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A glance at Multi-State Cooperative Society Act, 2002

A cooperative society protects the interest of the weaker section of the society. The primary motive of every organisation is to earn profits, but this is not the case with cooperative societies. A cooperative society is a group of individuals who voluntarily come together to achieve a common economic objective.

A multi-state cooperative society is a cooperative society registered under the Multi-State Cooperative Society Act, 2002. It consolidates and amends the law related to a cooperative society.

Multi-State Co-operative Society

Section 3(p) of the Multi-State Co-operative Society Act, 2002 defines Multi-State Cooperative Society. It states that a Multi-State Cooperative Society is registered or deemed to be registered under the Multi-State Cooperative Society Act, 2002.

Societies covered under this act are cooperative societies whose operations get extended to multiple states. These are also known as multi-state unit co-operatives.

The objective behind the act is to make laws that protect the interest of members of the different states who come together with a common motive. So, the act facilitated the creation and democratic functioning of the cooperative society with individuals of different states as its members.

Types of cooperative society

Types of cooperative societies are:

  1. Producer Cooperative Society: This cooperative society protects the rights of small producers. These societies do activities like processing, marketing and distributing the products created by the members. This society increases the possibility of marketing and efficiency of the producers to produce goods, who decide to work together.
  2. Consumer Cooperative Society: The consumers of the particular area with the motive to provide necessary commodities at optimum price do such businesses. They don’t work to earn profits but provide service to the consumers.
  3. Credit Unions: Credit Unions are members owned financial cooperatives. These societies provide credit and financial services to their members at competitive prices.
  4. Marketing Cooperative Society: These societies provide help to small scale producers to sell their products. The producers who wish to obtain the reasonable price of their products become members of such a society.
  5. Housing Cooperative Society: These societies help people construct houses reasonably. They build the house and offer it to its members. They give the option to its members to either purchase it by paying the whole amount at once or in instalments. They either construct the house or provide the plot for such construction.

Characteristics of registration of Multi-State Cooperative Society

  1. Open Membership: The membership of the cooperative society is open to all those who have common interests. To form a cooperative society, the minimum number of members must be 10.
  2. State Control: The state controls the cooperative societies. But only if the members of different states have common goals. These societies can be formed under the Multi-State Cooperative Society Act, 2002.
  3. Democratic Management: The board of directors manage the multi-state cooperative society. The members of the cooperative society appoint the board of directors.
  4. Voluntary Association: Cooperative society is a voluntary association where a member can join and leave at his will.
  5. Sources of Finance: Members of Cooperative society contribute the capital. Loans and secure grants can get raised from the government.
  6. Service Motive: The motive of a cooperative society is not to maximise profit but to provide service.
  7. Separate Legal Entity: After registration, a cooperative society is a separate legal entity.
  8. Distribution of Surplus: The cooperative society members earn some profit while conducting its business, and the surplus gets divided into the members as per their shares.
  9. Self-help through Mutual Cooperation: The principle of the Cooperative society is to help each other. So, the financially weaker section forms such societies.

Registration of Multi-State Cooperative Society

Registration procedure and conditions for the Multi-State Co-operative Society is provided under Chapter II of the Multi-State Cooperative Society Act, 2002.

Condition for Registration of Multi-State Cooperative Society

Section 5 of the Multi-State Cooperative Society Act, 2002 provides registration conditions. A multi-state cooperative society cannot be registered under the Multi-State Cooperative Act, 2002 until it fulfils the following conditions.

The conditions are as follow:

  • The main object of the cooperative society is to serve the interest of the members of different states.
  • Society should work for the social and economic betterment of its members.
  • It should have the word ‘limited’ or equal to ‘limited’ in its name.

Application Procedure for registration of Multi-State Cooperative Society

Section 6 of the Multi-State Cooperative Society Act, 2002 provides for the application for the registration of the Multi-State Cooperative Society. Such an application is made to the Central Registrar in the prescribed form.

Requirement of the application:

  • At least 50 people of each concerned state must sign the application.
  • The representative on behalf of at least five societies not registered in the same state must authorise the application.
  • The representative of each society shall authorise the application.
  • The application is accompanied by four copies of the proposed bye-laws.

Documents required for setting up a Multi-State Cooperative Society

  • A duly signed copy of proposed bye-laws.
  • List of contributors of the share capital and the contribution of their capital.
  • A certificate from the bank that shows the credit balance of the desired cooperative society
  • A scheme that indicates the financial reasonability of the proposed society. It should also express how the enlistment of the society would be helpful to the society and monetary advancement of the individuals.
  • A resolution that provides the name and the address of the chief promoter
  • A copy of the resolution in favour of the person who is authorised to make the bye-laws

Benefits of registering the Multi-State Cooperative Society

Chapter VI of the Multi-State Cooperative Society Act, 2002 provides the benefits of registration of the cooperative societies. Multi-State Cooperative societies can charge and set off the share or interest of members. With the share of contribution interest, a member is not liable to attachment of his property. A registered or list of members kept with multi-state cooperative societies is the prima facie evidence of the date the person entered in the register or list as a member of the multi-state cooperative society.

Conclusion

Multi-State Cooperative Society has its operational area across the state. It serves the members of more than one state to facilitate voluntary and democratic formation and promotes economic and social betterment to provide functional autonomy. Such societies get formed for the betterment of their members. The objective behind the evolution of society is for the economic and social improvement of its members. Registration of the Multi-State Cooperative Society Under the Multi-State Cooperative Society Act, 2002 brings benefits.

FAQs

Can a Multi-State Cooperative Society borrow funds?

A Multi-State Cooperative Society can borrow loans accept deposits and grants until the limit specified in the bye-laws of the cooperative society.

What are the characteristics of the Multi-State Cooperative Society?

  • Open membership
  • Democratic Management
  • Voluntary Association
  • Service Motive
  • Separate Legal Entity
  • Distribution of surplus

What do you mean by bye-laws?

“Bye-Laws” means laws in force that are duly registered or deemed to register under the Multi-State Cooperative Societies Act, 2002 . Bye-laws get defined under section 3(c) of the Multi-State Cooperative Societies Act, 2002.

Who appoints Central Registrar?

The central government appoints a Central Registrar.

About Author

Anshita Surana, born in the year 1999 in Guwahati, Assam and brought up in Hanumangarh, Rajasthan, where I completed my elementary and secondary education from the CBSE board.

Currently, Pursuing B.B.A.LL.B(H) from K. R. Mangalam University, Gurugram.