The Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995.

THE ANDHRA PRADESH MUTUALLY AIDED CO-OPERATIVE SOCIETIES
ACT, 1995
(ACT NO. 30 OF 1995)
ARRANGEMENT OF SECTIONS
Sections
1. Short title, extent and commencement
2. Definitions
3. Co-operative Principles and bye-laws
4. Registration
5. Registration Certificate
6. Society to be a body corporate
7. Registration with limited or unlimited liability
8. Display of name
9. Bye-laws
10. Amendment of Bye-Laws
11. Change of liability, transfer of assets and liabilities, division,
amalgamation
12. Promotion of subsidiary organisation
13. Creation of new organisation with others
14. Mobilisation of funds
15. Investment of fund outside the business
16. Disposal of surplus
17. Management of deficit
18. Reserve Fund
19. Eligibility for membership
20. General Body
21. Board of Directors
22. Powers and functions of the Board of Directors
23. Elections
24. Meetings
25. Staff
26. Accounts and Records
27. Audit
28. Special Audit
29. Inquiry
30. Power to summon and examine persons and documents
31. Action on Special Audit or Inquiry Report
32. Constitution of Tribunals
33. Power of the Tribunal to order recovery
34. Filing of returns
35. Rights and privileges
36. Execution of decisions, decrees and orders
37. Settlement of disputes
38. Offence and penalities
39. Dissolution by members
40. Dissolution by Tribunal
41. Appointment of Liquidator
42. Duties of Liquidator
43. Powers of Liquidators
44. Final accounts
45. Fee for services
THE ANDHRA PRADESH MUTUALLY AIDED CO-OPERATIVE
SOCIETIES ACT, 1995
ACT No.30 OF 1995
(18th May, 1995)
AN ACT TO PROVIDE FOR THE VALUNTARY FORMATION OF
CO-OPERATIVE SOCIETIES AS ACCOUNTABLE, COMPETITIVE SELF
RELIANT BUSINESS ENTERPRISES, BASED ON THRIFT SELF HELP AND
MUTUAL AID OWNED MANAGED AND CONTROLLED BY MEMBERS FOR
THEIR ECONOMIC AND SOCIAL BETTERMENT AND FOR THE MATTERS
CONNECTED THEREWITH OR INCIDENTAL THERETO.
Be it enacted by the Legislative Assembly of the State of Andhra Pradesh
in the Forty-sixth Year of the Republic of India, as follows:-
1. Short title, extent and commencement –(1) This Act may be called the
Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995.
(2) It extends to the whole of the State of Andhra Pradesh.
(3) It shall come into force on such date as the Government may by
notification in the Andhra Pradesh Gazette, appoint.
2. Definitions -In this Act unless the context otherwise requires:—
(a) “Board”means the Board of Directors of a Co-operative Society;
(b) “bye-laws”means the bye-laws of a Co-operative Society as
originally framed or as altered from time to time in pursuance of this
Act;
(c) “Co-operative principles”means the Co-operative principles
specified in section 3;
(d) “Co-operative Society”means a Mutually Aided Co-operative
Society registered under section 4 whose bye-laws prohibit it from
raising share capital from the Government a operative Society
registered1[under the provisions] of the Andhra Pradesh Co-operative
Societies Act, 1964 if it amends its bye-laws where necessary to
reconstitute its capital base and in respect of other relevant aspects
to be in accordance with this Act and returns to the Government its
share capital if any, and either enters into a Memorandum of
Understanding with the Government for any outstanding loans due
to, or guarantees given by the Government or returns to the
Government of such assistance and further gets itself registered
under section 4 as a Co-operative Society under this Act,2[but does
not include the Milk/Dairy Co-operative Societies.]
(e) “Co-operative Society with limited liability”means a Co-
operative Society in which the liability of its members for the debts of
the Co-operative Society in the event of its being wound up, is limited
by its bye-laws to such amount as they may undertake to contribute
to the assets of the co-operative;
(f) “Co-operative Society with unlimited liability”means a Co-
operative Society the members of which are, in the event of its being
wound up, jointly and severally liable for and in respect of all its
obligations and to contribute to any deficit, in the assets of the Co-
operative Society;
(g) “Co-operative Tribunal”means the Tribunal or Tribunals
constituted under section 32;
1. Substituted by Act No.20 of 2006, s.2, for  the words “under section 7”.
2 . The words added by Act No.20 of 2006, s.2,
(h)“deficit”means the net excess of expenditure over income;
(i) “delegate” means a member nominated by a Co-operative Society
to represent its interests in a federation;
 (j)“director”means a director of the Board of directors;
(k) “federation”means a Mutually Aided Co-operative Society
registered under section 4 whose members are Mutually Aided Co-
operative Societies;
(l) “Financial Year”in relation to a Co-operative Society means the
twelve month accounting period as provided for in the bye-laws;
(m)“general body”in relation to a Co-operative Society means all the
members of the Co-operative Society and includes a representative
general body of the Co-operative Society referred to in section 20;
(n)“general meeting”means a meeting of the general body of a Co-
operative Society;
(o)“Government”means the State Government of Andhra Pradesh;
(p)“member”means a member of a Co-operative Society.
