Chapter 2 INCORPORATION

Registration of a new co-operative

1. (1) Where not less than ten individuals, each being member of a different family, intend to form a Co-operative or, two or more Co-operatives registered under this Act, wish to form into Secondary Co-operative or a society registered under the Co-operative Societies Act intend to convert itself into a Co-operative under this Act, they shall frame articles of association for this purpose in accordance with Schedule A: Provided that after registration of the Co-operative, any member of the family may be admitted as member of the Co-operative subject to provisions of section 16 of this Act.
2. (2) Such articles of association and the memorandum of association as specified in Schedule B or C as the case may be, shall be submitted to the Registrar by hand or by registered post for registration of the Co-operative.
3. (3) Every such memorandum or association shall contain-
   • (a) the proposed name of the Co-operative;
   • (b) the address where the registered office of the Co-operative to be situated;
   • (c) the objects or the Co-operative;
   • (d) declaration by the promoter of their commitment to the Co-operative principles as provided for in Schedule D;
   • (e) a list of names of the promoters, with their complete addresses; and shall be accompanied by-
     • (i) the original articles of association and one true copy thereof of the proposed Co-operative as adopted by the promoters; and
     • (ii) a true copy of the resolution adopting the articles of association passed at a meeting by the signatories to such memorandum or association.
4. (4) The Registrar shall register the Co-operative and also take on record its articles of association and communicate by registered post under acknowledgement a certificate of registration and a certified copy of the memorandum of association including the articles of association signed and sealed by him/her, within sixty days from the date of submission of the memorandum of association, to such person as specified in the memorandum.
5. (5) Before registration of the Co-operative, the Registrar shall satisfy himself that-
   • (a) the memorandum of association is in conformity with the requirements laid down by this Act; and
   • (b) the proposed articles of association are not contrary to the provisions of this Act.
6. (6) If the conditions laid down in sub-sections
7. (3) and
8. (5) are not fulfilled, the Registrar shall communicate by registered post under acknowledgement the order of refusal to member, with specific reasons thereof, within sixty days from the date of submission of the memorandum of association: Provided that no order of refusal shall be passed except after giving an opportunity of making representation on behalf of the promoters by the representative specified in the memorandum.
9. (7) Where a Co-operative is registered, the certificate of registration signed and sealed by the Registrar shall be conclusive evidence that the association mentioned therein is a Co-operative duly registered under this Act, unless it is proven that the registration of the Co-operative has been cancelled or the Co-operative is dissolved.
10. (8) Where within seventy-five days of submission of the memorandum of association for registration, the representative specified in the memorandum of association receives neither the certificate of registration nor the order of refusal, the Co-operative shall be deemed to have been registered under this Act and the promoter may apply to the Registrar, who shall issue certificate of registration within fifteen days of receipt of such application.

