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BASIC GUIDELINES FOR THE FORMATION OF CO-OPERATIVES UNDER KARNATAKA SOUHARDA SAHAKRI ACT, 1997

·      There should be at least ten persons.

·      These persons should be from different families.

·      These persons should be competent to enter into a contract under the Indian contracts Act 1872.

·      He should reside in the area of operation of the Cooperative.

·      He should be eligible as per the bye-laws of the proposed Cooperative.

·      Any individual, firm, company or any other body corporate can become member of the Cooperative.

·      Any Cooperative registered under this Act (For Union cooperative) or Societies registration Act 1860.

·      The object of the Cooperative should be promotion of economic interests or general welfare of the members or the public, in accordance with the co-operative principles.

·      It should be economically sound, its registration should not affect adversely on the development of the co-operative movement.

·      Its registration should not be contrary to the policy directives of the State government.

PROCEDURE OF FORMATION OF A CO-OPERATIVE

The basic guidelines for the formation of Co-operatives under Karnataka Souharda Sahakri Act, 1997 are as follows:`

·      Promoters meeting : Willing , eligible persons should come together and conduct a meeting, which is called as promoters' meeting. This meeting will decide the name of the proposed Cooperative, its object and bye-laws and then elect a Chief Promoter authorizing him to sign the necessary documents on behalf of the promoter members.

·      Collecting initial share capital : The Chief Promoter will apply to the Registrar of the  concerned area for requesting to authorize to collect share-capital. The application shall consist of:

o   Prescribed application

o   Resolution of promoters' meeting

o   Proposed byelaw

o   Details of promoters

Registrar will authorize the Chief promoter to collect the share and direct him to deposit the collected share capital in a particular Bank.

·      Registration : After collection of the necessary share capital, the chief promoter shall apply for registration of the cooperative along with:

o   Prescribed application

o   5 copies of proposed byelaws

o   List of persons who have contributed to the share-capital and the entrance fee of the proposed Cooperative

o   Bank documents having been deposited share capital

o   Registration fees : 1% of the authorized share capital, subject to minimum of Rs.500/- and maximum of Rs. 5000/-

o   After scrutinizing the documents Registrar will register the cooperative

·      Election to first Board : After Registration the chief promoter shall call first General Body of the newly formed cooperative to elect its first board.

·      Beginning of activities : After election of first board, the President and Secretary can open the Bank account and may start activities of the cooperative.