Objects, Share Capital and Funds of Societies

¯     Objects of a Society

As per Bye-law No.5 of the aforesaid Model Bye-laws, the objects of the society shall be as under:

(1)   In accordance with the provisions of the Ownership Flats Act and the Rules made there under, to obtain from the Owner/Promoter (Builder), the relevant documents of the right, title and interest, in the land with building/buildings thereon.

(2)   To manage, maintain and administer the property of the society;

(3)   To raise funds for achieving the objects of the society.

(4)   To undertake and provide for, on its own account or jointly with another Co-operative institution, or other social, cultural or receative activities;

(5)   To do all things, necessary or expedient for the attainment of the objects of the society, specified in the Bye-laws.

¯     Share Capital and Shares Certificates

No.8 of the Model Bye-laws deals with the ‘Authorised Share Capital of the Society, and the manner in which it shall be divided. Bye-law No.9 of Model Bye-laws directs the issuance of Share Certificates, by the society, to every member, within a period of six months of the allotment of the Shares. The same shall bear the seal of the society and be signed by the Chairman, the Secretary and one member of the Committee, duly authorised by the Committee, on its behalf.

¯     Duplicate Share Certificates

There is no provision in the Maharashtra Co-operative Societies Act, 1960, Maharashtra Co-operative Societies Rules, 1961 or the Model Bye-laws, regarding the issue of Duplicate Share Certificate to a member, in case the Original Share Certificate is lost/mislaid/misplaced or is not traceable etc. However, in such a case, the member concerned should make an application to the society for the issuance of Duplicate Share Certificate to him. A duplicate share certificate may be issued after passing the necessary resolution to that effect. The society need not make it obligatory for the member to issue a public notice announcing the loss in a widely circulated local news paper. However the society must insist on an Undertaking/Indemnity Bond, on requisite stamp paper, from the member concerned, in the said regard. This will protect the society against unauthorized dealings with the Share Certificates. The society may also display a notice on its Notice Board, in the said regard.

¯     Funds of Society

Every society requires funds to achieve its objectives. The manner of raising of funds, constitution of the funds, utilization of the funds and investment of the funds are discussed below:

As per Rule 39 the society has to issue Shares within the authorised capital limit stipulated in its Bye-laws. Further, the society can borrow funds within the limit prescribed under Rule 35. As per Rule 35 the liability should not exceed in total ten times the total amount of the paid up share capital, accumulated Reserve Funds and Building Fund minus accumulated losses.

Bye-law No.7 makes provisions for manner in which the funds are to be raised by the society. Some of these are as follows:

(1)   by entrance fees

(2)   by issue of shares

(3)   by loans and subsidies

(4)   by deposits

(5)   by voluntary donations, but not from transferor and transferee

(6)   by contributions towards cost of building or buildings

(7)   by fee on transfer of shares, along with the occupancy rights

(8)   by premium on transfer of occupancy rights over the flat

(9)   by any other mode permitted under the said Bye-laws.