(q) “office-bearer”means an individual elected by the general body
or the board of the Co-operative Society to any office of such Co-
operative Society in accordance with its bye-laws;
(r) “Registrar”means the Registrar of Mutually Aided Co-operative
Societies appointed under section 4 of this Act, and includes any
other person on whom all or any of the powers of the Registrar under
this Act are conferred;
(s) “surplus”means the net excess of income over the expenditure.
3. Co-operative Principles and bye-laws -Individuals or Co-operatives
intending to form into a Co-operative Society under this Act shall frame bye-
laws conforming to the following principles of co-operation, namely,-
(a)  membership of a Co-operative Society shall be voluntary and
available without restriction of any social, political, racial or religious
discrimination, to all persons who can make use of its services and
are willing to accept the responsibilities of membership;
(b)  Co-operative Societies are democratic organisations; their affairs
shall be administrated by persons elected or appointed in a manner
agreed by the members and accountable to them. Members of
primary Co-operative Societies shall enjoy equal rights of voting (one
member one vote) and participation in decisions affecting their Co-
operative Societies. In other than primary Co-operative Societies, the
administration shall be conducted on a democratic basis in a suitable
form;
(c)  share capital shall only receive a strictly limited rate of interest, if
any;
(d)  the economic results, arising out of the operations of a
Co-operative Societies belong to the members of that Co-operative
Societies and shall be distributed in such a manners as would avoid
one member gaining at the expense of others, which shall be
achieved,-
(i) by provision for development of the business of the Co-
operative Society;
(ii) by provision of common services; or
(iii)by distribution among the members in proportion to their
transactions with the Co-operative Society;
(e)  all Co-operative Societies shall make provision for education of
their members, office-bearers and employees and the general public,
in the principles and techniques of co-operation, both economic and
democratic;
(f)  all Co-operative Societies, in order to best serve to interest of their
members and their communities, shall members activity co-operate
in every practical way with other co-operatives at local, national and
international levels having as their aim the achievement of unity of
action by co-operatives on throughout the world.
4. Registration -(1) Where not less than ten individuals of each being
member of a different family intend to form a Co-operative Society, or two or
more Co-operative Societies registered under this section wish to form into a
federation, or a society registered1[under the provisions] of the Andhra Pradesh
Co-operative Societies Act, 1964 intends to convert itself into a Co-operative
society under this Act, they shall frame bye-laws for this purpose in accordance
with section 3 in the first instance.
2[Provided that no Co-operative Society shall be registered as a Dairy or
milk Co-operative Society and no Dairy or milk Co-operative Society registered
under any other law shall be converted into a dairy or milk Cooperative Society
under this Act.]
3[(1A) Notwithstanding anything contained under this Act or under the
provisions of the Andhra Pradesh Co-operative Societies Act, 1964, (Act 7 of
1964), all the Dairy/Milk Co-operative Societies registered or deemed to have
been registered or converted under the provisions of this Act, shall be deemed
to have been excluded from the provisions of this Act and deemed to have been
registered and continued under the provisions of the Andhra Pradesh Co-
operative Societies Act, 1964 (Act 7 of 1964).]
(2) Thereafter an application for registration shall be submitted to the
Registrar by hand or by registered post.
(3) Every such application shall be accompanied by,-
(a)  the original and one copy of the bye-laws of the proposed Co-
operative Society as adopted by the individuals or delegates of Co-
operative Societies who wish to form into a co-operative society under
this Act or by the general body of a Society registered under the
Andhra Pradesh Co-operative Societies Act, 1964 which wishes to
convert itself into a Co-operative Society under this Act;
(b) a list of names of individuals or Co-operatives who wish to form
into a Co-operative Society under this Act or of the members of the
Committee of the society registered under the Andhra Pradesh Co-
operative Societies Act, 1964 which intends to convert itself into a Co-
operative Society under this Act with their addresses, occupations
and their financial commitments to the proposed Co-operative
Society;
(c) a true copy of the minutes of the meeting at which the bye-laws
were adopted, duly signed by atleast a majority of individuals or
delegates present at the meeting where the bye-laws were adopted, or
by a majority of the  members of the Committee of the Co-operatives
concerned where a Society registered under the Andhra Pradesh Co-
operative Societies Act, 1964 intends to convert itself into a Co-
operative Society under this Act;
1 . Substituted by Act No.20 of 2006, s.3, for the words “under section 7”.
