START NOW – Making a cooperative permit is an important first step for every group that wants to establish that organization. 

Completing the procedure of making a cooperative permit will ensure the institution to operate legally based on the applicable regulations.

Understanding Cooperatives

Before discussing about the procedure of making a cooperative permit, we should understand about that kind of institution first. 

Cooperative is an organization that aim to meet the needs and improving the welfare of its members. 

It’s based on the principles of togetherness, mutual assistance and justice, so that all members can experience the same benefits.

Each member of a cooperative also has the same right to participate in decision making and share the profits generated.

Cooperatives can be divided into two main categories, namely:

• Primary cooperatives that formed by individuals or small groups 
• Secondary cooperatives that consist of several primary cooperatives

Types of Cooperatives

Based on their function, cooperatives can be divided into several types, namely: 

Savings and Loans Cooperative (KSP)

As the name implies, these cooperatives provide savings and loan services to their members to help them overcome financial problems. 

Members can save their money and borrow money at lower interest rates compared to other financial institutions.

Production Cooperative

These cooperatives are formed to assist their members in producing goods or services. It is usually engaged in agriculture, fisheries or crafts.

Marketing Cooperative

These cooperatives aim to help the members marketing their products. It will bridge the members with a wider market, so they can get better prices.

Consumer Cooperative

Consumer cooperatives are cooperatives that provide goods or services for members’ daily needs. For example: cooperative that sells basic necessities, clothing or other household necessities.

This cooperative aims to make it easier for members to meet their needs at more affordable prices.

Service Cooperative

Service cooperatives are cooperatives that provide certain services to their members, such as health cooperatives, transportation cooperatives, or educational cooperatives.

This cooperative helps members to get quality services at lower costs.

Cooperative Benefits for Members

By making a cooperative permit, these institutions will have a strong foundation to develop and provide benefits to their members.

Some of the benefits of cooperatives are: 

Economic Independence

Cooperative members will have access to better economic resources to overcome financial problems. Furthermore, they will also have more opportunities to develop businesses.

Better Prices

Cooperatives usually offer products and services at more competitive prices compared to the general market, especially for their members. 

This is due to cost savings through collective purchasing of goods, so that members can buy at more affordable prices.

Product Quality Improvement

Cooperative products generally come from and for members. So, the members will certainly be more motivated to supply their cooperative with the best quality products.

Shared Benefits

Profits obtained by cooperatives will be distributed to members in proportion to their contributions. This is the specialty of cooperatives compared to other business entities.

Education and training

Cooperatives also often organize education and training programs to increase the knowledge and skills of their members. 

That way, they will be able to manage their business better and be economically independent.

Legal Protection

Cooperatives operate under applicable laws and regulations.That’s why it is important for you to complete the procedure of making a cooperative permit carefully. 

By joining a cooperative, members are protected by the legal regulations governing the cooperative. So, they will have certainty in running their business.

Allow Participation in Decision Making

In addition to profit sharing, cooperatives also allow all members to be involved in the decision-making process.

Every member of the cooperative has voting rights and can contribute in determining the direction and policies of the cooperative. 

That way, the aspirations and interests of all members can be better articulated.

The Procedures of Making A Cooperative Permit

The establishment of a cooperative requires permission from the authorities in order to operate legally. It also needs a proper permit as an assurance. 

The process of making a cooperative permit involves several important steps that must be followed by the cooperative founder, namely: 

Preparation of Cooperative Plan

The first step on making a cooperative permit is preparing a clear cooperative plan that includes: 

• The cooperative’s objective
• The type of business to be run
• Organizational structure
• The articles of association.

This plan will be the basis for applying for a permit and shows the founder’s seriousness in running the cooperative.

Preparation of Articles of Association (AD) and Bylaws (ART)

The articles of association (AD) is an important document that contains the name, objectives and organizational structure of the cooperative. 

Meanwhile, the bylaws (ART) explains the procedures for managing and operating the cooperative. Both AD and ART are important to obtain a cooperative permit.

These two documents must be approved by all cooperative founders.

Member Data Collection

Cooperatives must have a minimum of 20 members committed to participating. You need to attach the member’s data to register the cooperative permit.

Member data required includes name, address and personal identity.

Submission of Permit Application

After all documents are prepared, cooperative founders can apply for permission to the local Cooperative and SME Service.

Attach any supporting documents that you have prepared in advance. Make sure all documents are complete to speed up the approval process.

Verification and Assessment

After the application is received, the Department of Cooperatives and SMEs will verify the documents and cooperative business plan.

This process aims to ensure that the proposed cooperative meets the specified requirements and criteria.

Issuance of Cooperative License

After verifying all of the completed application requirements, The Department of Cooperatives and SMEs will then issue a Cooperative Permit.

This letter is legal proof that the cooperative has been registered and can carry out its business activities.

Registration and Account Opening

After completing the steps of making a cooperative permit and obtain it, the cooperative must register with the relevant agency. 

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The cooperative also need to open a bank account in their name to facilitate financial management and business transactions.

If you need any help to complete the process of making a cooperative permit, don’t hesitate to contact Start Now.