1. society

OVERVIEW OF CO-OP SECTOR
PROFESSIONAL OPPORTUNITIES
FOR CAs
FORMATION OF CO-OP SOC
DRAFTING OF BYLAWS
REGISTRATION
T.N.C.SRIDHAR
JCIT ( RETD)
ROAD MAP
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History of co-op movement
Concept of mutuality
Types of co-op soc
Players -visionaries
-co-operators -executives
-workforce -professionals
-authorities-co-op dept-RBI
2
• Legislations
• Role of professional
• Formation-basic requirementformalities-documentations
• Drafting bylaws
• -salient features –
• basic ingredients
• -procedures –adoptionsamendments
3
OVERVIEW OF CO-OP SECTOR
• 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.
• International Co-operative Alliance
(ICA)
4
MEANING OF COOPERATION
•
•
•
•
Latin word - co- operari
‘ co ’ means ‘with’ +
‘ operari ’ means ‘to work’
Co-operation ’ means working together
• Section 4 of the Co-operative Societies Act,
1912 defines cooperative society as
• “a society which has as its objectives the
promotion of economic interest of its
members in accordance with cooperative
principles.“
5
Co-operative Society ’
means
 A voluntary association of persons
 working together with common economic
objective
 providing support to the members
 self-help and mutual help
 non-profit motive
 pooling individual resources for group welfare
 for common benefit
6
CO-OPERATIVES IN WORLD
(HISTORY)
• Robert Owen father of co-op
movement
• Rochdale Pioneers,manchester,UK1844
• Weavers’ co-op
• consumer—UK
• Milk-Denmark
• Agricultural credit--Germany
7
CO-OPERATIVES IN INDIA
(HISTORY)
• ‘SUCCESS OF CO-OP MOVEMENT
SHOULD NOT BE MEASURED BY
THE NUMBER OF CO-OP SOC
FORMED,
• BUT
• BY THE MORAL CONDITION OF
THE CO-OPERATORS’.
M.K.GANDHI
8
STATE OF INDIAN FARMERS
•Indian farmers
•born in debt,
•grow in debt &
•dies in debt
9
AIM
• To mitigate the ryots
against exploitation by
private money lenders,
• Act passed in 1904
10
CO-OPERATIVES IN INDIA
(HISTORY)
1st co-op in Asia formed at Kanaginahal
village in Dharwar (now Gadag) district in
1914 by late Shri Siddanagowda
SannaRamanagaowda Patil
1912-co-op act amended to facilitate
various types of co-operatives- District
Central Co-op banks-Marketing co-op to
enable Agricultural produce sale
11
• 1919-As per recommendation of
Chelmsford reforms the subject
was transferred from central to
provincial government
• 1935- R.B.I. was formed
(1.4.1935- All Fools Day)
• 1949-Banking Regulation Act
passed
12
13
14
Rupee one:
Other currency notes
Issued by
Government of India
RBI
Signed by
secretary ministry of finance
Governor RBI
Photo/water mark
One rupee coin
Gandhiji since 02/10/1987
language
13
15( Nepali, Konkani added in
1996)
nature
Legal tender
Promissory note
Year of printing
Till 1994
Mentioned after 2005
Serial no.
once side bottom
Twice- left bottom and right
top
15
• 1951-A.D. Gorwala committee formed for
All India Rural Credit Survey Committee
• appointed by RBI
• Report submitted in 1954
• “co-op has failed in India
• but it shall succeed,
• there is no other way for development of
the country
• co-op is inevitable”
16
REFORMS
• Government participation in co-op soc
• Large size multipurpose co-op soc
(LSMP)
• Registration, Arbitration, liquidation –
control with co-op dept
• Licensing provisions of BR Act , CRR
SLR reporting –control with RBI
17
• 1959-Karnataka state co-op soc
act
• 1966-(1/3/66)-B.R. Act amended
with a new chapter ‘As Applicable
‘to Co-op Soc (AACS)
• To control co-op banks- use of
‘Bank/Banker/Banking’ prohibited
for those not having license under
B.R. Act
18
• Credit soc can carry on banking
activity except issue of cheques,
DDs & money transfers. , they
can accept deposit only from
members & give loan only to
members
• 1995-Deposit Insurance & Credit
Guaranty Corporation (DICGC)
19
The Karnataka Souharda
Sahakari Act,
• Karnataka Souharda Sahakari Act in
1997. (Karnataka Act 17 of 2000).
