VISIT TO A CO OPERATIVE SOCIETY

INTRODUCTION
MEANING
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 Cooperative 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.

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.
1) Co-operative society:-Under section 2(27) of the act, Society means a
co-operative society registered or deemed to be registered under this Act. Cooperative society is corporate body distinct from its member. Section 167 of cooperative societies A ct state that provisions of companies Act are not applicable to
Co-operatives.
2) Working capital:-Under section 2(31) of the Act, Working capital means funds at
the disposal of society inclusive of paid up share capital, funds built up out of profits
and money raised by knowing and other means. The definition of the term is
different as generally working capital means Net current assets less current
liabilities. The audit fees of certain types of socities such as Urban co-operative
banks, salaray earners credit socities are related to the amount of the working capital.
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3) Auditor:- Rule no 69 of co-operative societies rules states that the audit of cooperative societies shall be conducted either by departmental auditor or certified
auditors. The term certified auditors includes the following:
a) Chartered accountant
b) A person who holds a government diploma in co-operative accounts and
audit.
c) A person who has served as an auditor in the co-operative department of the
state government .
4) Bye-laws:- Under section 2(5) bye-laws registered under this Act and for

the time

being in force and includes registered amendments of such bye-laws. bye-laws of a

co-operative society may be be compared with the articles of a company. The byelaws cannot be contrary to the provisions of the co-opreatives societies Act. The byelaws generally includes the followings clauses for internal management of cooperatives society1. Name and address of society
2. Area of operation
3. The manner in which , and the limits upto which the funds of the society
4.
5.
6.
7.
8.
9.

should be raised.
Objects of society
Maximum amount of the share capital that may held by a member
Terms and qualifications for admission of membership
Rights , duites and liabilities of members
Maximum loans admissible to a member
Disposal of net profit

(Rule 8 of Maharashtra State Co-operative Societies Rules, 1961 give the various
details if the items in the bye-laws of the society. Any amendments , changes or
deletion in bye-laws shall have to be approved by a resolution at special general
meeting and also a wirtten approval for the District Deputy Registrar is
necessary. The first bye-laws of the society are required to be approved by the
Registrar, as per Rule No. 9.)
5) Co-operative year:- The Act as fixed 31st day of March as day of bal;ancing of
accounts of the society. However ,any other day can be fixed by the society for this
purpose with the prior approval of the registrar. It means that the co-operative year
need not necessarilyber from 1

st

April to 31st March. Normally , now-a-days

societies follow 31 March as the year-ending to comform with the Income-tax Act.
6) Member:- Under Section 2(19), a member of a Co-operative Society means a
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person joining in an application for the registration of a Co-operative Society, which

is subsequently registered , or a person duly admitted to a membership of Society
after registration and includes and associates, nominal or a sympathiser member.
Following are the different types of the membersa) Associate Member : Associate Member means a member who holds jointly
share of society with others, but whose name does not stand first in share
certificates.
b) Nominal Member : Nominal Member means a person admitted to
membership as such after registration in accordance with its laws.
c) Sympathiser Member : Sympathiser Member means a person who
sympathises with aims and objects of the society and who is admitted by
society as such member.

OBJECTIVES OF CO-OPERATIVE SOCIETY

A co-operative housing society may be formed for all or any of the following objectsTo enable each of its members

to purchase land and to erect a dwelling-house thereon; or

to erect a dwelling-house on land already owned by him; or

to erect a dwelling-house on Crown land leased by him for a term of not less than 50
years being Crown land within an area approved by the Governor in Council for the
purposes of this Act;

subject to section thirty-four of this Act to purchase land upon which is situated a
dwelling-house; or

to maintain and keep in proper repair his dwelling-house; or

where the approval of the Governor in Council given after consideration of a report
by the registrar is first obtained-to discharge a mortgage held by another society
upon any land; or

to discharge a mortgage or any other charge or security over or affecting any land
which mortgage charge or security was granted or executed by the member in
question in anticipation of the society's making an advance to him and with the
approval of the registrar to the making of the advance.

