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Annual Legal Compliances with respect to Co-operative Societies

Annual Legal Compliances with respect to Co-operative Societies. Compliance w.r.t. MCS Act. The Maharashtra Co-op. Act 1960 was amended in 2014 due to 97 th Constitutional Amendments This changes casts duty on Co-operative Societies to perform in a time bound manner

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Annual Legal Compliances with respect to Co-operative Societies

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  1. Annual Legal Compliances with respect to Co-operative Societies

  2. Compliance w.r.t. MCS Act • The Maharashtra Co-op. Act 1960 was amended in 2014 due to 97th Constitutional Amendments • This changes casts duty on Co-operative Societies to perform in a time bound manner • As per the new provisions certain online compliances have to be made by all Co-operative Societies in a time bound manner. • Each and Every society has to maintain the prescribed books of account, registers and other compliances which are meant for In house compliances. • There are certain compliances which are to be made either online or in a paper form with the Co-operative Department.

  3. Amendments of bye laws • As per rule 12 of the MCS Rules, the bye laws of the society may be amended by passing a resolution at General Meeting. • An amendment shall be deemed to have been duly passed if a resolution is passed at GM by not less than 2/3 rd of members present there at and voting. • After resolution is passed, a copy of which shall be furnished to the Registrar with in a period of 2 months from the date of general meeting. (along with reasons justifying such amendments, 4 copies of the text of byelaws after amendments, copy of notice)

  4. Classification of Members • As per rule 20A of the MCS Rules, if a member is classified as non active member, the society shall communicates such classification in Form “W” to the concern member with in 30 days from the date of close of financial year by Registered post acknowledgement Due, by speed. • A Member can become Non Active if he does not fulfill any of the 3 conditions, namely • a) He should Attend at least 1 amongst 5 AGM • b) He should own Minimum One Share of society • c) He should have Transaction with the Society as prescribed by byelaws.

  5. Education & Training • As per section 24A of MCS Act and rule 20B of the MCS Rules • Every society shall organise co-operative education & training for it’s a members, officers and employees to such state federal societies or state apex training institutes. • The period of education & training for committee members shall minimum 3 days in aggregate during their tenure. • Every society shall contribute annually towards education & training fund of State Federal Society.

  6. Institutes Declared u/s 24A • Vaikunth Mehta National Institute of Co-operative Management • Dr. Dhananjayrao Gadgil Institute of Cooperative Management • Yashwantrao Chavan Academy of Development Administration (YASHADA) • Sahakar Bharati • Maharashtra State Co-op. Federation & All Districts Co-op. Board.

  7. Change in Address • As per section 37 of the MCS Act, every change in registered address shall be communicated by the society to the Registrar within 30 days from it’s a change. • As per rule 31 of the MCS Rules, every society shall communicate in writing to Registrar it’s a postal address as indicated in it’s a byelaws.

  8. Preparation of accounts • As per rule 61 of the MCS Rules, every society shall prepared annual statements of accounts within 45 days of the close of every co-operative year showing – • (a) Receipts & Disbursements during the previous year • (b) the profit and loss a/c for the year • (c) the balance sheet as at the close of the year • These statements of accounts shall be opened to the inspection by any member and it shall be submitted within 15 days from the date of preparation to the auditor so appointed.

  9. Accounts and Books • As per rule 65 of the MCS Rules, every society shall keep the following books and accounts, registers, documents, lists, forms and returns. • - A register of Members u/s 38 in form “ I ” • - A list of Active Members in form “ J- 1 ” • - A list of Non Active Members in form “ J- 2 ” • - A register of Shares • - A register of Debentures & Bonds • - Minutes Book of General Meeting • - Record of Attendance of General Meeting

  10. - Minutes Books of Committee Meetings • - Cash Book, Day Book, Bank Book • - General Ledger & Personal Ledger • - Stock Register • - Property Register • - Register of Auditors appointed & their written consent. • - Register of Audit objection & their rectification. • - Returns of the society in form “ Y ” • - In case of the society to which cost audit provisions are applicable is required to kept certain books and records as specified by state govt.

  11. Responsibility of Committee to intimate & assist to arrange for election • U/S 73-I • It shall be the duty of committee to intimate to state co-operative election authority, for holding of it’s a election before expiry of it’s a term. • Section 73-CB (14) : The Committee of every society shall • (a) inform the state co-op. election authority about the expiry of it’s a term of office at least 6 months before the date of expiry of such term. • (b) inform any casual vacancy occurred in the committee or it’s a office bearers within 15 days of occurrence of such vacancy.

  12. Audit – Section 81 • As per the section 81 of the MCS Act, the society shall cause to be audited it’s a accounts at list once in each financial year. • And cause it to be completed within a period of 4 months from the close of financial year to which such accounts relate by auditor or auditing firm. • If Registrar is satisfied that, the society has failed to intimate and filed return (section 75(2A)) and section 79(1B) about appointment of auditor then Registrar may cause it’s a accounts to be audited by an auditor from the panel.

