear subsidiary liability for the debts that necessarily spelled out in its Charter. 

2. Production cooperative: pros and cons.

Like all economic enterprises, the production cooperative has its advantages and disadvantages. Compare the production cooperative and the Bank granting the credit for housing. The most important advantage of co-operative unions – the principle of “one for all and all for one”. Unscrupulous shareholders for a long time it is not delayed, and for the rest of the membership will be enough of the minimum package of documents. 

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Usually, you will need a copy of the work book and the main document of the citizen of the Russian Federation: the passport. At the Bank under the housing loan requests a much larger set of documents. But for the Bank, sufficient for 15-20 % of the total cost of purchased housing, for cooperative enterprises, the percentage will be much higher – at least half of the cost. 

In Addition, each participant contributes a certain amount when you join the co-operative organization, which is 2-5 % of the estimated cost of housing, which will not return if a shareholder for any reasons out of her. The term of this accumulation of an initial payment of 2 years, that is not the fact that by paying, you immediately notice the move into a new apartment. 

A Definite plus – is the fact that each member of the cooperative Association is well aware of the real state of things and involved in decision-making. The co-op can be a certain number of shareholders, not directly involved in the activities of the cooperative enterprise. Management, of course, only democratic. 

At the conclusion of the contract with the Bank for the purchase of housing mortgage, you arrange accommodation in a property with a few restrictions, but when joining the cooperative, housing will be in his ownership until, until you pay the full cost of the apartment. But when leaving the cooperative, a full member may demand that his share or the property, appropriate because all the cooperative property necessarily divided into shares (this solution must have a state registration). 

It is Very difficult, if not impossible, if necessary, to produce the assignment of the business, as you will need to withdraw the old members and introduce new members. And each transition will require mandatory state registration. 

Production cooperative as a form of non-profit organizations, has several obvious advantages and several disadvantages. Each person must individually decide for themselves the question of membership in such an organization.