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1. INTRODUCTION:
A co-operative Society is a body corporate with perpetual succession. It can acquire, hold
and dispose off properties, enter into contracts and it can sue and it can be used. In the state
of Maharashtra a society is formed, regulated and governed and controlled by the
Maharashtra Co-operative Societies Act, 1960. (Section 36 of M.C.S. Act, 1960).
All the Co-operative Societies have to maintain the records as per the Maharashtra Co-
operative Societies Act, 1960, M.C.S. Rules, 1961 and the Byelaws of the Society.

2. MEANING:
The term co-operation is derived from the Latin word co-operari, where the word co means
with and Operari means to work. Thus, co-operation means working together. So those
who want to work together with some common economic objective can form a society which
is termed as co-operative society. It is a voluntary association of persons who work
together to promote their economic interest. It works on the principle of self-help as well as
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, utilise them in the best possible manner, and derive some common benefit out of
it.

3. DEFINITION:
Co operative society: Under section 2(27) "society" means a co-operative society registered,
or deemed to be registered, under this Act;
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Working capital: 1) "working capital"means funds at the disposal of a society inclusive of
paid up share capital, funds built out of profits, and money raised by borrowing and by other
means.

4. HISTORY:
Around the world modern cooperatives have developed for over 200 years. Co-operative
institutions exist all over the world providing essential services which would otherwise be
unattainable. In many countries, co-operatives such as credit unions and agricultural
organizations have been very successful in helping people to provide for themselves where
private and other corporate capitals do not see high profitability .
Development of Indian Co- operative Movement (Period wise)
1] Beginning Period of Co-operative Movement in India (1904 - 1912):-Started on 25th
march 1904 Objectives : - Establishment of co-operative societies Legal Existence Control of
registrar Loans to members Concession to society
Development of Indian Co- operative Movement (Period wise)
2]Period Of Harried Expansion (1912-1918):- The Govt. passed another act in 1912.
Features:- Permission to start non-credit supplying societies. Classification as per their
responsibility Utilization of profit Special right to societies Concession to co-operative
societies.
Development of Indian Co- operative Movement (Period wise)
3] Unplanned Rapid Developement (1919- 1929):-By passing this in 1919 the Co-operative
Movement Boosted up. Co-operative Movement was Defines as Unplanned Developement
by Ramdas Pantalu.
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Development of Indian Co- operative Movement (Period wise)
4] Period of Consolidation and Re-organization (1929 1939):-World wide financial
depression in 1929.In 1935 RBI was formed and suggest that co-operative societies should be
given priority.
Development of Indian Co- operative Movement (Period wise)
5] Period of Recovery (1939 1947):-During this period financial depression was
removed.The Co-operative Movement was again on path of its development.
Development of Indian Co- operative Movement (Period wise)
6] The Sixth Stage (1947 -1970)7] The Seventh Stage (1970 2000)8] The Eighth Stage
(2000 Onwards).

5. Research methodology:
This project was manage only with the help of secondary data the information has been
collected with the help of newspaper,journal,reference books and internet.

6. Objectives:
Inculcate good habits of savings in the cooperative members
Focus on poor, low income and deprived people of the community, especially women who
have no accessibility to any financial institutions
Provide opportunities to people to organize services collectively by pooling their resources
without depending upon the government or other agencies
Seek active participation of all members without any kind of social, racial, political, gender
or religious discrimination
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Provide education, training and information to develop their members as well as their staff
Enhance womens participation and decision in policy making-processes at all levels

NON-PROFIT ORGANISATIONS:
There are certain institutions whose main aim is not to earn profit. They are established to
provide services and their sole motto is to render services, e.g., schools, libraries, sports
clubs, hospitals and professionals like, doctors, lawyers, chartered accountants, company
secretaries and co-operative housing societies, etc. Though the main aim of these bodies is
not to earn profit but still they are interested in knowing whether their current income is more
than the current expenses or not. They are also keen in knowing the financial position of their
concern.
Co-operative Societies are not charitable societies. They carry on Economic Activities. The
profit is not the motive but the proper accounts need to be maintained and presented before
the members for their approval in the Annual General Body meeting. The same need to be
properly audited as per the provisions of the Act.

CO-OPERATIVE YEAR:
Earlier the accounting year for Societies was a year ending on 30th June or other day fixed
by a particular society with the Approval of the Registrar. However, with the amendment
made in 1993, the Co-operative year has been compulsorily made to end on 31st day of
March .
Co-operative movement in our country shall not only stay but also grow in times to
come. In spite of the drawbacks experienced in the working and administration of the co-
operative societies, they have positively contributed to the growth and development of the
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national economy. Promotion of thrift, self-help and mutual aid are the fundamental
principles of co-operation. The orientations of commercial organization and co-operative
organizations are basically different. In a commercial organization, earning and maximizing
the profits is the sole motive; whereas in a co-operative organization profit cannot be the sole
motive. The prime objectives, in addition to the three fundamentals of co-operation
mentioned above are to make available the goods and services in required quantity, of better
quality and at a reasonable price to its members. It does not mean that a Co-operative Society
is a charitable organization. It should, therefore, conduct itself in a business like manner in
attaining its objectives efficiently.
Broadly speaking there are three sectors operating in the Union of India.
1. PUBLIC SECTOR: wherein the State i.e. The Union of India and the respective State
Government undertake developments projects which are wholly owned by either the Central
Government or the State Government.
2. PRIVATE SECTOR: which is a sector where private enterprises are permitted in certain
fields of economic activities.
3. CO-OPERATIVE SECTOR: which is beautifully blended in between a public sector and
the private sector. It has benefits of both the sectors and disadvantages of neither of them.