Conversion of Co-operative Society

1. (1) Notwithstanding anything contained in the Co-operative Societies Act, from the date of commencement of this Act, any Co-operative Society registered and functioning under the Co-operative Societies Act, which is not in receipt of any share capital, guarantee, loan from the Government, at the time of seeking registration under this Act, may submit memorandum of association for registration under this Act: Provided that where the Government does have share capital, guarantee, or other dues in a Co-operative Society desiring to convert into a Co-operative under this Act, the Co-operative Society shall, before registration under this Act, return the same to the Government and the Government shall accept it: Provided further that the Co-operative Society in receipt of share capital, loan, guarantee from any other agency/authority may return such share capital, loan, guarantee and obtain a no objection certificate from such agency/authority: Provided also that the Co-operative Banks as defined in sub-clause
   • (ccii) of section 56 of the Banking Regulation Act, 1949, and functioning under the Co-operative Societies Act, which intends to convert into a Co-operative under this Act, shall obtain previous sanction of the Reserve Bank of India in conformity with section 2
   • (gg) of the Deposit Insurance and Credit Guarantee Corporation Act, 1961.
2. (2) A memorandum of association for registration, in the form specified in Schedule C, may be submitted to the Registrar by hand or by registered post, by the board of such Co-operative Society which intends to convert itself into a Co-operative under this Act, on the basis of a decision of a majority of members present at a meeting of the general body of the Co-operative Society.
3. (3) Every such memorandum of association shall state-
   • (a) the name of the Co-operative;
   • (b) the address where the registered office of the Co-operative Society is situated; and
   • (c) the objects of the Co-operative; and it shall be accompanied by-
     • (i) a true copy of the resolution of the general body expressing commitment to the Co-operative principles as specified in Schedule D;
     • (ii) the original articles of association and one copy of the articles of association of the proposed Co-operative as adopted by the general body of the Co-operative Society;
     • (iii) a true copy of the resolution of the general body of the Co-operative Society adopting the articles of association;
     • (iv) a true copy of the declaration of the general body of the Co-operative Society stating that the Co-operative Society is not in receipt of any share capital, loan, guarantee or any other dues from the Government and does not intend ever to raise share capital from the Government;
     • (v) a true copy of the latest annual report and audited statement of accounts of the Co-operative Society;
     • (vi) a true copy of the resolution of the general body of the Co-operative Society along with particulars regarding the wiping off of accumulated losses, if any, from various reserves and/or by debiting to the accounts of members as decided at the general body meeting of the Co-operative Society; and
     • (vii) a statement of the total number of members of the Co-operative Society with right to vote as on the day of the said meeting, the number of members attended the meeting, and the number of members voted for the resolution.
4. (4) The Registrar shall register the Co-operative and also take on record its articles of association and communicate by registered post a certificate of registration and a certified copy of the memorandum of association including the articles of association signed and sealed by him/her, within sixty days from the date of submission of memorandum of association, to such person as specified in the memorandum, if-
   • (a) the memorandum of association is in conformity with the requirements laid down by this Act; and
   • (b) the proposed articles of association are not contrary to the provisions of this Act.
5. (5) If the conditions laid down in sub-sections
6. (3) and
7. (4) are not fulfilled, the Registrar shall communicate by registered post the order of refusal together with the specific reasons therefors, within sixty days from the date of submission of memorandum of association, to such person as specified in the memorandum of association: Provided that no order of refusal shall be passed except after giving an opportunity of making representation on behalf of the Co-operative Society by the representative as specified in the memorandum.
8. (6) Where a Co-operative is registered under sub-section (4), the certificate of registration signed and sealed by the Registrar shall be conclusive evidence that the association mentioned therein is a Co-operative duly registered under this Act, unless the Co-operative is dissolved under sub-section
9. (4) of section 53.
10. (7) Where within seventy-five days of submission of the memorandum of association for registration, the representative specified in the memorandum of association receives neither the certificate of registration nor the order of refusal, the Co-operative Society shall be deemed to have been registered as a Co-operative under this Act and the representative specified in the memorandum may apply to the Registrar, who shall issue certificate of registration to such representative within fifteen days from the date of receipt of such application.
11. (8) Notwithstanding anything contained in the Co-operative Societies Act in this context, where a Co-operative is registered under sub-section (4), its earlier registration as a Co-operative Society under the Co-operative Societies Act shall stand cancelled and it shall send within seven days of receipt of the registration certificate, by registered post, to the Registrar of Co-operative Societies a copy of the registration certificate under the Co-operative Societies Act, and a copy of the registration certificate under this Act, and the Registrar of Co-operative Societies shall, within seven days of receipt of such information, delete the name of such Co-operative Society from the register.
12. (9) Where a Co-operative is registered under sub-section (4), the assets and liabilities, the rights and obligations, and the members of the converted Co-operative Society shall become the assets and liabilities, the rights and obligations and the members of the Co-operative registered under this Act, and all transactions of the Co-operative Society shall be deemed to have been the transactions of the Co-operative registered under this Act.
13. (10) where a Co-operative society, which is a member of a Central/Apex Co-operative Society, is registered as a Co-operative under this Act, the Co-operative may continue to receive services from the Central/Apex Co-operative Society and to participate in its affairs for a period of one year from the date of its registration under this Act, at the end of which period, its membership in that Central/Apex Co-operative Society shall cease, unless, by then, such Central/Apex Co-operative Society too is registered as Secondary Co-operative under this Act: Provided that in all matters governing the internal functioning of the Co-operative, this Act shall prevail, whereas in matters governing the relationship including the recoveries of dues of the Co-operative with the Central/Apex Co-operative Society to which it is affiliated, the Co-operative Societies Act shall prevail: Provided further that even on cessation of membership, the Co-operative may continue to receive such services, and have such business relations as are mutually agreed upon, and permissible under the Co-operative Societies Act.
14. (11) Where a Central Co-operative Society which has other Co-operative Societies as its members is registered as a Secondary Co-operative under this Act, it may continue to serve and have its affairs managed by its member Co-operative Societies, for a period of one year from the date of its registration under this Act, at the end of which period it may have as its members only such Co-operatives as are registered under this Act: Provided that in all matters governing the relationship between the Secondary Co-operative and its member Co-operative Societies, the provisions of this Act shall prevail: Provided further that in respect of recovery of dues from the Co-operative Societies by the Secondary Co-operative, the relevant provisions under the Co-operative Societies Act, shall mutatis mutandis apply.
15. (12) Where any liability, proceeding, suits, transactions or litigation of the Co-operative Society remains unsettled, the outcome of the same shall lie to the Co-operative after its conversion under this Act.