2. Proviso added by Act No.20 of 2006, s.3.
3 . Inserted by Act No.20 of 2006, s.3.
(d) registration fee amounting to one percent of the total authorised
share capital by whatever name called subject to a minimum of one
hundred rupees and a maximum of ten thousand rupees; and
(e) In the case of a Society registered under section 7 of the Andhra
Pradesh Co-operative Societies Act, 1964 and wishing to convert itself
into a Co-operative Society under this Act, evidence to show that the
Society is not in possession of any share capital from Government,
and evidence also to show that the Society is not in receipt of any
Government loans or guarantees at the time of applying for
registration as a Co-operative Society under this Act, or that it has
entered into a memorandum of understanding with the Government
for any such outstanding loans or guarantees.
(4) The Registrar shall if he is satisfied that,-
(a)  the application is in conformity with the requirements of this Act;
(b)  the proposed bye-laws are not contrary to the provisions of this
Act; and
(c)  the name of the proposed Co-operative Society is not the same as
that of a Co-operative Society already registered under this section, or
the same as that used by a class of Societies already registered under
section 7 of the Andhra Pradesh Co-operative Societies Act, 1964,-
 Register the Co-operative Society and also its bye-laws and
communicate by registered post a certificate of registration and the
original of the registered bye-laws signed and sealed by him, within
period of sixty days from the date of submission of application, to the
Chief Promoter mentioned in the application.
(5) If the conditions laid down in sub-section (4) are not fulfilled, the
Registrar shall communicate by registered post the order of refusal together
with the reasons therefor, within sixty days from the date of submission of
application, to the Chief Promoter.
(6) There shall be appointed a Registrar of Mutually Aided Co-operative
Societies for the State and as many other Officers as the Government may
think fit for the purposes of this Act.
5. Registration Certificate -Where a Co-operative Society registered, the
certificate of registration signed and sealed by the Registrar shall be conclusive
evidence that the Co-operative Society mentioned therein, is a Mutually Aided
Co-operative Society duly registered under this Act:
Provided that where a Society was earlier registered under the Andhra
Pradesh Co-operative Societies Act, 1964, such registration shall stand
cancelled once a certificate of registration under this section is issued.
6. Society to be a body corporate -(1) A Co-operative Society registered
under this Act shall be a body corporate by the name under which it is
registered having perpetual succession and a common seal.  The Co-operative
Society shall be entitled to acquire, hold and dispose of property, to enter into
contracts, to sue and be sued and to do all other things necessary to achieve
its objectives.
(2) All transactions entered into in good faith prior to registration, in
furtherance of the objectives of the Cooperative Society, shall be deemed to be
transactions of the Co-operative Society after its registration.
7. Registration with limited or unlimited liability -A Co-operative Society
may be registered with limited or unlimited liability. Where the liability is
limited, it shall have as a suffix to its name the expression “limited” or its
equivalent in any Indian language.
8. Display of name -(1) Every Co-operative Society shall display its full name
registration number and the address of its registered office in legible characters
in a conspicuous position,
(a)  at every office or place at which it carries on business;
(b)  in all notices and other official publications;
(c)  on all its contracts, business letters, orders for goods, invoices,
statements of account, receipts and letters of credit; and
(d)  on all bills of exchange, promisory notes, endorsements, cheques
and orders for money it signs or that are signed on its behalf.
(2) Where a Co-operative Society has a corporate seal, it shall display its
full name in legible characters on its corporate seal.
9. Bye-laws -(1) Except on such specific matters for which this Act has
provided, the functioning of every Co-operative Society shall be regulated by its
bye-laws. Subject to the provisions of this Act and the bye-laws every Co-
operative Society shall have regard to the Co-operative principles in its
functioning.
