OVERVIEW OF CO-OP SECTOR PROFESSIONAL OPPORTUNITIES FOR

CAsFORMATION OF CO-OP SOC

DRAFTING OF BYLAWS REGISTRATION

T.N.C.SRIDHARJCIT ( RETD)

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ROAD MAP• History of co-op movement• Concept of mutuality• Types of co-op soc• Players -visionaries• -co-operators -executives• -workforce -professionals• -authorities-co-op dept-RBI

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• Legislations• Role of professional• Formation-basic requirement-

formalities-documentations• Drafting bylaws• -salient features –• basic ingredients• -procedures –adoptions-

amendments

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OVERVIEW OF CO-OP SECTOR

• An autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

• International Co-operative Alliance (ICA)

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MEANING OF CO-OPERATION

• Latin word - co- operari • ‘ co ’ means ‘with’ + • ‘ operari ’ means ‘to work’• Co-operation ’ means working together• Section 4 of the Co-operative Societies Act, 1912

defines cooperative society as • “a society which has as its objectives the

promotion of economic interest of its members in accordance with cooperative principles.“

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Co-operative Society ’ means

A voluntary association of personsworking together with common economic

objectiveproviding support to the membersself-help and mutual helpnon-profit motivepooling individual resources for group

welfare for common benefit

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CO-OPERATIVES IN WORLD (HISTORY)

• Robert Owen father of co-op movement• Rochdale Pioneers,manchester,UK-

1844• Weavers’ co-op • consumer—UK• Milk-Denmark• Agricultural credit--Germany

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CO-OPERATIVES IN INDIA (HISTORY)

• ‘SUCCESS OF CO-OP MOVEMENT SHOULD NOT BE MEASURED BY THE NUMBER OF CO-OP SOC FORMED,

• BUT • BY THE MORAL CONDITION OF THE

CO-OPERATORS’. M.K.GANDHI

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STATE OF INDIAN FARMERS

•Indian farmers •born in debt,•grow in debt & •dies in debt

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AIM

•To mitigate the ryots against exploitation by private money lenders,

•Act passed in 1904

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CO-OPERATIVES IN INDIA (HISTORY)

1st co-op in Asia formed at Kanaginahal village in Dharwar (now Gadag) district in 1914 by late Shri Siddanagowda SannaRamanagaowda Patil

1912-co-op act amended to facilitate various types of co-operatives- District Central Co-op banks-Marketing co-op to enable Agricultural produce sale

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• 1919-As per recommendation of Chelmsford reforms the subject was transferred from central to provincial government

• 1935- R.B.I. was formed (1.4.1935- All Fools Day)

• 1949-Banking Regulation Act passed

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Rupee one: Other currency notes

Issued by Government of India RBI

Signed by secretary ministry of finance Governor RBI

Photo/water mark One rupee coin Gandhiji since 02/10/1987

language 13 15( Nepali, Konkani added in 1996)

nature Legal tender Promissory note

Year of printing Till 1994 Mentioned after 2005

Serial no. once side bottom Twice- left bottom and right top

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• 1951-A.D. Gorwala committee formed for All India Rural Credit Survey Committee

• appointed by RBI• Report submitted in 1954• “co-op has failed in India • but it shall succeed, • there is no other way for development of

the country • co-op is inevitable”

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REFORMS• Government participation in co-op soc• Large size multipurpose co-op soc

(LSMP)• Registration, Arbitration, liquidation –

control with co-op dept• Licensing provisions of BR Act , CRR

SLR reporting –control with RBI

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• 1959-Karnataka state co-op soc act

• 1966-(1/3/66)-B.R. Act amended with a new chapter ‘As Applicable ‘to Co-op Soc (AACS)

• To control co-op banks- use of ‘Bank/Banker/Banking’ prohibited for those not having license under B.R. Act

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• Credit soc can carry on banking activity except issue of cheques, DDs & money transfers. , they can accept deposit only from members & give loan only to members

• 1995-Deposit Insurance & Credit Guaranty Corporation (DICGC)

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The Karnataka Souharda Sahakari Act,

• Karnataka Souharda Sahakari Act in 1997. (Karnataka Act 17 of 2000). The act came into force with effect from January 1st , 2001with certain observations to modify and include specific suggestions of Reserve Bank of India with regard to Banking Business.

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• No Government share capital, loan, subsidy or any financial help

• No Government control• AGM supreme• Auditor appointment to be decided by AGM

and not government appointed• Option to choose auditors from panel

published by co-op dept• Auditor must complete audit before last

date of august every year as per sec 63 of KCS Act

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• Complaints to Karnataka state Souharda Federal Corp Ltd

• 2 parallel Acts free flow migration• KCS Act for only co-op Hsg soc –others

optional• Conduct of Election by Co-op election

commissioner• Disputes regarding election only to

jurisdictional civil court

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THE CONSTITUTION (97TH AMENDMENT) ACT, 2011

WITH EFFECT FROM 15TH FEBRUARY 2012.

