Question

Under Rule 5(3) of KCS Act, bye-laws of non-credit societies must include provisions related to:

• A. Dividend distribution, loan policies, and member eligibility
• B. Manufacture, purchase, sale, and stock-taking
• C. Investment strategies, risk management, and financial audits
• D. Employee salaries, office rent, and marketing expenses

Answer 1

Answer:

B. Manufacture, purchase, sale, and stock-taking

Sec 13 : When amendment of bye-law came into force.

• An amendment shall take effect from the date of its registration, unless a specific effective date is otherwise provided."

Sec 13 A Rule 5: Subject Matter of Byelaw

• Every co-operative society shall make its bye-laws consistent with the provisions of this Act and rules and no provision in the bye-laws of a co-operative society shall be contrary to the provisions of the Act and the Rules.

RULE 5- SUBJECT MATTER OF BYELAW

• Rule 5(1) Byelaws of the Society shall not be contrary to the Act and Rules and may deal with all or any of the matters specified below

• A) Name and address of the Society and its Branches if any

• B) Area of operation

• C) Objectives

• D) The manner and limit of raising the funds of the Society and the purpose of its utilization, Maximum share capital one member can

• E) Terms and qualification for admission to membership, privileges, rights, duties and liabilities of members including nominal or associate members etc.

Rule 5(2): In case of Credit Societies, following should also be be included in the Byelaw

• Maximum loan admissible to a member

• Maximum rate of interest on loans to members

• Conditions of loans granted to members and Managing committee and penalties for misappropriation.

• Consequences for default for payment of any sum due

• The circumstances under which a loan may recalled.

Rule 5(3):

• In case of Non- Credit Societies, the mode of conducting business such as manufacture, purchase, sale, stock taking and other matters and also the matters specified in Rule 5(1)

Rule 5(4):

• Society having Credit and Non Credit Functions called Composite Society. They maintain both 5(2) and 5(3).

Rule 6 Model Byelaw

• The Registrar is competent to frame model bylaws of Co- operative Societies.

• Such model byelaw shall be adopted by the society with modifications as may be suggested by the Society and agreed by the Registrar.