A business organization can take much structure, and one such structure is that of a cooperative society. The cooperative societies have distinctive features of democratic leadership and joint ownership. The concept of a cooperative society is not new to us, and it prevails in almost every country. Hence, this is almost a worldwide accepted concept. The business format like cooperative society deals with sectors like food, agriculture, healthcare, finance, etc. the ultimate aim behind forming a cooperative society is in order to safeguard the interest of weaker sections.
It is significant to note that this business structure is the voluntary association of people, whose aim is to do the welfare of its members. To setup or form a co-operative society, one has to abide by the certain set prescribed rules or guidelines. Further, these set of rules and regulations have to be followed in sequential order. Whereas in all the other forms of business structure, whether be it a partnership or joint-stock company or sole trader, the primary aim to increase the level of profits. Furthermore, to get the registration of a cooperative society done, ten or more individuals are required together to form a society. Moreover, one of the essential requirements for registration is that the individuals who are forming the society must need to be commonly desirous of forming it.
The ultimate aim of a co-operative society is to safeguard the interest of the economically weaker and backward sections of the society. In every type of organization, whether it is a sole proprietorship, Joint-stock Company or a partnership firm the primary motive is to increase the level of profits. Further, a cooperative society is the only form of business structure, which is considered as a democratic set-up operated by its members for serving the interest.
The concept of a cooperative society is governed and regulated by the Cooperative Societies Act, 1912. This is the central Act formulated by the union with the freedom to the states to formulate their own state act regulating and governing the cooperative societies. The act formulated by the state government must be suitable as per the local conditions prevailing in that state. Still, again it is noteworthy to note that conditions must not be derogatory towards the central government act.
What are the Types of Cooperative Societies Available in India?
There are sets of different types of cooperative societies available in India, everyone having unique features with them:
- Consumer Cooperative Society: The Consumers Co-operative Society is formulated for considering the interest and grievance of the general public. Subsequent to the establishment of a consumer society, its members primarily focuses on providing reasonable goods to the consumers by eliminating the scope of middleman and directly buying the products from the concerned manufacturers.
- Producer Cooperative Society: The Producers Co-operative Society is mainly formulated to safeguard the interest of the small producers. The society accomplishes its aim by availing the items that a producer’s needs like machinery, equipment, raw material, etc.
- Marketing Cooperative Society: The Marketing Cooperative Society is formed to help small manufacturers and producers who find difficulty in selling their products individually. Further, the members of this society collect the products from the concerned parties and take responsibility for selling them in the market.
- Cooperative Credit Society: As the name suggests, the Cooperative Credit Society works on the objective of offering financial support. Cooperative Credit Society firstly accepts deposits from its members and thereafter grants them loans at reasonable Rates of Interest.
- Cooperative Housing Society: Cooperative Housing Society is mainly established to provide the facility of residential houses to its members. Under this, the society firstly purchases land, develops it and constructs houses or flats on it and then allots the same to its members. Further, some these societies offer loans to its members at a lower rate of interest to help them construct their own houses.
- Cooperative Farming Societies: The last of a cooperative society is the Cooperative Farming Society. These Societies are formed by small farmers, who decide to work jointly and thereby enjoy the benefits of large scale farming.
What are the Documents Required for the Registration of a Cooperative Society?
Following are the set of documents required for registering a cooperative society:
- List of the Promoter Members
- Form No. An in quadruplicate and duly signed by 90 percent of the promoter members.
- Bank Certificate
- A detailed explanation of society’s working
- Four copies of the proposed bye-laws of the society
- Proof of payment of the registration charges
- Other documents such as the affidavits, indemnity bonds, or any other documents specified by the Registrar.
- Submit the PAN Card number of all the members of the concerned society together with the application for registration.
- Deposit the valid Residential and Identity proof of all the members by way of their Driving License, Aadhar Card, Bank Statement, Utility Bill and Passport.
- Prepare a Memorandum of Association (MOA) that must include these details and information:
- Central objectives of the society concerned for which it got established
- All details and information of the members forming the society
- The address proof of the society’s registered office
- Prepare the society’s Article of Association (AOA) including the following information
- Society’s bylaws for maintaining day to day affairs of the concerned society
- Membership of the concerned cooperative society
- Details and Particulars regarding future meetings
- Information about the Auditors
- Forms of Arbitration in case of any dispute
- Ways out of dissolving the concerned society
- A Cover Letter will clearly declare about the objective and purpose of the society concerned. It is significant to note that every founding member of the society concerned has to sign the cover letter.
- A copy of the Address Proof, where the society’s registered office will get located together with the No-Objection Certificate from the landlord if any.
- Give a complete list of all the members of the managing body together with their signatures.
- The last and the most crucial document is the declaration by the society’s president. This declaration is to be submitted together with the application. Further, the president must confirm that he is competent and willingly want to hold the stated position.
What is the Procedure for the Registration of the Cooperative Societies?
Following are the steps required in the procedure for Cooperative Society registration:
- To start with a Cooperative Society, the first thing that is essential is to find ten individuals who want to share a common objective and also desire to commence a Society.
- The next step in the procedure is to form a Provisional Committee and then elect a chief Promoter amongst them.
- Next, all the members of the concerned society must voluntarily select a name for the society.
- Now the members of the concerned society need to apply to the Registration Authority for reservation name of the Co-operative Society. It is significant to note that the members of the society concerned must obtain a confirmation letter regarding the name reservation. Further, it is again significant to note that the name reserved shall be valid for three months.
- The next step is to collect the membership fees together with the share capital from all the prospective members of the society concerned
- Now the sixth step is to open a bank account in the society’s name and after that deposit the collected membership fees and share capital in that concerned account. Further, it is significant to obtain a certificate in this respect.
- Now next step is to deposit the prescribed registration fees with the Reserve Bank of India (RBI) and thereafter obtain a receipt of one Challan.
- Now submit the concerned application for society’s registration with the Registrar of Societies of the concerned municipal ward together with the required documents.
- Subsequent to the application for registration, the Registrar will enter the particulars of the concerned society in his register in Form “B.” Thereafter the Registrar of Societies will issue a serial number and receipt in acknowledgment of the same.
Lastly, after the duly compliance of the requirements, the Registrar notifies the members about the society’s registration in the Official Gazette and will also issue the certificate of registration.