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MAJOR IMPORTANT CHANGES IN MCS ACT, RULES AND BYE-LAWS - 2014

Major changes in MSC Act, 1960 viz-a-viz Model Bye Laws of Co-operative Housing Societies and similar changes have been done in all types of Co-operative Societies.

1. Condition for Membership: Applicant to take 10 shares of Rs.50 each as against earlier condition of 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.

2. Classification of Active and Non-Active members: Active member:

o He has purchased and/or owns the Flat/Unit in the Society.

o He has attended at least One General Body Meeting within a consecutive period of Five years. (Provided that nothing in this clause shall apply to the member whose absence has been condoned by the General Body of the Society).

o He has at least paid the amount equivalent to Three year of Society Maintenance and Service charges within a consecutive period of Five years.

Non-Active member:

o A member who is not an ‘Active Member’ shall be the 'Non–Active Member'.

o Society shall classify the members as ‘Active’ or Non – Active’ member at the close of every financial year.

o Society shall communicate to every Non–Active member about his classification within a period of 30 days from 31st March of every year as prescribed under these Bye Laws as per Appendix

o If a question of a member being Active or Non – Active arises, an appeal shall lie to the Dy. Registrar within a period of 60 days from the date of communication of such classification.

o The 'Non-Active' member can be reclassified as 'Active Member' if he satisfies the conditions laid down under Byelaw no. 22(B) (1).

3. 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.

4. Co-operative Education and Training to Members, Committee Members, Officers And Employees.

5. Education and Training fund of Rs.10 per member per month to be collected as against Rs.3 per member per annum and such fund to be used to impart training to the members through the notified Training Institutes.

6. Sinking fund can be utilized by the Society and no permission of the Registrar is needed. General body permission however, is must.

7. NOC of Society for transfer of flat or property is not required. However, MCS Rule 24 and Bye Law No.38 on transfer of shares and interest want the transferring member to give 15 days’ notice to the Society of his intention to do so along with the consent of the transferee member.

8. Elections of Managing 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.73 CB.

9. Casual vacancy in Managing Committee to be informed to Election Authority and Co-option is not allowed.

10. Disqualification of Managing Committee and its members- Sec.77-A & 78.

11. Strength of Management committee and Reservation of seats for Women and for members of SC, ST and OBC Category with Expert and Functional Directors appointment possible subject to conditions.-Sec.73AAA & Bye Law No.113.

12. Last date for conducting AGM is 30' Sept every year as against 14’ Aug.

13. Appointment of Auditors , their Remuneration, Rights and Responsibilities, 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.1lac. Additional responsibility to file FIR if misappropriation etc is noticed -Special & Specific Reports to be filed with Registrar by the auditor- Sec.81/ MCS Rules -69/Bye Law No.150-152

14. Cash expenses limit Rs.1500/- as against Rs.4500/-in Bye laws.-Bye Law No.144/ MCS Rule -107D.

15. Cash in Hand at the close of the day limit increased from Rs.300 to Rs.5000/-Bye Law No.143/MCS Rule -107C.

16. 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.

17. Applicability and adoption of accounting standards prescribed by State Government and by ICAI-Sec.81 & notification dtd.29th Oct.2014 regarding the audit fees include the applicability of accounting standards and standards on auditing also.

18. Filing of Annual Mandatory Returns with the Registrar.-Sec.79 (1A) & 79(1B).

19. Penalties prescribed for various offenses and consolidated penalty for all defaults to be Rs.5000/-maximum in any financial year.

20. Concept of Emergency Planning Scheme and Fire Safety Audit introducing Bye Law N0.75. The Maharashtra Fire Prevention and Life Safety Measures Rules, 2009 has made it mandatory for building owners and residents to conduct half - yearly fire safety audits and submits 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.

21. 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.

22. One time limit for repairs and maintenance expenses Managing Committee can decide is Rs.1 lac Max.-else General Body permission must.

23. Cheques should be signed by Secretary and Chairman/Treasurer and same with the vouchers.

24. Mandatory filing of Annual Returns and auditor’s appointment should be insisted for.

25. Security Bond for holding cash from the employee and officer 500 and 1000 respectively if Paid up Capital is less than 1.50 lakhs and Rs.1000 & 2000 if it is more than 1.50 lakhs MCS Rule-107B.

26. The word "Administrator" has been removed and now the term is "Authorized Officer"

27. 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

28.Dismissal of Managing Committee if the election due date is not intimated or mandatory returns are not filed, non submission of audit rectification report, not holding AGM or SGM as required under law, disobeying the notifications and order of the Government and Registrar etc.

29.Copy of Bye laws, list of members to be kept open for inspection to public free of charge.

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