CS Kanika Goel


While going through the galaxy of knowledge “GOOGLE”, I barely found info about multi state co-operative society (abbreviated as MSCS)

In this article, I will try to make you aware about the practical aspect related to such society.

MSCS is regulated by Central Registrar (CR) of Co-operative Societies headed at Krishi Bhawan New Delhi.

The MSCS Act, 2002, along with MSCS Rules, 2002 govern the compliance requirement of MSCS.

MSCS is a society registered or deemed to be registered under this Act and includes a national cooperative society and a Federal cooperative. It may make its bye-laws consistent with the provisions of this act and the rules made there under

As the name says, its operational area is not confined to one state. It serves the interests of members in more than one State, to facilitate the voluntary formation and democratic functioning of cooperatives as people’s institutions based on self-help and mutual aid and to enable them to promote their economic and social betterment and to provide functional autonomy and for matters connected therewith or incidental thereto.

MSCS purely works for mutual benefit of its members.

The MSCS Act is somehow based on similar lines to the Companies Act with respect to documentary compliance.

An entity willing to work as MSCS needs to get registered and obtain RC from CR by filing an application along with necessary documents and consent of minimum members, i.e., by at least fifty members from each state or duly authorized representative of at least five Co-operative societies, if members are cooperative society or by duly authorised representatives of each of such societies, if another multi-state cooperative society and other cooperative societies are members. (Section 6)

The application for registration shall be disposed of by the Central Registrar within a period of four months from the date of receipt thereof by him

The Charter of MSCS is known as BYE LAWS which is required to be submitted along with the application and should be updated as and when any amendment is made in the operations of the society.

There is well defined procedure of filing amendment to the CR for which proper Board meeting  and consent of its member through general meeting of general body is required.

There is a compulsion of transferring prescribed % out of profits to reserves. “A multi-state cooperative society shall, out of its net profits in any year- (a) transfer an amount not less than twenty-five per cent, to the reserve fund; (b) credit one per cent, to cooperative education fund maintained, by the National Cooperative Union of India Limited, New Delhi; (c) transfer an amount not less than ten per cent to a reserve fund for meeting unforeseen losses.

PLEASE NOTE No multi-state cooperative society shall make a contribution, either in money or in kind, whether directly or indirectly, to an institution which has an object of furtherance of the interest of a political party.

Like other entities, MSCS shall also cause to be audited atleast once a year by a statutory auditor as appointed in AGM of general body of the society. First auditor or auditors of a multi-state cooperative society shall be appointed by the board within one month of the date of registration of such society and the auditor or auditors so appointed shall hold office until the conclusion of the first annual general meeting.

Moreover, from taxation point of view, MSCS enjoys the benefit of Section 80 P of the Income Tax Act, 1961.

Thinking of forming a MSCS? Contact your expert at prudentadviso@gmail.com/9873564091

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