Question

Under Section 55 of KCS Act, which category of cooperative society funds is generally prohibited from being divided among members upon dissolution or during operation?

• A. Share capital and members' deposits
• B. Working capital and loanable funds
• C. Reserve fund and other statutory funds
• D. Dividend equalization fund and patronage refund

Answer 1

Answer:

C. Reserve fund and other statutory funds

Section 55 – Funds Not to Be Divided

• The funds of a Co-operative Society cannot be divided or shared among its members.

• Only the net profits (profits remaining after all expenses) can be distributed as bonus or dividend, and that too as per the rules.