(2) Subject to section 3, the bye-laws of a Co-operative Society shall be
specific on the following matters, namely:-
(i) the name and address of the Co-operative Society;
(ii) the object of the Co-operative Society explicitly stated as a
common central need of the members which the Co-
operative Society aims at fulfilling;
(iii) eligibility, ineligibility and procedure for obtaining and
retaining membership;
(iv) procedure for withdrawal, cessation and termination of
membership;
(v) the services that it intends to give its members;
(vi) fixation of minimum performance expected annually of each
member vis-a-vis use of service financial commitment and
participation in meetings, in order to be eligible to exercise
the right of membership including the right to vote;
(vii) the consequences of performing below the minimum level
fixed;
(viii)       the consequences of default in payment of any sum due by a
member;
(ix) rights of members;
(x) the nature and extent of the liability of the member or the
debts contracted by the Co-operative Society;
(xi) the manner of making or amending bye-laws;
(xii) the powers and functions of the general body and the
powers and functions an the manner of constitution of
representative general body, if any, and subjects which
must be defelt with by the general body, and by the
representative general body, if any;
(xiii)      the manner and frequency of convening general meetings and
quorum required;
(xiv) the manner of conducting elections and of filling casual
vacancies;
(xv) the size and composition of the Board of Directors;
(xvi) the term of office of the Directors;
(xvii) the manner of removal of Directors;
(xviii) the manner and frequency of convening board meeting and
quorum;
(xix) the powers and duties of the Board;
(xx) the powers and duties of the Chairperson;
(xxi) the term of on which the Co-operative Society may deal with
non-members;
(xxii) eligibility, ineligibility for becoming and continuing as
Director;
(xxiii) penalties for acting against the interests of the Co-operative
Society and for non-fulfilment of duties by members, office-
bearers, Directors or staff;
(xxiv) the nature and extent of the liability of office-bearers, Directors
for debts contracted by the Co-operative Society;
(xxv)  the authorisation of an officer or officers to sign documents and
to institute and defend suits and other legal proceedings on
behalf of the Co-operative Society;
(xxvi) the manner of choosing delegates to higher tier co-operative and
federations;
(xxvii)     the rights, if any, which the Co-operative Society intends to
confer on any co-operative society or other federation and
the circumstance under which these rights may be
exercised by the society or federation;
(xxviii)     the nature and amount of capital, if any, of the Co-operative
Society;
(xxix)        the maximum capital which a single member can hold;
(xxx)      the maximum interest payable to members on paid up share
capital;
(xxxi)      the sources, types and extent of funds to be raised by the Co-
operative Society;
(xxxii)      the purposes for which the funds may be applied;
(xxxiii)     the constitution of various funds and their purposes;
(xxxiv)     the manner of appointment of auditors and their powers and
functions;
(xxxv)    the manner of appointment of internal auditors and their
powers and functions;
(xxxvi)    the manner of disposal of funds when the Co-operative
Society is under liquidation; and
(xxxvii)  the manner of dissolution of the Co-operative Society.
10. Amendment of Bye-Laws -(1) Amendment of bye-laws:- A Co-operative
Society may amend any of the provisions of its bye-laws by a resolution of its
general body, or by the representative general body, where this exists:
Provided, that no such resolution shall be passed unless atleast twenty
clear days of written notice of the meeting has been given along with a copy of
the proposed amendment to each member of the general or representative
general body, as the case may be, and such notice and proposed amendment is
also displayed on the notice board of the Co-operative Society for a period of
twenty days immediately preceding the date of the meeting:
Provided further that the representative general body shall not alter any
provision in the bye-laws relating to its own constitution and powers.
(2) in the case of amendment of its bye-laws with regards to matters
relating to items (i), (ii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xix), (xxiv),
(xxix), (xxxvi) and /(xxxvii) of sub-section (2) of section 9, an application for the
registration of the amendment shall be forwarded by the Cooperative Society by
registered post to the Registrar within a period of thirty days from the date of
the resolution.
(3) Every application forwarded to the Registrar shall be signed by the
Chairperson and shall be accompanied by a copy of the resolution adopting the
amendment and the following particulars, namely:-
(a) the date of the meeting at which the amendment was
approved;
(b) the total number of members on the rolls of the co-
operative society who were eligible to vote on the date of such
meeting, the number present at the meeting and the number of
eligible members who voted for the resolution.
(4) If the proposed amendment is in consonance with the provisions of
this Act, the Registrar shall register the proposed amendment within a period
of sixty days from the date of receipt of the application.
(5) The Registrar shall forward by registered post to the Co-operative
Society within a period of fifteen days after registration, a copy of the
registered, amendment together with a certificate signed and sealed by him and
such certificate shall be conclusive evidence that the amendment has been
duly registered.
(6) If the proposed amendment is not in consonance with the provisions
of this Act, the Registrar shall refuse, within a period of sixty days from the
date of receipt of the application, to register the proposed amendment:
Provided that no order refusing to register the amendment shall be passed
except after giving the Co-operative Society an opportunity of making its
representation.
(7) The Registrar shall forward by registered post to the Co-operative
Society, within a period of fifteen days after refusal, the order of refusal
together with the reasons therefor.
(8) Where no order of refusal is received by the Co-operative Society
under sub-section (7) within a period of seventy five days from the date of
submission of application, it shall be deemed that the Registrar has registered
the amendment on the last date of the period specified in that sub-section.
