Chapter VI: Funds, Share Capital and Charges

Bye-law 12. Raising of Funds

The funds of the Society may be raised in one or more of the following ways:—

(i)by entrance fees;

(ii)by issue of shares and collection of share capital;

(iii)by contributions, service charges, maintenance charges and other charges levied from Members for maintenance, repairs, common services and other purposes, in accordance with the provisions of the Act, the Rules and Government directions issued from time to time;

(iv)by deposits received from Members and, where permissible, from non-members, in accordance with the provisions of the Act and the Rules;

(v)by loans raised from co-operative banks, including the District Central Co-operative Bank, or from any other financial institution or agency permitted under the Act and the Rules;

(vi)by grants, subsidies or financial assistance from the Government, local authority or any other lawful source, and by voluntary donations, provided that—

(a)such donations shall not be collected as a condition for—

(i)admission of a Member;

(ii)transfer of shares and interest in the Society; or

(iii)grant of any permission/NOC, approval or consent by the Society;

(b)such donations shall be made voluntarily and without any coercion; and

(c)such donations shall be duly accounted for and reflected in the books of the Society;

(vii)by transfer fees, premium, non-occupancy charges, parking charges, interest on dues, penalties and such other charges as may be levied in accordance with the provisions of the Act, the Rules and Government directions;

(viii)by income derived from the property of the Society, including use of common areas and facilities, amenities, services, installations or any other lawful use permitted under the Act and the Rules;

(ix)by contributions to various funds of the Society as provided under these bye-laws and the Rules;

(x)by any other lawful means, with the approval of the General Body and in accordance with the provisions of the Act and the Rules.

Bye-law 13. Share Capital

(a)The authorised share capital of the Society shall be Rs. ______/- (Rupees __________ only) divided into ______ shares of Rs. 50/- each and the paid up share capital of Rs.______ divided into ______ share of Rs. 50/-

(b)The issued and subscribed share capital of the Society shall consist of shares subscribed by the Members from time to time in accordance with these bye-laws.

(c)The paid-up share capital of the Society shall be the amount actually paid by the Members towards the shares subscribed by them.

(d)Every Member shall subscribe to at least five shares of the Society and shall pay the full value thereof at the time of admission or within such period as may be decided by the Committee.

(e)The share capital of the Society may be increased with the approval of the General Body and in accordance with the provisions of the Act and the Rules.

(f)The liability of the Members shall be limited to the extent of the value of shares subscribed by them.

Bye-law 14. Share Certificate

(a)The Society shall issue a share certificate to every Member in respect of the shares held by him within the period of six month from the allotment of the shares.

Every share certificate shall bear the seal of the Society and shall be signed by the Chairman, the Secretary and one Member of the Committee duly authorised by the Committee, and shall be issued under the authority of the Committee through the Secretary of the Society.

The Society shall maintain a register of share certificates and shall keep proper records thereof in physical and/or digital form.

(b)Upon completion of redevelopment or reconstruction of the Society’s building or buildings, the Society shall issue fresh share certificates to the Members.

The existing Members shall be issued fresh share certificates in respect of the premises allotted to them in accordance with the approved plans and agreements executed.

The original share certificates shall be surrendered and cancelled before issuance of fresh share certificates. The Society shall also issue share certificates to new Members admitted in respect of newly created flats or units.

Such share certificates shall be issued within a period of six months from the date of receipt of occupation certificate or completion of redevelopment, whichever is earlier. The Society shall ensure that the particulars recorded in the share certificates correspond with the records of the Society, agreements executed and statutory approvals obtained.

Bye-law 15. Duplicate Share Certificate

(a)The Committee may issue a duplicate share certificate where the original share certificate is lost or destroyed, upon the Member making an application to the Society and submitting—

(i)a copy of the police complaint or non-cognizable complaint lodged in respect of such loss.

(ii)an indemnity bond in the prescribed form; and a self-declaration or affidavit stating the circumstances of such loss or destruction.

