The process of registering cooperative societies that operate across multiple states is governed by the Multi-State Cooperative Societies (MSCS) Act of 2002. This statute lays down the rules and regulations for the registration, amendments, and management of such societies. Cooperative societies, being incorporated in individual states, fall under the jurisdiction of the respective states.
Each state government has the authority to draft and implement laws that govern cooperative societies within their boundaries. These laws are tailor-made to suit the unique needs and characteristics of each specific state. Alongside the state-specific laws, the MSCS Act of 2002 applies to cooperative societies functioning in all states.
For those considering establishing a multi-state cooperative society, obtaining registration under the MSCS Act provides several advantages. It’s essential to note that registration under this act is voluntary and not mandatory. However, specific circumstances may arise where the registration of a multi-state cooperative society becomes compulsory. Understanding these conditions is crucial for prospective society founders.
The Objective Behind the MSCS Act 2002
The primary goal of the Multi-State Cooperative Societies (MSCS) Act of 2002 is to safeguard the interests of members belonging to multi-state cooperative societies by amending and consolidating relevant laws. This act serves as a catalyst for promoting economic and social progress within these cooperative societies. In essence, the MSCS Act aims to facilitate the voluntary formation of such cooperative societies. Additionally, it pursues the following objectives:
- Empowering Weaker Sections: The act strives to aid cooperative societies that work towards supporting the interests and welfare of the weaker sections of society.
- Supporting Producers and Sellers: It encourages individual sellers and producers with limited market access to unite under a single cooperative society, providing them with a platform to sell their produce effectively.
- Promoting Democratic Functioning: The MSCS Act promotes the democratic functioning of cooperative societies, based on principles of self-help and mutual aid.
- Fostering Solidarity: It enables cooperative societies to function as people’s institutions, where the collective motto is “All for each and each for all.”
- Enhancing Economic and Social Betterment: Members of cooperative societies are encouraged to work towards their economic and social improvement through the provisions of this act.
- Enabling Self-Governance: The act allows cooperative society members to have the right of self-governance, enabling them to handle administrative matters effectively.
- Providing Financial Support: During times of financial challenges or crises, the MSCS Act offers monetary support to cooperative societies.
- Empowering the BPL Category: It supports and empowers members from the below poverty line (BPL) category through self-help and mutual assistance concepts.
A multi-state cooperative society refers to a society that is registered or deemed to be registered under the MSCS Act, 2002. It encompasses both national cooperative societies and federal cooperatives, which can be primary (with individual and institutional members) or federal (comprising only institutional members). Such societies can be incorporated under various cooperative sectors.
It is important to note that being classified as a multi-state cooperative society does not necessarily mean having branches in more than one state. Even if the cooperative society operates solely in one state but serves the interests of members in multiple states, it falls under the category of a multi-state cooperative society.
Under the MSCS Act, registration is usually voluntary, allowing members to decide whether to pursue it. However, certain circumstances mandate the registration of a cooperative society. These include having more than fifty members in a specific state, holding property and entering into contracts in the society’s name, having members residing in multiple states, requiring loans from banks with society’s property as collateral, lending more than ₹5,000 to members without the registrar’s sanction, representing the society in legal proceedings, updating the member list when another cooperative society seeks membership, and granting loans to another cooperative society with the registrar’s permission.
A multi-state cooperative society is a society that is registered or deemed to be registered under the MSCS Act 2002, and it can be either a national cooperative society or a federal cooperative. This Act allows for the formation of different types of cooperative societies, such as primary cooperative societies (comprising individual and institutional members) and federal cooperatives (consisting of only institutional members).
The term “multi-state” does not necessarily imply that the cooperative society should have branches in multiple states. Even if the cooperative society operates solely within one state but caters to the interests of members residing in multiple states, it is classified as a multi-state cooperative society.
The registration of a multi-state cooperative society under the MSCS Act is typically voluntary, allowing members to decide whether to pursue it. However, there are specific circumstances outlined in the Act where registration becomes mandatory. These include having more than fifty members in a specific state, holding property and entering into contracts in the name of the society, having members residing in multiple states, requiring loans from banks with the society’s property as collateral, lending more than ₹5,000 to members without the registrar’s sanction, representing the society in legal proceedings, updating the member list when another cooperative society seeks membership, and granting loans to another cooperative society with the registrar’s permission.
Multi-State Cooperative Society Registration Procedure
While registration of a cooperative society in a multi-state context is optional, the benefits of registration are significant. A multi-state cooperative society enjoys the privileges of a company, being recognized as a body corporate with a common seal, separate legal entity, and perpetual succession.
Registering a Co-operative Society Online has become a Streamlined Process. Here’s a Step-by-Step Guide to the Registration Procedure:
- Fulfill Pre-Conditions: Ensure that all pre-conditions for registration are met, and necessary documents, along with the society’s bye-laws, are readily available.
- Submit FORM – I: Prepare and submit the application for registration of a Multi-State Cooperative Society in the prescribed format as per FORM – I.
