Chapter III MEMBERSHIP

(1) Any person who needs the services of a co-operative, expresses willingness to accept the responsibilities of membership, meets such other conditions as may be specified in the articles of association of the co-operative, and is in a position to use the services, may seek membership and be admitted as a member : Provided that the co-operative is in a position to extend its services to the applicant. (2) Every applicant for membership, and every member of a co-operative must keep each co-operative of which the person is a member, informed of membership in other co-operatives, and it shall be lawful for a co-operative to refuse admission or remove from membership on grounds, among other, of dual or conflicting membership.

(1) Admission to membership shall be made, in accordance with the procedure specified in the articles of association, only by an elected Board. (2) Where admission is refused, the decision with the reason thereof shall be communicated by registered post to such applicant within fifteen days of the date of the decision, or within sixty days from the date of application for membership, whichever is earlier. (3) Where an applicant has been refused admission by the Board, or has had no response from the Board, the applicant may request the Board to place the matter for review by the arbitral tribunal. The Board shall place the matter before the arbitral tribunal at its next meeting and the decision of the general body shall be final; Provided that the applicant shall be given opportunity to be heard by the arbitral tribunal.

(1) A member may at any time withdraw from membership in a co-operative in accordance with the procedure specified in the articles of association of that co-operative (2) Before withdrawal from membership he/she will fulfil all such obligations as were enjoined upon him/her as a member, under the provisions of this Act, the articles of association or other agreements.

(1) A person shall cease to be a member on death or on incurring such disqualification as may be specified in the articles of association. (2) Every co-operative shall inform, in the event of the death of the member, the nominee of the member, and in every other instance, the member, about the cessation of membership and consequence thereof.

(1) The Board of a co-operative may terminate the membership of a person who has acted adversely to the objects and interests of the co-operative, including the violation by the member of the articles of association of the co-operative, the policies of the general body or Board, and/or contracts entered into by the member with the co-operative : Provided the member has been given a fair opportunity to make a representation at the Board meeting as to why membership should not be terminated. (2) Where the membership of a person has been terminated by the Board, the person may request the Board to place its decision for review by the arbitral tribunal. The Board shall place the matter before the general body at its next meeting and the decision of the arbitral tribunal shall be final; Provided that pending the decision of the general body the person may have only such transactions, if any, with the co-operative, as may be permitted by the Board.

(1) Every co-operative shall maintain a register of members. The name of every person admitted as a member of the co-operative, the date of admission, and the address of the member shall be entered in the register along with such other particulars as are deemed necessary by the Board. (2) The name of every person whose membership has ceased, or was terminated or withdrawn, shall be struck off the register.

(1) Every co-operative shall include in its annual budget, a provision for expenses on member and potential member education and staff and Board training for the development of the co-operative in accordance with the principles and practices of cooperation. (2) Any balance under the budget head provided for under sub-section (1) shall be transferred at the end of the year into a co-operative education fund, and may be used only for the purpose of educating and training members, potential members, staff and Directors in co-operative principles and practices.

(1) A Co-operative’s services shall normally be available to members only. (2) After two years of its being registered under this Act, any co-operative found to be providing more than one-fourth of its core services, as specified in its articles of association, in terms of the value of transactions, to non-members in any given financial year shall be deemed to be an “aberrant co-operative” and may be liable to lose for that year exemptions, if any, provided to it, on the ground that it is a co-operative, by this or other laws. (3) Any co-operative found to be “ aberrant” for continuous three years shall be deregistered or dissolved by the Registrar; Provided that such co-operative shall be given an opportunity of being heard before the deregistration or the dissolution.

(1) No member of a co-operative shall exercise the rights of membership, including the right of vote, unless the member has made such payments to the co-operative in respect of membership or has acquired and continues to have such interest in the co-operative, including a minimum use of the service of the co-operative, as may be specified in the articles of association. (2) Every year, within twenty days of closure of the previous financial year, the chief executive shall prepare a list of members with the right of vote, and a list of members without the right of vote, valid for the current financial year. The list shall be affixed to the notice Board of the co-operative for information of all members, and any member, not satisfied with the specific instances of inclusion or non-inclusion of members in the lists, may appeal to the Board within ten days of the affixation of the lists on the notice Board, for re-examination of the records, and the Board shall, within forty five days of closure of the previous financial year, review the lists, finalize them and have them affixed to the notice Board of the co-operative.

(1) In primary co-operatives, each members shall have one vote : provided that a person shall have been a member for at least one full financial year, before being eligible to vote : provided that the condition of one year membership shall not apply to the members who join at registration/conversion or at any time after the registration/ conversion of a co-operative but before the first financial year ending; (2) In secondary co-operatives, the articles of association may make provision for voting rights of a primary co-operative proportional to the numbers of members in the primary cooperative.

