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Registration of Co-operative in Nepal and Its Role in Developing Countries

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Registration of Co-operative in Nepal

In Nepal, the Co-operative organization is guided and regulated by Co-operative Act 2048. Before starting the co-operative, the prospective members are required to discuss all the matters relating to the formation of co-operative. A co-operative organization cannot start its legal business activity without registering in the co-operative department. Following steps are required to start co-operative in Nepal:

  1. Preliminary Meeting
  2. Application for registration
  3. Investigation of application
  4. Certificate of registration

Preliminary Meeting:

It is the first stage before starting a co-operative activity. In this meeting, all the members will discuss in the different matter such as problems and benefit of the co-operative, the number of members, objectives, capital required and rules and regulation. Once they agree about the formation of co-operative, they will form a different committee and sub-committee. At this meeting, different people will be given different responsibilities such as the collection of capital, development of laws and by-laws, preparing for registration etc.

Application for registration:

It is the second stage of co-operative registration. At this stage, a complete registration form is submitted to register department of co-operative. The co-operative act has provided a guideline, the checklist of information to be submitted along with the application for registration. Generally, the following information should be provided along with the application for registration:

  1. Name and address of co-operative
  2. Objective and area of co-operative
  3. Capital structure of co-operative
  4. Minimum amount of membership fee
  5. Any agreement between members before starting any co-operative
  6. Copies of laws and by-laws of co-operative

Investigation of application:

The concerned authority of department or co-operative will investigate information provided in application form. It identifies the correctness of information. The department will verify either the law or by-law of co-operatives are against or in support of current law of a country. If the department finds certain things to be amended it will issue notice for amendment. If the team of co-operative is not able to provide such amendment then the department will refuse for application registration.

Certificate of registration:

The registrar of the department of co-operative will issue a certificate of registration after making an entry in the registration book. The co-operative can start its legal business after getting a certificate of registration. The co-operative relating to saving and credit is required to follow rules and regulation provided by NRB. It must complete all basic requirement of NRB before starting its economic activities.

Role of Cooperatives in Developing Countries

Developing countries are those countries which are in the process of development and industrialization. The level of income availability and the resources are less in developing countries. They are slowly developing their resources for industrialization. The co-operative organization plays a vital role in the development of the country. The importance of Co-operative in developing countries like; China, Nepal, India, Sri Lanka are explained as follows:

  1. Encourage Saving
  2. Provide Institutional Credit
  3. Help for Economic Diversification
  4. Terminate Middlemen
  5. Generate Employment
  6. Improve Living Standard
  7. Proper Utilization of Resources
  8. Democratic Management

Encourage Saving:

Co-operative organizations encourage saving habit of people by providing a high rate of interest on saving. They provide facilities for saving by collecting a small amount of saving daily or on the monthly basis. They visit door to door to collect savings.

Provide Institutional Credit:

In developing countries like Nepal, bank and financial institutions are limited to an urban area only. Urban people have to take a loan from a money lender at the high rate of interest but the co-operatives in the regular area provides institutional credit to their members via the easy process. They avoid the exploitation of money lenders.

Help For Economic Diversification:

The co-operative organization provides economic activities in rural backward areas. In rural areas banks, financial Institutions are not there but the co-operatives facilitates lending and saving service to the rural public to start and develop the economic activities there.

Terminating Middlemen:

The co-operative like consumer and marketing society helps to terminate middlemen consumer. Co-operatives directly purchase the product from manufacturers, provide to their member consumer. Marketing society helps to sell and promote the manufacture of product directly to the consumers. This helps to terminate the role of middleman and benefit both consumers as well as manufacturers.

Generating Employment Opportunities:

The co-operative organization needs different kinds of human resources to work at various level. It provides additional employment opportunities in society. On the other hand, co-operatives promote business by providing loan and other facilities. When the business organization is established and developed they will create new employment opportunities in society.

Improve the living standard:

Different co-operatives are established to help and promote the economic life of their members. They develop saving habit of members. The saving of members is later utilized for different purposes such as production, distribution, education, health, game and sports, cultural and traditional activities. These facilities promote the living standard of people.

Proper Utilization of Resources:

Co-operatives help to develop managerial skills in their member. They provide different training to their member regarding management of organization and resources. It helps in effective utilization of resources so that people will know the importance of scare resources.

Democratic Management:

Co-operative organization practices a democratic system of management. They provide freedom to express ideas, knowledge, and views, among their members. It develops a democratic culture in society. They encourage the member to accept norms, values, rules, and regulation of the organization.









Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.

Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.





  1. The preliminary meeting is the first stage before starting a co-operative activity, at this meeting all the members will discuss the different matter such as problems and benefit of the co-operative number of members, objectives, capital required, rules, and regulation.
  2. Application for registration the second stage of co-operative registration. At this stage, a complete registration form is submitted to register department of co-operative.
  3. NCDB is the highest authority to develop plans and policies relating to the co-operative organization.
  4. Co-operative organizations encourage a saving habit of people by providing a high rate of interest on saving.

Very Short Questions

The functions od National Co-operative Development Board are as follows:

  •  Formation of plan and policies.
  • Support to Nepal Government.
  • Conduct necessary research and study.
  • Provide credit facility.
  • Investment in co-operative organization.
  • Provide Guarantee for Securities.
  • Provide technical Assistance.
  • To enter into agreement for joint investment with local and foreign investors companies, institutions, for industrial development.


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