140 



APPENDIX TO CHAPTER VI 



Liability of 

 members. 



Disposal of 

 profits. 



Restrictions 

 on borrowing. 



(2) If the Registrar is satisfied that the persons proposing to 

 form a society are qualified in accordance with the require- 

 ments of section 3, and have compUed with the provisions of 

 this Act and with the rules made thereunder, he may, if he 

 thinks fit, register the society accordingly, and the society shall 

 thereupon become and be a body corporate by the name under 

 which it is registered, with perpetual succession and a common 

 seal, and with power to hold property, movable or immovable, 

 to enter into contracts, to institute and defend civil suits, and 

 to do all things necessary for the purposes of its constitution. 



(3) Every society shall have an address, registered in 

 accordance with the rules made under this Act, to which all 

 notices and communications may be sent. 



(4) The registered name of a society shall distinguish 

 whether the society is rural or urban, and if the liability of the 

 members is limited, the word * limited ' shall be added to such 

 name. 



(5) No charge shall be made for registration under this 

 section. 



Management. 



7. The liability of each member of a society for the debts of 

 the society 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 ; 



(h) In the case of an urban society, such liability shall be 

 unlimited or limited, as may be provided by the 

 by-laws or by any rules made under this Act. 



8. (i) No dividend or payment on account of profits shall 

 be paid to a member of a rural society, but all profits made by 

 such a society shall be carried to a fund (to be called the 

 reserve fund) : 



Provided that, when such reserve fund has attained such 

 proportion to the total of the liabihties of the society, and 

 when the interest on loans to members has been reduced to 

 such rates, as may be determined by the by-laws or rules 

 made under this Act, any further profits of the society, not 

 exceeding three-fourths of the total annual profits, may be 

 distributed to members by way of bonus. 



(2) Not less than one-fourth of the profits in each year of an 

 urban society shall be carried to a fund (to be called the reserve 

 fund) before any dividend or payment on account of profits is 

 paid to the members or any of them. 



g. A society may receive deposits from members without 

 restriction, but it may borrow from persons who are not 



