Unit 2: The Uttar Pradesh Cooperative Societies Act, 1965 and Rules, 1968
The Uttar Pradesh Cooperative Societies Act, 1965 & Rules, 1968
Registration, Amendment of Bye-laws, Division & Amalgamation
The UP Cooperative Societies Act, 1965 and UP Cooperative Rules, 1968 provide the legal framework for how cooperatives are formed, run, and regulated in Uttar Pradesh.
Let’s understand the important provisions in easy layman language:
Registration of Cooperative Societies (Under UP Act 1965)
What is Registration?
Registration means getting legal approval from the government to form a cooperative society.
After registration, a cooperative becomes:
- a legal entity
- can enter contracts
- can sue or be sued
- can open bank accounts
- can carry out business officially
Who Can Form a Cooperative?
Minimum requirement:
- 10 or more individuals
- From the same area
- With common economic or social objectives
- Must be above 18 years
- Must have a common interest (e.g., farming, dairy, consumer, housing, banking)
Steps in Registration
Step 1: Formation of a Promoter Group
A group of motivated members forms a promoter committee to prepare documents.
Step 2: Prepare Required Documents
- Application for registration
- Proposed Bye-laws
- List of members
- Resolution agreeing to form a society
- Proof of share capital collected
- Identity documents of members
- Details of the society’s purpose and area of operation
Step 3: Submit Application to the Registrar of Cooperative Societies (RCS)
The application is reviewed by:
- District Assistant Registrar / Deputy Registrar
- or directly by RCS (for larger cooperatives)
Step 4: Scrutiny by Registrar
Registrar verifies:
- genuineness of members
- financial feasibility
- objective of the society
- whether the cooperative is necessary for that area
Step 5: Issue of Certificate
If satisfied, Registrar issues a:
- Certificate of Registration
- Society gets a registration number
Then the cooperative officially comes into existence.
Amendment of Bye-laws
What are Bye-laws?
Bye-laws are internal rules created by the society to manage its functioning.
They include:
- membership rules
- share capital structure
- roles of board and CEO
- powers of general body
- elections
- business operations
- dispute resolution
Why Amend Bye-laws?
Bye-laws need amendment when:
- society expands its operations
- new services are added
- membership rules change
- election system needs updates
- government rules change
Process of Amending Bye-laws
Step 1: Proposal
The amendment is proposed by:
-
Board of Directors or 1/3rd of the members through a requisition
Step 2: Approval by General Body
The proposed amendment must be approved in a General Body Meeting (GBM).
Requirement: 2/3rd majority of members present must vote in favour.
Step 3: Submit to Registrar
After GBM approval:
- society submits the amendment to the Registrar
- Registrar examines if it matches cooperative principles and the UP Act
Step 4: Registrar’s Approval
Registrar may:
- Approve
- Reject
- Suggest modifications
Once approved: The amendment becomes valid and enforceable.
Division of Cooperative Societies
Division means splitting a large cooperative society into two or more new societies.
When Division is Needed?
- Society becomes too large to manage efficiently
- Conflicts among members
- Geographical expansion makes coordination difficult
- Different groups want different types of services
- To improve operational efficiency
Process of Division
Step 1: Proposal by Members or Board
The division is proposed by:
-
Board or Majority of members
Step 2: Approval by General Body
General Body Meeting must approve division with 2/3rd majority.
Step 3: Prepare Division Scheme
Scheme includes:
- assets and liabilities distribution
- branch & staff allocation
- area of operations of new societies
- name of new societies
Step 4: Registrar’s Sanction
Registrar reviews and approves the division scheme.
Step 5: Registration of New Societies
New societies are registered separately, and the old society may be:
-
dissolved or continue with reduced area
Amalgamation of Cooperative Societies
Amalgamation means merger of two or more societies into one society.
When Amalgamation Happens?