7. Advantages Of CoOperative Society:
A Co-operative form of business organization has the following advantages:
1. Easy Formation: Formation of a co-operative society is very easy compared to a joint
stock company. Any ten adults can voluntarily form an association and get it registered with
the Registrar of Co-operative Societies.
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2. Open Membership: Persons having common interest can form a co-operative society.
Any competent person can become a member at any time he/she likes and can leave the
society at will.
3. Democratic Control: A co-operative society is controlled in a democratic manner. The
members cast their vote to elect their representatives to form a committee that looks after the
day-to-day administration. This committee is accountable to all the members of the society.
4. Limited Liability: The liability of members of a co-operative society is limited to the
extent of capital contributed by them. Unlike sole proprietors and partners the personal
properties of members of the co-operative societies are free from any kind of risk because of
business liabilities.
5. Elimination of Middlemens Profit: Through co-operatives the members or consumers
control their own supplies and thus, middlemens profit is eliminated.
6. State Assistance: Both Central and State governments provide all kinds of help to the
societies. Such help may be provided in the form of capital contribution, loans at low rates of
interest, exemption in tax, subsidies in repayment of loans, etc.
7. Stable Life: A co-operative society has a fairly stable life and it continues to exist for a
long period of time. Its existence is not affected by the death, insolvency, lunacy or
resignation of any of its members.





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Disadvantages Of CoOperative Society :
1. Limited Capital: The amount of capital that a cooperative society can raise from its
member is very limited because the membership is generally confined to a particular section
of the society. Again due to low rate of return the members do not invest more capital.
Governments assistance is often inadequate for most of the co-operative societies.
2. Problems in Management: Generally it is seen that co-operative societies do not function
efficiently due to lack of managerial talent. The members or their elected representatives are
not experienced enough to manage the society. Again, because of limited capital they are not
able to get the benefits of professional management.
3. Lack of Motivation: Every co-operative society is formed to render service to its
members rather than to earn profit. This does not provide enough motivation to the members
to put in their best effort and manage the society efficiently.
4. Lack of Co-operation: The co-operative societies are formed with the idea of mutual co-
operation. But it is often seen that there is a lot of friction between the members because of
personality differences, ego clash, etc. The selfish attitude of members may sometimes bring
an end to the society.
5. Dependence on Government: The inadequacy of capital and various other limitations
make cooperative societies dependant on the government for support and patronage in terms
of grants, loans subsidies, etc. Due to this, the government sometimes directly interferes in
the management of the society and also audits their annual accounts.



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8. Types of Co-operative Societies:
Although all types of cooperative societies work on the same principle, they differ with
regard to the nature of activities they perform. Followings are different types of co-opera-
tive societies that exist in our country.
1. Consumers Co-operative Society:These societies are formed to protect the interest of
general consumers by making consumer goods available at a reasonable price. They buy
goods directly from the producers or manufacturers and thereby eliminate the middlemen in
the process of distribution. Kendriya Bhandar, Apna Bazar and Sahkari Bhandar are
examples of consumers co-operative society.
2. Producers Co-operative Society:These societies are formed to protect the inter- est of
small producers by making available items of their need for production like raw materials,
tools and equipments, machinery, etc. Handloom societies like APPCO, Bayanika, Haryana
Handloom, etc., are examples of producers co-operative society.
3. Co-operative Marketing Society: These societies are formed by small producers and
manufacturers who find it difficult to sell their products individually. The society collects the
products from the individual members and takes the responsibility of selling those products
in the market. Gujarat Co-operative Milk Marketing Federation that sells AMUL milk
products is an example of marketing co-operative society.
4. Co-operative Credit Society: These societies are formed to provide financial support to
the members. The society accepts deposits from members and grants them loans at
reasonable rates of interest in times of need. Village Service Co-operative Society and Urban
Cooperative Banks are examples of co-operative credit society.
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5. Co-operative Farming Society:These societies are formed by small farmers to work
jointly and thereby enjoy the benefits of large-scale farming. Lift-irrigation co-operative
societies and pani-panchayats are some of the examples of co-operative farming society.
6. Housing Co-operative Society: These societies are formed to provide residential houses
to members. They purchase land, develop it and construct houses or flats and allot the same
to members. Some societies also provide loans at low rate of interest to members to construct
their own houses. The Employees Housing Societies and Metropolitan Housing Co-
operative Society are examples of housing co-operative society.
Cooperative societies are of various types depending upon their objects and natureof work.
Some of the cooperatives have been formed to help consumers and other have been
established to help producers. There are some societies which help the farmers
in providing credit for the purchase of fertilizers and seeds etc. and some help them
in the promotion of trade.Some of the important types of cooperative societies are as under.1