The act came into force with effect
from January 1st , 2001
with certain observations to modify
and include specific suggestions of
Reserve Bank of India with regard to
Banking Business.
20
• No Government share capital, loan,
subsidy or any financial help
• No Government control
• AGM supreme
• Auditor appointment to be decided by
AGM and not government appointed
• Option to choose auditors from panel
published by co-op dept
• Auditor must complete audit before last
date of august every year as per sec 63 of
KCS Act
21
• Complaints to Karnataka state Souharda
Federal Corp Ltd
• 2 parallel Acts free flow migration
• KCS Act for only co-op Hsg soc –others
optional
• Conduct of Election by Co-op election
commissioner
• Disputes regarding election only to
jurisdictional civil court
22
THE CONSTITUTION (97TH
AMENDMENT) ACT, 2011
WITH EFFECT FROM 15TH
FEBRUARY 2012.
 Constitution of India divided into twenty two
parts, 395 articles and twelve schedules.
 Part-III –
 Fundamental Rights (Articles 12 to 35).
 Article 19(c) to include under right to
freedom the right to citizens to form cooperative societies.
23
Part-IV
Directive Principles of
State Policy
• Article 43B
• “Promotion of co-operative societies –
The State shall endeavor to promote
• voluntary formation,
• autonomous functioning,
• democratic control and
• professional management of
• co-operative societies”
24
Part IXB
 – Article 243ZH to Article 243ZT
 The Co-operative Societies – inserting articles relating
to the co-operative societies.
• This part gives out the co-operative societies related
provisions of
• incorporation,
• board structure,
• election of members,
• application of this part among others.
• Article 243ZR
• under this part also specifies that these provisions
shall also apply to multi-state co-operative societies.
25
After Part IXA of the
constitution,
Part IXB was inserted to
accommodate state vs. centre
roles.
It inter alia provides for:
• (i) Incorporation, regulation and winding up of
cooperative societies based on the principles
of voluntary formation, democratic member
control, member economic participation and
autonomous functioning;
26
• (ii) Specifying the maximum number
of directors of a co-operative society
to be not exceeding 21 members;
• (iii)a fixed term of 5 years from the
date of election in respect of the
elected members of the board and its
office bearers; and an authority or
body for the conduct of elections to a
cooperative society;
27
• (iv)a maximum time limit of 6 months
during which board of directors of a cooperative society could be kept under
supersession or suspension;
• (v) independent professional audit;
• (vi) right of information to the members of
the co-operative societies;
• (vii) Empowering the State Governments
to obtain periodic reports of activities and
accounts of co-operative societies;
28
• (viii) reservation of
• (1/6)seat for OBC
• (1/6) seat for the Scheduled Castes or the
Scheduled Tribes and
• (2/6) seats for women
• on the board of every cooperative society,
which have individuals as members from
such categories; and
• (ix) Penalties in respect of offences
relating to co-operative societies.
29
CLASSIFICATION OF
COOPERATIVES
Agriculture/ Forestry
Non- Agriculture
Banking/ Credit Unions
30
THE DOCUMENTS
REQUIRED FOR
REGISTRATION OF
FLAT OWNER’S HOUSING
SOCIETY
1) 7/12 extract of the land or property card.
2) Certificate from the competent authority
regarding non-agricultural land
3) The order regarding applicable/non
applicable of land ceiling Act
31
4) Construction layout approved by the
competent authority
5) Letter of sanction for starting
construction
6) Certificate regarding completion of
construction work
7) Development Agreement if the land
is taken for development
32
8) Letter of Power of Attorney of the
land
9) Title search report of the land
10) The registered agreement of
purchases of the flat with necessary
stamp duty paid
11) Architect Certificate regarding
construction
33
12) At least ten members are necessary for
registration of society.