- Two societies perform similar functions
- To avoid duplication of work
- To strengthen financial position
- For better management and services
- For economies of scale
Process of Amalgamation
Step 1: Proposal
Initiated by the:
- Board of Directors
- or General Body
Step 2: Approval by Members
Each society involved must approve merger in their General Body with 2/3rd majority.
Step 3: Prepare Merger Scheme
The scheme includes:
- new society name
- share capital structure
- distribution of assets/liabilities
- staff reallocation
- business plan
Step 4: Registrar’s Approval
Registrar ensures:
- interests of members are protected
- merger is beneficial
- legal requirements are met
Once approved:
- The societies officially merge
- New certificate of registration is issued
Quick Summary Table
| Topic | Meaning | Authority | Majority Required |
|---|---|---|---|
| Registration | Forming a new cooperative | Registrar | Not applicable |
| Amendment of Bye-laws | Changing internal rules | Registrar | 2/3rd of GB |
| Division | Splitting a society | Registrar | 2/3rd of GB |
| Amalgamation | Merging societies | Registrar | 2/3rd of GB |
Conclusion
The UP Cooperative Societies Act, 1965 and Rules, 1968 ensure that cooperatives in Uttar Pradesh operate:
- legally
- democratically
- efficiently
- transparently
They help in forming, modifying, dividing, and merging societies in a structured and fair way.
Qualifications, Membership, Rights & Liabilities, Management, and Board
1. Qualifications for Membership
To become a member of a cooperative society, a person must:
- Be above 18 years of age.
- Be of sound mind (able to take decisions).
- Not be insolvent (not bankrupt or financially disqualified).
- Accept the rules and bye-laws of the society.
- Purchase the minimum number of shares as defined in the bye-laws.
- Reside within the area of operation of the society (for primary societies).
Note: In case of companies or firms, they can also become members if the bye-laws allow.
2. Obtaining Membership
Steps to get membership in a cooperative:
- Submit an application in writing to the society.
- Attach required documents (ID proof, address proof, share amount, etc.).
- Pay the entrance fee and the value of minimum shares.
- Wait for the approval of the Managing Committee/Board.
- Once approved, the applicant’s name is entered in the membership register.
3. Rights of Members
Members of a cooperative society enjoy certain rights:
- Right to vote in the General Body Meeting (one member = one vote principle).
- Right to contest elections of the Board (if qualified).
- Right to inspect accounts, books, and records as allowed by rules.
- Right to receive services and benefits provided by the society.
- Right to share in profits/dividends.
- Right to request a special meeting by following due procedure.
4. Liabilities of Members
Members also have certain responsibilities and liabilities:
- Liability to pay share capital and dues on time.
- Liability for debts of the society (only limited to the share value in most societies).
- Liability to follow bye-laws and decisions of the society.
- Liability to maintain discipline and not harm the society’s reputation/interests.
5. Management of the Co-operative Society
Management of a cooperative society mainly includes:
A. General Body (GB)
- Supreme authority of the society.
- Approves budget, accounts, major policies, and elects the board.
B. Board / Managing Committee
- Elected by the General Body.
- Responsible for day-to-day management and administration.
- Holds meetings regularly and takes decisions.
C. Office Bearers
- President/Chairman, Vice-Chairman, Secretary, Treasurer, Manager, etc.
- Perform operational functions like signing cheques, maintaining records, etc.
6. Qualification of Board Members
To become a Board member, a person must:
- Be an active member of the society.
- Have no overdue loans or outstanding dues.
- Not be involved in activities harmful to the society.
- Participate regularly in society functions (attendance requirement may apply).
- Meet any special qualifications mentioned in the bye-laws.
7. Disqualification of Board Members
A Board member becomes disqualified if:
- He fails to attend three consecutive meetings without valid reason.
- He becomes a defaulter (has unpaid loans or dues).
- He is declared insolvent or convicted of a criminal offence.
- He engages in fraud, misappropriation, or conflict of interest.
- He misuses his position or harms the society’s reputation.
- He resigns or loses membership of the society.