7. Farming Cooperative Societies: These solicits are formed by the by the small
agriculturalist to get the benefits of larges scale forming. These societies provide help to the
farmer for the improve methodof cultivations by providing large scale forming tools
such as tractors, threshers andharvesters etc.etc.
8. Insurance Cooperative Societies: These societies make contract with insurance
companies for the purchase of different insurance policies for its member at lower
premium. This society may take agroup insurance policy for its members. The main
object of the society is to minimizethe risk of its member.
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9. Transport Cooperative Societies: These societies are formed to provide the services
of transport to its members atlower rates. Welfare bus scheme is an example of this type
of society. A pass is handedover to the member for traveling on approved routes.
10. Storage Cooperative Societies: These societies are formed for the provision of storage
facilities to its member for perishable and non perishable goods at lower rates. These
societies also provide gradingand distribution services to its members.
11. Labour Cooperative Societies: These societies are formed by unskilled labour for
selling their services at reasonable wage rate. This type of society makes a contract
with different firm for the provision of labour to them.
12. Miscellaneous Societies: Some other important societies, in addition to the major form
of societies discussed above are, Processing cooperative societies, Fisheries cooperatives
societies,Forestry and poultry forming etc.

9. PRINCIPLES OF CO-OPERATIVE SECTOR:
1. LEGAL STATUS : A co-operative Society is a body corporate registered under the
applicable state Act with perpetual succession having a common seal. It can acquire, hold
and dispose of properties, enter into contracts and it can sue and it can be sued.
2. VOLUNTARY ASSOCIATION : Co-operative Society is essentially an organization or
an association of persons who have come together for the common purpose of economic
development or for mutual help.
3. SELF HELP AND MUTUAL HELP : The Co-operative societies office
bearers/executive committee is elected as per democratic election procedure. The Co-
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operative Society function under the principle of self help and mutual help which means each
will help for themselves and all will help others.
4. DEMOCRATIC CONTROLS : The Control of a Co-operative enterprise in not in the
hands of capitalists who can corner the share capital and control the interest in any
undertaking which would be a private undertaking.
5. EQUALITY : In co-operative Sector, the principle of One man one Vote is provided
in the statute so as to ensure that the capital does not dominate the administration of co-
operative Society.
6. OPEN MEMBERSHIP : Any person can apply for the membership of the Society
without any discrimination. The membership is open for all.
7. SOCIAL APPROACH / NO PROFIT MOTIVE : As the Society is working on
democratic principle and the office bearers of the Society will be functioning like a trustees
for the better management of the society and there is no separate benefits to the executive
committee members. Service is the main motto and the profit is not the main concern in co-
operative societies.
8. PROFITS AND RETURNS TO THE MEMBERS : Co-operative Society is an
association of members and certain percentage profits earned by the society, as decided in the
meeting of the General body will be distributed in the form of dividend to the members.
9. LIMITED INTEREST ON SHARES :
Irrespective of the shareholding, each member has only one vote in the decision-making in
the General body meeting or at the time of election of the committee for management. The
shares are not traded in the stock exchange. The State Co-op. Act also prescribes the
maximum amount, which a member can hold as a share capital in any society.
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10. PERSONAL PARTICIPATION : The shareholders have to personally attend the
meeting or for voting. They are not allowed to appoint proxies for attending the general body
or for voting in the resolution to be passed.
11. EDUCATIONS AND CO-OPERATION : Every society has to contribute towards the
education fund maintained and looked after by the district co-operative education Board as
per the notification issued from time to time for educating the members or the office bearers
of the Society.
12. CO-OPERATION AMONGST CO-OPERATIVE INSTITUTIONS : The funds
generated or mobilized through the co-operative societies have to be deposited/ invested in
the Co-operative Sector only.

10. Characteristics of Co-operative Society:
A co-operative society is a special type of business organisation different from other forms of
organsation you have learnt earlier. Let us discuss its characteristics.
i. Open membership: The membership of a Co-operative Society is open to all those who
have a common interest. A minimum of ten members are required to form a co- operative
society. The Cooperative societies Act does not specify the maximum number of members
for any co-operative society. However, after the formation of the society, the member may
specify the maximum number of members.
ii. Voluntary Association: Members join the co-operative society voluntarily, that is, by
choice. A member can join the society as and when he likes, continue for as long as he likes,
and leave the society at will.
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iii. State control:To protect the interest of members, co-operative societies are placed under
state control through registration. While getting registered, a society has to submit details
about the members and the business it is to undertake. It has to maintain books of accounts,
which are to be audited by government auditors.
iv. Sources of Finance: A co-operative society capital is contributed by all the
members.However, it can easily raise loans and secure grants from government after its
registration.
v. Democratic Management: Co-operative societies are managed on democratic lines.
The society is managed by a group known as Board of Directors. The members of the
board of directors are the elected representatives of the society. Each member has a single
vote, irrespective of the number of shares held. For example, in a village credit society the
small farmer having one share has equal voting right as that of a landlord having 20 shares.
vi. Service motive: Co-operatives are not formed to maximise profit like other forms of
business organisation. The main purpose of a Co-operative Society is to provide service to its
members. For example, in a Consumer Co-operative Store, goods are sold to its members at a
reasonable price by retaining a small margin of profit. It also provides better quality goods to
its members and the general public.
vii. Separate Legal Entity: A Co-operative Society is registered under the Co-operative
Societies Act. After registration a society becomes a separate legal entity, with limited
liability of its members. Death, insolvency or lunacy of a member does not affect the
existence of a society. It can enter into agreements with others and can purchase or sell
properties in its own name.