(9) In the case of all amendments to the bye-laws other than those
specified in sub-section (2), information about the amendment shall be
forwarded by the Co-operative Society by registered post, with the enclosures
and particulars specified in sub-section (3), to the Registrar within a period of
thirty days from the date of the general meeting at which the resolution was
passed, and the Registrar shall immediately take on file such amendment:
Provided that such action shall not in any way preclude the Registrar
from proceeding against the Co-operative Society or its management, where
such amendment is found to be contrary to the provisions of this Act.
(10) An amendment to the bye-laws under sub-section (9) shall come into
effect only after registration or on the thirtieth day from the date of the
amendment has been sent to the Registrar for taking on record, as the case
may be.
11. Change of liability, transfer of assets and liabilities, division
amalgamation -
(1) A Co-operative Society may, by a resolution of its general body,-
(a)  decide to amend its bye-laws to change the form or the extent of
its liability;
(b)  decide to transfer its assets and liabilities, in whole or in part, to
any other Co-operative Society which agrees to such transfer by a
resolution of its general body;
(c)  divide itself into two or more Co-operative Societies.
(2) Any two or more Co-operative Societies may, by a resolution of their
respective general bodies, decide to amalgamate themselves and form a new
Co-operative Society.
(3) Every resolution of a Co-operative Society under this section shall be
passed at its general meeting by a majority of total members with right of/vote
or two-thirds of members present and voting whichever is less and such
resolution shall contain all particulars of the liability, transfer, division,
amalgamation as the case maybe.
(4) Before passing a resolution under this section, the Co-operative
society shall give notice thereof together with a copy of the resolution to all its
members, and federations to which it affiliated, and creditors who may give
their consent. Notwithstanding any bye-law or contract to the contrary, any
member federation, or creditor not consenting to the resolution shall, during a
period of one month from the date of service of the notice have the option of
withdrawing their shares, deposits, loans or services as the case may be.
(5) Any member, federation, or creditor who or which does not exercise
within the specified period the right under sub-section (4) shall be deemed to
have consented to the resolution.
(6) A resolution passed by a Co-operative Society under this section shall
not take effect until,-
(a)  (i) the members, federations, and creditors have consented or are
deemed to have consented to the resolution under sub-section (4) or,
as the case may be, sub-section (5); or
(ii) all claims of the members, federations and creditors who
have exercised the option referred to under sub-section (5)
within the period specified therein have been met in full or
otherwise satisfied; and
(b)  (i) in the case of change of liability, amendment of the bye-laws of
the Co-operative Society concerned is registered or is deemed to have
been registered; or
(ii) in the case of division or amalgamation, certificate of
registration of the Co-operative Society or Societies is issued.
(7) When a resolution passed by a Co-operative Society under sub-
section (2) takes effect the resolution shall be a sufficient conveyance to vest
the assets and liabilities in the transferee without any further assurance.
(8) The registration of a Co-operative Society shall stand cancelled and
the Co-operative Society shall be deemed to have been dissolved and shall
cease to exist as a Corporate body,-
(a)  when the whole of the assets and liabilities of such Co-operative
Society are transferred to another Co-operative Society; or
(b)  when such Co-operative Society divides itself into two or more Co-
operative Societies.
(9) Where two or more Co-operative Societies are amalgamated to form a
new Co-operative Society, the registration of the Co-operative Societies so
amalgamated shall stand cancelled and they shall be deemed to have been
dissolved and shall cease to exist as corporate bodies.
12. Promotion of subsidiary organisation - (1) Any Co-operative Society may,
by a resolution passed at general meeting by a majority of members present
and voting, promote one or more subsidiary organisations for the furtherance
of its stated objectives, and such organisations may be registered under any
law for the time being in force, as agreed to by the general body.
(2) The annual reports and accounts of any such subsidiary organisation
shall be placed before the general meeting of the promoting Co-operative
Society every year.
(3) Any subsidiary organisation created under sub-section (1) shall exist
for only as long as the general body of the Co-operative Society deems its
existence necessary.
13. Creation of new organisation with others -Where the collaboration
between a Co-operative Society and any other organisation or organisations
requires the creation of a new organisation, the new organisation may be
registered as a company or a public society, as appropriate for the fulfilment of
the objective with which it was created, and such collaboration shall be
reviewed every year by the general body of the Co-operative Society.
14. Mobilisation of funds -(1) A Co-operative Society may mobilise funds in
the shape or share capital, deposits, debentures, loans and other contributions
from its members to such extent and under such conditions as may be
permissible under the bye-laws of the Co-operative Society:
Provided that, at the time of dis-solution of a Co-operative Society the
amounts due to the members shall be settled only after the settlement of dues
to others.
1[ Provided further that in the case of a co-operative society, other than a
co-operative bank, deposits shall be mobilized only from those members who
have voting rights in that co-operative society.]
