Chapter VI PROPERTY AND FUNDS OF SOCIETIES

No part of the funds, other than the net profits of a society shall be paid by way of bonus or dividend, or otherwise distributed among its members ; Provided that, a member may be paid remuneration on such Scale as may be laid down by the bye-laws, for. any services rendered by him to the society.

(1) Every society Which does, or can, derive a profit from its transactions, shall maintain a reserve fund. (2) In the case of a Resource or Producer’s society at least one-fifth of the net profit of the Society each year, and in the case of any other society at least one-tenth of the net profits of the society each year, shall be carried to the Reserve Fund; and such reserve fund shall not be used in the business of the society or may, subject to the provisions of section 70, be invested, as the State Government may by general or special order direct, or may, With the previous sanction of the Registrar, be used in part for some public purpose likely to promote the objects of this Act, or some such purpose of the State, or of local interest.

After providing for the reserve fund as provided in Section 66, and for the educational fund as provided in section 68, a Society may set aside a sum not exceeding twenty 'per cent, of its net prefitsand utilise, with the approval 'of the State» Cesoperative Union as may be notified by the State Government in this behalf from time to time, the ‘whole or part of such sum in contributing to any Co-operative purpose, or any charitable purpose within the meaning of section 2 of the Charitable Endowments Act, 1890 or to any other public purpose.

A Society shall invest or deposit its funds in one or more of the following :— (a) in a Central Bank, or the State Co-operative Bank ; (b) in any of the securities specified in section 20 of the Indian Trustee Act, 1882 ; (c) in the shares, or security bonds, or debentures issued by any other society With limited liability ; (d) in any banking company, approved for this purpose by the Registrar, and on such conditions as the Registrar may from time to time impose ; (e) in any other mode permitted by the rules, or by general or special order of the State Government.

(1) Any society may estabiish for its employees a provident fund, into Which shall be paid contributions made by its employees and by the society. Such provident fund shall not be used in the business of the society, nor shall it form: part of the assets of the society ; but shall be invested under the provisions of the last preceding section, and shall be administered, in the manner prescribed. (2) Notwithstanding anything contained in the foregoing subsection a provident fund estabiished by a society to which the Employees’ Pro-vident Fund Act, 1952 is applicable shall be governed by the Act;