(b)Where the original share certificate is damaged, defaced, torn or mutilated, the Committee may issue a duplicate share certificate upon—

(i)submission of an application by the Member;

(ii)submission of an indemnity bond and affidavit; and

(iii)surrender of the original share certificate.

(c)Every duplicate share certificate shall be issued in accordance with the provisions of the Act, the Rules and these bye-laws, and shall be recorded in the register of share certificates maintained by the Society.

The duplicate share certificate shall be clearly marked as “Duplicate” and shall bear appropriate reference to the original share certificate.

Bye-law 16. Restrictions on Incurring Liabilities

The Society may receive deposits from its Members and raise loans for such purposes, for such period, at such rate of interest and on such terms and conditions as may be decided by the Committee, subject to the provisions of the Act, the Rules and Government directives issued from time to time.

(i)The Society shall not incur liabilities exceeding the limits prescribed under Rule 106C-10 of the Maharashtra Co-operative Societies Rules, 1961.

Accordingly, the total liabilities of the Society shall not, at any time, exceed ten times the aggregate of—

(a)the paid-up share capital;

(b)the accumulated reserve fund;

(c)the amount contributed by Members towards land and building; and

(d)the building fund;

after deducting accumulated losses, if any.

(ii)Provided that, in case of self-redevelopment of the Society’s building or buildings, the Society may incur liabilities or borrow funds up to ten times the value of the land, as determined by a Government-approved valuer, subject to prior approval of the General Body and compliance with the provisions of the Act, Rules and Government directives issued from time to time.

(iii)All borrowings, deposits and liabilities shall be placed before the General Body for its approval and shall be incurred and utilised strictly in accordance with the provisions of the Act, the Rules and Government directives.

Bye-law 17. Reserve Fund

The Society shall constitute and maintain a Reserve Fund in accordance with the provisions of Section 66 of the Maharashtra Co-operative Societies Act, 1960.

(a)Constitution of Reserve Fund The Reserve Fund of the Society shall consist of:

(i) all entrance fees received from Members;

(ii) all transfer fees and transfer premium received on transfer of shares and interest in the capital or property of the Society;

(iii) amounts appropriated from the net profits or surplus of the Society in accordance with the provisions of Section 66 of the Maharashtra Co-operative Societies Act, 1960;

(iv) all donations and contributions received by the Society, except those specifically earmarked for any particular purpose.

(b)Credit to Reserve Fund

All amounts specified in clause (i) above shall be credited to and shall form part of the Reserve Fund of the Society. The Society shall, while finalising the accounts for every Co-operative Year, transfer to the Reserve Fund such portion of its net profits as may be prescribed under Section 66 of the Act and the Rules made thereunder.

(c)Nature and Accounting of Reserve Fund The Reserve Fund shall be separately accounted for in the books of the Society and shall be indivisible.

The Reserve Fund shall be utilised only in accordance with the provisions of the Act, the Rules and the directions issued by the competent authority from time to time.

Bye-law 18. Creation of Other Funds

In accordance with the provisions of the Act and the Rules, the Society shall create and maintain such funds as are prescribed and may create such other funds as may be decided by the General Body.

Subject to the approval of the General Body, the Society may establish and maintain the following funds, and shall maintain the Corpus Fund, namely:—

(a)The Society shall establish a Sinking Fund.

The Sinking Fund shall consist of contributions collected from its Members at a rate determined in the General Body Meeting, subject to a minimum of 0.25 per cent per annum of the construction cost of each flat, incurred during the building's construction and certified by the Architect.

The amount so collected shall form part of the Sinking Fund of the Society and shall be separately accounted for.

The Sinking Fund shall be utilised for heavy repairs, structural repairs, replacement of major assets, and such other capital expenditure relating to the buildings or property of the Society, as approved by the General Body.

(b)The Society shall establish a Repair and Maintenance Fund.