2[(1-A) Notwithstanding anything contained in the sub-section (1), a co-
operative bank may mobilize funds in the shape of deposits, debentures, loans
and other contributions from any person other than its member, to such extent
and under such conditions as may be permissible under the bye-laws, subject
to provisions of the Banking Regulation Act, 1949 (Central Act 10 of 1949).]
(2) A Co-operative Society may also mobilise funds in the shape of3[****],
debentures, loans and other contributions from other individuals and
institutions, to such extent and under such conditions as may be permissible
under the bye-laws;
Provided that a Co-operative Society shall not accept share capital from
the Government but may accept other funds or guarantee from the
Government on such terms and conditions as are mutually agreed upon
through a memorandum of understanding.
4[Explanation:  For the purpose of this section a "co-operative bank"
means a society registered under this Act, which is doing the business of
banking as defined in clause (b) of sub-section (1) of Section 5 of the Banking
Regulation Act, 1949.]
15. Investment of fund outside the business - A Co-operative Society may
invest or deposit its funds in any non-speculative manner outside its business.
16. Disposal of surplus –(1) In any year a Co-operative Society shall allocate
towards a deficit cover fund, reserve funds, deferred payment to members as
patronage rebate in proportion to their use of the Co-operative Societies
1. Proviso inserted by Act No.20 of 2018, s.2
2 . Inserted by Act No.20 of 2018, s.2.
3 . The word “deposits” omitted by Act No.20 of 2018, s.2.
4  Added by Act No.20 of 2018, s.2.
services and payment on share capital of interest not exceeding the rate of
interest paid by scheduled banks such percentage of the surplus arising from
its business transactions in the previous year, as may be approved by the
general body.
(2) Reserves created under sub-section (1) shall be costed by crediting on
annual interest equal to the rate paid by scheduled banks on fixed deposits.
17. Management of deficit -(1) Where a Co-operative Society is left with a
deficit in any given year, the board of directors shall place before the general
body in the first following annual a general meeting a detailed report on the
causes of deficit and the manner in which the deficit is proposed to be met.
(2) The general body of the Co-operative Society shall decide to have the
deficit covered by setting it off against the amounts available in the deficit cover
fund, and/or by debiting the deficit to the accounts of the members in
proportion to the services they had availed or were expected to avail of the Co-
operative Society during the year.
18. Reserve Fund -A Co-operative Society may create a Reserve for such
purpose as may be specified in the bye-law.
19. Eligibility for member ship -(1) Subject to the bye-laws, any person who
is desirous of utilising the services of the Co-operative Society may express his
willingness to accept the responsibilities of membership and fulfil such other
conditions as may be specified in the bye-laws of the Co-operative Society and
there upon he may be admitted as a member, subject however to the condition
at the Co-operative Society is in a position to extend its services  applicant and
that the Applicant is not already a member of a Co-operative Society registered
under this Act, or the Andhra Pradesh Co-operative Societies Act, 1964,
providing the same or similar services.
(2) Admission of members and removal from membership shall be made,
in accordance with the procedure specified in the bye-laws, only by an elected
Board or by the general body where such an elected Board does not exist for
the time being.
(3) A person admitted as a member may exercise the rights of
membership, including the right to vote, only on fulfilment of such conditions
as may be laid down from time to time in the bye-laws:
Provided that a person shall have been a member for at last one year
before being eligible to exercise the right of vote.
Provided further that the other above proviso shall not apply to the
promoter, member in the first year of registration of a Co-operative Society.
20.  General Body -(1) Subject to the provisions of this Act and the bye-laws,
the ultimate authority of a Co-operative Society shall vest on its general body:
Provided that where, because of spread of number of members, a Co-
operative Society feels the need for constituting a Representative General body
for more effective decision making, it may constitute a Representative General
body in such manner and with such functions as may be specified in the bye-
laws.
(2) The following matters, among others specified in the bye-laws shall be
dealt with by the general body of a Co-operative Society, namely:-
(a) amendments to bye-laws;
(b) election and removal of Directors;
(c) consideration of,-
(1) the long term perspective plan and budget;
(2) the normal operational plan and budget;
(3) the annual report of activities for being filed with the
Registrar;
(4) the auditor's report and the annual audited statement of
accounts for being filed with the Registrar;
(5) special audit report or inquiry report, if any;
(6) compliance report relating to audit, special audit and/or
inquiry, if any;
(d) approval of appointment and removal of auditors;
(e) disposal of surplus;
(f) management of deficit;
(g) creation of specific reserves and other funds;
(h)  review of actual utilisation of reserves and other funds;
(i)  review of the Chief executive’s report of the attendance at
meeting by Directors and review of the business done with
the Co-operative Society by the Directors;
(j) appointment, reconstitution and disbanding on the
Representative General body;
(k)  remuneration payable to any Director or internal auditor in
connection with his duties in that capacity or his
attendance at related meetings;
(l)    membership of the Co-operative Society in federation;
(m)  collaboration with other organisation and its review;
(n)   promotion of subsidiary organisations and review;
(o)   dissolution of the Co-operative Society; and
(p)  all other functions expected of the general body under the
other provisions of this Act.
