Registration and Types of Cooperative Societies

Registration of a Cooperative Society

A minimum of ten persons who have attained the age of majority, sharing a common economic objective and normally belonging to the same area of operation, may join together to form a cooperative society. To register it, an application is made to the Registrar of Cooperative Societies of the state, giving the proposed name of the society, its objects, the area of operation, and a copy of its proposed bye-laws (the society's own internal rules, corresponding roughly to a company's Memorandum and Articles of Association). If the Registrar is satisfied that the application and bye-laws comply with the Act, the society is registered, entered in the register of cooperative societies, and issued a certificate of registration.

Effects of registration. From the date of registration, the cooperative society becomes a body corporate — it acquires a legal personality distinct from its members, a common seal, the capacity to hold and deal with property in its own name, and the ability to enter into contracts and to sue and be sued, all in the society's own name rather than in the names of individual members. Its existence continues without interruption regardless of changes in its membership — a genuinely important advantage that a Joint Hindu Family Business (which has no separate legal identity of its own) does not enjoy.

Types of Cooperative Societies

Cooperative societies are commonly classified by the function they perform for their members:

1. Consumer Cooperative Societies. Formed by consumers to purchase goods in bulk directly from producers/wholesalers and sell them to members at fair, reasonable prices, cutting out middlemen's margins — cooperative stores are the familiar example.
2. Producer (Industrial) Cooperative Societies. Formed by small producers/artisans who pool their resources to procure raw materials, tools, and other inputs collectively, and sometimes to sell their finished output jointly, gaining bargaining strength that an individual small producer would lack alone.
3. Marketing Cooperative Societies. Formed by small producers, especially farmers, to market their produce collectively — the society may grade, store, transport, and sell members' produce, helping them secure better prices than they could obtain individually from local traders.
4. Cooperative Credit Societies. Provide credit and banking-type services to members at reasonable rates of interest, freeing them from dependence on private moneylenders. In rural India these typically take the form of Primary Agricultural Credit Societies (PACS) at the village level, which are, in turn, linked upward to District Central Cooperative Banks and State Cooperative Banks, with institutions such as NABARD supporting the structure with refinance; in towns, urban cooperative credit societies/banks perform a similar role for non-agricultural members.
5. Cooperative Farming Societies. Formed by small and marginal farmers who pool their land and other resources for joint cultivation, aiming to gain the economies of scale that come from farming a larger, consolidated holding using shared equipment and labour.
6. Housing Cooperative Societies. Formed by members of moderate means to acquire land and construct or purchase houses/flats collectively, often with cooperative-sourced finance, making home ownership more affordable than it would be for an individual acting alone. …