In this article, Prateeksha Gupta discusses the reasons why housing complexes are structured as co-operative societies.

Housing Complex basically means a type of complex in which people live. It may be a  three, or four storeyed apartment or perhaps a townhome community that has two or more units with adjoining walls.

What is a Co-operative Society?

The term co-operation is derived from the Latin word co-operari, where the word co means ‘with’ and operari means ‘to work’. Thus, co-operation means working together.

So fundamentally, persons who need to cooperate with some basic financial goal can frame a society which is named as “co-operative society. It is an intentional relationship of people who cooperate to advance their monetary interest. It works on the principle of self-help and mutual-help.

A Co-operative Society is a type of business where people having a place with a similar class join their hands for the advancement of their shared objectives. These are for the most part shaped by the destitute individuals or weaker segment individuals in the general public.
It reflects the desire of the poor people to stand on their own legs or own merit. The philosophy of the formation of co-operative society is “all for each and each for all”.[1]

A Co-operative Society is a society which has its objectives as the promotion of economic interests of its members in accordance with co-operative principle.[2]

Dr. H.N.Kunzen define Co-operatives as “ Co-operative is self-help and mutual help. It is a joint enterprise of those who are not financially strong and cannot stand on their legs and therefore come together not with a view to get profits but to overcome disability arising out of want of adequate financial resources.”

In India, co-operatives are begun by the weaker segments of society for shielding its individuals from the grip of profit hungry business people.

One of the best examples that can relate to the concept of cooperative society is a government bank or a dairy. The motive behind the formation of these two is the welfare, promotion of the people in need.

The main objectives for the formation of a co-operative society are:

• Render service rather than making profit
• Mutual help instead of competition
• Self help instead of dependence
• Developing moral solidarity instead of unfair business practices

CHARACTERISTICS OF A CO-OPERATIVE SOCIETY

A co-agent society is a unique kind of business association not the same as different structures

of organization you have learnt prior. Let us discuss about some of its basic features and characteristics:

• Open Participation

The enrollment of a Co-Operative Society is interested in each one of those who have a typical interest. At least ten individuals are required to frame an agreeable society. The Co–operative Society Act does not indicate the greatest number of individuals for any co-operative society. Be that as it may, after the arrangement of the society, the member may indicate the greatest number of individuals.

• Willful Association

Any member my decide to join the society at any time on his wish. He may continue for as long as he wants and can leave the society whenever he wants. It is totally upon his discretion to be a part of the society.

• State Control

To ensure the enthusiasm of individuals, co-operative societies are set under state control through enrollment. While getting enrolled, a general public needs to submit details about the individuals and the business it is to attempt. It needs to keep up books of records, which are to be evaluated by government evaluators.

• Sources Of Finance

In a co-agent society capital is contributed by all the members. However, it can without much of a stretch raise credits and secure stipends from government after its enlistment.

• Service as its Objective

Co-agents are not shaped to augment benefit like different types of business association. The fundamental reason for a Co-operative Society is to give benefit to its individuals. For instance, in a Consumer Co-operative Store, products are sold to its individuals at a sensible cost by holding a little edge of benefit. It moreover gives better quality merchandise to its individuals and the overall population.

BENEFITS OF A CO-OPERATIVE SOCIETY

• Simple Arrangement

Formation of a co-operative society is an easy process compared to that of a joint stock company. Any ten members can arrange and form an association and can get it registered under the Co-operative Societies with the Registrar.

• Open Membership

Persons who have a similar intrigue may form a co-operative society. The society has a feature and benefit of providing open membership to any person who may like to join the formed association of this society.

• Democratic Control

A co-operative society is controlled in a vote based way. The individuals make their choice to choose their delegates to frame an advisory group that cares for the everyday organization. This board of trustees is responsible to all the individuals from the general public.

• Limited Liability

The obligation of individuals from a co-operative society is restricted to the degree of capital contributed by them. Dissimilar to sole proprietors and accomplices the individual properties of individuals from the co-agent social orders are free from any sort of hazard in view of business liabilities.

• Stable life

A co-agent society has a genuinely stable life and it keeps on existing for a drawn out stretch of time. Its reality is not influenced by the demise, bankruptcy, lunacy or abdication of any of its individuals.

