What is multi state co-operative credit society?

     In this article, I will try to make you aware of the practical aspects of such a society. MSCS is regulated by the Central Registrar of major co-operative societies at Krishi Bhavan, New Delhi. The MSCS Act, 2002, regulates the requirements for compliance with the MSCS Rules, 2002.

     The Multi-State Co-operative Societies Act, 2002, enacted in 2002 to consolidate and amend laws relating to co-operative societies, and the Multi State Co-operative Societies Act, 1984, as an alternative. The purpose of this Act is to facilitate the inclusion, functioning and organization of co-operative societies operating in more than one state. The Act facilitates the voluntary formation and operation of multi-state cooperatives which are member-driven organizations and are based on self-help and mutual assistance. The Act further helps these societies for their economic and social progress and provides for their functional autonomy.

     It serves the interests of members in more than one state, facilitates the voluntary formation and democratic functioning of cooperatives as a self-help and mutually supportive democracy and enables them to promote their economic and social reform and provide functional autonomy for or related.

What is Multi-State Cooperative Society?

     Multi-state co-operative society is defined under Section 3 (p) of the MSCS Act, 2002. It states that "multi-state co-operative" means a society deemed to be registered or registered under this Act and includes a national co-operative society and a federal co-operative. It is the most important part of the enactment that authorizes the central government to regulate the formation, financing, functioning and wind up of the co-operative society in companies. The main objectives of the Society are to work for the benefit and welfare of its members in more than one state. It is not necessary for a society to have branches in more than one state, its branches may be limited to one state and it will not stop as a multi-state co-operative society, as long as it serves the interests of the members, more than one state.

Registration process of Multi-state cooperative credit society

     Section 5 of the Act states that no multinational co-operative society shall be registered under this Act unless its main purpose is to serve the interests of the members of more than one State and its bye-laws provide for social and economic reform of its members through self-help and mutual assistance according to cooperative principles. In section 6 of the MSCS Act, 2002 provides for an application for registration to be made to the Central Registrar in such form and with the prescribed details. The application will be signed:

  1. In the case of a multinational co-operative society in which all the members are individuals, at least fifty persons from each of the respective states
  2. In the case of multinational co-operative societies whose members are co-operative societies, by duly authorized representatives on behalf of at least five societies not registered in the same state.
  3. The application shall be accompanied by four copies of the proposed bye-laws of the Multi-State Co-operative Society and by whom or on whose behalf such application has been made; such information regarding the Society shall be submitted as required by the Central Registrar.

Following documents are required for setting up multi state co-operative society:

  1. List of contributors to the share capital List of contributors to the share capital with details of the amount paid by each member.
  2. Certificate of bank showing credit balance in the account of the proposed multi-state co-operative society.
  3. The scheme shows the financial viability of the proposed society and further states that the registration of the society will be beneficial for the social and economic betterment of the members.
  4. A copy of the resolution in favor of the authorized person to amend the bye-laws of the proposed society.
  5. A resolution providing the name and address of the main promoter for any communication by the Central Registrar.

Is a multi-state cooperative society a corporate body?

Section 9 states that the registration of a Multi-State Cooperative Society makes it a corporate body which will be-

  1. Eternal succession.
  2. General seal.
  3. The right to acquire hold and dispose of movable and immovable property.
  4. The right to enter into an agreement.
  5. The right to establish and defend exemptions and other legal proceedings.
  6. Able to do all that is necessary to achieve the purpose of his constitution.
  7. Empowered to sue or be sued.
  8. All transactions made in good faith before registration will be considered as transactions after registration for the growth of the objects of its registration.

Is a multinational co-operative society a banking company?

     Section 5 (c) of the Banking Regulation Act provides the definition of the Banking Regulation Act, 1949. A multinational co-operative society is not a company under the Banking Regulation Act and therefore it is not a banking company. Multi state co-operative societies smaller versions are Patpedhi, Patsanstha, Salary earners co-operative credit society, Bigar sheti sahkari patsanstha.