- Attach Required Documents: Ensure all the required documents (to be discussed later) are attached to the application form and submitted accordingly.
- Await Ministry Approval: It typically takes 5 to 6 months to receive approval from the Ministry after submitting the documents. However, if all documents are correctly submitted, approval may come earlier.
- Address Objections: If the registrar raises any objections, the members of the cooperative society must respond appropriately.
- Receive Registration Certificate: Upon receiving full approval, the registrar issues the multi-state cooperative society registration certificate.
Important Documents for Multi-State Cooperative Society Registration:
- Memorandum of Association (MOA)
- Bye-laws of the Society
- List of Promoters
- List of Members
- Address and Identity Proof of Members
- Address Proof of Registered Office
- Bank Account Details
- Consent of Members
- Audit Report and Balance Sheet (for the previous financial year, if applicable)
By following this registration process and providing the necessary documents, cooperative societies can enjoy the benefits and recognition of a multi-state cooperative society under the MSCS Act, 2002. Online law consultants can be helpful guides throughout the entire process.
Documents Required for Multi-State Cooperative Society Registration
To register a multi-state cooperative society, the submission of essential documents is crucial. Here is a checklist of the required documents for cooperative society registration:
- FORM-I: Along with the documents and enclosures required under FORM-I, as per the application for registration of a Multi-State Cooperative Society.
- Proposed Bye-Laws: Four copies of the proposed bye-laws in their original form.
- Resolution Copy: Certified copies of the resolution passed by the cooperative society concerning the appointment of promoters.
- List of Minimum Members: A list of cooperative society members, comprising a minimum of 50 people, including their details like name, address, date of birth, etc.
- Audited Financial Statements: Audited financial statements of the cooperative society for the preceding three financial years. This requirement may be exempted if the society has not completed three years since its incorporation.
- Bank Certificate: A bank certificate indicating the credit balance in favor of the proposed multi-state cooperative society.
- Chief Promoter’s Contact Details: Contact details of the chief promoter or cooperative society.
- NOC (If Applicable): In certain cases, like thrift and credit societies, a No Objection Certificate (NOC) from the registrar of the state where the society’s place of operation is proposed.
- Member Details: Copies of Aadhar, PAN, and other necessary details of all the society members, duly attested by the promoter of the society.
- States of Operation: The cooperative society should mention the list of states where current operations are conducted, along with the states where future operations are proposed to be undertaken. Note that the society is allowed to operate in only two conditions for the first two years from the registration date.
- Framework and Working Explanation: A detailed explanation of the framework and functioning of the cooperative society.
- Registration Fee Proof: Proof of payment of the cooperative society registration fees.
- List of Share Capital Contributors: A list of share capital contributors, indicating the amount contributed by each member.
- Additional Documents: Any other necessary documents as may be prescribed by the registrar.
By providing these essential documents as part of the registration process, the multi-state cooperative society can complete its registration under the MSCS Act, 2002.
Circumstances Leading to Cancellation of Multi-State Cooperative Registration Certificate
After obtaining the registration certificate and establishing a multi-state cooperative society, certain situations may arise that lead to the cancellation of the cooperative registration certification. In such cases, the existing cooperative society registration is revoked, and the society is considered dissolved. As a result, the old society no longer exists as a corporate body, and a new society may be formed due to the following specific scenarios:
- Transfer of Assets and Liabilities: If the entire assets and liabilities of a multi-state cooperative society are transferred to another multi-state cooperative society or cooperative society, the registration certificate of the old society may be cancelled.
- Amalgamation of Cooperative Societies: When two or more cooperative societies merge to form a new multi-state cooperative society, the existing registration certificate of the involved societies may stand cancelled.
- Demerger or Division: In the event of a demerger or division of a multi-state cooperative society into two or more cooperative multi-state societies, the registration certificate of the old society may be cancelled.
In these circumstances, the original cooperative society is dissolved, and a new entity is created as a result of the actions undertaken, leading to the cancellation of the previous multi-state cooperative society registration.
FAQ
Q: What is the Cooperative Society Minimum Members Limit?
Ans: The minimum number of members required for a cooperative society in the case of multi-state cooperatives is 50 members from each state where registration is proposed.
Q: Can a Cooperative Society Convert into a Multi-State Harmonious Society?
Ans: Yes, a cooperative society can convert into a multi-state cooperative society by amending its bye-laws and registering with the central registrar, as per section 22 of the MSCS Act, 2002.
Q: Is Registration of a Cooperative Society in the Case of Multi-State Cooperatives Mandatory?
Ans: No, the registration of a cooperative society in the case of multi-state cooperatives is voluntary and not mandatory. However, there are specific scenarios highlighted in the MSCS Act, 2002, where registration becomes compulsory.
Q: How to register a cooperative society in the case of multi-state cooperatives?
Ans: To register a cooperative society in the case of multi-state cooperatives, you need to submit the application form, FORM – I, along with the required documents to the Central Registrar of Cooperative Societies.
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