What is the maximum limit on the share ownership of a member in a cooperative?

What is the maximum limit on the share ownership of a member in a cooperative?

• A. 5%
• B. 25%
• C. 10%
• D. 20%

Answer: (C)

The important idea here is to protect fair governance by preventing any one member from accumulating too much influence. A cap on share ownership, such as ten percent, keeps control spread more broadly among members and reduces the risk that a single member could steer decisions or capture a large portion of profits simply by owning more shares. If the limit were much higher, a single member could gain outsized influence; if it were much lower, it might unnecessarily restrict legitimate investment without addressing governance risk. So ten percent is chosen as the balance point that preserves the cooperative’s democratic character and equitable participation.

The important idea here is to protect fair governance by preventing any one member from accumulating too much influence. A cap on share ownership, such as ten percent, keeps control spread more broadly among members and reduces the risk that a single member could steer decisions or capture a large portion of profits simply by owning more shares. If the limit were much higher, a single member could gain outsized influence; if it were much lower, it might unnecessarily restrict legitimate investment without addressing governance risk. So ten percent is chosen as the balance point that preserves the cooperative’s democratic character and equitable participation.