Any ten persons living in the same village or town or belonging to the same class or tribe could form a cooperative credit society. Cooperatives have deep roots in India, playing a crucial role in the nation’s growth since achieving Independence. With more than a million cooperatives, including 105,000 financial cooperatives, the cooperative movement in India possesses tremendous capacity to stimulate economic development, bring informality into the formal sector, and mitigate disparities. A cooperative society is typically a voluntary group established by those who are less privileged or belong to disadvantaged sections.
Nonetheless, the present structure, which involves dual control over cooperative banks, presents several challenges, including jurisdictional conflicts that obstruct their systematic development. Despite these complications, cooperatives continue to be https://onlineregistration.net.in/ a vital part of India’s economic framework and serve as a significant instrument for enhancing the living standards of the impoverished. Despite its autonomous operations, a cooperative society remains under the jurisdiction of the state government.
The amount of capital that each member of a cooperative organization has contributed determines the extent of their liability. Members of cooperative societies do not face any risk to their personal property due to business liabilities, unlike solo owners and partners. The primary object or principal business of a primary credit society is the transaction of banking business. When its paid up capital and reserves attain the level of Rs.1 lakh, a primary credit society automatically becomes a primary cooperative bank. However, even after a primary credit society becomes a cooperative bank, it has to apply to RBI for a license to carry on banking business. But it can carry on banking business until it is granted a license or notified that a license cannot be granted to it. Section 3 talks about the Registrar-The state Government may appoint a person to be Registrar of the society for the state or any portion of it, and may appoint persons to assist such registrar.
In respect of audits which can not be supervised locally by the supervising officer, a general scrutiny will be exercised by the audit report releasing authority, when audit reports are received from the Auditors concerned. Audit is conducted with a view to testing the correctness of Final Audit done by an Auditor. The objective of Test Audit is to check the efficiency of audit staff, to find out the mistakes committed by them and to ensure correct and efficient audit. Test audit is conducted by the superior officers in the presence of the Auditor who has conducted test Audit. Test Audit is conducted in order to ascertain whether the auditor has done the audit correctly or not. While selecting societies for test audit care should be taken to select only those with considerable transactions. In the case of societies with heavy transactions it is sufficient if one month’s transactions are test-audited.
The accounts and the financial statements along with the schedules have been prepared and presented before the auditor by the Co-operative Society for each separate year in such form as specified. The Auditor with the management before finalizing the Audit Report should discuss the draft audit report. Infringement of the provisions of the KCS Act and Rules and the bye-laws of the society, if any, should be pointed out in audit. Financial implications of the infringement should also be assessed and indicated. As per Section 57 of the KCS Act and Rule 22 of the KCS Rules, the maximum dividend a society can pay to a share holder is 25 percent. According to Section 63, the remuneration of the auditor or auditing firm of a co-operative society shall be borne by the society and shall be at such rates as may be fixed by general body of the society .
Types of Cooperative Societies
Between 1860 and 1900 not without help of Canadian Pacific Railway there were developed over 1200 cooperative creameries and cheese factories in Ontario, Québec and Atlantic Canada. In the UK, cooperatives find it advantageous to form political groupings to represent their interests. The British cooperative movement formed the Co-operative Party in the early 20th century to represent members of consumers’ cooperatives in Parliament, which was the first of its kind. The Co-operative Party now has a permanent electoral pact with the Labour Party meaning someone cannot be a member if they support a party other than Labour. Many of India’s financial cooperatives suffer from weak governance and management, which can lead to mismanagement, fraudulent activities, and corruption.
Challenges of Cooperative Society
Mutually Aided Cooperative Societies Act is legislated in Andhra Pradesh on the pattern o the Model Act of Choudhary Brahm Perkash.This is a pioneering step and is a trend setter to other States in the country to liberalize their Cooperative laws. After obtaining the name approval, collect the prescribed registration fees and share capital amount from each prospective member. The next step is to file an application to the registration authority, elaborating on the business operation of the proposed society and submit it along with the documents. If the concerned authority confirms the application, it will issue a certificate of name approval. Marketing Cooperative Society – When small scale producers and manufacturers struggle in selling their products individually, they come together to form a Cooperative Marketing Society. The society collects the products from each member and initiates to sell those products in the market.
The ITR Filling process is way simpler to the cooperative society in comparison to others. The surplus received by the cooperative societies is divided in an equal way between members. Moreover, society is 10% amount of the surplus can be used for developing the welfare of the people in a cooperative society.
The Constitution Act of 2011 on cooperatives aims to promote cooperative economic activity, which in turn aids rural India’s advancement. Amul is one of the most well-known cooperative brands in the nation. Then there are producers’ cooperative groups, which provide access to raw materials, tools, machinery, etc.
The co-operative structure placed ownership of these businesses directly in the hands of farmers who joined as members with each individual given an equal say in the direction of that business regardless of wealth and status. Industrialization led to the emergence of large centralized factory systems in urban centers. These systems disrupted the existing crafts system and many Canadian craftsmen lost their power in the market very quickly. This made craftsmen to start to unite in small cooperative enterprises to provide themselves power to control their business and products they couldn’t afford otherwise. Agricultural movements were the first successful cooperative movements in Canada. The dairy industry had a lot of opportunities because many farmers had excessive production of milk.