NEEDS & IMPORTANCE

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The objectives and role of cooperation have undergone a sea-change during the last decade.
In order to gear up the cooperative societies to meet the challenges posed due to economic
liberation and super fast growth in the field of information technology and to protect the
interests of the members of cooperative societies as financial stakes have become high, the
Govt, of National Capital Territory of Delhi had made efforts to prepare a new cooperative
law to make cooperative societies a viable economic movement, encompassing
simultaneously growth in the field of socio-culture, information technology, health, education
through the medium of cooperative societies. Therefore, the Delhi Cooperative Societies Act,
2003 has been enacted which aims to consolidate and amend the laws relating to cooperative
societies, to facilitate the voluntary formation and democratic functioning of cooperatives as
people's institutions based on self-help and mutual aid to enable them to promote their
economic and social betterment and to provide for better regulation, management, functional
autonomy of such societies and for matters connected therewith or incidental thereto in the
National Capital Territory of Delhi.

The intention
In today's context, just offering, a never-before service is only half the objective of any
organization. What makes the real difference is the way these services are rendered. We
realized this even before we started. Every service that we promise to offer to our customers
comes with strong and dear- commitment. To put in simple words, following are some of the
ways we serve:
Cooperation and tr ansparency
Courtesy and understanding
Efficiency and professionalism
Speedy processing and prompt action
Fair and speedy settlement of disputes
To act as a friend, philosopher & guide to the cooperatives

The Team
The Registrar Cooperative Societies plays a pivotal role in monitoring the functioning of
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Cooperative Societies registered under the Act. The Government also appoints other persons
to assist the Registrar, as Joint Registrar, Deputy Registrar, Asstt. Registrar and other field /
ministerial staff. The Government, by general or special order, has conferred on persons
appointed to assist the Registrar, the powers of the Registrar under the DCS Act/ Rules. Every
person appointed to assist the Registrar exercises the powers conferred on him subject to
general guidance and superintendence and control of the Registrar

Role of Registrar
From the registration of a Cooperative Society till the cancellation of its registration, the
Registrar- acts as a friend, philosopher and guide to the cooperatives in order to ensure that
the Cooperative Societies function in accordance with the provisions of Delhi Cooperative
Societies Act, Rules, Byelaws and Govt, policies. The main functions of the Registrar are as
under:1. Registration of Cooperative Societies
2. Amendments to the Bye-laws of Cooperative Societies

DETAIL REPORT
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 Bye-laws of Co-operative Housing Societies
As per bye law no 142 and as per standard accounting principles following accounts books
need to be maintained in respect of the financial transaction of the society.
a) The cash and the bank book
b) The general ledger
c) The personal ledger (member wise monthly collection register)
d) Bill register (month wise charges register)
e) Expense vouchers with receivers signature, authorization to pass vouchers and
corresponding
bill and receipt
f) Monthly /quarterly bills raised on the members for outgoings of the society.
g) Receipts of the collection of charges transfer fees and other funds of the society.
h) Bank passbook, check issued with counter files ,pay in slips book of the bank.
i) Issues of individual pass books issued to the members in respect of their transaction
with the society
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ADVANTAGES & DISADVANTAGES OF CO-OPERATIVE SOCIETY

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.
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.
Disadvantages of Cooperative Society
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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.

FORMATION OF CO-OPERATIVE HOUSING SOCIETY

a) Formation of Co-operative Housing Society:Practically every developer has to form a Co-operative Housing Society at one point of
time or another. With the limited amount of options available with regard to
management of the affairs of the building i.e.
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Condominium

Private Limited Company and

Co-operative Society, (excluding the unrealistic rental housing)

it will not be an exaggeration to state that in at least 90% cases particularly in

Mumbai the Promoters and/or the Builders have formed a Co-operative Housing
Society.

There are basically four types of Co-operative Housing Societies connected with the
housing.

(a) Open Plot Societies- members purchase or take one lease a plot of land and they
construct the building.
(b) Flat Owners Societies- When a builder constructs flats and sells them to Flat Owners,
the Society when formed is called Flat Owners Society
(c) Tenant Societies- When Landlord forms a Society of tenants, it is called Tenants
Society.
(d) Housing Board Societies- When a Society is formed by Allotted of flats
and building is constructed by the Housing Board Authorities, i.e. Mumbai
Housing and Development Board, then the Society so formed is of the type
of Housing Board Society .

The procedure for Registration of a society begins with electing a Chief Promoter in a
meeting of the Promoter.

Normally, the name reservation proposal should be accompanied with the signature of
at least 10 Promoters who have attended the meeting. It is a common belief that the
Society should consist of at least 10 members.

