Co-operative societies must raise funds as per law only
It is essential for any corporate to raise funds for various needs of the corporate and a co-operative society being one of the corporate also need to raise funds for long term use of the co-operative society.
Right methods of raising funds
Every co-operative society is required to follow laws & bye laws for raising of long term funds for the co-operative society.
Every co-operative society having a share capital shall provide in the bye-laws, the maximum amount of such share capital, the number of shares into which it is divided, the class of shares, the face value of share of each class and the rights and liabilities attaching to each class of shares and in the case of full amount of the shares is not payable on allotment, the amount and their number of installments required to be paid and such other incidental matters.
Any co-operative society, authorized under its bye laws to raise funds by the issue of debentures and bonds may with the prior sanction of the Registrar, frame regulations regarding the minimum amount to be raised by the issue of debentures and bonds, the class or classes of debentures and bonds, the face value of each debentures or bond, the date of redemption of debentures or bonds the rate of interest payable the terms and conditions regarding transfer of debentures and bonds and other incidental matters.
Wrong methods used by the co-operative society
Besides charging the maintenance for the common charges, the co-operative societies out of their own sweet will have started raising funds for the society by imposing following charges
(A) Car Parking charges: It is illegal method used by the co-operative societies to raise the funds for the society. Let us clarify that, very serious repercussions shall be there if an action through a legal expert is taken again the societies for charging Car Parking charges from the members.
(B) Community hall or basement or park use charges: It is also illegal method used by the co-operative societies to build funds for the society. Just allowing use of particular space or giving permission to use particular space of the common areas of the co-operative society is not the method of raising funds for the co-operative society. If any member raised objection through an legal expert in a court of law, the society has to return all such charges with interest and may also have to pay damages as may be decided by the Courts.
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