  13. Procedure for appointment of Auditors and for conducting Audit – Rule 69 • The Audit of accounts of the societies shall be conducted by Auditor appointed by society in its AGM within the period of 4 months from the close of the financial year. • There will be classification of Auditor and Society into ‘A’ Class, ‘B’ Class & ‘C’ Class. • Auditor shall submit Audit Memorandum in Format N1 for Co-operative Banks & N2 for Other class of Society. • On completion of Statutory Audit, the Auditor shall award Audit Classification letter to the Society.

  14. Rectification of Defects in Accounts Sec. 82 • If the result of the Audit held under section 81 discloses any defects in the working of society, the society shall within 3 months from the date of audit report, explain to the Registrar the defects, or the irregularities pointed out by the Auditor and take steps to rectify the defects and remedy irregularities and report to the Registrar the action taken by it theiron. • Also place this report before the next General Body Meeting.

  15. Registrar or the person authorised by him shall scrutinise the Audit rectification report and inform the society about such report within 6 month from the date of receipt thereof. • It shall be the responsibility of the Auditor concerned to offer his remarks on rectification report of the society, item-wise, till entire rectification is made by the society and submit his report to the Registrar.

  16. Annual General Meeting • Section 75 - AGM • Every society, shall within a period of 4 months after the close of the financial year, get it’s a books of account audited and within Six months after the close of financial year to transact it’s a business (as may be provided in the act), call the annual general body meeting of it’s a members. • Every society shall appoint an auditor or auditing firm for the current financial year from a panel in it’s a annual general meeting and shall also file the form of return to the Registrar.

  17. The form of return shall contain the name of the auditor so appointed and his written consent for auditing the accounts of the society with in a period of 30 days from the date of annual general meeting. (The auditor shall not be appointed for more than 3 consecutive years by AGM of the society) • At every AGM, the audited Balance Sheet & Profit and Loss a/c, Audit Report of Preceding Financial Year and Rectification Report of Earlier Audit & Committee’s Report shall be placed for adoption.

  18. Subjects of AGM • Statements showing details of Loans give to any member of committee or family of any committee member. • Annual report of activities. • Plan for disposal of Surplus. • List of Amendments of byelaws, if any • Audit Report of preceding year. • Audit Rectification report of Earlier Audit. • Annual Budget for next year.

  19. The management of the co-operative society may forward to the Registrar the amendment of byelaws with in 30 days from the date of AGM.

  20. Annual Returns U/S 79 • Annual Returns U/S 79 : “Society’s obligation to file returns and statements & registrars to power to enforce performance of such obligations”.

  21. (1) The registrar may direct any society or class of societies, to keep proper books of accounts with respect to all sums of money received and expended by the society, and the matters in respect of which the receipt and expenditure take place all sales and purchases of goods by the society, and the assets and liabilities of the society, and to furnish such statements and returns and to produce such records as he may require from time to time; and the officer or officers of the society shall be bound to comply with his order within the period specified therein.

  22. (1-A) Every society shall file returns within six months of the close of every financial year to which such accounts relate, to the Registrar or to the person authorised by him. The returns shall contain the following matters, namely :- • (a) Annual Report of its activities; • (b) Its Audited Statement of Account; • (c) Plans for disposal of surplus funds as approved by the general body of the society;

  23. (d) List of amendments to the bye-laws of the society, if any; • (e) Declaration regarding date of holding of its general body meeting and conduct of elections when due; • (f) Any other information required by the Registrar in pursuance of any of the provisions of this act.

  24. (1-B) Every society shall also file a return regarding the name of the auditor or auditing firm from a panel approved by a State Government in this behalf, appointed in the general body meeting together with his written consent, within a period of one month from the date of annual general body meeting.

  25. (2) Where any society is required to take any action under this Act, the rules or the byelaws, or to comply with an order made under the foregoing sub-section, and such action is not taken- • (a) within the time provided in this Act, the rules or the bye laws, or the order as the case may be, or • (b) where no time is so provided, within such time, having regard to the nature and extent of the action to be taken, as the Registrar may specify by notice in writing. • the Registrar may himself, or through a person authorised by him, take such action, at the expense of the society; and such expense shall be recoverable from the society as if it were an arrear of land revenue.

  26. (3) Where the Registrar takes action under sub-section (2), the Registrar may call upon the officer or officers of the society whom he considers to be responsible for not complying with the provisions of this Act, the rules or the bye-laws, or the order made under sub-section (1) and after giving such officer or officers an opportunity of being heard, may require him or them to pay to the society the expenses paid or payable by it to the State Government as a result of their failure to take action and to pay to the assets of the society such sum not exceeding twenty-five rupees as the Registrar may think fit for each day until the Registrar's directions are carried out.