Constitution of India divided into twenty two parts, 395 articles and twelve schedules.

Part-III – Fundamental Rights (Articles 12 to 35). Article 19(c) to include under right to freedom

the right to citizens to form co-operative societies.

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Part-IV Directive Principles of

State Policy• Article 43B • “Promotion of co-operative societies – The

State shall endeavor to promote• voluntary formation, • autonomous functioning, • democratic control and • professional management of • co-operative societies”

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Part IXB – Article 243ZH to Article 243ZT The Co-operative Societies – inserting articles relating to

the co-operative societies.• This part gives out the co-operative societies related

provisions of • incorporation, • board structure, • election of members, • application of this part among others. • Article 243ZR • under this part also specifies that these provisions shall

also apply to multi-state co-operative societies.

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After Part IXA of the constitution,

Part IXB was inserted to accommodate state vs. centre

roles.It inter alia provides for:

• (i) Incorporation, regulation and winding up of cooperative societies based on the principles of voluntary formation, democratic member control, member economic participation and autonomous functioning;

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• (ii) Specifying the maximum number of directors of a co-operative society to be not exceeding 21 members;

• (iii)a fixed term of 5 years from the date of election in respect of the elected members of the board and its office bearers; and an authority or body for the conduct of elections to a cooperative society;

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• (iv)a maximum time limit of 6 months during which board of directors of a co-operative society could be kept under supersession or suspension;

• (v) independent professional audit; • (vi) right of information to the members of

the co-operative societies; • (vii) Empowering the State Governments

to obtain periodic reports of activities and accounts of co-operative societies;

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• (viii) reservation of • (1/6)seat for OBC• (1/6) seat for the Scheduled Castes or the

Scheduled Tribes and • (2/6) seats for women • on the board of every cooperative society,

which have individuals as members from such categories; and

• (ix) Penalties in respect of offences relating to co-operative societies.

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CLASSIFICATION OF COOPERATIVES

Agriculture/ ForestryNon- AgricultureBanking/ Credit Unions

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THE DOCUMENTS REQUIRED FOR

REGISTRATION OF FLAT OWNER’S HOUSING

SOCIETY1) 7/12 extract of the land or property card.

2) Certificate from the competent authority regarding non-agricultural land

3) The order regarding applicable/non applicable of land ceiling Act

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4) Construction layout approved by the competent authority

5) Letter of sanction for starting construction

6) Certificate regarding completion of construction work

7) Development Agreement if the land is taken for development

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8) Letter of Power of Attorney of the land

9) Title search report of the land

10) The registered agreement of purchases of the flat with necessary stamp duty paid

11) Architect Certificate regarding construction

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12) At least ten members are necessary for registration of society.

13) If the land is given by the government or undertaking agency of the government then its guarantee letter

14) No objection certificates from the Charitable Commissioner if the land is of Trust.

15) Certificate of the competent authority regarding non-agricultural plot

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16) Application for Registering Society (A form)

17) Table giving information of society (B )

18) Table giving details of the members (C )

19) Statement of Accounts of the Members (D )

20) Notarized Guarantee letter by the Chief Promoter of the society on the stamp Paper of Rs. 100/-

21) List of Members

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22) Scheme of the Society

23) Application for reserving name

24) Notarized Guarantee letter by the Builder, Promoter on the Stamp Paper of Rs. 100/-Affidavit of Members (Affidavit of Minimum 10 Promoters)

25) Two copies of bye laws of the Society approved by the Commissioner, Co-operation and Registrar, Co-operative Societies

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26) Proof of the bank balance of the promoter member (deposit of each share of Rs. 500 and admission fee of Rs. 100), after getting permission for reservation in the District Central Co-operative Bank

27) Challan of Rs. 2500/- deposited in the Government Treasury Registration fee for the Housing Society of Backward class is Rs. 50/-

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PROFESSIONAL OPPORTUNITIES- CO-OP

SECTOR1. Registration of housing society

2. Drafting bye laws of the Society

3. Legal opinion

4. Legal documentation and advice on Sale/Purchase/Lease of Property

5. Verification of Title Deed of the Property

6. Finance Agreements

7. Building, Development and Construction Contracts

8. Real estate investment and development projects

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9. Taxation and Accounting

10. Registration and Stamp Duty

11. Advisory in Foreign Direct Investment in Real Estate

12. Valuation of property

13. Arbitration and Consulting

14. Litigation Support

15. Tax Appeals

16 Compliance with Development Control Regulations

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17. Acquisition, sale and transfer of Immovable property in India by Non Resident Indians and Persons resident outside India