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11. Formation of a Co-operative Society:
A Co-operative Society can be formed as per the provisions of the Co-operative Societies
Act, 1912. At least ten persons having the capacity to enter into a contract with common
economic objectives, like farming, weaving, consuming, etc. can form a Co-operative So-
ciety. A joint application along with the bye-laws of the society containing the details about
the society and its members, has to be submitted to the Registrar of Co-operative Societies of
the concerned state. After scrutiny of the appliation and the byelaws, the registrar issues a
Certificate of Registration.

12. Requirements for Registration:
1. Application with the signature of all members
2. Bye-laws of the society containing:
(a) Name, address and aims and objectives of the society;
(b) Names, addresses and occupations of members;
(c) Mode of admitting new members;
(d) Share capital and its division.

13. ACT & RULES APPLICABLE:
A Co-operative Society functions as per the provisions of
1. Co-operative Societies Act under which the same is registered.
2. Co-operative Societies rules made there under
3. Bye-laws approved by the registrar at the time of registration and amendments made from
time to time and approved by the registrar.
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4. Notification and Orders
Co-operative Societies Act:
We have a number of Co-operative Societies Acts functional in different states like
- Maharastra Co-operative Societies Act, 1960,
- Pondicherry Co-operative Societies Act, 1972,
- Karnataka Co-operative Societies Act, 1959,
- Delhi Co-operative Societies Act, 1972,
- Kerala Co-operative Societies Act etc.

2. Co-operative Societies Rules
A set of rules is also framed under the respective State Co-operative Act for procedural
aspects.
3. Bye-laws
Each society also registered with the bye-laws for internal management of the societies duly
approved by the registrar at the time of registration of the society. The bye-laws of a society
constitute a contract between a member and the society and it provide for the management of
the society. The bye-laws are framed within the provisions of the Act and the rules made
there under.
Bye-laws include the objects of the society and completely define and restrict the societys
activities, but the rights and liabilities of members are determined by the Act and Rules and
not by the bye-laws as such.
4. Notification and Orders issued from time to time by the Government, or any other
Authority as prescribed under the Act, Rules there under by them.
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14. PROVISIONS FOR REGISTRATION OF CO-OPERATIVE
SOCIETIES:
There are different types of Co-operative Societies, which can be registered under the
Maharashtra Cooperative Societies Act, which were explained earlier. In all these types of
societies, the procedure to be followed for formulation of registration proposals slightly
differs. The requirements in respect of each type of co-operative societys needs to be
properly understood by every promoter, or the professional charged with the responsibility of
getting the society registered (chief promoter).
PROVISIONS UNDER THE M.C.S. ACT, 1960
Sections 3 to 11of the Act, provide for registration of Societies and the conditions for the
same. Section 4 provides for a nature of an organization, which can be registered as a
Society. Section 6 lays down the conditions for registration of the Society. Section 8 provides
for application for registration bye-laws and the registration fees. Section 9 provides for time
bound registration of the Society and the bye-laws.