21. Board of Directors -(1) There shall be a Board of Directors for every Co-
operative Society constituted and entrusted with the direction of the affairs of
the Co-operative Society in accordance with the provisions of the Act and the
bye-laws.
(2) This size of Board shall be a multiple of the term of office of its
Directors.
(3)  The Directors of the Board shall have staggered terms such that at
any point of time the vacancies arising as a result of the terms of Directors
coming to an end, are less than one half of the total strength of the Board;
Provided that the term of a Director shall not exceed five years:
Provided further that at the first election all the Directors shall be elected
at once, and their terms staggered by drawal of lots specifying different terms.
(4) In addition to such criteria as may be specified in the bye-laws, a
person shall be ineligible for being chosen as a Director if such person,-
(a)  has at any time lost the right to vote as a member or to continue
as one as specified in the bye-law;
(b)  incurs any other disqualification specified in the bye-laws.
(5) In addition to such criteria as may be specified in the bye-laws, a
person shall cease to be a Director if he incurs any of the disqualifications
specified in sub-section (4) or,-
(a)  absent himself from three consecutive Board meetings to leave or
absence;
(b)  absents himself from General Body Meetings out of three
consecutive Board meetings without leave or absence;
(c)  is penalised under this Act.
(6) In addition to such criteria as may be specified in the bye-laws, the
Directors of the Board shall incur disqualification for a period of three years for
being chosen as Directors and shall be ineligible to continue as Directors of any
Co-operative Society, if during their term as Directors of a Co-operative
society,-
(a)  they did not conduct elections within the time specified in the
bye-laws and before the expiry of the terms;
(b)  They did not conduct their annual general body meeting within
six months of closure of the Co-operative accounting year, or a
requisitioned meeting of the general body within the specified time;
(c)  They did not place the audited accounts for the preceding
financial year along with the reports of the auditors before the general
body at its annual general meeting.
(7) In order to be eligible for being chosen as director of the Board of a
Co-operative Society which has been in existence for more than two years a
member,-
(a) shall have been a voting member of the Co-operative Society for at
least two years immediately preceding the year of election;
(d)  shall have attended the two general body meetings of the Co-
operative Society held immediately preceding the elections.
(8) Every Director and employee of a Co-operative Society while
exercising his powers and discharging his duties shall,-
(a)  act honestly and in good faith and in the best interests of the Co-
operative Society; and
(b)  exercise such due care, diligence and skill as reasonably prudent
person would exercise in similar circumstances.
(9) A Director or employee who is guilty of misappropriation, breach of
trust or any other omission or commission resulting in loss to the Co-operative
Society as a result thereof, shall be personally liable to make good that loss,
without prejudice to such criminal action to which he is liable under the law.
22. Powers and functions of the Board of Directors - (1) The Board shall, in
accordance with the bye-laws be the authority to,-
(a) admit and terminate membership;
(b) elect the chairperson and other office bearers;
(c) remove from office the chairperson and other office bearers;
(d) appoint and remove the chief executive;
(e) fix staff strength;
(f) frame policies concerning;
(i) organisation and provision of services to members
(ii) recruitment, and conditions of service of the staff at the Co-
operative Society;
(iii) mode of custody and investment of funds;
(iv) manner of keeping accounts;
(v) mobilisation, utilisation and investment of various funds;
(vi) monitoring and management information systems including
statutory returns to be filed;
(vii) such other subjects and matters necessary for the effective
performance of the Co-operative Society.
(g) Place the annual report, annual financial statements, annual
plan and budget for the approval of the general body;
(h) Consider audit and compliance reports and place these before
the general body;
(i) review membership in other Co-operatives;
(j) undertake such other functions as may be delegated by the
general body;
(2) The Chairperson shall be elected by the Board from among the elected
members and shall, in accordance with the bye-laws,-
(a) preside at meetings of the Board and the general body;
(b) have only a casting vote in the event of equality of votes on any
matters being decided upon by the Board;
(c) exercise such other powers as may be delegated by the board
and specified in the policies framed or resolutions adopted by
the Board.
23. Elections -(1) The conduct of elections of Directors of a Co-operative
Society shall be the responsibility of the incumbent Board of the Co-operative
Society.
(2) Election shall be conducted before the expiry of the term of office of
the outgoing Directors in the manner specified in the bye-laws.
