Liability of member

(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.