JURISDICITION
Each Society based on its area of operation has to be registered by the Registrar appointed by
the Government for the particular jurisdiction. For the purpose of registration of the Societies
the City of Mumbai has been divided as per the Municipal Wards. There is a Deputy or
Assistant Registrar of Co-operative Societies for each Ward who is the Registration
Authority for the Co-operative Societies in that Ward. Normally the office of such
Registering Authority (RA) is situated within the limits of such Ward. However if no space is
available for the office of the RA in any ward the office of RA of such Ward is at the office
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of Deputy Registrar Co-operative Societies India House 6th floor opposite GPO Mumbai.
Other places in each Taluka one Deputy/Assistant Registrar, Registers & Supervises the
Societies.
SOCIETIES, WHICH MAY BE REGISTERED
As per section 4, a society, which has as its objects the promotion of the economic interests
or general welfare of its members or of the public, in accordance with co-operative principles
or a society established with the object of facilitating the operations of any such society, may
be registered under this Act:
Provided that, no 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, or the registration of which may be contrary to the policy directives, which the
State Government may, from time to time, issue.
REGISTRATION WITH LIMITED OR UNLIMITED LAIBILITY:
As per section 5, a Society may be registered with limited or unlimited liability.
As per section 2[28] society with limited liability means a society having the liability of its
members limited by its bye-laws;
As per section 2[29] society with unlimited liability means a society, the members of
which are, in the event of its being wound up, jointly and severally liable for and in respect of
its obligations and to contribute to any deficiency in the assets of the society;
CONDITIONS OF REGISTRATION
As per section 6(1) No society, other than a federal society, shall be registered under this Act,
unless it consists of at least ten persons [or such higher number of persons as the Registrar
may, having regard to the objects and economic viability of a society and development of the
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co-operative movement, determine from time to time for a class of societies](each of such
persons being a member of a different family), who are qualified to be members under this
Act, and who reside in the area of operation of society :
[Provided that, a lift irrigation society consisting of less than ten but of five or more such
persons may be registered under this Act.]
(2) No society with a limited liability shall be registered, unless all persons forming the
society reside in the same town or village, or in the same group of villages.
[(2-A) No crop protection society shall be registered, unless the Registrar is satisfied, after
such inquiry as he thinks necessary, that a draft of the proposal made by the society for
protecting crops, structures, machinery agricultural implements and other equipment such as
those used for pumping water on the land, was duly published for inviting all owners of land
likely to be affected by the proposal and all other persons likely to be interested in the said
lands to join the proposal or to send their objections or suggestions and that the objections
and suggestions received , if any, have been duly considered by the society and that the
owners in possession of not less than 66 percent in the aggregate of lands included in the
proposal have given their consenting writing to the making of the proposal and that the
proposal made is feasible. For this purpose, the society shall submit to the Registrar:
(a) a plan showing the area covered by the proposal and the surrounding land as shown in the
map or maps of the village or villages affected;
(b) an extract from the record of rights duly certified showing the names of the owners of
lands and the areas of the lands included in the proposal;
(c) Statements of such of the owners of the lands as consented to the making of the proposal
signed by owners before two witnesses;
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(d) a detailed estimate of the cost of implementing the proposal;
(e) a detailed statement showing how the cost is proposed to be met.
When such society is registered, the cost of implementing the proposal shall be met wholly or
in part by contribution to be levied by the society from each owner of the land included in the
proposal, including any such owner who may have refused to become a member of the
society. The owner of every land included in the proposal shall also be primarily liable for
the payment of the contribution liable from time to time in respect of such land].
(3) No federal society shall be registered unless it has at least five societies as its members.
(4) Nothing in this Act shall be deemed to affect the registration of any society made before
the commencement of this Act.
(5) The word limited or unlimited shall be the last word in the name of every society
with limited or unlimited liability, as the case may be which is registered or deemed to be
registered under this Act.
Explanation: For the purpose of this section and section 8, the expression member of
family means wife, husband, father, mother, [son, or unmarried daughter]
POWER TO EXEMPT SOCIETIES [OR CLASS OF SOCIETIES] FROM
CONDITIONS AS TO REGISTRATION
As per section 7, notwithstanding anything contained in this Act, the State Government may,
by general or special order, exempt any society or class of societies from any of the
requirements of this Act as to registration, subject to such conditions (if any) as it may
impose.


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15. APPLICATION FOR REGISTRATION
As per section 8(1) For the purpose of registration, an application shall be made to the
Registrar in the prescribed form and shall be accompanied by four copies of the proposed
bye-laws of the society and such registration fee as may prescribed in this behalf. Different
registration fees may be prescribed for different class of societies, regard being had to the
service involved in processing an application for registration. The person by whom, or on
whose behalf, such application is made, shall furnish such information in regard to the
society, as the Registrar may require.
(2) The application may be signeda) in case of a society other than a federal society by at
least ten persons (each of such person being a member of different family), who are qualified
under this Act, and,
b) in the case of a federal society, by at least five societies.
No signature to any application on behalf of a society shall be valid, unless the person
signing is a member of the committee of such a society and is authorized by the committee
by resolution to sign on its behalf the application for registration of the society and its bye-
laws; and a copy of such resolution is appended to the application.

REGISTRATION
As per section 9(1) If the Registrar is satisfied that a proposed society has complied with the
provisions of this Act and the Rules, [or any other law for the time being in force, or policy
directives issued by the State Government under section 4], and that its proposed bye-laws
are not contrary to this Act or to the rules, he [shall, within two months], from the date of
receipt of application register the society and its bye-laws.
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(2) Where there is a failure on the part of the Registrar to dispose off such application within
the period aforesaid, the Registrar shall, within a period of fifteen days from the date of
expiration of that period refer the application to the next higher officer and where the
Registrar is himself the registering officer, to the State Government, who are which, as the
case may be, shall dispose of the application within two months from the date of its receipt
and on the failure of such higher officer or the State Government, as the case may be, to
dispose of the application within that period, the society and its bye-laws shall be deemed to
have been registered.[and thereafter the Registrar shall issue a certificate of registration under
his seal and signature within a period of fifteen days.
(3) Where the registrar refuses to register a proposed society, he shall forthwith communicate
his decision, with reasons therefore, to the person making the application and if there be
more than one to the person who has signed first therein.
(4) The Registrar shall maintain a registrar of all societies registered or deemed to be
registered, under the Act.

16. Procedure For Registration Of Co Operative Societies:
The procedure for registration of society can be explained as the following steps:
1. APPOINTMENT OF CHIEF PROMOTER
The first step to register a Society is that minimum 10 adult individuals from independent
families desiring to form a Society should gather and hold a meeting to
(a) select a provisional committee and elect a Chief Promoter for formation of a society and
(b) select a name for such Society with three alternatives and to pass appropriate resolutions
in that behalf.
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c) To collect the entrance fee and share capital from the prospective members.
d) To open the Bank account in the name of chief promoter
e) To decide about area of operation of the Society and
f) To decide about the registered office of the Society
g) To authorize chief promoter to submit the proposal for registration and to do any other
thing to get the society registered.

