It is the main pillar of the Indonesian economy. It has therefore played an important role within.
Definition of Cooperative
The article 33 of the Constitution of 1945 contains a message for not to establish only the individual welfare but mainly the social welfare. To reach its goal therefore the cooperative is established.
The definition of cooperative is stated on the Cooperative Act that is in the article 1 subsection 1 of the Law of No. 25/1992 concerning the cooperative states as the follows.
"The cooperative is a corporation comprises persons or corporations based on its principle as the social movement concerning kinship principles."
The Base of Cooperatives
There are two kinds of the base of cooperative namely Pancasila (the five basic principles of the Republic of Indonesia) and the Constitution of 19945.
- Pancasila is the ideal base of the cooperatives. Therefore, its activities must have been based on the moral principles of Pancasila.
- The constitution of 2945 is the structural base of the cooperatives. It means that the cooperatives are a part of the national economic structures based on the article 33 subsection 1 of Constitution of 1945.
The Principle of Cooperatives
It belong to a corporations supported by kinship principles. All activities within are done by its members for the purpose of the joint welfare and truth.
The Purpose of Cooperatives.
These purpose are stated on the Cooperative Act as the follows
- improving its members welfare;
- improving social welfare;
- building foundations of the national economy.
The Roles and the Functions of Cooperatives within the Indonesian Society
The cooperative plays roles as the social economic movements and the main pillar of the national economy. These roles and functions are stated on the Law of Number 25/ 1992 (UU No. 25 Tahun 1992) as the follows.
- It is movement for generally establishing and developing economic skills of its members and the public society. There being of cooperative, its members and the society are capable of improving their welfares.
- It plays a role in improving the quality of the society lives.
- It supports the social economy as the principles of the national economic power.
- It develops and establishes the national economy based on the basis of kinship principles and the economic democracy.
The Establishment of Cooperatives
There are some requirements for either the primary cooperative or the secondary one as the follows.
- The primary cooperative is established by at least of 20 person while the secondary one is established by at least of three primary cooperative.
- It must be located in Indonesia.
- It is established with articles of incorporation's concerning it statutes.
Kinds of Cooperatives
Based on the same activities and the economic interests of its members, these following are some kinds of cooperatives.
- The credit cooperatives (Koperasi Simpan Pinjam) manage credit loans business.
- The consumer cooperatives manage stores business.
- The producer cooperatives manage production and marketing business.
- The marketing cooperatives manage the distribution of production demands of their members and also the marketing sales of their members products.
- The service cooperatives manage the service business.
Moreover, there are also multipurpose cooperative which manage various business activities of its members. This kind of cooperatives is well-known as the Rural Unit of Cooperative (KUD).
It is an economic development center in rural areas. Its members comprise of farmer, fishermen, handcrafters, and other groups of rural societies. Therefore, it plays an important role within the rural economy. This is the smallest unit of economic activities within the Indonesian economy.
The Organization Equipment's of Cooperatives
The equipment's of cooperative consist of general meeting, managers, and supervisors.
1) The general meeting is the highest authority within the cooperatives.
2) The managers are elected by the general meeting. Their duties are as the following:
- managing the cooperatives business;
- proposing work schedules, revenue budget plans, and the cooperative budgets;
- presenting financial statements and being in charge of undergoing their duties.
3) The Supervisors are elected by the general meeting. Their main duties are controlling the undergoing duties and management and making reports.
The Capital Sources of Cooperatives.
The capitals consist of own capitals and the capital loans.
1) Own capitals are derived from some basic contributions, obligatory deposits, reserve funds, and some donations.
- The basic contributions are paid in when the members first registered.
- The obligatory deposits are paid on some certain periods.
- The reserve funds are part of the saved Business Revenue Remnants (SHU).
- The donations are capital donations from other parties.
2) Capital loans are collected from the cooperative members, other cooperatives, banks, and other legal sources.
Business Revenue Remnants (SHU)
They are the profits earned by the cooperatives. They are used for
- reserve funds for example 20% for instance;
- the members for example 50% based on their dedication towards the cooperatives;
- the cooperative education funds for example 15%;
- other needs which have been decided in the general meeting for example 15%.
The Primary Roles of Cooperatives as the Corporations
As they have been generally described in the previous, the roles and the functions of cooperatives can be concluded from the determinations below.
- Being the corporations, cooperatives manage their companies business. Therefore they also produce goods and service for the social welfares.
- Being the social economic movement and the main pillar of the national economy the cooperatives should be able to develop the people's potentials.
On the other hand, they also play an important in recruiting large employees.