The Repair and Maintenance Fund shall consist of contributions collected from its Members at a rate fixed in the General Body Meeting, subject to a minimum of 0.75 per cent per annum of the construction cost of each flat, incurred during the building's construction and certified by the Architect.

The amount so collected shall form part of the Repair and Maintenance Fund of the Society and shall be separately accounted for.

This Fund shall be utilised for routine recurring repairs, day-to-day maintenance and upkeep of the buildings, common areas and properties of the Society.

(c)The Society shall establish a Major Repair Fund.

The Major Repair Fund shall consist of contributions collected from its Members at a rate fixed pro-rata on an area basis, as and when required, and as decided by the General Body.

The amount so collected shall form part of the Major Repair Fund of the Society and shall be separately accounted for.

The Major Repair Fund shall be utilised for significant repair, renovation, restoration, replacement, rehabilitation and maintenance works relating to the buildings and properties of the Society.

(d)The Society may establish an Education and Training Fund.

The Education and Training Fund shall consist of contributions collected from its Members in accordance with the provisions of the Rules and the rates prescribed by the Government from time to time.

The amount so collected shall form part of the Education and Training Fund of the Society and shall be separately accounted for.

This Fund shall be utilised for co-operative education, training programmes, seminars, workshops, conferences, publications and capacity building of Members, Committee Members and employees of the Society.

(e)The Society shall establish an Election Fund.

The Election Fund shall consist of contributions collected from its Members.

The Society shall collect contributions equally from all Members for conducting elections of the Managing Committee, as decided by the General Body.

The amount so collected shall form part of the Election Fund of the Society and shall be separately accounted for.

The Election Fund shall be utilised exclusively for meeting the expenses relating to conduct of elections of the Managing Committee.

(f)The Society may establish Welfare Fund which may consist of voluntary contributions collected from its Members.

The Welfare Fund may be used for social, cultural and recreational activities organised by the Society.

(g)The Society may maintain a Corpus Fund.

The Corpus Fund shall consist of contributions received from the Promoter / Builder, voluntary contributions from Members, or any other receipts as may be approved by the General Body. All such receipts shall be credited to and form part of the Corpus Fund of the Society.

(h)The Society may establish any other additional fund for specific purposes with contributions collected equally from all Members, subject to the approval of the General Body. The amount so collected shall form part of such fund and shall be separately accounted for.

Bye-law 19. Utilisation of Funds

The funds of the Society shall be utilised strictly in accordance with the provisions of Section 154B-18 and Section 67 of the Maharashtra Co-operative Societies Act, 1960, read with the applicable provisions of the Rules and these bye-laws. No fund of the Society shall be utilised for any purpose other than that for which it is created, except with the approval of the General Body and in accordance with the provisions of the Act and Rules.

(a)The Reserve Fund of the Society shall be utilised only in accordance with the provisions of Section 66(2) of the Maharashtra Co-operative Societies Act, 1960 read with Rule 54 of the Maharashtra Co-operative Societies Rules, 1961. Accordingly, the Reserve Fund may—

(i)be used in the business of the Society; or

(ii)subject to the provisions of Section 70 & Section 154B-17 of the Act, be invested in the modes prescribed; or

(iii)with the previous sanction of the State Government, be utilised in part for any public purpose likely to promote the objects of the Act or for such purposes of the State or local interest;

(iv)No part of the Reserve Fund shall be drawn, pledged or otherwise utilised except in accordance with the provisions of the Act and Rules and, wherever required, with the prior sanction of the Registrar or competent authority.

(b)The Sinking Fund shall be utilised for structural repairs, replacement of major components, reconstruction of the building or such other purposes relating to long-term sustainability of the building, as may be approved by the General Body, in accordance with Section 154B-15 read with Rule 106C-11.

No amount shall be utilised from the Sinking Fund without prior approval of the General Body.

