Credit co-operative societies are credit institutions characterized by member ownership and control. Registered with the primary goal of fostering economic and societal progress, they emphasize providing accessible credit at fair interest rates.
There are different types of business organisations, one such form is of cooperative society. Cooperative societies are formed with the aim of helping their members. This type of business organisation is formed mainly by weaker sections of the society in order to prevent any type of exploitation from the economically stronger sections of the society.
Cooperative societies need to be registered under the Cooperative Societies Act, 1912 in order to function as a legal entity. Members of the society raise the capital within themselves.
What is the Purpose of a Credit Co-operative Society?
Upon successful registration, credit co-operative societies offer various services for the welfare of their community members, such as:
Deposit Procurement: Credit co-operative societies gather deposits exclusively from their members.
Financial Assistance: Credit co-operative societies are designed to provide financial aid to their members.
Elimination of Intermediaries: Credit co-operative societies often minimize additional expenses associated with intermediaries in trade and business.
Low-Interest Loans: Members of credit co-operative societies benefit from loans with favourable interest rates, covering various needs such as housing, personal assets, automobiles, etc.
Protection of Rights: Credit co-operative societies are primarily responsible for safeguarding the rights of rural consumers and producers.
Eligibility Criteria for Forming a Credit Co-operative Society
Bank Certificate: Members are required to furnish a bank certificate validating the presence of a credit balance meeting the society’s requirements.
Minimum Members: A minimum of fifty members is essential for establishing a credit co-operative society at the state level.
Minimum Directors: A board of directors, comprising at least seven and not exceeding twenty-one members, is vital for fulfilling society’s requirements.
Comprehensive Documentation: Detailed documentation outlining the credit co-operative society’s role in social and economic development, including its name and registered office details, is mandatory.
Capital Requirements: Members need to provide information on pre-registration compliance, encompassing initial capital, member count, and other pertinent data associated with the credit society.
What are the Benefits of Registering a Credit Co-operative Society?
Inclusive Membership:– Credit cooperative societies are open for anyone to join without any membership fees. There are no limitations based on gender, creed, race, caste, or religion. Individuals from diverse backgrounds are welcome to become members at any time.
Simplified Formation Process: – Establishing a credit co-operative society is a straightforward process. A group of ten or more adults can collaboratively form a society, and the registration process is uncomplicated. Notably, there are minimal legal requirements to fulfill, facilitating the ease of formation.
Limited Liability: – A notable benefit is the limited liability that comes with the formation of a credit co-operative society. Members’ liability is confined to the capital contributed to the society. This safeguards members from potential losses, ensuring that their personal assets and properties are not at risk in the event of societal losses.
Equal Member Rights: – Every member of the credit co-operative society enjoys equal rights at all times. Members actively participate in policy creation. This democratic management approach underscores the equal value and importance of all members.
LLP Registration:– Many co-operative credit societies in India opt for Limited Liability Partnership (LLP) registration. LLP registration combines the benefits of a company and a collaboration, providing a streamlined business structure.
How to Register a Credit Co-operative Society: Necessary Documents
- Model Bye-Laws: – Submit four copies of the model bye-laws that outline the rules and regulations governing the credit co-operative society.
- Promoter Member Details:– Provide the names and a list of promoter members involved in the formation of the credit co-operative society.
- Head Office Address: – Furnish details of the head office address where the credit co-operative society will be registered.
- No Objection Certificate (NOC): – Include a No Objection Certificate obtained through an intensive inquiry letter, affirming compliance with necessary regulations.
- Specific Plan Document: – Present a written document incorporating a specific plan format outlining how the credit co-operative society intends to contribute to the social and economic growth of its members and the community.
- Bank Certificate: – Obtain a certificate from the bank confirming that the credit balance is in favor of the respective credit co-operative society.
- Pre-Registration Meeting Details:– Include details and a copy of the judgment from the pre-registration meeting covering aspects such as funding, membership, operations, board structure, etc.
- Proposed Society Name:– Provide the suggested name for the credit co-operative society as proposed by its members.
Additional Requirements:
– The credit co-operative society must have a minimum of 50 members in each state.
– The board of directors should consist of a minimum of 7 and a maximum of 21 me
How Do You Categorise a Credit Co-operative Society?
Primary Credit Co-operative Society Banks: – This category of credit co-operative society comprises of a community of borrowers and non-borrowers residing in a specific geographical area. – There are no restrictions on residency, allowing individuals beyond the defined area to join.– Members within this structure actively engage in each other’s business affairs, fostering a sense of mutual interest and support.
Central Credit Co-operative Society Banks:– Central credit co-operative society banks are formed by individuals whose membership is limited to primary societies.– Often referred to as a banking union, members have the opportunity to join almost every central co-operative bank.
State Credit Co-operative Society Banks:– These societies are established to secure credit from affluent urban masses – Functioning as intermediaries between joint-stock banks and cooperative movements, they play a pivotal role in facilitating credit accessibility.
FAQs
How can one confirm if a cooperative credit society is enrolled or not?
To verify a cooperative credit society’s enrollment status, individuals can contact the Registrar of Cooperative Societies or check the official website for a list of registered societies. This ensures transparency and helps members make informed decisions about their financial affiliations.
How does the Co-operative Credit Society differ from other financial institutions?
Co-operative credit societies distinguish themselves by operating on a cooperative basis, where members are also owners. Unlike traditional financial institutions, they prioritise community welfare, offering democratic decision-making and shared benefits among members.
Are there specific criteria or qualifications that members must meet to participate in a Co-operative Credit Society, and how is membership determined?
Membership in a co-operative credit society typically requires individuals to meet certain criteria, such as residence or employment in the society’s operational area. The specific qualifications vary, but a commitment to mutual cooperation and financial responsibility is fundamental.
Practice area's of B K Goyal & Co LLP
Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online
Company Registration Services in major cities of India
Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon | Company Registration in Noida | Company Registration in lucknow
Complete CA Services
RERA Services
Most read resources
tnreginet |rajssp | jharsewa | picme | pmkisan | webland | bonafide certificate | rent agreement format | tax audit applicability | 7/12 online maharasthra | kerala psc registration | antyodaya saral portal | appointment letter format | 115bac | section 41 of income tax act | GST Search Taxpayer | 194h | section 185 of companies act 2013 | caro 2020 | Challan 280 | itr intimation password | internal audit applicability | preliminiary expenses | mAadhar | e shram card | 194r | ec tamilnadu | 194a of income tax act | 80ddb | aaple sarkar portal | epf activation | scrap business | brsr | section 135 of companies act 2013 | depreciation on computer | section 186 of companies act 2013 | 80ttb | section 115bab | section 115ba | section 148 of income tax act | 80dd | 44ae of Income tax act | west bengal land registration | 194o of income tax act | 270a of income tax act | 80ccc | traces portal | 92e of income tax act | 142(1) of Income Tax Act | 80c of Income Tax Act | Directorate general of GST Intelligence | form 16 | section 164 of companies act | section 194a | section 138 of companies act 2013 | section 133 of companies act 2013 | rtps | patta chitta