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Cooperative society


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Cooperative society

  2. 2. 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 jointly-owned and democratically-controlled 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.
  3. 3. 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 bye–laws, the registrar issues a Certificate of Registration.
  4. 4. 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.
  5. 5. 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 Co-operative Society
  6. 6. Characteristics of Co-operative Society I. Open membership: A minimum of ten members are required to form a co- operative society. The Co–operative 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.
  7. 7. 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.
  8. 8. 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
  9. 9. ADVANTAGE  Easy formation  Open membership  Democratic control  Limited liability  Elimination of middleman’s profits  State assistance  Stable life
  10. 10. LIMITATIONS  Limited capital  Problems in management  Lack of motivation  Lack of cooperation  Dependence on government
  11. 11. 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.
  12. 12. 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
  13. 13. 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
  14. 14. 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.
  15. 15. 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 President’s 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.
  16. 16. 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.
  17. 17. 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
  18. 18.  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. Tax shelter for co-operative societies
  19. 19. 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. Name of society Status of allotment of land Audit zone  1 121 RAILWAY CGHS YES NO SOUTH  2 158 ARVIND CGHS YES YES SOUTH  3 239 ALANKRIT CGHS YES YES SOUTH
  20. 20. Thank you
  21. 21. Questions