Section 115 of The Gujarat Co-Operative Societies Act, 1961 — Disposal of surplus assects
Bare section text
Official Legislative Text
Any surplus assets, as shown in the final report of the liquidator of a society which has been wound up, shall not be divided, amongst its members but shall be devoted to any object or objects provided in the bye-laws of the society, if they specify that such a surplus shall be utilized for the particular purpose. Where the society has no such byelaw, the surplus shall vest in the Registrar, who shall hold it in trust and shall transfer it to the reserve fund of a new society registered with a similar object, and serving more or less an area which the society to which the surplus belonged was serving :
Provided that, where no such society exists or is registered within three years of the cancellation of the registration of the society whose surplus is vested in the Registrar, the Registrar may distribute the surplus in the manner he thinks best, among any or all of the following :—
Educational Study Layer
Summary
- Surplus assets shown in the final report of a liquidator of a wound-up society cannot be divided among its members.
- These surplus assets must be devoted to any object or objects specified in the society's bye-laws if they outline a particular purpose.
- If no such bye-law exists, the surplus vests in the Registrar, who holds it in trust and must transfer it to the reserve fund of a new society with similar objects serving a similar area.
- If no such new society is registered within three years of the cancellation of the original society's registration, the Registrar may distribute the surplus among objects of public utility, federal societies, or charitable purposes.
Practical examples
FAQ
1. Can the surplus assets of a wound-up society be distributed among its members under Section 115?
No, Section 115 explicitly prohibits the division of surplus assets among the members of a society that has been wound up.
2. What happens to a wound-up society's surplus assets if there are no specific provisions in its bye-laws?
Under Section 115, if the bye-laws do not specify a purpose, the surplus vests in the Registrar in trust, who must transfer it to the reserve fund of a new society registered with a similar object and serving a similar area.
3. How long must the Registrar wait before distributing the vested surplus assets to alternative public or charitable purposes?
Under Section 115, the Registrar must wait three years from the date of the cancellation of the society's registration to see if a similar society is registered in that area before distributing the funds to other objects.
Practice Quiz
Q1.Under Section 115 of this Act, if a co-operative society is wound up and has surplus assets of 20,000 rupees, but its bye-laws do not mention how to utilize the surplus, which of the following is correct?
Q2.Under Section 115 of this Act, if a co-operative society's registration is cancelled on June 1, 2012, and its surplus assets vest in the Registrar, by what date must a similar society be registered in the area to receive these assets before the Registrar can distribute them to other public or charitable objects?
Q3.Under Section 115 of this Act, which of the following is NOT an approved recipient of a wound-up society's surplus assets if no similar society is established within three years of registration cancellation?
Q4.Under Section 115 of this Act, if the records of a defunct society are completely lost, none of its members can be found, and no similar society is registered within three years, how is a public utility object selected to receive the surplus?