(1) A co-operative shall be registered with limited liability, where; a “ co-operative with limited liability” means a co-operative in which the liability of its members for the debts of the co-operative is limited by its articles of association, to such form and extent as they may undertake to contribute to any deficit in the assets of the co-operative, in the event of its being wound up. (2) Where a co-operative amends its articles of association to change the form and extent of its members ‘liability, it shall, within fifteen days of such amendment, give notice thereof together with a copy of the amendment to 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 proposes change, or creditor shall, during a period of fifteen days from the date of service of the notice upon him/her, have the option of withdrawing from the co-operative, his/her interests, subject to the discharge of his/her obligations to the co-operative. (3) Any member or creditor who does not exercise his/her option within the period specified in sub-section (2) shall be deemed to have assented to the resolution. (4) An amendment passed under sub-section (2) shall not take effect until (a) all claims of the members and creditors of the co-operative who have exercised the option under sub-section (2) have been met in full or otherwise satisfied; and (b) notice of the amendment of the articles of association of the co-operative has been received by the Registrar in accordance with this Act. (5) Where a co-operative is ordered to be dissolved, the liability of a past member, who ceased to be a member, or of the estate of a deceased member, who died, within two years immediately preceding the date of order of dissolution, shall continue for a period of two years from the date of such order.

(1) There shall be a general body for every co-operative consisting of all the members of such co-operative. (2) Subject to the provisions of this Act and the articles of association of a co-operative, the ultimate power of a co-operative shall vest in the general body of its members : Provided that nothing contained in this sub-section shall affect the exercise by the Board or any other authority of a co-operative of any power conferred on such Board or such other authority by this Act. (3) Any function or responsibility, falling within the scope of a co-operative as a legal entity, which has not been specifically entrusted by this Act or the articles of association, to any of the several authorities within the co-operative, may be dealt with by the general body, on a reference by the board of Directors.

(1) The following and such other matters as are considered necessary by the Board, shall be dealt with by the general body at its Annual General Meeting: (a) action on resolutions of the previous meeting; (b) consideration of the long term plan and budget, when required; (c) consideration of the annual operational plan and budget for the current financial year; (d) appointment of auditors for the current financial year; (e) consideration of the annual report of activities for the previous financial year; (f) consideration of the annual audited statements of accounts, and the audit report relating to the previous financial year; (g) consideration of the report on deviations, if any, from the approved budget relating to the previous financial year and the appropriate action to be taken; (h) disposal of surplus, if any, of previous financial year; (i) management of deficit, if any, of previous financial year; (j) creation of specific reserves and other funds; (k) review of actual utilization of reserves and other funds; (l) review of the report on the attendance at meetings by Directors; (m) review of the use of the co-operative’s service by the Directors; (n) review of remuneration paid to any Director or member of any committee or internal auditor in connection with his/her duties in that capacity or his/her attendance at related meetings; (o) review of quantum and percentage of services provided to non-members vis-a vis service provided to the members; (p) appeal of a person whose application for membership has been rejected by the Board; (q) appeal of a person who has been expelled from membership by the Board; (r) report of activities and accounts related to member education and Board and staff training. (2) The following and other matters when considered necessary by the Board. shall be dealt with by the general body at its annual or other general meeting: (a) election of Directors; (b) amendments to articles of association; (c) removal of Directors; (d) elections/appointments to casual vacancies on the Board; (e) removal, and consequent appointment of auditors; (f) membership of the co-operative in secondary co-operatives; (g) partnership with other co-operatives; (h) amalgamation, division, merger, transfer of assets and liabilities; (i) dissolution of the co-operative; (j) Consideration of the Registrar’s report of inquiry, if any.

(1) The Board of a co-operative may, at any time, call a general meeting of the members of the co-operative: Provided that one such meeting known as Annual General Meeting shall be held within one hundred any fifty days of the closure of the co-operative’s financial year to deal with the matters specified in section 27 (1). (2) The Board shall hold a special general meeting within thirty days of the date of receipt of a requisition from: (a) one- fifth of the members having the right to vote or 500 members having the right to vote; or (b) the Registrar, in pursuance of the Registrar’s functions under this Act; Provided that any such requisition shall contain the reasons why the proposed agenda and the meeting is felt necessary, and no subject other than the subjects included in the proposed agenda shall be discussed at the special general meeting. (3) All Directors shall cease to be Directors at the end of the period within which an Annual General Meeting under sub-section (1) or a special general meeting under sub-section (2) is required to be held, if the Board fails to hold such general meetings within the specified period. (4) All Directors shall cease to be Directors at the Annual General Meeting, if the audited annual financial statement and auditor’s comments and observations, if any, along with the report of activities for the previous financial year were not made available to the members along with the notice to attend the Annual General Meeting at which the report and accounts are to be considered by the general body, and such general meeting shall be conducted by the chair person appointed by the Arbitral Tribunal. (5) The quorum for a general meeting shall be as specified in the articles of association, but shall not be less than one-fifth of the members eligible to vote at the meeting;

(1) Every co-operative shall maintain, in the language specified by the articles of association, in the minutes book, minutes of all proceeding of every general meeting and the chief executive shall send the copy of the minutes within fifteen days of the conclusion of every such meeting to all members. (2) The minutes so recorded shall be signed by the person who chaired the said meeting, or the event of his/her incapacity to sign the minutes within the time required, by a Director duly authorized by the Board.