Co-operative to be body corporate

A Co-operative registered under this Act shall be a body corporate by the name under which it is registered having perpetual succession and a common seal. The Co-operative is entitled to acquire, hold and dispose of property, to enter into contracts, to institute and defend suits and other legal proceedings and to do all other things necessary for the purpose for which it was constituted.

1. (1) The members constituting a Co-operative, shall have a set of articles of association, not contrary to the provisions of this Act, and the affairs of the Co-operative shall be managed in accordance with the terms, conditions and procedures specified in the articles of association.
2. (2) Except on such specific matters as provided under this Act, the functioning of every Co-operative shall be regulated by its articles of association.
3. (3) The articles of association may contain such matters as decided, by the members and shall be specific on all matters specified in Schedule A.

1. (1) A Co-operative may decide, by a special resolution, to amend the provisions of its articles of association : Provided that the text of such proposed amendment with reasons therefor shall be sent to each member, along with the notice of the general body meeting at which the proposed amendment is to be discussed.
2. (2) A copy of any amendment shall be forwarded by the Co-operative by registered post to the Registrar within a period of thirty days from the date of the general body meeting at which the resolution was passed.
3. (3) Every such amendment forwarded to the Registrar shall be signed by the President and two directors and shall be accompanied by the following particulars, namely:-
   • (a) a copy of the resolution agreeing to the amendment ;
   • (b) the date of the general body meeting at which the amendment was approved ; and
   • (c) the date on which the amendment has been proposed to come into force.
4. (4) The Registrar shall take on record immediately on receipt of such amendment : Provided that if such amendment is not consistent with the provisions of this Act, the Registrar shall, within a period of 30 days, return with reasons and suggestions, if any, which shall be reconsidered by the Co-operative.

1. (1) A Co-operative may not be registered with exactly the same name as another Co-operative already registered under this Act or the Co-operative Societies Act : Provided that where the articles of association of a Secondary Co-operative require all its Member Co-operatives to use a common name, the name of each such Member Co-operative shall have its location or other distinguishing feature included in the name at the beginning or end of the common name.
2. (2) Every Co-operative shall display its full name, in legible characters in a conspicuous position,-
   • (a) at its office or place at which it carries on the business ;
   • (b) in all notices and other official publications ;
   • (c) on all its contracts, business letters, orders for goods, invoices, statements of account, receipts and letters of credit ; and
   • (d) on all bills of exchange, promissory notes, endorsements, cheques and orders for money it signs or that are signed on its behalf.
3. (3) Every Co-operative shall display its full name in legible characters on its common seal.
4. (4) A Co-operative with limited liability shall have as a suffix to, or as part of its name, the expression "limited".
5. (5) Nothing in sub-section
6. (2) shall prevent a Co-operative from displaying any shorter name more conspicuously than the full name, by which it is popularly known and which, too, is included in the articles of association.
7. (6) A Co-operative may, by an amendment to its articles of association, change its name : Provided, however, that before changing its name it shall send notice of such intention to the Registrar, along with the proposed names, and the Registrar shall, within thirty days of receiving such notice inform the Co-operative if such name is already in use by another Co-operative.
8. (7) Where a Co-operative changes its name, the Registrar shall enter the new name of the Co-operative on the register of Co-operatives in place of the former name and issue a certificate to this effect.
9. (8) The change of name of a Co-operative shall not affect any rights, obligations or liabilities of the Co-operative or of any of its members or past members or render defective any legal proceedings by or against it. Any legal proceedings which might have been continued or commenced by or against the Co-operative by its former name shall be continued in its new name.
10. (9) A Co-operative which changes its name shall publish such change of name through a popular newspaper widely circulated in the district in which its registered office is located.

1. (1) Every Co-operative shall intimate to the Registrar the full address of its registered office, within ninety days of being registered as a Co-operative.
2. (2) Every Co-operative shall display in full the address of its registered office in legible characters in a conspicuous position -
   • (a) at every office or place where it carries on business ;
   • (b) in all notices and other official publications ;
   • (c) on all its contracts, business letters, orders for goods, invoices, statements of account, receipts and letters of credit ; and
   • (d) on all bills of exchange, promissory notes, endorsements, cheques and orders for money it signs or that are signed on its behalf.
3. (3) A Co-operative may, by a resolution being passed in the general body meeting, change the address of its registered office: Provided, however, that it shall inform such change to its creditors, the Registrar and to any Secondary Co-operatives to which it may be affiliated, within fifteen days of the resolution being passed.
4. (4) The Registrar shall, within fifteen days of receiving such information from a Co-operative, take on record, in the register of Co-operatives, the full address of the registered office of a Co-operative, and any changes thereof.

