Legal Framework for Cooperative Societies in West Bengal
Cooperative societies in West Bengal are governed by the West Bengal Cooperative Societies Act, 2006, and the West Bengal Cooperative Societies Rules, 2011. The Act replaces the earlier West Bengal Cooperative Societies Act, 1983, and introduces several reforms, including the requirement for professional management, audit by certified auditors, and the election of managing committees by the State Election Commission. The Act classifies cooperative societies into several types: credit societies, housing societies, agricultural marketing societies, consumer societies, and multipurpose societies.
Under Section 4 of the Act, a cooperative society can be formed by at least 10 persons (for a primary society) who are residents of the area of operation of the society and who have a common economic interest. The members must be individuals who are above 18 years of age and are not disqualified under the Act. For a federal society (a society of societies), the members are other cooperative societies, and the minimum number is 5 societies. The Act also provides for the formation of apex societies at the state level.
The Registrar of Cooperative Societies is the statutory authority responsible for the registration, regulation, and supervision of cooperative societies in West Bengal. The Registrar has the power to register societies, approve bye-laws, conduct elections, audit societies, and dissolve managing committees. The Registrar's office for the Asansol region is the Assistant Registrar or the Deputy Registrar, who handles the registration of societies within the Asansol jurisdiction.
Prerequisites for Registration
Before applying for registration, the promoters must convene a meeting to discuss the proposed society, its objectives, its area of operation, and its membership. The meeting should resolve to form the society, elect a chief promoter, and authorize the chief promoter to take steps for registration. The promoters must also decide on the name of the society, which should not be identical to or closely resemble the name of any existing registered society.
The promoters must draft the bye-laws of the society, which are the internal rules governing the society's functioning. The bye-laws must comply with the model bye-laws prescribed by the Registrar and must cover the following: the name and address of the society, the objectives, the area of operation, the membership qualifications and admission procedure, the rights and duties of members, the share capital and the manner of raising funds, the composition and election of the managing committee, the conduct of general body meetings, the audit and accounts, the dispute resolution mechanism, and the procedure for amendment of bye-laws and dissolution of the society.
The promoters must also open a bank account in the name of the proposed society (with the chief promoter as the signatory) and deposit the initial share capital contributions of the members. The bank account is used for the society's financial transactions pending registration, and the balance certificate from the bank is submitted with the registration application as evidence of the initial capital.
Documents Required for Registration
The documents required for registration of a cooperative society in Asansol include: the application in Form I (prescribed by the West Bengal Cooperative Societies Rules, 2011); four copies of the proposed bye-laws signed by all the promoters; a list of the promoters with their names, addresses, occupations, and share capital contributions; a feasibility report or a project report explaining the objectives and the viability of the proposed society; a bank certificate showing the balance in the proposed society's bank account; and the prescribed registration fee.
In addition, the promoters must submit a resolution of the promoters' meeting authorizing the chief promoter to file the registration application, a declaration by the chief promoter that the information provided is true and correct, and a NOC from the owner of the premises proposed to be the registered office of the society (if the premises are not owned by the society). For housing societies, the promoters must also submit the title documents of the land or building, the building sanction plan, and the promoter's agreement with the landowner or builder.
The application and the documents must be submitted to the Assistant Registrar or the Deputy Registrar having jurisdiction over the area where the proposed society's registered office will be located. The Registrar examines the application for compliance with the Act and the rules, and may return the application for defect correction. If the application is in order, the Registrar registers the society and issues a registration certificate.
Step-by-Step Registration Procedure
The registration procedure begins with the promoters' meeting, where the decision to form the society is taken and the chief promoter is elected. The chief promoter then drafts the bye-laws, opens a bank account, collects the share capital contributions, and prepares the application in Form I. The application, along with the bye-laws and other documents, is submitted to the Registrar.
The Registrar examines the application and may conduct an enquiry to verify the information provided. The Registrar checks whether the proposed society's objectives are consistent with the Act, whether the bye-laws comply with the model bye-laws, whether the promoters are eligible, and whether the proposed society is viable. If the Registrar is satisfied, the society is registered and a registration certificate is issued. The registration certificate is the conclusive evidence of the society's registration and its legal identity.
After registration, the society must hold its first general body meeting within 3 months, where the bye-laws are adopted, the managing committee is elected, and the accounts and the audit arrangements are finalized. The society must also apply for PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) from the Income Tax Department, and must register under the GST if the society's activities are covered by GST. The society must file annual returns with the Registrar, including the audited accounts and the list of managing committee members.
Drafting the Bye-Laws
The bye-laws are the constitution of the cooperative society and must be carefully drafted to avoid future disputes. The bye-laws must cover all aspects of the society's functioning, including the objectives, the membership, the share capital, the management, the meetings, the accounts, the audit, the dispute resolution, and the dissolution. The bye-laws must comply with the model bye-laws prescribed by the Registrar and must not contain any provision that is contrary to the Act or the rules.
The objectives clause should clearly specify the purpose of the society (e.g., providing housing to members, providing credit to members, marketing agricultural produce). The membership clause should specify the qualifications for membership, the admission procedure, the rights and duties of members, and the grounds and procedure for expulsion. The share capital clause should specify the authorized and paid-up share capital, the nominal value of each share, and the manner of payment.
The management clause should specify the composition of the managing committee (the number of members, the office-bearers, the term of office), the election procedure, the powers and duties of the committee, and the procedure for removal of committee members. The meetings clause should specify the frequency of general body meetings and committee meetings, the notice period, the quorum, the voting procedure, and the recording of minutes. The accounts and audit clause should specify the financial year, the books of accounts to be maintained, the audit by a certified auditor, and the presentation of audited accounts to the general body.
Post-Registration Compliance
After registration, the cooperative society must comply with several statutory requirements. The society must hold its first general body meeting within 3 months of registration, where the managing committee is elected. The managing committee must then conduct the society's affairs in accordance with the Act, the rules, and the bye-laws. The committee must hold general body meetings at least once a year (the annual general body meeting), where the audited accounts, the annual report, and the budget are presented.
The society must maintain books of accounts, including the cash book, the ledger, the register of members, the register of shares, the minutes of meetings, and the voucher file. The accounts must be audited annually by a certified auditor appointed by the general body. The audited accounts, the audit report, and the annual returns must be filed with the Registrar within the prescribed time. Failure to file the returns or to conduct the audit can result in penalties and, in serious cases, dissolution of the managing committee.
The society must also conduct the election of the managing committee every 5 years (or as prescribed by the bye-laws). The election is conducted by the State Election Commission or the Registrar, as prescribed. The society must also comply with the provisions of the Income Tax Act, the GST Act (if applicable), and the Employees' Provident Fund Act (if the society employs staff). Engaging a professional consultant or an advocate at Asansol who is experienced in cooperative law can help ensure compliance and avoid legal issues.