Co-Operative Share Capital: Part2

Shares have a fixed or ‘par’ value.

They do not represent a share within the underlying plus worth of the co-operative then their worth does not fluctuate with the ever-changing fortunes of the co-operative. They are not tradeable on an exchange though there is scope to transfer shares to a different member and this might be done at a premium22 wherever the membership of the co-operative is restricted. 

A co-operative’s constitution could offer further distribution to members on capital at polishing off if there is a surplus. This is often not an equivalent because the capability of company shares to be oversubscribed with a financial gain. The fastened share worth, lack of financial gain and therefore the restriction of marketing solely to members, implies that it is tough or rare for a co-operative to be confiscate by another entity.

 Shares could also be repurchased or repaid by the co-operative. The flexibility to repay share capital could be a feature of co-operatives that lends itself to supplying community shares, though obligations to repay share capital will gift challenges to co-operatives to manage their capital providentially.

Co-Operative Share Capital: Part 1

Shares can only be issued to members.

 A co-operative cannot issue shares to someone, unless that person additionally agrees to become a member together with committing to any active membership obligation. Once the person could be a member, then the co-operative might issue or provide any range of further shares to the member, on condition that the member doesn’t hold over 2 hundredth of the overall issued share capital.

 Wherever the necessity for membership includes associate obligation to accumulate a minimum range of shares, this area unit usually said as ‘membership shares’. Any shares no inheritable by the member on top of the minimum quantity is also said as further shares. Further shares is also issued to members with very different rights to membership shares.

 Shares do not carry a vote. Solely a member will vote and every member has just one vote, notwithstanding what percentage shares the member holds.

Co-operative Shares:

Co-operative shares area unit similar, however not a similar as share capital during a company. During a company, a member is somebody United Nations agency holds shares. Balloting management of the corporate is usually proportional to the quantity of shares control. During a co-operative with share capital, members could also be needed to carry shares as a part of their membership; however, balloting management is joined to membership and to not the quantity of shares control.

 

The reversal of this notion is that the place to begin for associate understanding of co-operative share capital. Co-operatives are shaped by and for members to serve their common would like or goal. While the proper or obligation to require up shares is also a part of the individual’s relationship with the co-operative, the proper to carry or acquire shares solely arises through the individual’s standing as a member.

Role of Registrar in Co-Operative Society

Right from the Registration of a Co-operative Society until the cancellation of its registration, the Registrar acts as friend, thinker and guide to the co-operatives and ensures that Co-operative Societies operate in accordance with the Co-operative Act. Actually, the Registrar is “Trimurti” of the Co-operative movement. The most functions of the Registrar are as under:-

 

  • Registration of amendments within the Byelaws of Co-operative Societies;
  • Amalgamation, Division and re-organization of Co-operative Societies;
  • Ensure timely Election of the Managing Committee in Co-operative Societies;
  • Conduct elections of Managing Committee in primary co-operative banks and federal co-operative societies;
  • Ensure correct investment of funds by Co-operative Societies as per Act and Rules;
  • Conduct audit, order scrutiny, enquiry and conjointly fixing surcharge on negligent functionaries of co-operative societies;
  • Settle disputes of Co-operative Societies through the method of arbitration.
  • Function as A proceedings Court;
  • Enforcement/execution of Orders, Awards and Decrees of varied Courts;
  • Order ending and cancellation of registration of defunct/non-functional societies.
  • Operating Co-operative Education Fund for coaching, education, information and packaging programmer for the event of Co-operative Movement within the NCT of urban center.
  • To frame/amend urban center Co-operative Societies Rules, 1973 from time to time.
  • Issue Instructions/directives for the promotion of business of various variety of Co-operatives;
  • To approve proposals for entering, resignation and surcease of membership in Housing Co-operative; and
  • To frame, execute and monitor varied beneficiary schemes approved by the Central /State Govt. as well as monetary help to varied sectors of Co-operatives.

What is a Co-operative? What is a Mutual?

What is a co-operative?

A co-operative is a corporation closely held by the members WHO use its services (a shopper co-operative or credit union), or by folks that work there (an employee co-operative), or by those that live there (a housing co-operative). Once neutral teams share a typical interest within the success of associate enterprise these teams will use different categories of membership within the Co-Operative’s bylaws to arrange however, they will work along (a multi-stakeholder Co-Operative).

Co-operatives will offer just about any product or service and square measure completely different from alternative businesses in this they use profits for functions that square measure directed by the board and membership. Co-operatives exist in each sector of the economy and may bit each facet of our lives.

What is a mutual?

The term “mutual” is sort of continually – although not solely – wont to describe associate insurance firm in North American nation. In an exceedingly mutual insurance firm, the client is that the insured party and additionally a participant within the business – sort of a co-operative. If you terminate a mutual insurance, the merchandise, you are additionally retreating from the mutual business and leaving behind the rights of possession.

The security of pooled of funds and shared risk among an oversized cluster of individuals may be a terribly stable and winning business model that has existed since before Canadian confederation. Mutual tend to grow steady over time to serve current and future policyholders.

Websoftex Co-Operative Society Software’s

We have engineered a code to change co-operative banking operations. The merchandise is constructed to scale back manual paper work and additionally addresses numerous security issues associated with information loss and backup of direction. The package contains several modules, which can ease the management of users, customers, transactions and accounts. The merchandise is extremely reliable and features a separate module to get reports. The administrator World Health Organization has the liberty to determine access rights to the users controls the package.