1. (1) A Co-operative may, by a special resolution, decide to transfer its assets and liabilities, in whole or in part, to any other Co-operative which agrees, by a special resolution, to receive such assets and meet such liabilities.
2. (2) Where special resolutions are passed under sub-section (1), each Co-operative shall give notice thereof together with a copy of the resolution passed by it to all its members and creditors, and notwithstanding any provision in the articles of association or contract to the contrary, any member other than one who voted in favour of the proposed transfer of assets and liabilities and any creditor shall, during a period of thirty days from the date of issue of the notice upon him/her, have the option of withdrawing the share, deposits or loans from the Co-operative, as the case may be, subject to the discharge of his/her obligations to the Co-operative.
3. (3) Any member or creditor who does not exercise his/her option within the period specified under sub-section
4. (2) shall be deemed to have assented to the resolution.
5. (4) The special resolutions passed under sub-section
6. (1) shall not take effect until-
   • (a) all claims of the members and creditors of each Co-operative who have exercised the option under sub-section
7. (2) have been met in full or otherwise satisfied; and
   • (b) information about the transfer of assets and liabilities has been sent by the Co-operative concerned to the Registrar and his/her acknowledgement of receipt of the information received.
8. (5) When special resolutions passed under sub-section
9. (1) take effect, the resolutions shall be sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.
10. (6) When a Co-operative transfers the whole of its assets and liabilities to any other Co-operative, under this section, the registration of the former Co-operative shall stand cancelled and it shall be deemed to have been dissolved and the Registrar shall delete the name of the Co-operative from the register of Co-operatives.

1. (1) A Co-operative may, by a special resolution, decide to divide itself into two or more Co-operatives.
2. (2) Where a special resolution is passed under sub-section (1), it will be treated to be a scheme according to which the Co-operative shall give notice thereof, together with a copy of the resolution to all its members and creditors and notwithstanding any provision in the articles of association or contract to the contrary any member other than one who voted in favour of the proposed division, or creditor shall, during a period of thirty days from the date of issue of the notice upon him/her, have the option of withdrawing his/her shares, deposits or loans, as the case may be, subject to the discharge of his/her obligations to the Co-operative.
3. (3) Any member or creditor who does not exercise his/her option within the period specified in sub-section
4. (2) shall be deemed to have assented to the resolution.
5. (4) A special resolution passed under sub-section
6. (1) shall not take effect until-
   • (a) all claim of the members and creditors of the Co-operative who have exercised the option under sub-section
7. (2) have been met in full or otherwise satisfied;
   • (b) information of the intended division and information about settlement of claims of members and creditors along with memorandum of association and articles of association of the Co-operatives are sent to the Registrar by Registered Post; and
   • (c) the certificates of registration and the certified copy of memorandum of association including articles of association of such Co-operatives, signed and sealed by the Registrar, are issued to them in accordance with section 4.
8. (5) When a Co-operative divides itself into two or more Co-operatives under this section, the registration of the Co-operative shall stand cancelled and it shall be deemed to have been dissolved and the Registrar shall delete the name of the Co-operative from the register of Co-operatives. On the other hand, the names of the newly formed Co-operatives which are registered by the Registrar shall find place in the Register of Co-operatives.
9. (6) When a Co-operative divides itself into two or more Co-operatives, each member who has assented or deemed to have assented to the division shall be deemed to have become a member of that newly formed Co-operative to which his/her interests were transferred, in accordance with the scheme of division approved by the general body.
10. (7) When a special resolution passed under sub-section
11. (1) takes effect, the resolution shall be sufficient conveyance to vest the assets and liabilities in the respective Co-operatives so formed without any further assurance.

