A glance at Multi-State Cooperative Society Act, 2002

A cooperative society protects the interest of the weaker section of the society. The primary motive of every organisation is to earn profits. However, this is not the case with cooperative societies. A cooperative society is a group of individuals who voluntarily come together to achieve a common economic objective.

A multi-state cooperative society is a cooperative society registered under the Multi-State Cooperative Society Act, 2002, and It consolidates and amends the law related to a cooperative society.

Multi-State Co-operative Society

Section 3(p) of the Multi-State Co-operative Society Act, 2002 defines Multi-State Cooperative Society.

Societies covered under this act are cooperative societies whose operations are extended to multiple states. These are also known as multi-state unit co-operatives.

The objective of this act is to make laws that protect the interest of members of the different states who come together with a common motive. Therefore, the act facilitated the creation and democratic functioning of the cooperative society with individuals of different states as its members.

Types of cooperative society

Types of cooperative societies are as follows:

  1. Producer Cooperative Society: This cooperative society protects the rights of small producers. These societies perform activities such as processing, marketing and distributing products created by members. Such societies increase the possibility of marketing and efficiency of the producers to produce goods.
  2. Consumer Cooperative Society: The consumers of the particular area band togethr to provide necessary commodities at optimum prices. They do not work to earn profits but provide service to the consumers.
  3. Credit Unions: Credit unions are member-owned financial cooperatives. These societies provide credit and financial services to their members at competitive prices.
  4. Marketing Cooperative Society: These societies assist small-scale producers to sell their products. The producers who wish to obtain the reasonable price of their products become members of such a society.
  5. Housing Cooperative Society: These societies help people construct houses reasonably. They build the house and offer it to its members. Members have the option to either purchase the house by paying the whole amount at once or in instalments. They either construct the house or provide the plot for such construction.

Characteristics of Registration of Multi-State Cooperative Society

  1. Open Membership: The membership of the cooperative society is open to all those who have common interests. To form a cooperative society, the minimum number of members must be 10.
  2. State Control: The state controls the cooperative societies, but only if the members of different states have common goals. These societies can be formed under the Multi-State Cooperative Society Act, 2002.
  3. Democratic Management: The board of directors manage the multi-state cooperative society. The members of the cooperative society appoint the board of directors.
  4. Voluntary Association: Cooperative society is a voluntary association in which a member can join and leave at his will.
  5. Sources of Finance: Members of cooperative societies contribute the capital. Loans and secure grants can be raised from the government.
  6. Service Motive: The motive of a cooperative society is not to maximise profit but to provide service.
  7. Separate Legal Entity: After registration, a cooperative society can become a separate legal entity.
  8. Distribution of Surplus: The cooperative society members earn profit when conducting its business, and the surplus is divided among members as per their shares.
  9. Self-help Through Mutual Cooperation: The principle of the Cooperative society is to help each other. Therefore, financially weaker sections form such societies.

Registration of Multi-State Cooperative Society

Registration procedure and conditions for the Multi-State Co-operative Society is provided under Chapter II of the Multi-State Cooperative Society Act, 2002.

Condition for the Registration of Multi-State Cooperative Society

Section 5 of the Multi-State Cooperative Society Act, 2002 provides registration conditions. A multi-state cooperative society cannot be registered under the Multi-State Cooperative Act, 2002 until it fulfils the following conditions:

  • The main objective of the cooperative society is to serve the interest of the members of different states.
  • Societies should work for the social and economic betterment of its members.
  • It should have the word ‘limited’ or equal to ‘limited’ in its name.

Application Procedure for the Registration of Multi-State Cooperative Society

Section 6 of the Multi-State Cooperative Society Act, 2002 provides for the application for the registration of the Multi-State Cooperative Society. Such an application is made to the Central Registrar in the prescribed form.

Requirement of the application:

  • At least 50 people of each concerned state must sign the application.
  • The representative on behalf of at least five societies not registered in the same state must authorise the application.
  • The representative of each society shall authorise the application.
  • The application is accompanied by four copies of the proposed bye-laws.

Documents Required for Setting up a Multi-State Cooperative Society

  • A duly signed copy of proposed bye-laws.
  • List of contributors of the share capital and the contribution of their capital.
  • A certificate from the bank that shows the credit balance of the desired cooperative society
  • A scheme that indicates the financial reasonability of the proposed society. It should also express how the enlistment of the society would be helpful to the society and monetary advancement of the individuals.
  • A resolution that provides the name and the address of the chief promoter
  • A copy of the resolution in favour of the person authorised to make bye-laws

Benefits of registering the Multi-State Cooperative Society

Chapter VI of the Multi-State Cooperative Society Act, 2002, provisions the benefits of registration of the cooperative societies. Multi-state cooperative societies can charge and set off the share or interest of members. With the share of contribution interest, a member is not liable to attachment of his property. A registered or list of members kept with multi-state cooperative societies is the prima facie evidence of the date the person entered in the register or list as a member of the multi-state cooperative society.


Multi-State Cooperative Society has its operational area across the state and serves the members of more than one state to facilitate voluntary and democratic formation and promotes economic and social betterment to provide functional autonomy. Such societies are formed for the betterment of their members. The objective of the evolution of society is the economic and social improvement of its members. Registration of the Multi-State Cooperative Society Under the Multi-State Cooperative Society Act, 2002 provides numerous benefits.


Can a multi-state cooperative society borrow funds?

A multi-state cooperative society can borrow loans, accept deposits, and grant funds until the limit specified in the bye-laws of the cooperative society.

What are the characteristics of the Multi-State Cooperative Society?

  • Open membership
  • Democratic Management
  • Voluntary Association
  • Service Motive
  • Separate Legal Entity
  • Distribution of surplus

What are bye-laws?

“Bye-laws” are laws in force that are duly registered or deemed to register under the Multi-State Cooperative Societies Act, 2002 . Bye-laws are defined under Section 3(c) of the Multi-State Cooperative Societies Act, 2002.

Who appoints the central registrar?

The central government appoints a central registrar.