2. NAME RESERVATION
The second step would be to apply to the registration authority (RA) for reservation of name
for the society and obtain letter from the RA in that connection. The resolutions passed at the
promoters meeting as above should accompany such application for reservation of name as
aforesaid. The letter reserving the name of the society shall be valid for 3 months. The
validity of the name is normally extended on an application for 1 or 2 further terms of 3
months each.

3. BANK ACCOUNT AND DEPOSITS
The third step would be to (a) open a bank account in the name of the proposed Society as
per the RAs directions in that behalf that shall contain in the letter reserving the name and
(b) deposit therein the entrance fee share money and the amount recovered for preliminary
expenses from the promoters and obtain the certificate from such bank in respect of such
deposits. Normally the directions of the RA are to open account with a proximate branch of
the District Central Co-operative Bank or any Maharashtra State Co-operative Bank or any
other urban Co-operative bank.
23

4. REGISTRATION FEE
The fourth step is to deposit the registration fee with the Reserve Bank of India and to obtain
the receipted challan in that behalf. The registration fee for Housing Society is Rs.2,500/- and
for general Society is Rs.1250/-.
5. REGISTRATION PROPOSAL
The fifth and final step is to prepare and to submit to RA the proposal for registration of the
society. Under Rule 4 of Maharashtra Co-operative Societies Rules the chief promoter should
submit the following documents for registration
a) Application for registration - Form A
An application for registration of a society should be made in form. The specimen of Form
The application for registration in quadruplicate should be signed by at least 60% of the
promoters members and Chief Promoter should attest their signatures.
b) Four copies of the proposed bye-laws of the society
c) A list of promoters members, such as the name age occupation current residential a
address of the promoter member the cost of share amount etc.
d) A certificate from the Bank or Banks stating the credit balance therein in favour of the
proposed society;
e) A scheme showing the details explaining how the working of the society will be
economically sound and where the scheme envisages the holding of immovable property by
the society, the description of such property proposed to be purchased, acquired or
transferred to the society.
f) Such other documents as may be specified in the model bye-laws, if any, framed by the
Registrar.
24

g) The registration fees at the applicable rates.
h) Other documents like affidavit, indemnity bonds, copy of ration cards, public notice in
newspaper etc., as may applicable for different types of society as per the notification issued
from time to time.

BOOKS OF ACCOUNTS TO BE MAITAINED
ACCOUNT
An account is formal presentation of the transactions pertaining to an item or
person or an income or expense. An account is generally prepared in T form wherein the
left hand side is called the debit side and the right hand side the credit side. All accounts
(except the cash or bank), which are maintained in cashbook, are maintained in ledger.

ACCOUNTING YEAR
The erotically speaking a business may adopt any period of 12 months as its accounting year
except for first accounting year which may be less or more than a period of 12 months. Under
income tax act however every person is required (W.E.F 1.4.1989) to adopt a uniform
accounting year i.e. financial year, commencing on 1st April and ending on 31st march next
year. Accordingly, since 1993, the co-operative year also has been changed to Financial
Year.
Provisions under Rule 65 of M.C.S. Rules 1961:
In accordance with Rule 65 of the M.C.S. Rules, 1961 following books relating to accounts
of the Society are prescribed in general:
a) Cash Book
25

b) General Ledger and personal ledger
c) Stock Register
d) Property register
e) Register of Audit objections and rectifications, and
f) Such other books of account as may be prescribed from time to time by the
Government.
Books of Accounts maintained should be proper and systematic and depict clear and true
affairs of the Society.
GUIDELINES ABOUT MAINTAINING THE STATUTORY REGISTERS
It is considered necessary to give in brief Guidelines for maintenance of the important books
and registers. The Guidelines are as under:

Register of members:
(a) A co-operative society is constituted of persons who are members of the Society. It,
therefore, follows that the society should have the record to show as to who are its members.
The society has to enter into correspondence with its members during the course of its
business. It is therefore, necessary to have the full address of every member. In case of a co-
operative housing society, members stay in the building of the society. There is, therefore, no
difficulty of recording the address of all the members. However, cases are not wanting,
where some member of co-operative housing societies transfer their flats without informing
the societies and without leaving their new addresses with the societies. In such
circumstances, the societies find it very difficult to make any communications with such
members. The form of application for membership also contains the business address of the
26