TYPES OF CO-OPERATIVE SOCIETIES

Although a wide range of cooperative societies take a shot at a similar guideline, they contrast with respect to the way of exercises they perform. Followings are diverse sorts of cooperative societies that exist in our nation.

• Consumer’s Cooperative Society

These societies are framed to ensure the intrigue of general purchasers by making buyer products accessible at a sensible cost. They purchase merchandise straightforwardly from the makers and along these lines dispose of the middlemen during the process of distribution.

Examples for such cooperative society are Kendriya Bhandar, Apna Bazaar etc.

• Producer’s Cooperative Society

These societies are shaped to secure the intrigue of little makers by making accessible things of their requirement for creation like crude materials, devices and supplies, hardware, and so on.

Examples for such societies can be handloom societies like APCOO, Haryana Handloom etc.

• Co-operative Marketing Society

These societies are shaped by little makers what’s more, makers who think that its hard to offer their items separately. The general public gathers the items from the individual individuals and assumes the liability of offering those items in the market.

Gujarat Co-operative Milk Marketing Federation that sells AMUL milk products is an example of marketing co-operative society.

• Co-operative Credit Society

These societies are framed to give budgetary support to the individuals. The general public acknowledges stores from individuals and gifts them advances at sensible rates of enthusiasm for time in need. Village Service Co-operative Society and Urban Cooperative Banks are examples of co-operative credit society.

• Housing Co-operative Society

These social orders are framed to give private houses to individuals. They buy arrive, create it and build houses or pads and dispense the same to individuals. A few social orders additionally give credits at low rate important to individuals to develop their own homes. The Employees’ Housing Societies and Metropolitan Housing Co-operative Society are examples of housing co-operative society.

SOCIETIES WHICH MAY BE REGISTERED

This clause enumerates the societies which may be registered as a co-operative society under the provisions of this Act.[3]

The society which has as its goals the advancement of the monetary interests of its individuals as per cooperative principles and comprises of at least ten individuals and is established with the object of facilitating the operations of a society[4] and incorporates among its individuals no less than two enlisted cooperative societies can be registered as a cooperative society under The Cooperative Societies Act.

This article highlights the need of structuring housing complexes as cooperative societies. The aim of building housing complexes lies in the provisions under this act, as they focus on providing private houses to individuals at a comparatively low rate so that people who have low incomes can also build their own houses.
This works as the welfare of the people of the community, which is why housing complexes fall under the category of “Cooperative Societies.”

Now arises the question of how these housing complexes can be structured as cooperative societies?

Following are the provisions which are subject to the provisions of The Cooperative Societies Act which enumerates the procedure in which Housing Cooperative Societies can be formed and registered.

FORMATION OF A COOPERATIVE SOCIETY

A Housing Cooperative Society can be formed as per the provisions of The Cooperative Societies Act, 1912. The minimum requirement of the members for the formation of such society is ten, who have in them similar goals, motives and objectives for which they enter into a contract for the formation of such said society. These members may be the residents of the same locality, employees of the same organization, belonging to some group having affinity etc.

The basic idea that lies behind the formation of such Housing Cooperative Society is the achievement of the common motive and objective.

The application for the registration of such society falls under Section 6 of the Act.
The Act states that, for the purpose of the registration, a signed application by the members has to be made to the Registrar of The Cooperative Societies. The application has to be joined by three duplicates of the proposed tenets of the general public and the people by whom or for whose benefit such application is made should outfit such data with respect to the general public as the

Registrar may require. Further, the application should be made along with the registration fee.

The application form must contain the following information:

• Name and address of the society.
• Aims and objectives of the society.
• Names and addresses of the members of the society.
• Share capital and its division
• Mode of admission of new members
• A copy of the bye laws of the society

The Registrar examines the records, if these are according to necessities then the society’s name is entered in the enlist. A testament of enrollment is additionally issued to the society. The society will turn into a corporate body from the date said in the declaration.

References

[1] http://www.publishyourarticles.net/knowledge-hub/business-studies/what-do-you-mean-by-co-operative-society/759/

[2] The Indian Co-operative Societies Act, 1912

[3] Section 4,The Cooperative Societies Act

[4] Section 4 (b), The Cooperative Societies Act