A cooperative society is a voluntary association of persons who join together with the motive of welfare of the members to protect their economic interests. It is registered under the Cooperative Societies Act 1912. The key characteristic is voluntary membership, where a person is free to join or leave the society anytime without compulsion. Other features include equality in voting rights and limited liability of members.

The merits of a cooperative society include stable existence, as the society's continuity is unaffected by the death, bankruptcy, or insanity of its members. It ensures economy in operations because members often offer honorary services and focus on eliminating middlemen, which reduces costs. It also enjoys support from government through low taxes, subsidies, and low interest rates. Additionally, it has ease of formation due to simple legal formalities.

However, it suffers from limited resources as members have limited means and the low dividend rate discourages further investment. There is often inefficiency in management because societies cannot afford expert managers. Other limitations include lack of secrecy due to disclosure obligations, excessive government control, and differences of opinion among members that can hinder decision making.

Based on purpose and nature of members, the different types of cooperative societies include consumers cooperative society, producers cooperative society, marketing cooperative society, farmers cooperative society, credit cooperative society, and cooperative housing society.