Cooperative Society Registration- Introduction

Cooperative Society Registration

Cooperative Society Registration- Introduction

A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest. Its aim is to serve the interest of the poorer sections of society through the principle of self-help and mutual help. The main objective is to provide support to the members. Nobody joins a cooperative society to earn profit. People come forward as a group, pool their individual resources, utilize them in the best possible manner, and derive some common benefit out of it. However, ‘Cooperative Societies’ is a State Subject (Entry 32 of List II of Seventh Schedule to Constitution, i.e. State List). Though the Act is still in force, it has been specifically repealed in almost all the States and those States have their own Cooperative Societies Act. Thus, practically, the Central Act is mainly of academic interest and as per preamble to the Act, the Act is to facilitate formation of cooperative societies for the promotion of thrift and self-help among agriculturists, artisans and persons of limited means. If object of the society is creation of funds to be lent to its members, all the members must be residing in the same town, village or group of villages or all members should be of same tribe, class, caste or occupation, unless Registrar otherwise directs. The provision of minimum 10 members above 18 years of age or residing in same town/village etc. is not applicable if a registered society is member of another society.

The Statement of Objects and reasons states as follows:

  • (a) Cooperative Society can be established for purpose of credit, production or distribution.
  • (b) Agricultural credit societies must be with unlimited liability.
  • (c) Unlimited society is not best form of cooperation for agricultural commodities.
  • (d) Unlimited society can distribute profits with permission of State Government.

A society which has as its object the promotion of economic interests of its members in accordance with cooperative principles can be registered as a Society. Similarly, a society established with the object of facilitating operation of such a society can also be registered under the Act. The society can be registered with limited or unlimited liability. However, unless State Government otherwise directs,

  • (1) Liability of a society of which a member is a registered society shall be limited.
  • (2) Liability of a society of which object is to creation of funds to be lent to members, and of which majority of members are agriculturists and of which no member is a registered society shall be unlimited.