member. However, it was noticed that members who unauthorized transferred their flats,
changed their business addresses also, without informing the societies. It should, therefore,
be the practice of societies to get the business addresses of their confirmed as frequently as
possible but at least once in a year. There are changes in the membership. Some of the
existing members of the society Leave the society either as a result of transfer of shares,
resignations, death or expulsion and new members come in their places. It is, therefore,
necessary to maintain a complete record of such changes in membership and the addresses.
Therefore, it has been made obligatory on every society to maintain register u/s Section 38 of
the M.C.S. Act, 1960.
(b) The form l has prescribed under Rule 32 of the M.C.S. Rules, 1961, in which every
co-operative society has to maintain a Register of members. This member Register is
available with the federation on payment.
(c) It is noticed by the federation that some of the co-operative housing societies did not
maintain the register or did not record the changes in membership. It may be pointed out here
that the entry in the Members Register is the prima facie evidence of the date on which a
person was admitted to the membership of the Society and the date on which he ceased to be
the member of the Society (Vide Section 38(4) of the M.C.S. Act, 1960).
Non-maintenance of the members Register correctly and up-to-date, may present several
legal problems apart from confusion about membership. All co-operative housing societies
should, therefore, make it a point to maintain this important Register and keep it quite up to-
date for all the time.
(d) It was further noticed that some co-operative housing societies did not know how to begin
with maintenance of this Register. It is, therefore, necessary to explain the procedure of
27

maintenance of this Register. The following paragraphs will enable the secretary to know the
procedure.
(i) The section 2(19) (a) of the M.C.S. Act, 1960 defines a member as a person joining in the
application for registration of a co-operative society which is subsequently registered or a
person duly admitted to membership of a co-operative society after it is registered. According
to this definition of a member, the persons who have signed the application for registration
are the original members of the society after its registration. The work of maintaining the
requisite records of the society actually starts after the provisional Managing Committee is
elected as per the bye-law No. 91
(ii) The Hon. Secretary of the Society should, therefore enter the names of the persons
from the application for registration, a copy of which is supplied to the society along with
a copy of the bye-laws by the Registering Authority. All other details as required by the
l Form are available in the application for registration and the application for membership,
Similar entries of persons admitted to membership after the registration of the society should
be made in the Members Register.
(iii) Some societies had enquired of the Federation as to what date be entered in the column
for date of admission to membership in case of a newly registered society. It is clarified here
that the persons who had signed the application for registration become members, of the
society on its registration and the date of registration of the society should, therefore, be
entered in the said column of date of admission to membership of the society.
(iv) In certain cases, there is Joint or Associate Membership. The names of persons who
become joint or Associated Members on registration of the society or who are admitted as
28

such members after registration of the society should also be entered in the Members register
below the name of the member whose name stands first in application for registration .It may
not be necessary to enter other details in the Members Register in respect of a Joint Associate
Members.
(v) There is another class of members called Nominal Members. Such members are not
required to hold any shares and there cannot be any transfers of shares in their cases. The
question of making entries regarding the Shares held and the shares transferred, therefore,
does not arise in their cases.
17. PRIMARY ACCOUNTING RECORDS
RAISING OF BILLS:
The Managing Committee as per the decision of the General body has to recover various charges
towards the outgoing of the society from the members. The contribution towards various funds is
also fixed in the general body, as provided in the bye - laws of the Society. The Managing
Committee has to accordingly raise the bill on every member, on monthly or quarterly basis, and
recover the contribution from the members.
RECEIPTS
On making the payment by the members towards outgoing of the society receipt should be issued
to the member by office bearers authorised by the Committee. When the Society receives any
payment from the members or from outsiders on sale of any material or services, receipt has to be
issued by the Society for having received the money with the details. Receipts could be for
monthly/quarterly.
maintenance charges,
Property tax
Sinking Fund
29

Repair Fund
Entrance Fees
Transfer Fees
Transfer Premium
Donations etc
Sale of scrap
Refund of deposits etc
18. ASSETS, LIABILITIES EXPLAINED
BALANCE SHEET
Balance sheet is prepared to ascertain the true financial position of a Housing Society at the end
of the year. It is a statement showing the state of affairs of a Housing Society as on a specified
date. The state of affairs includes what the Society owns and what the society owes. It displays
the properties, assets and other rights owned by the Society on the right hand side, whereas the
liabilities to outsiders and amount invested by the members as capital on the left hand side.
ASSETS
Asset means right of ownership over anything valuable. Anything, which will enable the Society
to get cash or a benefit in future, is an asset. This refers to properties that can be expressed in
terms of money, e.g. plant & machinery, vehicles, stock, cash etc. It also includes money due to
the Housing Society from debtors for goods and services or for money lent. Rights available to a
Society such as patent or copyrights, goodwill etc. are also included in assets.
LIABILITIES
This represents financial obligations of a Housing Society other than Members
Funds. It is the amount owing to the creditors for goods or services received or for
moneys borrowed. Liabilities = Assets - Capital. Liabilities can be divided into two
30

categories:
(a) Current Liabilities:
These are usually paid within a period of one year and are paid out of current assets e.g.
Creditors, Bills payable, bank overdraft etc.
(b) Long term Liabilities or Fixed Liabilities:
These do not become due for payment in one year and do not require current assets for their
payment e.g. long-term loans, issue of debentures etc.,
CAPITAL
This is the amount invested by the members in the Co-operative Housing Society. It also includes
the Surplus/ Profit of the business also, to the extent they are not withdrawn by the members for
their personal purposes.
However, any losses/ Deficit/ deferred revenue expenditures, which may have been shown on
asset side of balance sheet, will have to be deducted from capital of the Society to ascertain true
amount of the Capital.
DEBTORS (ACCOUNTS RECEIVABLE)
It represents the indebtedness of members, customers for merchandise or services supplied to
them. It is the right of the Society to receive the moneys against supplies of goods or services.
CREDITORS (ACCOUNTS PAYABLE)
It represents indebtedness of business to its suppliers for merchandise or services supplied by
them to the Society. It is the obligation of Society to pay for any goods or services received by it.


