Abhijit Shaha & Co.

Chartered Accountants

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Recent changes in Maharashtra Co-op Society Act

Following are some of the important changes done in the MCS Act, 1960 and also in the Model Bye-laws of Cooperative Housing societies.

  • Condition for membership- Applicant to take 10 shares of Rs.50 each as against 5 shares. Bye law No.22 on rights of membership talks about the right to receive the notice of demand from society if there is increase in minimum contribution of member in share capital.
  • Classification of Active and Non-Active members.
  • Associate member definition- ownership in the property individually or jointly with others is must and whose name does not stand first in the share certificate.
  • Co-operative .Education and training to members, committee members ,officers and employees. 
  • Education and Training fund of Rs.10 per member per month to be collected as against Rs.3 per member per annum. 
  • Sinking fund can be utilised by the society and no permission of the Registrar is needed-General body permission however, is must. 
  • NOC of society for transfer of flat or property is not required.However, Rule 24 and Bye law No.38 on transfer of shares and interest wants the transferring member to give 15 days notice to the society of his intetion to do so alongwith the consent of the transferee member. 
  • Elections of management committee must be notified six months in advance and to be held under the supervision of the newly constituted State Co-operative Election Authority (SCEA).-Sec.73CB 
  • Casual vacancy in management committee to be informed to Election Authority and co-option is not allowed. 
  • Disqualification of committee and its members- Sec.77-A & 78 
  • Strength of Management committee and Reservation of seats for Women and for members of SC,ST & OBC category with Expert and Functional Directors appointment possible subject to conditions.- Sec.73AAA & bye law No.113
  • Last date for conducting AGM is 30th against 14th Aug. 
  • Appointment of Auditors ,their Remuneration, Rights and Responsibilites ,removal etc.-Auditor should be a panel auditor and Maximum appointment for consecutive three years and maximum 20 audits excluding for societies with paid capital of less than Rs.1 lac.-Additional responsibility to file FIR if mispappropriationetc etc is noticed –Special & Specific Reports to be filed with Registerar- Sec.81/R- 69/Bye la 150-152 
  • Cash expenses limit Rs.1500/- as against Rs.4500/-in Bye laws.-Bye law No.144 /R-107D 
  • Cash in Hand at the close of the day limit increased from Rs.300 to Rs.5000/-Bye law 143/R-107C 
  • For encroachment of common areas by members to be charged at 5 times the monthly maintenance charges for the period of such encroachment.-Bye law No.168 
  • Applicability and adoption of Accounting standards prescribed by state government and by ICAI-Sec.81 & notification dtd.29th Oct.2014. 
  • Filing of Annual Mandatory Returns with the Registrar.-Sec.79(1A) & 79(1B) 
  • Penalties prescribed for various offenses and consolidated penalty for all defaults to be Rs.5000/- maximum in any financial year.-Bye law No.164(a) 
  • Concept of Emergency Planning Scheme and Fire Safety Audit introduced.-Bye law No.75*The Maharashtra Fire Prevention and Life Safety Measures Rules, 2009, made it mandatory for building owners and residents to conduct half – yearly fire safety audits and submit the report to the fire department. As per the directive of Directorate of Maharashtra Fire Services, the safety audit has to be conducted by the ‘Licensed Agency” approved by them.

Other imp bye law provisions auditor should know:

  • Structural Audit –once in 5 yrs for Bldg ageing 15-30 years and once in 3 years if Bldg ageing more than 30 year by BMC approved structural engineers.
  • One time limit for repairs and maintenance expenses management committee can decide is Rs.1 lac Max.-else General Body permission must.
  • Cheques should be signed by Secretary And Chairman/Treasurer and same with the vouchers. 
  • Creating Awareness regarding Nomination to be filed.
  • Mandatory filing of Annual returns and auditors appointment should be insisted for.
  • Security bond for holding cash from the employee and officer -500 and 1000 if paid up capital is less than 1.50 lacs and Rs.1000 & 2000 if it is more than 1.50 lacs R-107B 
  • The word “Administrator” has been removed and now the term is “authorized officer” 
  • Audit rectification memo needs to be submitted to Registrar in O form within 3 months from the date of the audit report and even auditor has to give remarks on that-Penalty for society of Rs.5000 u/s 147 
  • Introduction of sec.146 offences and 147 which talks about penalties 
  • Dismissal of committee if the election due date is not intimated or mandatory returns are not filed & non submissiom of audit rectification report etc. 
  • Copy of Bye laws ,list of members to be kept open for inspection to public free of charge- Sec.39


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