Chapter IV FINANCE AND FUNDS

(1) A Cooperative Society may, by a resolution of its general body, Change the extent of its limited liability. (2) A Cooperative Society may, by a resolution of its general body transfer it assets and liabilities, in whole or in part, to any other Cooperative Society which agrees to such transfer by a resolution of its general body. (3) A Cooperative Society may, by a resolution of its general body, divide itself into two or more Cooperative Societies. (4) Any two or more Cooperative Societies may, by a resolution of their respective general bodies, amalgamate themselves and a new Cooperative Society. (5) Every resolution of a Cooperative Society under this section shall be passed at its general meeting majority of total members with right of vote and such resolution shall contain all particulars of the liability, transfer, division, amalgamation as the case may be, (6) Where a resolution is passed under this section, the Cooperative Society shall give notice thereof together with a copy of the resolution to all its members and federation to which it is affiliated and creditors who may give their consent. Notwithstanding any bye- law or contract to the contrary any member, federation or creditor shall, during a period of one month from the date of service of the notice have the option of withdrawing their shares, deposits, loans or services as the case may be. (7) Any member, federation or creditor who or which does not exercise within the specified period the right under sub-section (6) shall be deemed to have assented to the resolution. (8) A resolution passed by Co-operative Society under this section shall not take effect until- (a) (i) all the members, federation and creditors have assented under sub-section (6) or are deemed to have assented to the resolution under sub-section (7), or

(ii) all claims of the members, federation and creditors who have exercised the option referred under sub-section (6) within the period specified therein have been met in full or otherwise satisfied, and (b) (I) in the case of change of liability, amendment of the bye-laws of the Cooperative Society Concerned is registered or deemed to have been registered, or (ii) in the case of division or amalgamation the certificate of registration of the Cooperative Society or the Cooperative Societies as the case may be, is issued or deemed to have been issued. (9) When resolution passed by a Cooperative Society under sub-section (2) takes effect the resolution shall be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance. (10) The registration of a Cooperative Society shall stand cancelled and the Cooperative Society Shall be deemed to have been dissolved and shall cease to exist as a corporate body- (a) when the whole of the assets and liabilities of such cooperative Society are transferred to another Cooperative Society, or (b) when such Cooperative Society divides itself into two or more Cooperative Societies. (11) Where two or more Cooperative Societies are amalgamate into a new Cooperative Society the registration of the Cooperative Societies so amalgamated shall stand cancelled and they shall be deemed to have been dissolved and shall cease to exist as corporate bodies.

by a resolution passed at general meeting by a majority of members present having voting right, promote one or more subsidiary organisations for the furtherance of its stated objectives, and such organistion or organisations may be registered under any, law for the time being in force, as agreed to by the general body. (2) The annual reports and accounts of any such subsidiary organization shall be placed before the general meeting of the promoting Cooperative Society every year. (3) Any subsidiary organization created under-section (1) shall exist only as long as general body of the Cooperative Society deems its existence necessary.

Cooperative Society and any other organisation or organisation requires the creation of a new organisation , the new organisation may be registered as a company or a public society, a appropriate for the fulfillment of the objective with which it was created. CHAPTER—IV

in the State under this Act and it shall be known as the State Cooperative Union of Bihar. The Cooperative/Union shall be constituted consisting of the Cooperative Federations and such Cooperative Societies as are not the members of any Cooperative Federation. (2) Cooperative Federations consisting of Primary and Central Cooperative Societies having same nature of objects may be established and shall be eligible for registration under this Act: Provided that there shall be only one federation in the State for a class of primary and Central Cooperative Societies having same mature of objects. (3) For servicing their constituents and in accordance with their bye-saws, Union/Federations may perform the following functions :- (a) safeguard the observance of the Cooperative principles, (b) promote and organize Cooperative Societies and for this purpose frame model bye-laws and guide lines for framing various regulations and policies for consideration by Cooperative Societies,