31

19. How Is The Net Surplus Of A Co-operative Allocated And Distributed?
Generally, the distribution of a co-operatives surplus is determined by-laws. Surplus is
determined at the close of a co-ops fiscal year or as prescribe by its by-laws. A co-operatives
surplus is not profit in the usual sense of the word. As far as the co-op is concerned, this
excess payment or surplus is considered as having been returned to the members if the
surplus is distributed in the following manner. First priority goes generally to the reserve
fund at least 10 percent of the net surplus. The reserve fund is meant to stabilize co-op
operations and may be used only for investments allowed by the code. Second priority
goes to Education and Training, which is generally not more than 10 percent of net surplus.
Third priority is an optional fund, a land and building fund, community development fund
and any other necessary funds. After all these have been allocated, the remainder is available
to the general membership in the form of interest on his investment and patronage refund.
Nevertheless, interest in share capital should exceed normal rate of return on investment.






32

Statutory formats of final accounts:
Fig.Of
Revious
Year
Liabilities Amt Fig.Of
Revious
Year
Assets Amt.
--



























--











Share capital
Authorized issued & paid
up
Purchased by the
government
Purchased by co-operative
societies
Purchase by individuals
Shares in advance
Less-calls in arrears
Add:calls in advance
Subscription/deposits
towards shares

Reserve fund and other
fund
Reserve fund
Building fund
Development fund
Reserve for doubtful debts
--



























--











--







--













--





--











Cash balance
On hand
At bank

Investments
Government
securities
Shares in co
operative
Fixed deposits
with banks.
Provident fund
investment

Loans &
advances
-loans
-cash credit
-dues from the
Managing
--







--













--





--











33












--















--











--






Depreciation fund
Dividend fund
Bonus equalization fund
Other equalization fund

Staff provident fund
Debentures
Cash credit
Overdrafts
Loans
Government loans
Other secured loans

Unsecured loans
From banks
From gov.
Bills payable
Others

Deposits
Fixed deposit
Saving deposit
Recurring deposit













--















--











--













--







--











--















--
committees
-dues from
employees

Sundry debtors
-for credit sale
-for advances

Current assets
Tools and
equipments
Closing stock
Work in progress

Fixed assets
Land and building
Plant and
machinery
Livestock
Deadstock
Vehicles

Other expenses









--







--











--















--
34






--











--

--

--

--










Others

Current liabilities &
provisions
Sundry liabilities
Outstanding salaries, etc
Advances

Unclaimed dividend
Interest due but not paid
Other liabilities
P&l appropriation
opening balance
Add:current year profit







--









--

--

--

--






















--











--
& losses
Preliminary exp.
Advances
Payment of taxes
Goodwill
Deferred revenue
exp.

Other debtors
Advance paid
Int.accrued but
not received
Other dues

Losses
Add:current loss


















--











--








35

CONCLUSION:
I conclude based upon the data in my project I have learned what is cooperative society and
there are many advantages and disadvantages in cooperative society. Though the main aim of
these cooperative society is not to earn profit but still they are interested in knowing whether
their current income is more than the current expenses or not. They are also keen in knowing
the financial position of their concern. Co-operative Societies are not charitable societies.
They carry on Economic Activities. The profit is not the motive but the proper accounts need
to be maintained and presented before the members for their approval in the Annual General
Body meeting. While doing this project I learn how to register the cooperative society, step
involve while registering a society. All types of cooperative societies are formed for the
welfare of the people, either these are produces cooperative, consumer cooperative, farming
cooperatives. The main object of all these types of societies is not to earn profit but the
welfare of its members. It was knowledgeable experience for me.

BIBLOGRAPHY:
Books:
(financial accounting) dr.varsha m. ainapure
Websites:
www.google.com
http://accountingexplained.com
wikisource.org/wiki/Consumers_Cooperative_Societies
wiki.answers.com
http://my.safaribooksonline.com/book/business/
36

SUMMARY

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 mutual help.
Membership of co-operative societies is voluntary and open to all. It is democratically
managed and it has a separate legal existence . The main motive is to provide service to the
members. It works on the principle of self help through mutual cooperation of members.
A co-operative society can be formed under the Co-operative Societies Act, 1912,
with a minimum of ten members. For registration, an application along with bye-law of the
society has to be submitted to the Registrar of Co-operative Societies.
Co-operative societies may be classified as follows:
1) Consumers co-operative society - formed to eliminate the role of middlemen and
supply high quality goods and services at reasonable price to consumers.
2) Producers co-operative society - formed to help producers to procure raw material,
tools, equipment etc.
3) Co-operative marketing society - formed to ensure a favourable market for small
producers to sell the output and get a good return on sale.
4) Co-operative credit society - formed to provide financial help to members through loans
at low interest rates. They encourage saving habit among members.