Effects of Registration and Remedy on Refusal

The legal consequences of registration are what make the whole exercise worthwhile. The most fundamental effect, under Section 36 of the Maharashtra Co-operative Societies Act, 1960, is that on registration the society becomes a body corporate — a legal person separate from the members who formed it. It acquires perpetual succession, meaning its existence is not affected by members joining, leaving, or dying; a common seal; and the legal capacity to acquire, hold, and dispose of property, to enter into contracts, and to sue and be sued in its own name. Members' liability, if the society is registered with limited liability, is confined to the unpaid amount on their shares. The bye-laws, once registered, become binding on the society and its members, and the society comes under the ongoing supervision of the Registrar, including the requirements of audited accounts and periodic elections to the managing committee.

Registration also confers practical advantages that flow from this legal recognition. A registered society can open bank accounts and borrow in its own name, is eligible for the loans, subsidies, and concessions that governments extend to the co-operative sector, and enjoys the confidence of members and outsiders precisely because it is bound by a statute and supervised by a public authority. These benefits are simply not available to an unregistered association of the same persons. …