 Challenges Faced:

  • Manage multiple users and supply appropriate interface
  • Automate entire banking operations
  • Keep track of transactions in real time
  • Enable access rights to users
  • Prevent information security and information loss
  • Report generation

 Solutions Offered:

  • Authorized client login panel and development of a multi user profile module
  • Development of a master module to feature users, manage account varieties and workers
  • Integration of a definite module manage customers
  • Development of a part module to trace transactions in real time
  • Integration of a special part to handle pigmy accounts
  • Development of a report generation module to come up with relevant reports.

Service tax on co-operative societies

Service tax on co-operative societies could be a contentious issue. during a co-operative housing society, the land and building belongs to the society and therefore the members by virtue of their membership of the society have right to occupy, fancy and transfer their flats, subject to the prevailing rules and rules and bye-laws of the society that area unit needed to be approved by the required authorities underneath the law.

 A co-operative housing society could be a collective mechanism whereby it build payments of land tax and like payment to the municipal corporation and alternative Government bodies, incur some expense for commonweal and portion and collect the expense in type of sure charges from the members on some basis or as per the resolutions passed within the General Body conferences.

 Such collections area unit typically within the sort of reimbursements. A number of the functions of co-operative housing society area unit statutory functions like transfer of shares of the members with the underlined interest within the property (flats). It works on mutuality principles because the operation of the society is for the members and by the members.

Impact of GST on Co-operative Housing Societies Maintenance

Co-operative Housing Societies area unit just a assembling and experience mechanism like just in case of capital levy, water charges, common space repairs and maintenance etc. It may be contended that no activity is distributed by a society for its members. There could also be varied service suppliers providing service to the society that is that the legal owner of the building together with that of common areas, for e.g. repairs service suppliers, maintenance service suppliers, security agencies etc.

 

Thus, the society is receiver of service and not supplier of service. If a member’s flat or workplace premises need repairs, a similar is obtained directly by the member and therefore the society is not concerned in provision of that service. More no thought is flowing from the members to the society except allocation and assortment of expense. Any such payments while not quid-pro-quo of a service cannot be at risk of tax. Thus, it will be argued that even underneath the new dispensation, service tax is not applicable just in case of a co-operative society once, any activity is administered for no thought and therefore the same would be continued underneath the GST Act.

Duties and Responsibilities of the Managing Committee of Cooperative housing society Part-2

  • To make offered papers mentioned in Section thirty-two as per members demand.
  • To take call as per provisions in by laws and laws on the complaints received from the members.
  • To give necessary info to the members if he contacted society for commercialism of the flat and co-operate him for commercialism as per provisions in by-laws and laws.
  • To take call on the human concerning property of the flat and inform an equivalent to the involved member among prescribed closing date.
  • To make agreements as necessary on behalf of the society.
  • To take necessary action for keeping the property of the society so as.
  • To take contract of the building and property of the society.
  • To give approval for amendment in utilization of flat.
  • To inspect flat of the member internally by taking previous appointment for the needs of leakage/structural audit etc.
  • To initiate action as per provision in law if the member makes hindrance in internal review.
  • To sanction the amendments in laws, rules, bye-laws urged by the govt. from time to time with the approval of the overall body meeting.
  • It is obligatory on the part of the govt. to relinquish details of the bill/bifurcation and additionally as per that resolution/ bye- law if the members demand therefore.
  • It is obligatory on the part of the society to just accept less quantity paid by the member than the quantity shown within the bill and it is necessary to relinquish receipt of thence.
  • There is a provision within the sub-rule concerning what proportion most interest to be charged. However, it is necessary to create resolution within the general body meeting concerning charging interest.
  • By doing structural audit of the building, necessary repairs ought to be meted out with the approval of the overall body meeting.
  • If the society does not have funds and if any member is prepared to try to escape work on his own value, then to make the foundations in this regard and take approval of the overall body meeting for an equivalent.
  • To submit the fault rectifying report in ‘O’ type by rectifying the faults within the audit report, among 3 months to the Auditor and to send its copy to the Registrar.

Duties and Responsibilities of the Managing Committee of Cooperative housing society

According to Co-operative Housing Society Manual 2012 – here is that the list of roles and responsibilities of co-operative housing society managing committee:

 Putting a board displaying name of the society, full address with registered survey No. and Registration No. near the main gate of the society, which could be seen easily.

  • To raise funds for the society.
  • Recommend to the society for deciding maintenance fee, repair and deposit amount.
  • To give membership, pass the resignation of members similarly to take decision regarding nomination of the members.
  • Internal inspection of the flat.
  • To take decision on the various applications received from the members.
  • To take action against the defaulting members.
  • To issue Share Certificate to the members.
  • To call monthly meeting of the committee and finalize its minutes.
  • To determine agenda of the annual meeting and to call Annual Meeting in prescribed period.
  • To organize special general body meeting as required.
  • To make arrangement of election for the formation of a new committee before expiring the term of the managing committee.
  • To select office bearers by forming the new committee after election.

After taking charge of the office by the members of the managing committee, it is obligatory on them to execute bond under Section 73(1) (1AB) in M-20 (bond paper of Rs.100/- and each separately on the cost of the society) and to include the same in the record of the society. Similarly, the responsibility to inform the concerned Registrar in the regard is entrusted with Secretary.

It is necessary to take detailed note of taking charge, handover of record with its detailed list of the record received in the minutes of the managing committee meeting. Thereby the record regarding exactly which files received in whose possession and on which date is available with the society permanently.

  • To fill up the vacant post in the managing committee as per provision in the byelaws and Rule No. 60(5) of Maharashtra Co-operative Rule 1961.
  • To accept the resignation of the members of Managing Committee.
  • To keep neatly the files of members and society records.
  • To finalize the financial statement of the society within 45 days at the end of the financial year.