18. Real Estate Venture Capital Investment Negotiations

19. Property Specific Joint Venture agreements

20. Green Building consultancy

21. Statutory compliances

22. Statutory Audit

23 Internal Audit

24. Conveyance and Deemed Conveyance

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25. Project Management Consultancy

26. Feasibility Report in case of redevelopment of property

27. Drafting Agreement with builders

28. Writing articles in cooperative/NPO related magazines and other publications

29. Participating as speaker in conferences

30. Communicating with people related to cooperative activities

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31. Building a cooperative information website

32. Writing books on topics covered under cooperative

33. Projecting oneself as a cooperative society expert

34. Reaching out to the prospective service receivers

35. Using social media to reach more number of people related to Cooperative societies

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36. Increase expertise in the field of Cooperative society by undertaking capacity building initiatives

37. Registration of co-operative society under various applicable labour legislations, if applicable

38. Obtaining Licenses

39. Completion of Forms

40. Submission of Returns on a regular basis

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FORMATION OF CO-OP SOC

• Fundamental right• -cannot be refused

• Sec 5-• object should be • economic interest of members • in accordance with principles of co-

operation (mutuality)

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THE BASIC GUIDELINES FOR THE FORMATION OF CO-

OPERATIVES UNDER KARNATAKA SOUHARDA

SAHAKRI ACT, 1997• There should be at least ten persons.• These persons should be from different families.• These persons should be competent to enter into

a contract under the Indian contracts Act 1872.

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• He should reside in the area of operation of the Co-operative.

• He should be eligible as per the bye-laws of the proposed Co-operative.

• Any individual, firm, company or any other body corporate can become member of the Co-operative.

• Any Co-operative registered under this Act (For Union co-operative) or Societies registration Act 1860.

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• The object of the Co-operative should be promotion of economic interests or general welfare of the members or the public, in accordance with the co-operative principles.

• It should be economically sound, its registration should not affect adversely on the development of the co-operative movement.

• Its registration should not be contrary to the policy directives of the State government.

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Procedure of Formation of a Co-operative

Cooperative :• Promoters meeting : Willing , eligible persons

should come together and conduct a meeting, which is called as promoters' meeting. This meeting will decide the name of the proposed Cooperative, its object and bye-laws and then elect a Chief Promoter authorizing him to sign the necessary documents on behalf of the promoter members.

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Collecting initial share capital

•  The Chief Promoter will apply to the Registrar of the concerned area for requesting to authorize to collect share-capital. The application shall consist of:– Prescribed application– Resolution of promoters' meeting– Proposed byelaw– Details of promoters

• Registrar will authorize the Chief promoter to collect the share and direct him to deposit the collected share capital in a particular Bank

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REGISTRATION :• After collection of the necessary share

capital, the chief promoter shall apply for registration of the co-operative along with:– Prescribed application– 5 copies of proposed byelaws– List of persons who have contributed to the

share-capital and the entrance fee of the proposed Co-operative

– Bank documents having been deposited share capital

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• Provided that -• No co-operative 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

– Registration fees : 1% of the authorized share capital, subject to minimum of Rs.500/- and maximum of Rs. 5000/-

– After scrutinizing the documents Registrar will register the cooperative

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• Election to first Board : • After Registration the chief promoter

shall call first General Body of the newly formed cooperative to elect its first board.

• Beginning of activities : • After election of first board, the

President and Secretary can open the Bank account and may start activities of the cooperative.

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Bye –laws of a multi-state Cooperative Society should cover

the following matters– 1. the name, address and area of operation of

the society;

2. the objects of the society;

3.the services to be provided to its members;

4. the eligibility for obtaining membership; the transfer of membership;

5.the procedure for expulsion from membership;

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6. the rights and duties of the members;

7. the nature and amount of capital of the society;

8. the manner in which the maximum capital to which a single member can subscribe;

9. the sources from which the funds may be raised by the multi-State co-operative society

10. the purpose for which the funds may be applied;

;

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11.the manner of allocation or disbursement of net profits of the multi-State co-operative society;

12. the constitution of various reserves

13. the manner of convening general meetings and quorum thereof other than those provided under this Act;

14. the procedure for notice and manner of voting, in general and other meetings;

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15. the procedure for amending the bye-laws;

16. the number of members of the board not exceeding twenty-one;

17. the tenure, of directors, chairperson and other office-bearers of the society, not exceeding five years;

18. the procedure for removal of members of the board and for filling up of vacancies;

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19. the manner of convening board meetings, its quorum, number of such meetings in a year and venue of such meetings;

20. the frequency of board meetings;

