• PRINCIPLES OF CO-OPERATIVE SECTOR

    • 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.

    • 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.

    • SELF HELP AND MUTUAL HELP

      The Co-operative societies office bearers/executive committee is elected as per democratic election procedure. The Co-operative Society function under the principle of self help and mutual help which means each will help for themselves and all will help others.

    • 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.

    • 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.

    • OPEN MEMBERSHIP

      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.

    • 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.

    • 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.

    • 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.

      Under M.C.S. Act, 1960 as per Section 28 other than Government or other society, shall not hold more than 1/5 of the total capital or interest in shares or exceeding Rs. 20,000/- which the State Government power to change by way of notification.

    • 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.

    • 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.

    • CO-OPERATION AMONGST CO-OP. INSTITUTIONS

      The funds generated or mobilized through the co-operative societies have to be deposited/ invested in the Co-operative Sector only.

    ACT & RULES APPLICABLE

    A Co-operative Society functions as per the provisions of

    • Co-operative Societies Act under which the same is registered.

    • Co-operative Societies rules made there under

    • Bye-laws approved by the registrar at the time of registration and amendments made from time to time and approved by the registrar.

    • 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.


    When the area of operation is restricted to one state, the State Co-operative Act & Rules, under which the society is registered will be applicable.

    In a particular state, if Co-operative Act and Rules is not enacted, the Central Act which is known as The Co-operative Act, 1912 and its rules will be applicable.

    When the area of operation of Society is spread in two or more states. The Multi-State Co-operative Societies Act, 2002 and its rules shall be applicable.

    Co-operative Societies Rules

    A set of rules is also framed under the respective State Co-operative Act for procedural aspects.

    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 society’s activities, but the rights and liabilities of members are determined by the Act and Rules and not by the bye-laws as such.

    Notification and Orders

    issued from time to time by the Government, or any other Authority as prescribed under the Act, Rules there under.