13) If the land is given by the government or
undertaking agency of the government
then its guarantee letter
14) No objection certificates from the
Charitable Commissioner if the land is of
Trust.
15) Certificate of the competent authority
regarding non-agricultural plot
34
16) Application for Registering Society (A form)
17) Table giving information of society (B )
18) Table giving details of the members (C )
19) Statement of Accounts of the Members (D )
20) Notarized Guarantee letter by the Chief
Promoter of the society on the stamp
Paper of Rs. 100/21) List of Members
35
22) Scheme of the Society
23) Application for reserving name
24) Notarized Guarantee letter by the
Builder, Promoter on the Stamp Paper of
Rs. 100/-Affidavit of Members (Affidavit
of Minimum 10 Promoters)
25) Two copies of bye laws of the Society
approved by the Commissioner, Cooperation and Registrar, Co-operative
Societies
36
26) Proof of the bank balance of the
promoter member (deposit of each share
of Rs. 500 and admission fee of Rs. 100),
after getting permission for reservation in
the District Central Co-operative Bank
27) Challan of Rs. 2500/- deposited in the
Government Treasury Registration fee for
the Housing Society of Backward class is
Rs. 50/-
37
PROFESSIONAL
OPPORTUNITIES- CO-OP
SECTOR
1. Registration of housing society
2. Drafting bye laws of the Society
3. Legal opinion
4. Legal documentation and advice on
Sale/Purchase/Lease of Property
5. Verification of Title Deed of the Property
6. Finance Agreements
7. Building, Development and Construction
Contracts
8. Real estate investment and development projects
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9. Taxation and Accounting
10. Registration and Stamp Duty
11. Advisory in Foreign Direct Investment in
Real Estate
12. Valuation of property
13. Arbitration and Consulting
14. Litigation Support
15. Tax Appeals
16 Compliance with Development Control
Regulations
39
17. Acquisition, sale and transfer of Immovable
property in India by Non Resident Indians
and Persons resident outside India
18. Real Estate Venture Capital Investment
Negotiations
19. Property Specific Joint Venture agreements
20. Green Building consultancy
21. Statutory compliances
22. Statutory Audit
23 Internal Audit
24. Conveyance and Deemed Conveyance
40
25. Project Management Consultancy
26. Feasibility Report in case of
redevelopment of property
27. Drafting Agreement with builders
28. Writing articles in cooperative/NPO
related magazines and other
publications
29. Participating as speaker in
conferences
30. Communicating with people related to
cooperative activities
41
31. Building a cooperative information
website
32. Writing books on topics covered under
cooperative
33. Projecting oneself as a cooperative
society expert
34. Reaching out to the prospective service
receivers
35. Using social media to reach more
number of people related to Cooperative
societies
42
36. Increase expertise in the field of
Cooperative society by undertaking
capacity building initiatives
37. Registration of co-operative society
under various applicable labour
legislations, if applicable
38. Obtaining Licenses
39. Completion of Forms
40. Submission of Returns on a regular
basis
43
FORMATION OF CO-OP SOC
• Fundamental right
• -cannot be refused
• Sec 5• object should be
• economic interest of members
• in accordance with principles of cooperation (mutuality)
44
THE BASIC GUIDELINES FOR
THE FORMATION OF COOPERATIVES UNDER
KARNATAKA SOUHARDA
SAHAKRI ACT, 1997
• There should be at least ten persons.
• These persons should be from different families.
• These persons should be competent to enter into
a contract under the Indian contracts Act 1872.
45
• He should reside in the area of operation
of the Co-operative.
• He should be eligible as per the bye-laws
of the proposed Co-operative.
• Any individual, firm, company or any other
body corporate can become member of
the Co-operative.
• Any Co-operative registered under this Act
(For Union co-operative) or Societies
registration Act 1860.
46
• The object of the Co-operative should be
promotion of economic interests or general
welfare of the members or the public, in
accordance with the co-operative
principles.
