Mutual assistance and service are the objectives as distinguished from the aim of the other forms of organization, which is primarily making of profit.
It aims at encouraging self-help on the part of economically weaker sections of the society by looking after a truly cooperative society is the elimination of profit and provision of goods and services to members at cost.
A cooperative society is a voluntary association that started with the aim of the service of its members. It is a form of business where individuals belonging to the same class join their hands for the promotion of their common goals.
These are generally formed by poor people or weaker sections of people in society. It reflects the desire of the poor people to stand on their legs or own merit.
Key Features of a Cooperative Society
A Co-operative Society possesses these characteristics:
Open Membership:
when a minimum of 10 members with a common interest come together to form a society, then it is referred to as a Co-operative Society. Besides, the co-operative societies act, 1912 does not specify any maximum number of members, while the member may specify the maximum limit after the formation of the society.
Voluntary Collaboration:
No Co-operative Society registration is possible without the volunteer efforts of members to build one. The members have access to enough freedom to join and leave the Co-operative Society at any time by providing a legal notice of the same. So it is a voluntary mutual association of persons for mutual help.
A Separate Legal Entity: when a company registers under the Cooperative Societies Act, 1912 it becomes a separate legal entity. Thus, a Co-operative Society holds a limited liability of its members. Any instances like, insolvency, death, or lunacy of the member will not affect the Co-operative Societies. Also, members have the power to enter in an agreement with others to sell or purchase properties under its name. A cooperative society have a separate existence other than that of its members.
Service is the manthra:
unlike other types of organizations, the Co-operative Societies do not emphasize upon maximizing the profit; instead, its main objective is to fulfil the common interest of the members.
Management is demoractic:
Every Co-operative Society follows “All for each and each for all” agenda which hinders dictatorship rule. Such societies conduct an Annual General Meeting (AGM) every year to select ‘Board of Directors‘ Irrespective of how many shares a member holds, he only has a single vote.
Procedure for register a Cooperative Society
1st Step: To form a Co-operative Society, it’s essential to find 10 individuals who share a common objective and desires to commence a Society.
2nd Step: The next thing to do is to form a Provisional Committee and elect a chief Promoter amidst them.
3rd Step: Then all the members must voluntarily select a name for the society.
4th Step: Now you need to apply to the Registration Authority for name reservation of your Co-operative Society. You must obtain a confirmation letter for the name reservation. Also, understand that the reserved name shall be valid for 3 months.
5th Step: Further, collect the entrance fees and share capital from all the prospective members of your society.
6th Step: Thereby open a bank account in the name of your Co-operative Society and deposit the collected entrance fees and share money in that account. Also, procure a certificate in that respect.
7th Step: You are almost done with the process of Co-operative Society registration. Now deposit the registration fees with the Reserve Bank of India and thereof obtain a receipt of 1challan.
8th Step: Submit the application for registration to the Registrar of Societies of the concerned municipal ward along with the necessary documents.
9th Step: Subsequent to your application, the Registrar will enter the particulars in his register in Form “B.” Thereby he will give you serial number and issue a receipt in acknowledgement of the same.
10th Step: Lastly, the Registrar notifies you about the registration of the Co-operative Society in the Official Gazette and thus issues you the certificate of registration.
Documents Required for register a Cooperative Society
Submit PAN Card of all the members of your proposed society with the registration application.
Next, deposit the valid Residential proof of all the members including, Bank Statement, Driving License, Aadhaar Card, Utility Bill and Passport.
3. Prepare a Memorandum of Association <1> that must contain these clauses and information:
1. The central objectives of your society for which it got established.
2. All details of members forming the society
3. The address of the registered office of your society.
4. Also, prepare an Articles of Association containing the following information:
The rules and regulations which will govern and maintain of day to day activities of the proposed society.
Moreover, it will contain the rules for taking the Membership of the Co-operative society.
The details about the meetings that will be held in future.
Information about the Auditors
Forms of Arbitration in case of disputes between the society’s members.
Ways for the dissolution of the society
5. A Cover Letter which clearly mentions about the objective or the purpose of your society. Ensure that every founding member of the society has signed the cover letter.
6. A copy of the Address Proof, where the registered office of your society will get located along with a NOC from the landlord if any.
7. Give a list of all the members of the governing body with their signatures.
The last and most essential document which you need to submit with the application is a declaration by the society’s president. He must confirm that he is willing and competent to hold the stated position.