Section 18 of the Co-operative Societies Act, 1912 - Societies to be Bodies Corporate
What is Section 18 of the Co-operative Societies Act, 1912?
Section 18 appears under the chapter dealing with the privileges of registered societies. It states the legal effect of registration by treating the registered society as a body corporate. In practical terms, the registered society acquires a legal identity through which it can own property, enter contractual relationships and participate in legal proceedings in its own registered name.
Text and effect of Section 18
The provision declares that registration renders the society a body corporate under its registered name, with perpetual succession and a common seal. It also gives the society power to hold property, enter into contracts, institute and defend suits and other legal proceedings, and undertake acts necessary for the purposes of its constitution.
Meaning of the important expressions
Body corporate
A body corporate is an incorporated legal entity recognized in law under its registered name. Section 18 therefore enables the registered society itself to exercise the legal capacities expressly conferred by the provision.
Perpetual succession
Perpetual succession means that the corporate existence of the registered society does not ordinarily depend upon continuity of the same individual members. Changes in membership do not, by themselves, end the society's corporate identity.
Common seal
The section expressly refers to a common seal as one of the incidents of incorporation. Its use in a particular transaction should be considered together with the applicable law, rules, registered by-laws and requirements governing that transaction.
Power to hold property
The registered society may hold property in its corporate capacity. This allows property connected with the society to be held in the legal identity created by registration, subject to applicable statutory and regulatory requirements.
Power to enter into contracts
Section 18 gives the registered society capacity to enter into contracts. The authority of the person executing a contract for the society remains subject to the governing statute, rules, by-laws, resolutions and other applicable requirements.
Power to institute and defend legal proceedings
A registered society may institute and defend suits and other legal proceedings in its corporate name. The provision therefore supplies the society with express legal capacity to litigate, subject to procedural and other applicable laws.
Key legal consequences of registration
- The society becomes a body corporate in the name under which it is registered.
- It enjoys perpetual succession.
- The Act recognizes a common seal.
- It can hold property in its corporate capacity.
- It can enter into contracts.
- It can institute and defend suits and other legal proceedings.
- It can do things necessary for the purposes of its constitution.
Relationship with neighbouring provisions
Section 18 follows Section 17 concerning audit. It is followed by Section 19 concerning the prior claim of a society and Section 20 concerning charge and set-off in respect of a member's share or interest. These provisions form part of the statutory scheme concerning registered societies.
Official source
For the authoritative central Act text and amendments, refer to the Co-operative Societies Act, 1912 on India Code. Users should also check the co-operative societies legislation applicable in the relevant State or Union Territory because co-operative society regulation may be governed by separate local legislation.
Legal note: This article is a general explanation of Section 18 of the central Co-operative Societies Act, 1912. The applicable statute, State law, rules, by-laws and later amendments should be checked for a particular society or transaction.