Disposal of net profits

(1) A Society shall, out of its net profits in any year– (a) transfer an amount not less than ten percent in the case of a Co-operative Farming Society and not less than twenty-five per cent in any other case, of the profits to the reserve fund; and (b) credit four per cent of such profits to the Co-operative Education Fund constituted under Section 56-A. (2) The balance of the net profits may be utilised for all or any of the following purposes, namely :– (a) payment of dividend to members on their paid-up share capital at a rate not exceeding twelve per cent of such share capital; (b) payment of bonus to members on the amount or volume of business done by them with the Society, to the extent and in the manner specified in the Bye-laws; (c) constitution of or contributions to such special fund as may be specified in the Bye-laws; (d) donations of amounts not exceeding ten per cent of the net profits for any charitable purpose as defined in Section 2 of the Charitable Endowments Act, 1890 (6 of 1890). (e) payment of bonus to employees of the Society, to the extent and in the manner specified in the Bye-laws;