Defination of a multi state
cooperative society : -
A multi state cooperative society is registered from the
centre i.e. Delhi .
The co-agent social orders, with articles not kept to one state and serving the
hobbies of parts in more than one state for social and budgetary improvement of
its parts through self improvement and common help as per the co-agent
standards are recognized as Multi State Cooperative Societies.
Types of multi state
cooperative societies and requirements: -
A multi state cooperative society is of various types-
Credit, Housing, Agriculture, Transport, Hospital, Sugar, Stores, Fishery,
Handloom, Labour, Consumer and Multi Purpose Co-operative Society. The basic
formalities for forming this society is to arrange at least 50 members from two
states each. There can be more than 50 members as well but each additional
state requires a minimum of 50 members from that state. These first fifty
members are ordinary members who have voting right and to whom shares are
allotted. The second category of members are nominal members to whom shares are
not allotted, who do not have voting right and who never participate in any of
the general body meetings.
Role of Governing Body
Members of Multi State :-
As far the interim management committee list is concerned
who are responsible for the management and handling of the society, the society
should minimum 7 members and this list
can go upto 21 members. After the 97th Constitutional Amendment Act 2011 from
February 2013, it is mandatory to keep 2 ladies and 1 extra member who belongs
to Scheduled Caste or to Scheduled Tribe in the main governing body list. Till
today, there are 900-950 Multi State Cooperative Societies out of which maximum
are credit. The governing body members take part in annual general body
meetings, special general body meetings, resolutions, notice, quorums etc.
Just for example in a credit cooperative society, if the
society wants to make any scheme like gold loan, automobile loan, fixed deposit
loan, double deposit plan, triple deposit plan or any special scheme, the
society has to give a prior 15 days notice to all its members by speed post,
newspaper publication etc. After 15 days, the general body meeting is
conducted. The meeting can only happen if the quorum is one-fifth of the total
members present and voting during the resolution. The signatures of the governing
body members as well as ordinary members present and voting are taken in the
minutes book and maintained for future records. The special general body
meeting can be conducted by giving a notice of at least seven days. A society
should conduct at least 4 general body meetings in every financial year.
Moreover, in every financial year, the society should hire a chartered
accountant in a general body meeting by passing a resolution. This CA looks
after the accounts of the society and files the balance sheets and income tax
return. The societies except Credit, Housing and Multi Purpose can collect
money from its members on the basis of shared allotment and advance. They can
give dividends to their members on shares and commissions on advance. Moreover
as per the rules of MSCS Act 2002, a person already being a member of a society
cannot be a member of a multi state cooperative society of the same type.
Management of a Multi State
Cooperative Society : -
The elections of the cooperative society is held first time
within six months from the date of its registration. Thereafter the elections
are conducted at every five years. A President can remain as a President for
two consecutive times but the third time, the President has to change. No part
of the funds, other than net profits of a multi state cooperative society shall
be divided by way of bonus or dividend or otherwise distributed among its
members. The net profits of the multi state society shall be calculated by
deducting from the gross profit for the year, all interest accrued, and
accruing in relation to amounts which are overdue, establishment charges,
interest payable on loans and deposits, audit fees, working expenses including
repairs, rent, taxes and depreciation, bonus payable to employees under the law
relating to payment of bonus for the time being in force, and equalization fund
for such bonus, provision for payment of income-tax and making approved donations
under the Income Tax Act 1961, development rebate, provision for development
fund, bad debt fund, price fluctuation fund, dividend equalization fund, share
capital redemption fund, investment fluctuation fund, share capital redemption
fund, investment fluctuation fund, provision for retirement benefits to
employees and after providing for or writing off bad debts and losses not
adjusted against any fund created out of profit. The condition is that such
society may add to the net profits for the year interest accrued in the
preceding years, but recovered during the year. In case of multi state
cooperative societies which do not have share capital, the surplus of income
over expenditure shall not be treated as net profits and such surplus shall be
dealt with in accordance with the bye-laws. A multi state cooperative society
shall, out of its net profits in any year transfer an amount not less than
twenty-five percent to the reserve fund, credit one percent to cooperative
education fund maintained by the National Co-operative Union of India Limited,
New Delhi or transfer an amount not less than ten percent to a reserve fund for
meeting unforeseen losses. No multi state cooperative society shall make a
contribution either in money or in kind, whether directly or indirectly, to an
institution which has an object of furtherance of the interest of a political
party. There is a restriction on loan as well. No cooperative society other
than cooperative bank shall make a loan to a member on the security of this
share or on the security of a non-member. But the society can make a loan to a
depositor on the security of this deposit. The multi state society my receive
deposits, raise loans and receive grants from external sources to such extent
and under such conditions as may be mentioned in the memorandum provided that
the total amount of deposits and loans received during any financial year shall
not exceed ten times of the sum of subscribed share capital and accumulated
reserves. The net accumulated reserves is calculated by subtracting accumulated
losses from accumulated reserves.
Time Taken for registration :
-
Generally, the maximum time period for a multi statecooperative society registration is 4
months. In case, the application receives an objection, in that case, the
application can be filed again and in certain circumstances, the society
registration can be done earlier also on the basis of earlier rejections or on
political pressures.
Besides registration, the amendment proposal is also filed
in the Ministry of Agriculture. It takes normally three to four months. It is
very rare that amendment proposal is rejected. We can file amendment if we want
to increase our area of operation i.e. number of states or increase our
authorized share capital or change our name or change our office address.
The documents filed along with amendment proposal are bank
statement, audited balance sheets showing net profit and turnover. The ministry
demands justification and proper reasons why a society proposal should be
amended.
Benefits of a multi state
cooperative society : -
Overall, a multi state cooperative society is a useful
alternative for all real estate
companies, public limited, private limited and chit fund
companies where almost saturation has reached. This Centre Act has been passed
by the parliament in the year 2002. The mission of the multi state society is
to facilitate the voluntary formation
and democratic functioning of cooperatives as peoples institutions based
on self help and mutual aid and enable them to promote their economic and
social betterment and to provide functional autonomy.