Section 4 of the Co-operative Societies Act, 1912 - Societies Which May Be Registered

Section 4 of the Co-operative Societies Act, 1912 identifies the basic class of societies that may be registered under the Act and states when their liability is to be limited or unlimited.

Applicability note: The Co-operative Societies Act, 1912 is an old central enactment whose territorial operation has been affected by later State and Union Territory legislation. Before relying on Section 4 for a particular registration, the co-operative societies law currently applicable in the relevant State or Union Territory should be checked.

Text of Section 4 - Societies Which May Be Registered

Subject to the provisions hereinafter contained, a society which has as its object the promotion of the economic interests of its members in accordance with co-operative principles, or a society established with the object of facilitating the operations of such a society, may be registered under this Act with or without limited liability:

Provided that unless the State Government by general or special order otherwise directs -

(1) the liability of a society of which a member is a registered society shall be limited;

(2) the liability of a society of which the object is the creation of funds to be lent to its members, and of which the majority of the members are agriculturists, and of which no member is a registered society, shall be unlimited.

Meaning and Scope of Section 4

The section lays down the substantive eligibility requirement for registration under the 1912 Act. The proposed society must generally pursue the economic interests of its members in accordance with co-operative principles, or it must be formed to facilitate the operations of a society having that object.

Promotion of economic interests

The principal object contemplated by Section 4 is the promotion of the economic interests of members. The provision connects that object with co-operative principles, making the co-operative character of the proposed body central to eligibility under this section.

Society facilitating another co-operative society

Section 4 also permits registration of a society established to facilitate the operations of a society that promotes the economic interests of its members in accordance with co-operative principles.

Limited or unlimited liability

The main part of Section 4 permits registration with or without limited liability, but the proviso prescribes specific liability rules unless the State Government directs otherwise by a general or special order.

If a member of the society is itself a registered society, the liability of the society is to be limited, subject to a contrary State Government direction.
If the society is formed to create funds for lending to its members, the majority of its members are agriculturists, and none of its members is a registered society, its liability is to be unlimited, subject to a contrary State Government direction.

Registration Under the Act

Section 4 should be read with the succeeding registration provisions of the Act. In particular, the statutory scheme continues through the conditions of registration, the application for registration and the Registrar's decision on registration. The internal links in the sidebar provide direct access to those related provisions.

Official Legal Source

For the official text, amendments and territorial notes, refer to the Co-operative Societies Act, 1912 on India Code.

This page is intended as a general legal reference. For a current registration or compliance matter, verify the legislation and rules applicable in the relevant State or Union Territory.