(c)The Repair and Maintenance Fund shall be utilised for routine and recurring repairs, maintenance, upkeep and day-to-day management of the Society’s property, including common areas and facilities, in accordance with Section 154B-18 read with Rule 106C-13.

The Managing Committee shall be competent to incur expenditure from this fund in the ordinary course of management.

(d)The Major Repair Fund shall be utilised for substantial repairs, extensive renovation, replacement of major installations and other capital nature works, as approved by the General Body, in accordance with Section 154B-15 read with Rule 106C-11. No expenditure shall be incurred from this fund without prior approval of the General Body.

(e)The Education and Training Fund shall be utilised for co-operative education and training of Members, office bearers and employees of the Society in accordance with Section 154B- 6 & 154B-28 of the Act read with Rule 106C-7.

(f)The Election Fund shall be utilised exclusively for conducting elections of the Managing Committee in accordance with the provisions of the Act and Rules governing elections and Rule 106C-11.

(g)The Welfare Fund shall be utilised for social, cultural and welfare activities of the Members as may be approved by the General Body, in accordance with Section 154B-18 read with Rule 106C-11.

(h)The Corpus Fund shall be utilised only for such purposes as may be decided by the General Body in accordance with the provision to Section 154B-18 of the Act read with Rule 106C- 11.

(i)Any other fund created by the Society shall be utilised strictly for the specific purpose for which it is created, as approved by the General Body, and in accordance with the provisions of Section 154B-18 and Section 67 of the Act read with applicable Rules.

Bye-law 20. Investment of Funds

The Society shall invest or deposit its funds in accordance with the provisions of Section 70 and Section 154B-17 of the Maharashtra Co-operative Societies Act, 1960, read with Rule 54 and Rule 55 of the Maharashtra Co-operative Societies Rules, 1961.

(a)The Society shall invest or deposit its funds in one or more of the following modes as provided under the Act:—

(i)in the District Central Co-operative Bank or the State Co-operative Bank having at least “A” Audit Class in the last three consecutive years and, where such bank is not available, in any Nationalised Bank;

(ii)in any of the securities specified in Section 20 of the Indian Trusts Act, 1882, as permitted under Section 70 and Section 154B-17 of the Act;

(iii)in the shares, security bonds or debentures issued by any other co-operative society with limited liability;

(iv)in any other mode permitted by the Rules or by general or special order issued by the State Government.

(b)The Reserve Fund shall be invested strictly in accordance with the provisions of Section 66 read with Section 70 and Section 154B-17 of the Act and Rule 54 of the Rules.

No part of the Reserve Fund shall be drawn, pledged or otherwise utilised except in accordance with the provisions of the Act and Rules and, wherever required, with the prior sanction of the Registrar.

(c)The Society may invest its funds, other than the Reserve Fund, when not immediately required for its business, in accordance with the provisions of Section 70 and Section 154B-17 of the Act read with Rule 55 of the Rules.

(d)The Registrar may, by general or special order, specify the maximum amount or proportion of funds that may be invested in any class or classes of securities, and may impose such conditions as may be deemed necessary, in accordance with Rule 55 of the Rules.

(e)Restrictions by Registrar

(f)Where the Society has invested an amount not less than ten per cent of its working capital in securities, it shall constitute an Investment Fluctuation Fund as required under Rule 55 of the Rules, and such portion of the net profits shall be credited to this fund as may be directed by the Registrar.

(g)Where no bank is eligible as prescribed under Section 70 and Section 154B-17 of the Act, the Society may invest its funds in any other mode permitted by the State Government or the Registrar as authorised under the Act and Rules.

(h)Compliance and Accountability The Managing Committee shall ensure that—

(i)all investments are made strictly in compliance with the provisions of the Act and Rules;

(ii)safety and security of funds are ensured;

(iii)liquidity requirements of the Society are maintained; and

(iv)details of investments are properly recorded in the books of accounts and placed before the General Body in the Annual General Meeting.