  27. (4) The Registrar or the authorized person on his behalf shall scrutinize the returns and information so received and take further necessary action, if required.

  28. Online Compliance on Mahasahakar

  29. Mandatory Return – 1: Annual Report of Activities

  30. Co-operative department has prescribed 56 forms for different types of societies. E.g. Any society enter by its login on Maha Sahakar Web Site then that society is getting the Form I “Annual Report of Activities” as applicable to that society.

  31. Mandatory Return – 2: Abridged Audit Report - Sec 79 (1A) (b)

  32. Mandatory Return – 3: Plan for Surplus Distribution - Sec 79 (1A) (c)

  33. Mandatory Return – 4: List of Amendment to ByLaws - Sec 79 (1A) (d)

  34. Mandatory Return – 5: Date of holding AGM and Election- Sec 79 (1A) (e)

  35. Mandatory Return – 6: Name of Auditor and Return Consent- Sec 79 (1B)

  36. Various Compliances • 15 days clear notice for conducting AGM • Circulating the Agenda and the Audited accounts to the Members along with the notice of AGM • Conducting AGM latest by 30th September as no extension is possible as per new law. • Preparing Annual Budget for forthcoming year. • Intimating the Election due dates 6 months in advance to the office of the Registrar and preparing the Voters list. • Co-op. Education and training to members, Committee Members, officers and employees.

  37. Payment of TDS into the bank within 7th of the next month. • Timely filing of the Quarterly ETDS returns by 15th of the end of the quarter. • Timely filing of the GSTR Returns. • Paying the Advance tax installments

  38. Keeping Zerox copies of all the FDs as per Investment Register ready for audit. • Intimating the classification to the Non-Active member by 30th of April. • Finalizing the Accounts within 45 days i.e. by 15th of May. • Handing over the finalized accounts for audit by 1st June. • Classifying the members’ portfolio in Active and Non-Active member as of 31st March. • Collecting Bank balance confirmations and Interest certificates from all the banks as of 31st March for the audit.

  39. • Getting the accounts audited by 31st July. • • Reviewing the draft audit report and complying with the observations or queries raised by the auditor. • • Discussing and approving the final audit report before it is signed • Getting written consent of the Auditor after accepting the audit • Intimating the Election due dates 6 months in advance to the office of the Registrar and preparing the Voters list.

  40. One Time Compliances • Adoption of model Bye-laws at the earliest • Registering the society on Mahasahakar Site • Obtaining PAN & TAN No. from Income Tax Dept

  41. Income Tax /TDS Return Due Dates • Income Tax Return due date : 30th September • Since accounts of all co-operative societies are subject to statutory audit provisions under respective governing laws, therefore due date for filing return of income under the Income-tax Act, 1961 is September 30. • TDS Deposit Dates: 7th day of every month • TDS Return Due Dates: • Q1 : 31st July • Q2: 31st Oct • Q3: 31st Jan • Q4: 31st May

  42. Provident Fund/Professional Tax Due Dates • PF: Due date for payment of Provident Fund is 15th day of the next month • Professional Tax PTEC (Society): 30th June for every current year • Professional Tax PTRC (Employees): if total yearly tax above Rs.50000/- then 30th day of every month, in other case on 31st March.

  43. GST • Applicability for Registration – if Society is having Taxable & Non Taxable Turnover / Services more than Rs.20 Lacs, then Society is required to get registered under GST Act. • If Society is having Zero Taxable Services, then Society need not get Registered. • (Credit Society/UCB/PACS/KV Sangh/ Sugar Factory/Spinning Mill/Weavers Society etc.)

  44.  As per sub-section (1) of section 19, every person who is liable to be registered under Schedule III of the Act shall apply for registration within thirty days from the date on which he become liable to registration but if the person is registered under an earlier law, it shall not be necessary for him to apply for fresh registration except in case of Input Service Distributor under this section.  • As para 1 of Schedule III, every supplier shall be liable to be registered under GST in the state from where he makes taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds threshold limit as announced by GST Council on 24.09.2016.

  45. UCB’s Compliance • As per the Banking Regulation Act 1949 • - Section 18 & 24 : SLR, CRR statements to be submitted fortnightly on reporting Friday. • - As per section 29 & 31 : Banks will have to submit to the RBI 3 Typed copies of B/S, P&L together with Statutory Auditors Report singed by principal officer of the bank and at least 3 directors, before 30th September every year. • - As per rule 10, Balance sheet is required to be published in one local news paper within 9 months.

  46. - Submission of Returns to RBI (Form I to IX) • - OSS Returns • - CTR, STR • - DICGC : Statement of Distribution of Deposit of accounts according to the size before 30th September

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