• It should be economically sound, its
registration should not affect adversely on
the development of the co-operative
movement.
• Its registration should not be contrary to
the policy directives of the State
government.
47
Procedure of Formation
of a Co-operative
Cooperative :
• Promoters meeting : Willing , eligible persons
should come together and conduct a meeting,
which is called as promoters' meeting. This
meeting will decide the name of the proposed
Cooperative, its object and bye-laws and then
elect a Chief Promoter authorizing him to sign
the necessary documents on behalf of the
promoter members.
48
Collecting initial
share capital
• The Chief Promoter will apply to the
Registrar of the concerned area for
requesting to authorize to collect sharecapital. The application shall consist of:
–
–
–
–
Prescribed application
Resolution of promoters' meeting
Proposed byelaw
Details of promoters
• Registrar will authorize the Chief promoter to
collect the share and direct him to deposit the
collected share capital in a particular Bank
49
REGISTRATION :
• After collection of the necessary share
capital, the chief promoter shall apply for
registration of the co-operative along with:
– Prescribed application
– 5 copies of proposed byelaws
– List of persons who have contributed to the
share-capital and the entrance fee of the
proposed Co-operative
– Bank documents having been deposited
share capital
50
• Provided that • No co-operative society shall be
registered, if it is likely to be,
– economically unsound, or
– the registration of which may have an adverse
effect on development of the co-operative
movement
– Registration fees : 1% of the authorized share
capital, subject to minimum of Rs.500/- and
maximum of Rs. 5000/– After scrutinizing the documents Registrar will
register the cooperative
51
• Election to first Board :
• After Registration the chief promoter
shall call first General Body of the
newly formed cooperative to elect its
first board.
• Beginning of activities :
• After election of first board, the
President and Secretary can open the
Bank account and may start activities
of the cooperative.
52
Bye –laws of a multi-state
Cooperative Society should cover
the following matters–
1. the name, address and area of operation
of the society;
2. the objects of the society;
3.the services to be provided to its
members;
4. the eligibility for obtaining membership;
the transfer of membership;
5.the procedure for expulsion from
membership;
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6. the rights and duties of the members;
7. the nature and amount of capital of the
society;
8. the manner in which the maximum capital
to which a single member can subscribe;
9. the sources from which the funds may be
raised by the multi-State co-operative
society
10. the purpose for which the funds may be
applied;
;
54
11.the manner of allocation or disbursement
of net profits of the multi-State cooperative society;
12. the constitution of various reserves
13. the manner of convening general
meetings and quorum thereof other than
those provided under this Act;
14. the procedure for notice and manner of
voting, in general and other meetings;
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15. the procedure for amending the byelaws;
16. the number of members of the board not
exceeding twenty-one;
17. the tenure, of directors, chairperson and
other office-bearers of the society, not
exceeding five years;
18. the procedure for removal of members of
the board and for filling up of vacancies;
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19. the manner of convening board
meetings, its quorum, number of such
meetings in a year and venue of such
meetings;
20. the frequency of board meetings;
21. the powers and functions of the
Chief Executive in addition to those
provided under section 52;
22. the manner of imposing the penalty;
57
• aa. the appointment, rights and duties of
auditors and procedure for conduct of audit;
• bb. the authorization of officers to sign
documents and to institute and defend suits
and other legal proceedings on behalf of the
society;
• cc. the terms on which a multi-State cooperative society may deal with persons
other than members;
• dd. the terms on which a multi-State cooperative society may associate with other
co-operatives societies;
58
• ee. the terms on which a multi-State cooperative society may deal with
organizations other than co-operative
societies;
• ff. the rights, if any, which the multi-State
co-operative society may confer on any
other multi-State co-operative society or
federal co-operative and the
circumstances under which such rights
may be exercised by the federal cooperative
59
• gg. the procedure and manner for transfer of
shares and interest in the name of a nominee
in case of death of a member;
• hh. the educational and training programmes
to be conducted by the multi-State cooperative society;
• ii. the principal place and other places of
business of multi-State co-operative society;
• jj. the minimum level of services to be used
by its members;
• kk. any other matter which may be
prescribed.
