How are Co-operative Societies formed?

The co-operative movement was initiated to protect the interests of the weaker sections of society.

The major objective that governs the laws of co-operative societies includes the know-how of protecting economically backward sections of society from profit-hog middlemen who consume large chunks of profits illegally and leave the deserving beneficiaries scraping at the ends.

Business structures usually aim at generating profits whether they are a sole trade, joint stock companies, or partnerships.

The Union has passed a central act that protects the formation and development of co-operative societies and also enforces their laws with immense leeway for states to create laws that suit their local conditions but don’t denigrate the central act.

This has led to States creating their own set of laws for the cooperative society registration process and its development.

Advantages of Co-operative societies

  1. Co-operative societies prevent their consumers from consuming adulterated food and facing any malpractices as they provide high-quality products that are pure and have no mixtures as opposed to other shops and supermarkets.
  2. The most important and genuine requirements of the consumer can be met since co-operative societies have stores that are formed by members of the community.
  3. No single group can ever gain control over the co-operative society enterprise because one person doesn’t gain ownership of the organisation as the co-operative societies are governed by laws that are democratic in nature.
The registration process
  • The society is formed only when 10 or more members of the society step forward with a desirous intention of advancing the society for mutual benefits and have the same objective while forming it.
  • A provisional committee is formed once a group of 10 individuals are ready for the online cooperative society registration in India because of their desire to form a society. The chief promoter is selected from the provisional committee that everyone is a part of.
  • Once the committee is formed and the chief promoter has been selected, the members have to come up with the name of their Co-operative society.
  • An application has to be drafted and sent to the registration authority which states the details of the cooperative society such as the name, mission, vision, and objective which has to be approved by the registration authority. The authority checks whether the name is in conformity with the laws of Co-operative societies and issue a confirmation certificate to the Co-operative society.
  • The statutory requirements of the law suggest that a specific entrance fee along with the share capital must be collected from every prospective member of the Co-operative society. The society act mandates the fee amount or it can also be decided by the members of the Co-operative society.
  • The registering authority issues a set of instructions which mandate the chief promoter to open a bank account in the name of the Co-operative society and deposit the fee amount and the share capital collected. The bank then issues a certificate regarding the same which is approved by the registrar.
  • The chief promoter has to apply for society formation and has to submit documents which mention the detailed working of the society to the registrar.

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