(3)  Where a Board does not take necessary steps to conduct  elections as
specified in the bye-laws before the expiry of the terms or the Directors, of
where there are not Directors remaining on the Board, the Registrar shall at
the request of not less than twenty five members or five per cent of the total
members of the Co-operative Society whichever is less or may suo moto
convene  within 30 days a general meeting for appointing an ad-hoc Board for
the specific purpose of conducting elections.
(4) The term of the ad-hoc Board appointed under sub-section(3) shall
not exceed one month over and above the minimum period required under the
bye-laws to conduct elections and the ad-hoc Board shall cease to function as
soon as regular  Board is elected in accordance with the bye-laws.
(5)  The Director shall hold office for the period for which they are elected
and the newly elected Directors shall assume office at the end of this period.
(6) The Directors may be eligible for reelection, if the bye-laws so provide.
24. Meetings –(1) The bye-laws of a Co-operative Society shall specify the
frequency of and manner in which Board and General Body meetings shall be
held, so however the Board shall meet at least once in every three months and
the general body shall meet at least once a year.
(2) The Board shall convene a general meeting within thirty days of
receipt of a requisition for convening a meeting signed by at least one tenth of
members of the Co-operative Society or as provided in the bye-laws and any
such requisition shall contain the proposed agenda and the reasons why the
meeting is felt necessary.
(3) Where the Board fails to convene the annual or requisitioned general
meeting with in due time, it shall be competent for the Registrar to convene the
requisitioned or annual general meeting, as the case may be.
(4) Every Co-operative Society shall record in the minutes book, minutes
of all proceedings of every general meeting and of every meeting of its Board of
Directors.
(5) Such minutes shall be communicated to all persons invited for the
meeting within thirty days of the conclusion of the meeting.
(6) The minutes so recorded shall be signed by the person who chaired
the said meeting.
25. Staff -All staff of the Co-operative Societies shall be the employees of the
Co-operative Society and shall be fully accountable to the Co-operative Society
and be appointed, removed and function in accordance with such service
conditions as may be framed by the Board:
Provided that a Co-operative Society may take personnel on deputation
from other agencies including the Government, on such terms as are mutually
agreed upon.
26. Accounts and Records - (1) Every Co-operative Society shall keep at its
office, the following accounts, records and documents namely:-
(a)  a copy of this Act with upto date amendments incorporated;
(b)  copies of other laws and regulations to which the Co-operative
Society is subject;
(c)  a copy of its registered bye-laws with amendments made from
time to time;
(d)  the minutes book;
(e)  accounts of all sums of money received and expended by the Co-
operative Society and their respective purposes;
(f)  accounts of all purchases and sales of goods by the Co-operative
Society;
(g)  accounts of all assets and liabilities of the Cooperative Society;
(h)  a register showing member-wise patronage of various services
provided by the Co-operative Society;
(i)  an upto date register, and a list of all members with voting rights
for the current year prepared within thirty days of closure of the Co-
operative Society's financial year;
(j)  copies of the audit reports and special audit and/or inquiry
report, if any and compliance reports thereon; and
(k)  all such other accounts, records and documents as may to
required by this Act or other laws.
(2) The books of accounts and other records shall be open for perusal by
any Director during business hours.
(3) Copies of the Act, bye-laws, minutes book pertaining to the General
Body meetings, reports and compliance thereon audit, special audit and
inquiry, voters list and such account as relate to a member shall be made
available to any members during business hours at a fee to be decided by the
Board. In the case of a Co-operative Society with unlimited liability, in addition,
a member may also have access to all books of accounts during business
hours, at fee decided by the Board.
27. Audit –(1) A Co-operative Society may get it accounts audited by a
Chartered Accountan within the meaning of the Charted AccountantsAct,
1949, or by any other Auditor from the office of the Registrar.
(2) The general body of a Co-operative Society shall appoint an auditor by
a resolution which will be valid only until the close of the next succeeding
annual general body meeting.
(3) The remuneration of the auditor shall be fixed with the approval of
the general body.
28. Special Audit -(1) A Co-operative Society dealing with funds from the
Government or other external individual or institutions may be subject to a
special audit initiated by the Registrar at the request of such creditor, on such
specific terms of reference as agreed to by the Registrar.
(2) The cost of the special audit under sub-section (1) shall be met by the
creditor:
Provided that where the special audit reveals serious mismanagement in
the Co-operative Society, such costs may be recovered from the Co-operative
Society, or the persons responsible for the mismanagement.
(3) Every special audit shall be completed and the report submitted to
the Registrar within one hundred and twenty days of its commencement.
(4) The special audit report shall contain a 

Excerpt shown. Open the full act in Lexace.

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