COOPERATIVE

SOCIETY
PRESENTED BY:INDU BHUSHAN PRASAD(52)

Definition
A cooperative is defined as

an autonomous association
of persons united voluntarily
to meet their common
economic, social, and
cultural needs and
aspirations through a jointlyowned and democraticallycontrolled enterprise.
A cooperative society may
also be defined as a business
owned and controlled equally
by the people who use its
services or who work at it.

Formation of a Co-operative
Society
A Co-operative Society can be formed as per the provisions

of the Cooperative Societies Act, 1912.

At least ten persons having the capacity to enter into a
contract with common economic objectives, like farming,
weaving, consuming, etc. can form a Co-operative Society.
A joint application along with the bye-laws of the society
containing the details about the society and its members,
has to be submitted to the Registrar of Co-operative
Societies of the concerned state.
After scrutiny of the application and the byelaws, the
registrar issues a Certificate of Registration.

Types of Co-operative
Societies
1. Consumers Co-operative Society: to protect
the interest of general consumers by making consumer
goods available at a reasonable price.

2. Producers Co-operative Society: to protect the

interest of small producers by making available items of
their need for production like raw materials, tools and
equipments, machinery, etc. Bayanika, Haryana
Handloom, is example of producers co-operative society.

3. Co-operative Marketing Society: These societies

are formed by small producers and manufacturers who
find it difficult to sell their products individually.

Types of Co-operative
Societies
4. Co-operative Credit Society: to provide financial support to the
members. The society accepts deposits from members and grants them loans at
reasonable rate of interest in times of need.
Examples: Village Co-operative Society, Urban Cooperative Banks

5. Co-operative Farming Society: These societies are formed by

small farmers to work jointly and thereby enjoy the benefits of large-scale
farming. Examples: Ex: Pani-panchayats

6. Housing Co-operative Society: to provide residential houses to

members they purchase land, and construct houses or flats and allot the same to
members. Some societies also provide loans at low rate of interest to members to
construct their own houses.
Examples: The Employees Housing Societies , Metropolitan Housing Cooperative Society

Characteristics of Co-operative Society

I. Open membership: A minimum of ten members are required to form a cooperative society. The Cooperative societies Act does not specify the maximum
number of members for any co-operative society.
ii. Voluntary Association: Members join as well as leave the co-operative
society voluntarily, that is by choice.
iii. State control: To protect the interest of members, co-operative societies are
placed under state control through registration.
iv. Sources of Finance: In a co-operative society capital is contributed by all
the members. However, it can easily raise loans and secure grants from
government after its registration.
v. Democratic Management: The society is managed by a group known as
Board of Directors. The members of the board of directors are the elected
representatives of the society.

Characteristics
vi. Service motive: Co-operatives are not formed to maximize
profit like other forms of business organization.
vii. Separate Legal Entity: A Co-operative Society is registered
under the Co-operative Societies Act. After registration a society
becomes a separate legal entity, with limited liability of its members.
viii. Distribution of Surplus: Every co-operative society in
addition to providing services to its members, also generates some
profit while conducting business.
ix. Self-help through mutual cooperation: Co-operative
Societies thrive on the principle of mutual help. They are the
organizations of financially weaker sections of society.

Requirements for Registration:

1. Application with the signature of all members
2. Bye-laws of the society containing:
(a) Name, address and aims and objectives of the
society
(b) Names, addresses and occupations of
members
(c) Mode of admitting new members
(d) Share capital and its division

ADVANTAGE
Easy formation
Open membership
Democratic control
Limited liability
Elimination of middlemans profits
State assistance
Stable life

LIMITATIONS
Limited capital
Problems in management
Lack of motivation
Lack of cooperation
Dependence on government

ROLE OF REGISTRAR OF COOPERATIVE SOCIETIES

Right from the Registration of a Cooperative

Society till the cancellation of its registration,

the Registrar acts as a friend, philosopher
and guide to the cooperatives and ensures
that Cooperative Societies function in
accordance with the Cooperative Act.

The main functions of the Registrar

Registration of Cooperative Societies
Registration of amendments in the Bye-laws

of Cooperative Societies
Amalgamation, Division and re-organization of
Cooperative Societies
Ensure timely Election of the Managing
Committee in Cooperative Societies
Ensure proper investment of funds by
Cooperative Societies

The main functions of the Registrar

Conduct audit, order inspection, and enquiry.
Settle disputes of Cooperative Societies

through the process of arbitration.

Order winding up and cancellation of
registration of defunct/non-functional societies.
Issue Instructions for the promotion of
business of different types
To approve proposals for enrolment,
resignation and cessation of membership in
Housing Cooperative; and

SOCIETIES TO WHICH THE ACT

APPLIES
Charitable societies
Military orphan funds or societies
Societies established for promotion of

science, literature, or for fine arts

Societies established for maintenance of
libraries or reading rooms for general public
Societies established for Public museums and
galleries for paintings or other works of art.

Multi-state Cooperative
societies: Object of the Act
Serving the interests of members in more than one
State, to facilitate the voluntary formation and
democratic functioning of cooperatives .
Multi-State Cooperative Society can be formed under
Multi State Cooperative Societies Act.
Multi-State Cooperative Societies Act, 2002 has
received Presidents assent.
The Act will supersede 1984 Act when brought into
force.
Under the Act, there will be a Central Registrar
overseeing and regulating multi-state cooperative
societies.

Duties, rights and liabilities of

members
Duty of every member - It is duty of every member of multi-state

cooperative society to promote and protect interests and objects of

the society.
Voting by members - Every member, including member who is
employee shall have one vote, irrespective of his shareholding.
Management of Society - Management of a multi-state cooperative
society will be a three tier structure. General body consists of all
members. They elect Board of Directors to exercise overall control
over operations. Day to day control is exercised by Chief Executive
who will be employee of the multi-state cooperative society.
Chairperson/President of society - A multi-state cooperative
society can have Chairperson/President and Vice Chairperson/Vice
President. A person who is Minister in central or State Government
cannot be elected to the post.- A person can be elected as
Chairperson/President only for two consecutive terms, full or part.

OFFICE BEARERS OF SOCIETIES

1. Election of directors
2. Powers and functions of Board
3. Chief Executive
4. Privileges of multi-state cooperative
society
5. Winding up of society

Tax shelter for co-operative societies

While a co-operative society is treated under

the Income-tax Act, 1961, as an assessee for

extending certain concessions in computing
taxable income, the income of a co-operative
society is not exempt in its entirety.

Examples:
Annapurna Mahila Credit Co-operative Society

Krishak Bharati Cooperative Limited

(KRIBHCO)
Anwarde Crop Pritection Co-operative Society 195/1980

Co-operative Societies in Delhi

S.No.

Registration No.

zone
1
121
SOUTH
2
158
SOUTH
3
239
SOUTH

Name of society
RAILWAY CGHS
ARVIND CGHS
ALANKRIT CGHS

Status of allotment of land

Audit

YES

NO

YES

YES

YES

YES

Thank you

Questions