Laws Applicable to Co-Operative Society
The Cooperative Societies Act, 1912
expanded the sphere of cooperation between its members and provided for
supervision by central organization. A cooperative society, which has its
object the promotion of the economic interests of its members in accordance
with the co-operative principles, may be registered with limited or unlimited
liability by filing application to the registering authority with
requisite documents to be submitted by them
A Co-operative
Society has to conduct itself as per the following listed below:
- Co-operative
Societies Act under which the same is registered whether it be under state Act
or Central Act.
- Co-operative
Societies rules made there under whether it be central or state rules
- Bye-laws
approved by the registrar at the time of registration and amendments made from
time to time and approved by the registrar, these bye-laws have to be formed by
the concerned members themselves and present it to the registration authority
for its approval.
- Notification
and Orders by the concerned Government
The following steps have to be followed
while forming a Co-operative society, they are
Step
1: Ten Individuals together who are desirous of forming a Society
To form a society, law
mandates that 10 members minimum must show intention to be part of the society
having same aim and objective to be achieved through the society for their
mutual benefit and thereby be desirous to be part of it.
Step
2: Provisional Committee to select Chief Promoter
Once
a group of individuals have a desire to form a society the next step should be
there must be a provisional committee of which everyone is part of and all of
them should by mutual consent or by majority whichever their prefer must choose
a person who will be a chief promoter of the society which is going to be
formed by them.
Step
3: A Name for the Society has to be selected
Thereafter once a chief
promoter is selected by set of individuals among them, they have to select a
name for the co-operative society which they wish to form
Step
4: Application has to be made to the Registration Authority
Once the name of the society
is selected by the members then they have to make a application to the
registration authority stating that they have a intention to form a society and
the name of the society has to be given to the authority for its approval and
registering authority has to confirm that name is in conformity with laws and
issue a confirmation certificate to the members. Then when the members get
their name approval from the authority it is valid for 3 months from the date
of approval.
Step
5: entrance fees and share capital
Thereafter once name approval comes from
the concerned authority, the entrance fee and the share capital must be
collected from the concerned prospective members to meet the statutory
requirements under law and it can be prescribed by the members themselves or
society act mandates certain fees to be paid by them.
Step
6: Bank Account
Thereafter once the
prescribed fee and share capital is collect from the prospective members, then
as per the directions of the registering authority promoter has to open a bank
account in the name of the society and deposit the said fees and share capital
in that account and a certificate has to be obtained from the bank to that
effect
Step
7: Application for registration
Once the bank formalities are completed
then the promoter has to apply for the society formation to the registration
authority and it has to be accompanied with set of documents, they are
Form No. A in quadruplicate signed by 90% of the promoter
members
1. List of promoter members
2. Bank Certificate
3. Detailed explanation of working of the society.
4. Four copies of proposed bye-laws of the society.
5. Proof of payment of registration charges.
6. Other documents such as affidavits, indemnity bonds, any documents specified
by the Registrar also have to be submitted.
All these documents have to
be submitted at the time of applying for registration of the society to the
registering authority and the authority after it is satisfied with the
documents submitted to it has to apply its mind to whether or not to register
the said society.
Step
8: Registrar has to acknowledge
After the submission of the
said documents has mentioned in step 7, the registrar of that municipal ward
has to enter the particulars in the book called the “register of Application”
which is generally specified in form B and give it a serial number to the
application. Thereafter the registrar has to issue a receipt to that effect and
give it to prospective members to know the status of the application when it is
pending.
Then the registrar after
perusal of the records submitted to him/her has to make a decision whether has
to issue a certificate of registration or not and if there are any discrepancies
noticed then he/she has to inform the members of the same and get it rectified
if any.
Step
9: Registration
Last step is that the
registering authority after being satisfied with the documents meeting the
legal requirements will notify the registration of the society in the official
gazette mentioned by the state or central government and should issue the
registration certificate of the society and give it to the members of the
society.
Conclusion
In India, Co-operative
Societies were regarded as ideal instruments to motivate the people to come
together and help themselves in the process of eliminating the unscrupulous
middlemen making a huge profit at the expense of the society.
The main guiding factor if an
individual or group of individuals want to form a society must be whether all
the concerned members have common goal to achieve or not, it is important
factor because only when they share common desire or intention then only
society is desirable otherwise the whole purpose of forming a society will be
defeated.
Societies like any other
business structure come with certain advantages and disadvantages, they are:
Advantages
- Cooperative
stores supply quality goods unlike other shops wherein adulterated foods maybe
given to its consumers and thus saved them from adulteration and other
malpractices.
- As
consumers or members of the society are the owners and managers of such stores,
genuine requirements of the majority of consumers can be met. In other words,
goods required by a majority of the customers or members of the society are
always dealt by such stores.
- Cooperative
societies are an important form of democratic business enterprise because
ownership is not vested in one person completely so as a result, no single
group can secure control over the organization.
Disadvantages
- It
only caters to the needs of small and medium-income groups so when there are
large group with higher economic interest then it is preferable to choose
another business model.
- There
is much dependence on the honesty, integrity and loyalty of members and workers
and once there are trust issues between the members it is hard to transact
business thereafter.
- It
is limited to certain objectives hence profits are minimal.
Management of society usually rests in the hands of people
with less managerial experience due to which society will suffer and many do
not invest in hiring professionals to handle the society due to lack of funds
or interest so henceforth growth of the society maybe put to stake by its own
members.
