Limits Of Liabilities

¯     Limits of Liabilities

As per Bye-law No.11 deposits from members and loans may be received by the society for such period and at such rate of interest and up to such amount and on such terms and conditions as may be determined by the Committee, provided that at no time, the total amount of such liabilities shall exceed the limit prescribed under Rule 35 of the Rules.

¯     Composition of The Funds

(1)   Reserve Funds

  

      As per Bye-law No. 12 the reserve funds of the society shall comprise of –

     

(1)   The amounts carried over to the said fund, from year to year, out of the net profit of that year, subject to the provisions of Section 66(1) and (2) of the Act;

(2)   All entrance fees received by the society from its members;

(3)   All transfer fees received by the society from its members on transfers of shares, along with the occupancy rights.

(4)   All premium received by the society from its members on transfers of their interest in the capital or property of the society.

(5)   All donations received by the society, except those received by it for a specific purpose.

(2)   The Repairs and Maintenance Fund :

As per Bye-law No 13(a) the contribution from the members is to be collected at the rate fixed at the General Body from time to time, subject to the minimum 0.75 percent per annum of construction cost of each flat for meeting the expenses of nominal recurring repairs.

(3)   Major Repairs Funds :   

As per Bye-law No 13(b) the contribution from the members is to be collected as and when required and decided by the General Body at the rate fixed on area basis.

(4)   The Sinking Fund :

As per Bye-law No 13(c) the contribution from the members is to be collected at the rate decided at the meeting of the General Body, subject to the minimum of 0.25 percent per annum of the construction cost of each flat, excluding the proportionate cost of the land.

      NOTE: For a detailed discussion on Sinking Fund refer Chapter No.11.

¯     Utilization of Funds By The Society

As per Bye-law No.14 the society may utilize its funds in the manner indicated below:

·        Reserve Fund: The Reserve Fund of the society may be utilized for the expenditure on repairs, maintenance and renewal of the society’s property.

·        Repairs and Maintenance Fund: The Repair and Maintenance Fund may be utilized by the Committee for meeting the expenditure on maintenance of the society’s property and repairs and renewal thereof.

·        Sinking Fund: On the resolution passed at the meeting of the general body of the society and with the prior permission of the Registering Authority, the Sinking Fund may be used by the society for reconstruction of its building/buildings or for carrying out such structural additions or alteration to the building/buildings, as in the opinion of the Society’s Architect, would be necessary to strengthen it/them or for carrying out such heavy repairs as may be certified by the Architect and approved by the General Body.

NOTE:  For detailed discussion refer Chapter No. 11. 

§         Major Repairs Fund: This can be utilized with the prior permission of the General Body only for major repairs like plastering, painting drainage and water lines replacement etc.,

¯     Investment of Funds

The Funds of the society, when not employed for its regular activities, may be invested or deposited as required under Section 70 of the Maharashtra Co-operative Societies Act, 1960, provided that the sinking fund collections shall be invested on a long term basis, along with the interest earned thereon through one of the modes permitted under the said section. As per Section 70 a society shall invest or deposit its funds in one or more of the following:

(a) in a central bank or the State Co-operative Bank;

(b) in any of the securities specified in section 20 of the Indian Trust Act, 1882;

(c) in the shares, or security bonds, or debentures, issued by any other society with limited liability and having the same classification it is advisable to invest the fund in deposit with State or District Co-operative Banks only. Since the interest received are fully exempted under the Income-tax Act, 1961.