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Yogita Ingle 5 years, 7 months ago
- Unlike a departmental store in a chain store, the variety of products and the number of choices are limited
- Individual stores become dependent on the home office and generally do not show any initiative or drive to ramp up sales
- These stores are not well adapted to changing demand. Since they have huge inventories they may face losses if the market demand changes
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Merits:
- Ease of formation: It can be started with minimum of 10 members. Registration is also easy as it requires very few legal formalities.
- Limited liability: The liability of members is limited to the extent of their capital contribution.
- Stable existence: Due to registration it is a separate legal entity and is not affected by death, lunacy or insolvency of any of its members.
- Economy in operations: There is economy in operation due to elimination of middle man and voluntary services provided by its members.
- Government support: Government provides support by giving loans at lower interest rates, subsidies and by charging less taxes.
- Social utility: It promotes personal liberty, social justice and mutual cooperation. They help to prevent concentration of economic power in a few hands.
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