The distribution of profits based upon the level of patronage in the business is a common feature of?
Answer Details
The distribution of profits based upon the level of patronage in the business is a common feature of co-operative societies. In a co-operative society, the members are both owners and customers of the business. The profits earned by the society are distributed among the members in proportion to the amount of business each member has transacted with the society. This is known as the principle of patronage. The more business a member does with the co-operative, the greater their share of the profits. This is in contrast to a company, where profits are distributed among shareholders according to the number of shares they own, regardless of how much business they do with the company. The principle of patronage is a key feature of co-operative societies, and is intended to ensure that the benefits of the business are shared fairly among the members.