21. the powers and functions of the Chief Executive in addition to those provided under section 52;

22. the manner of imposing the penalty;

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• aa. the appointment, rights and duties of auditors and procedure for conduct of audit;

• bb. the authorization of officers to sign documents and to institute and defend suits and other legal proceedings on behalf of the society;

• cc. the terms on which a multi-State co-operative society may deal with persons other than members;

• dd. the terms on which a multi-State co-operative society may associate with other co-operatives societies;

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• ee. the terms on which a multi-State co-operative society may deal with organizations other than co-operative societies;

• ff. the rights, if any, which the multi-State co-operative society may confer on any other multi-State co-operative society or federal co-operative and the circumstances under which such rights may be exercised by the federal co-operative

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• gg. the procedure and manner for transfer of shares and interest in the name of a nominee in case of death of a member;

• hh. the educational and training programmes to be conducted by the multi-State co-operative society;

• ii. the principal place and other places of business of multi-State co-operative society;

• jj. the minimum level of services to be used by its members;

• kk. any other matter which may be prescribed.

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Maintenance of accounts

• A Society should maintain the following books of accounts, records and the registers:

(i) The Register of Members in “I” form, prescribed under Rule

(ii) The List of Members in 'J' form, prescribed under Rule

(iii) The Cash Book

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(iv) The General Ledger

(v) The Personnel Ledger

(vi) The Property Register

(vii) The Share Register

(viii) The Sinking Fund Register

(ix) The Audit Rectification Register in 'O' form, prescribed under Rules

(x) The Investment Register

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(xi) The Nomination Register

(xii) The Loan Register (if loan is raised)

(xiii) The Mortgage Register (if the property is mortgaged).

(xiv) The Minutes Book for the meetings of the Committee of the society

(xv) The Minutes Book for the meetings of the general body of the society

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(xvi) Register of deposits made with the Local Authority, the Electric Supply Company and any other Authorities

(xvii) The Register of Furniture, Fixtures and Office Equipments

(xviii) The Register of Library Books

(xix) The Register of Allotment of Flats

(xx) Structural Audit Register (wherever applicable).

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Types of co-op societiesThe co-operative banking structure in India

is divided into following main 5 categories:

• Primary Urban Co-op Banks

• Primary Agricultural Credit Societies

• District Central Co-op Banks

• State Co-operative Banks

• Land Development Banks

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Some of the Labour Laws enacted by the Central

Government which may be applicable to co-operative

societies are1.The Employees’ State Insurance Act, 1948

2.The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952

3.The Contract Labour (Regulation and Abolition) Act, 1970.

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4.The Equal Remuneration Act, 1976.

5.The Maternity Benefit Act, 1961

6.The Minimum Wages Act, 1948

7.The Payment of Bonus Act, 1965

8.The Payment of Gratuity Act, 1972

9.The Payment of Wages Act, 1936

10.The Plantation Labour Act, 1951

11.The Trade Unions Act, 1926

12.The Employees’ Compensation Act, 1923

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Points to note• Contract between members is up to first

General Meeting• Participation must be both physical and

financial• To stop sleeping members• 20% of eligible total members will be quorum• Eligible-non defaulters• Members education /enlightenment• Need for quality leadership

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Maintenance of registers• Ensure adequate facilities have been provided for the employees on behalf of the co-operative society

• Periodic Information to be filed with the concerned authorities

• Drafting employment agreements between the employer and employee and also specific non-disclosure agreements if required

• Arbitration

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Useful Websites• http://www.agricoop.nic.in/ - Department of

Agriculture and Cooperation• http://www.ncdc.in/ - National Cooperative

Development Corporation (NCDC)• www.nccf-india.com - National Cooperative

Consumers’ Federation of India (NCCF)• http://www.nafed-india.com/home.asp -

National Agriculture Cooperative Marketing Federation of India (NAFED)

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• http://www.nchfindia.net - National Cooperative Housing Federation of India (NCHF)

• http://www.labcofed.org/ - National Labour Cooperatives Federation Of India Ltd (NLCF)

• http://www.ncui.coop/welcome.html - National Cooperative Union of India, (NCUI)

• http://ica.coop/ - International Co-operative Alliance

• http://www.labour.nic.in/ - Ministry of Labour and employment

• http://labourbureau.nic.in/ - Labour Bureau

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INTERDEPENDENCE• We are neither independent nor dependent

but we are interdependent• This is the root mantra of co-op movement• Maintain the balance of this mantra• When this balance gets disturbed peace is

broken and atrocities surface• When the concept of interdependence is

understood peace prevails every where• We are neither independent nor dependent

but we are interdependent

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THANK YOU

• T.N.C.SRIDHARJCIT ( RETD)