The act was passed in 1990, and in order to help small enterprises, it was established as a law which had principles of cooperative association such as freedom of entering and leaving, the equal voting right, restraint of investing interest, and the dividend in accordance with the amount of use, under the circumstances in which tiny, small and medium enterprises were getting overwhelmed by big capitals as the Japanese capitalism grew.
1900年（明治33年）に成立した同法は、日本の資本主義は発達するに従って、中小零細企業が大資本に圧倒されている現状から、零細企業救済のため、加入脱退の自由、議決権平等、出資利子制限、利用分量配当といった協同組合原則の基本を組み入れた法律として制定された。