(c) Provide Cooperative training, education and information and propagate Cooperative principles, (d) undertake research and evaluation and assist in preparation of perspective development plans of member Cooperative Societies, (e) promote harmonious relations between member Cooperative Societies. (f) help member Cooperative Society in the settlement of dispute among themselves and between a Cooperative Society and its members, (g) represent the interests of member Cooperative Societies, (h) undertake business services on behalf of its members, (i) provide Cooperative and management development services to member Cooperative Societies including participation in board meetings where invited, (j) to prepare a panel of auditors and ensure timely conduct of annual audit in member Cooperative Societies, (k) ensure timely conduct of election in member Cooperative Societies, (I) assist member Cooperative Societies in regular conduct of general meeting, (m) evolve code of conduct for observance by member Cooperative Societies, (n) evolve viability norms for member Cooperative Societies, (o) provide legal aid and advice, (p) assist member Cooperative Societies in organising self-help groups of people living in area, (q) provide any other services, at the behest of member Cooperative Societies. (4) (a) A federation may request the board of a member Cooperative Society to convene a general body meeting of its members and shall request the board to do so where at least ten percent of the members of the member Cooperative Societies have requested the federation to do so. (b) The requisition shall contain the items to be included in the agenda and these shall be dealt with at the general body meeting. (c) The board of the member Cooperative Societies shall convene such a meeting thirty days of receipt of the requisition. (d) Where a member Cooperative Society fails to convene a general meeting within thirty days of receipt of a requisition to do so by a Federation, the board of the Federation may themselves call such meeting for dealing with such items as included in the requisition. (5) (a) General body of Federation shall consist of the delegates from the member Cooperative Societies. (b) The chair-person of a Cooperative Society shall ordinarily by the delegate of the next tier of Cooperative Society: Provided that if the chair-person is unable to represent owing to illness or other unavoidable reasons, he may nominate the Chief Executive or any other member of the board to be the delegate. (c) The delegate shall continue to represent his Cooperative Society in the next tier of Cooperative Society, Federation! Union as long as he remains in office in the member Cooperative Society. (6) The Cooperative Union may- (i) create and maintain the Cooperative education fund, (ii) represent the interest and welfare of all types of Cooperative societies at the district and State level. (iii) Promote new forms of Cooperative enterprise, (iv)undertake experimental projects towards the application of Cooperative ideology. (v) Liaison on half of and amongst Cooperative Societies, and (vi) serve as a date bank on Cooperation,

CHAPTER-V

shape of share capital, deposits, loans and other contributions from its members to such extent and under such conditions as may be permissible under the bye-laws of the Cooperative Society: Provided that at the time of dissolution of a Cooperative Society the amounts due to the members shall be settled only after settlement of due to others.

debentures, deposits, raise loans and receive grants from external sources to such extent and under such conditions as may be specified in the bye-laws. Deposits and loans raised form external sources, however, shall at no time exceed ten times the sum of member funds and organisational reserves less accumulated deficit, if any. (2) A Cooperative Society may accept funds/guarantees from the government of other financing institution for the fulfilment of its objectives on such terms and conditions as are mutually contracted, upon and such conditions may include the right of the government or other financier to nominate one expert on the board.

Society shall, at anytime, hold more than one-tenth of the paid up eqaity capital. (2) No Cooperative Society shall accept funds from the government by way of equity.

surplus arising from transactions with members in that year, make deferred payment to members as patronage rebate, an amount not exceeding twenty-five percent of surplus and make payment of dividend on share capital not exceeding fifteen percent of surplus divided into the members according to their shares. (2) The balance surplus accruing from members and the entire surplus accruing from transactions with others, shall be utilized in the following manner:- (a) not less than twenty-five percent shall be transferred to a statutory reserve fund, (b) not less than twenty percent shall be transferred to a reserve for meeting unforeseen losses, (c) where the Cooperative Society is a member of the Cooperative Union, upto three percent may b transferred to a Cooperative Education Fund with the Cooperative Union, (d) bonus shall be paid to employees in accordance with the decision of the general body, (e) not less than five percent may be transferred towards a common good fund whose purpose is approved by the general body, (f) not more than five percent may e paid as contribution for any purpose connected with the development of the Cooperative movement.

in any given year, the board shall place before the general body in the first following annual gen4era1 meeting, a detailed report on the causes of deficit and the manner in which the deficit is proposed to be met. (2) The general body of the Cooperative Society shall decide to have the deficit covered by setting it off against the amounts available in the deficit cover fund, and/ or by debiting the deficit to the account of the members in proportion to the services they had availed or were expected avail of the Cooperative Society during the year.

reserves and other funds for the promotion of the objects of the Cooperative Society. (2) Reserves and other funds shall be used for the purpose for which they were created when necessary but otherwise may be used in the business of the Cooperative Society.

for us by a Cooperative Society may be invested or deposited outside its business- (a) in any union! federation of which it is a member, (b) in a local Cooperative bank, (c) in the equities of any other Cooperative Societies, (d) in any of the securities specified in section 20 of the Indian Trust Act, 1982, (e) in the total Postal Savings Bank. (f) in any of the non-speculative manner as provided in the bye-laws,

contribution either in money or in kind, either directly or indirectly to an organisation that has as an object the furtherance of the interests of a political party of any religious faith. CHAPTER— VI