Audit of Co-operative Societies

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Kushal Tanna asked 5 years ago

Dear Sir
Section 5 of Act reads as” society where liability of members is limited, no member of a society other than a registered society can hold such portion of share capital of society as would exceed a maximum of 20% of the total number of shares or or of the value of shareholding to Rs.1000″
In this context kindly explain the provision in simple language
Let’s say a society has 10000 shares of Rs. 2 each and the liability of members of a society is limited.
1.How much a member of such society can hold?
2. If any other registered society is a member of such society, will there be any restrictions on shareholding?
3. Will there be any restrictions on shareholding in question 1 if such society is a society with unlimited liability?

Question Tags: Section 5 of Co-operative Societies Act

1 Answers

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Ravi Staff answered 5 years ago

1. 20% shares i.e 2000 shares and face value not exceeding 1000 i.e 500 shares of Rs 2 so we have to fulfill both conditions so lower of these two is 500 shares
2. no restrictions then
3. no restrictions then