24 



BRITISH INDIA - CO-OPERATION AND ASSOCIATION 



Liability of Members. 



The liability of each member 

 of a society for the debts of the so- 

 ciety shall be as follows : 



{a) in the case of a rural society 

 such liability shall, save with 

 the special sanction of the Local 

 Government, be unlimited ; 



(&) in the case of an urban so- 

 ciety, such liability shall be limi- 

 red or unlimited, as may be pro- 

 vided by the by-laws or by any 

 rules made under this Act. 



Provided that unless the I^ocal 

 Government by general or special 

 order otherwise directs — 



(i) the liability of a society 

 of which a member is a registered 

 society shall be limited; 



(2) the liability of a societ}^ 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. 



Restrictions on Loans. 



A society shall make no loan to 

 any person other than a member : 



Provided that, with the consent 

 of the Registrar, a society may 

 make loans to a rural society. 



A registered society shall not 

 make a loan to any person other 

 than a member : 



Provided that with the general 

 or special sanction of the Registrar, 

 a registered society may make loans 

 to another registered society. 



Investment of Funds. 



A society may deposit its funds 

 in the Government Savings Banks 

 or with any banker or person 

 acting as a banker approved for 

 this purpose by the Registrar. 



A registered society may invest 

 or deposit its funds — 



(a) in the Government Savings 

 Bank, or 



(b) in any of the securities speci- 

 fied in section 20 of the Indian 

 Trusts Act, 1882. or 



(c) in the shares or on the secur- 

 ity of any other registered society, or 



{d) with any bank or person carry- 

 ing on the business of banking, 

 approved for this purpose by the 

 Registrar, or 



{e) in any other mode permitted 

 by the rules. 



Division of Profits. 



(i) No dividend or payment on 

 account of profits shall be paid to 



No part of the funds of a registered 

 society shall be divided by way 