60
Maintenance of accounts
• A Society should maintain the
following books of accounts, records
and the registers:
(i) The Register of Members in “I”
form, prescribed under Rule
(ii) The List of Members in 'J' form,
prescribed under Rule
(iii) The Cash Book
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(iv) The General Ledger
(v) The Personnel Ledger
(vi) The Property Register
(vii) The Share Register
(viii) The Sinking Fund Register
(ix) The Audit Rectification Register in
'O' form, prescribed under Rules
(x) The Investment Register
62
(xi) The Nomination Register
(xii) The Loan Register (if loan is
raised)
(xiii) The Mortgage Register (if the
property is mortgaged).
(xiv) The Minutes Book for the
meetings of the Committee of the
society
(xv) The Minutes Book for the meetings
of the general body of the society
63
(xvi) Register of deposits made with the
Local Authority, the Electric Supply
Company and any other Authorities
(xvii) The Register of Furniture, Fixtures
and Office Equipments
(xviii) The Register of Library Books
(xix) The Register of Allotment of Flats
(xx) Structural Audit Register
(wherever applicable).
64
Types of co-op societies
The co-operative banking structure in India
is divided into following main 5 categories:
• Primary Urban Co-op Banks
• Primary Agricultural Credit Societies
• District Central Co-op Banks
• State Co-operative Banks
• Land Development Banks
65
Some of the Labour Laws
enacted by the Central
Government which may be
applicable to co-operative
societies are
1.The Employees’ State Insurance Act, 1948
2.The Employees’ Provident Fund and
Miscellaneous Provisions Act, 1952
3.The Contract Labour (Regulation and
Abolition) Act, 1970.
66
4.The Equal Remuneration Act, 1976.
5.The Maternity Benefit Act, 1961
6.The Minimum Wages Act, 1948
7.The Payment of Bonus Act, 1965
8.The Payment of Gratuity Act, 1972
9.The Payment of Wages Act, 1936
10.The Plantation Labour Act, 1951
11.The Trade Unions Act, 1926
12.The Employees’ Compensation Act, 1923
67
Points to note
• Contract between members is up to first
General Meeting
• Participation must be both physical and
financial
• To stop sleeping members
• 20% of eligible total members will be quorum
• Eligible-non defaulters
• Members education /enlightenment
• Need for quality leadership
68
Maintenance of registers
• Ensure adequate facilities have been
provided for the employees on behalf of
the co-operative society
• Periodic Information to be filed with the
concerned authorities
• Drafting employment agreements between
the employer and employee and also
specific non-disclosure agreements if
required
• Arbitration
69
Useful Websites
• http://www.agricoop.nic.in/ - Department of
Agriculture and Cooperation
• http://www.ncdc.in/ - National Cooperative
Development Corporation (NCDC)
• www.nccf-india.com - National Cooperative
Consumers’ Federation of India (NCCF)
• http://www.nafed-india.com/home.asp National Agriculture Cooperative Marketing
Federation of India (NAFED)
70
• http://www.nchfindia.net - National Cooperative
Housing Federation of India (NCHF)
• http://www.labcofed.org/ - National Labour
Cooperatives Federation Of India Ltd (NLCF)
• http://www.ncui.coop/welcome.html - National
Cooperative Union of India, (NCUI)
• http://ica.coop/ - International Co-operative
Alliance
• http://www.labour.nic.in/ - Ministry of Labour
and employment
• http://labourbureau.nic.in/ - Labour Bureau
71
INTERDEPENDENCE
• We are neither independent nor dependent
but we are interdependent
• This is the root mantra of co-op movement
• Maintain the balance of this mantra
• When this balance gets disturbed peace is
broken and atrocities surface
• When the concept of interdependence is
understood peace prevails every where
• We are neither independent nor dependent
but we are interdependent
72
THANK
YOU
• T.N.C.SRIDHAR
JCIT ( RETD)
73