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The Co-Operative Societies Act 1912.


Co-operation means a “voluntary concert, with equitable participation and control among all concerned in the enterprise”. The idea of co-operative enterprise took concrete shape in India for the first time in 1904. In that year upon the report of Mr. Fredrick Nicholson, a Madras civilian, the Co-operative Credit Societies Act, was passed. The Act provided for the formation of credit societies only, and therefore another act was passed in 1912 to provide for non-credit forms of co-operation in such activities as production, purchase, sale, insurance, housing etc. Later, the Maclagon Committee, appointed by the Government of India in 1914, recommended greater non-official participation in the movement. Based on the recommendations of the Maclagon Committee the Reforms Act of 1919 made Co-operation’ a State subject, allowing the States to enact their own laws depending on their needs.

At the present time, different states have their own Co-operative Societies Acts on the model of the Co-operative Societies Act, 1912. It may be noted that the Central Government enacted the Multi State Co-operative Societies Act, 1984 to consolidate and amend the law relating to Co-operative Societies with objects not confined to one State and serving the interests of members in more than one State.

The Act is designed to facilitate the formation of Co-operative Societies to promote thrift and self-help among agriculturists, artisans and persons with limited means.

Registration of Co-operative Societies (Section 4)

 A society that has for its object the promotion of economic interest of its members in accordance with co-operative principles, or a Society established with the object of facilitating the operations of such a society, may be registered under Co-operative Societies Act 1912, with or without the limitation of liability. But unless the State Government by general or special order other wise directs – 

  1. The liability of a Society of which a member is registered society shall be limited;
  2. The liability of a Society of which the object is the creation of funds to be lent to its members and of which the majority of the members are agriculturists, and of which no member is a registered society shall be unlimited.

The expression ‘economic interests’ is not defined in the Act but the preamble to the Act suggests thrift and self-help. 

Co-operative principles are principles, which prompt persons to associate together voluntarily as human beings, on a basis of equality, for promotion of their own economic interests. A Co-operative Society is only concerned with the interests of its members. It may undertake to deal with non-members if and only if such recourse furthers the interest of such members.

Co-operative Central Banks and Unions can only be set up with the object

Copyright © Maharashtra State Co-Operative Sugar Factories Federation Ltd. 2010