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Flat means a separate set and self-contained set of premises used or intended to be
used or intended to be used for residence, or office or show-room, or shop, or go
down and includes a garage, or dispensary, or consulting room, or clinic, or flour
mill, the premises forming part of a building and includes an apartment.

The Chief Promoter should submit Registration Proposal to the Registering

Authority within a period of 3 months from the date of issue of Letter of
Reservation in the name of the proposed Society.

The documents that are normally to be submitted to the Registering Authorities are as
under :1. Application for registration of Society in Form A along with Statement A. Enclosure
to application for Registration as per Rule 4(1) of Maharashtra Co-operative Societies
Rules, 1961.
2. Information about proposed society in Statement B (vide Govt. Circular dated 2-51980).
3. Information about promoter members of the proposed society in Statement C (vide
Govt. Circular Dt. 2-5-1980).
4. A Statement of Accounts as per Form D.
5. Model Bye-laws.
6. Bank Balance Certificate.
7. R.B.I. / Treasury Challan for payment of Registration Fee of Rs. 500/-.
8. Title Clearance Certificate from an Advocate
9. A true copy of the approved Building Plan.
10. Letter of Authority Granting permission to commence construction work/Completion
Certificate (if applicable).
11. Affidavit on Rs. 20/- Stamp Paper from at least 10 promoter members to the effect
that they are residing in the area of operation of the Society (Proposed), made before a
Competent Authority.
12. Affidavit from the Chief Promoter on Stamp Paper of Rs. 20/- executed before the
Competent Authority in form Y.
13. Certified True Copy of agreement made on Stamp paper and registered between the
builder, promoter and purchasers of flat.
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14. Where the promoter members are firms/ companies, a letter of authority from such
firms/companies authorizing the promoter to sign on behalf of firm/company.
15. In case of such proposed societies, names of 60% of the flat holders of the total
number of flats constructed or proposed to be constructed as per the plan approved,
must be included in Statement A to be attached to the Registration Proposal.
b) Stamp duty:Present rates of stamp duty for residential premises in the city of Mumbai are RS. 38,750/on Rs. 10, 00,000/-. Thereafter it is @ 8% for the additional value. The rate of stamp duty
for shops/Galas/office Premises and Garage even if used for car parking is 10% in Mumbai
Stamp duty has to be paid on the agreement Value or the market value of the property
whichever is higher. Stamp duty has to be paid every time the flat is being sold. Stamp duty
has to be paid even if it is a transfer within family.
c) Registration of Documents:The documents have to be registered within a period of fours months from the date of its
execution. The parties can go to the office of the Joint Sub-Registrar individually
/collectively to register the document. If for certain reasons the parties cannot attend the
office of the sub-Registrar within a period of the four months then in such cases the parties
can execute a deed of confirmation and complete the registration formalities.
d) Stamp paper:As per the amendment of section 34 of the Bombay Stamp Act 1958, the stamp paper should
be in the name of one of the parties executing the document.

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SUGGESTION
1) To be making provision of major repair fund as per Bye-Laws 13(b) of each member
on squire fir basis or value of cost which is decided in general body meeting and
invested as fixed deposit in RDCC bank.
2) Monthly meeting of committee and annual general body should be conducted as per
the laws, with prior agenda to each member. Minutes of general body meeting and
committee meeting should be recorded in register (two separate register).
3) Collect registered agreement from all members of society and take building cost those
units in balance-sheet.
4) Every voucher should be signed by chairman, secretary or treasurer.
5) Member information register form T and member registration register form J
should be update time to time.
6) Cash in hand to be maintained as stated in bye laws and shall make necessary
transaction of payment by cheque only.
7) Audit should be done after ending of every financial year.

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CONLUSION
I conclude based upon the data in my project I have learned what is cooperative housing
society and there are many advantages and disadvantages in cooperative housing society.
Though the main aim of these cooperative housing 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 housing society, step involve
while registering a society. While studying the auditing report of two year and making project
on a Shiv Samrath cooperative housing society was also a knowledgeable experience for me.

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REFERENCES
The Maharashtra Co-operative Societies Rules, 1961
Advanced Financial Accounting (M.Com Part-I)
Dr. Varsha M. Ainapure (Manan Prakashan)
sahakarayukta.maharashtra.gov.in/

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