1. (1) Any two or more Co-operatives may, by special resolutions, decide to amalgamate themselves and form a new Co-operative.
2. (2) Where special resolutions are passed under sub-section (1), each Co-operative shall give notice thereof together with a copy of the resolution passed by it to all its members and creditors, and notwithstanding any provision of the articles of association or contract to the contrary, any member, other than those who voted in favour of the proposed amalgamation, or creditor shall, during a period of thirty days from the date of issue of the notice upon him/her, have the option of withdrawing his/her shares, deposits or loans from the Co-operative, as the case may be, subject to the discharge of his/her obligations to the Co-operative.
3. (3) Any member or creditor who does not exercise his/her option within the period specified in sub-section
4. (2) shall be deemed to have assented to the resolution.
5. (4) The special resolutions passed under sub-section
6. (1) shall not take effect until-
   • (a) all claims of the members and creditors of each Co-operative who have exercised the option under sub-section
7. (2) have been met in full or otherwise satisfied;
   • (b) information of the intended amalgamation and information about settlement of claims of members and creditors is sent to the Registrar by registered post along with memorandum of association and articles of associations of the Co-operative; and
   • (c) the certificate of registration and certified copy of the memorandum of association including articles of associations of the Co-operative, signed and sealed by the Registrar, are issued to such Co-operative in accordance with section 4.
8. (5) When two or more Co-operatives amalgamate themselves into a new Co-operative under this section, the registration of the Co-operatives so amalgamated shall stand cancelled and shall be deemed to have been dissolved and the Registrar shall delete the names of the Co-operatives from the register of Co-operatives. On the other hand the name of the newly formed Co-operative which is registered by the Registrar shall find place in the register of Co-operatives.
9. (6) When two or more Co-operatives amalgamate themselves into a new Co-operative under this Section, all the members of the Co-operatives who have assented to or deemed to have assented to the amalgamation shall be deemed to have become members of the new Co-operative.
10. (7) When special resolutions passed under sub-section
11. (1) take effect, the resolutions shall be sufficient conveyance to vest the assets and liabilities in the Co-operative so formed without any further assurance.

1. (1) A Co-operative may, by a special resolution, decide to merge itself into any other Co-operative which agrees by a special resolution, to such merger.
2. (2) Where special resolutions are passed under sub-section (1), each Co-operative shall give notice thereof together with a copy of the resolution passed by it to all its members and creditors, and notwithstanding any provision in the articles of association or contract to the contrary, any member, other than those who voted in favour of the proposed merger, or creditor shall, during a period of thirty days from the date of issue of the notice upon him/her, have the option of withdrawing his/her shares, deposits or loans from the Co-operative, as the case may be, subject to the discharge of his/her obligations to the Co-operative.
3. (3) Any member or creditor who does not exercise his/her option within the period specified in sub-section
4. (2) shall be deemed to have assented to the resolution.
5. (4) The special resolutions passed under sub-section
6. (1) shall not take effect until-
   • (a) all claims of the members and creditors of each Co-operative who have exercised the option under sub-section
7. (2) have been met in full or otherwise satisfied; and
   • (b) information of the intended merger and information about settlement of claims of members and creditors is sent to the Registrar and his/her acknowledgement of receipt of the information is obtained.
8. (5) When a Co-operative merges itself into any other Co-operative under this section, the registration of the former Co-operative shall stand cancelled and it shall be deemed to have been dissolved and the Registrar shall delete the name of such Co-operative from the register of Co-operatives. On the other hand, the name of the newly formed Co-operative which is registered by the Registrar shall find place in the register of Co-operatives.
9. (6) When a Co-operative merges itself into any other Co-operative under this section, the members of the first Co-operative who assented or deemed to have assented to the merger, shall be deemed to have become the members of the Co-operative formed after merger.
10. (7) When special resolutions passed under sub-section
11. (1) take effect, the resolutions shall be sufficient conveyance to vest the assets and liabilities in the Co-operative so formed without any further assurance.

1. (1) The Registrar of Co-operative Societies appointed under sub-section
2. (1) of section 3 of the Co-operative Societies Act and the Additional Registrar of Co-operative Societies, the Joint Registrar of Co-operative Societies, the Deputy Registrar of Co-operative Societies and the Assistant Registrar of Co-operative Societies appointed under sub-section
3. (2) of section 3 of the same Act may be empowered by the State Government to exercise such powers and perform such duties of the Registrar under this Act.
4. (2) The State Government may specify the local area of the jurisdiction of the officers mentioned under sub-section (1).
5. (3) The State Government may also by order empower any society or local body to assist the Registrar and other officers who shall exercise the powers of Registrar as may be specified in the said order.
6. (4) State Government may declare any existing office under the administrative control of the Registrar of Co-operative societies to be the place for the purpose of registration of Co-operatives under this Act.

1. (1) Every memorandum of association for registration under this Act shall be accompanied by a registration fee amounting to one per cent of the authorised equity capital of the proposed Co-operative, subject to a minimum of rupees one hundred and maximum of rupees five thousand: Provided that the fee shall be rupees two hundred in the case of such Co-operatives who do not intend to have any equity capital.
2. (2) The Registrar may declare a reasonable scale of fees to be paid by Co-operatives for various services rendered by the Registrar under this Act.