Procedure for formation of a Housing Society

Real Estate and Property Law Housing Society Law

Posted by Aditya Pratap Law Offices on 09 May 24

                                ?php echo htmlentities($row['posttitle']); ?>


Forming a housing society under the Maharashtra Cooperative Societies Act, 1960, is a structured process governed by legal provisions aimed at ensuring transparency, accountability, and effective governance. This comprehensive guide outlines the step-by-step procedure, including relevant sections from the act, to facilitate the establishment of a housing society in Maharashtra.

The Maharashtra Cooperative Societies Act, 1960, stands as a cornerstone legislation governing cooperative effort in the state. Enacted with the objective of promoting cooperation among individuals and promoting socio-economic development, the act provides a robust framework for the establishment, functioning, and dissolution of cooperative societies across various sectors.

Procedure for formation of a Housing Society

1. Preliminary Meetings and Feasibility Study: Sections 3 & section 4

The journey begins with preliminary meetings where interested individuals gather to discuss the formation of a housing society. Section 4 of the Act mandates that a minimum of ten individuals is required to form a society. These meetings serve to gauge interest, identify common objectives, and conduct a feasibility study to assess the viability of the project.

2. Drafting Bye-laws: Section 13

One of the primary steps is drafting the bye-laws, which serve as the guiding principles for the society's operation. Section 13 of the Act stipulates that every cooperative society shall adopt bye-laws, covering aspects such as membership, governance structure, rights, and responsibilities of members, administrative procedures, and dispute resolution mechanisms.

3. Registration Process: Sections 9 & Section 10

Under Section 9 of the Act, the society must apply for registration to the Registrar of Cooperative Societies. The application must be accompanied by various documents, including the bye-laws of the society, memorandum of association, articles of association, consent letters from members, site plan and building plan, and a financial feasibility report. Upon registration, the society becomes a body corporate by the name under which it is registered.

Section 10 of the Act, talks about Evidence of Registration a certificate of society therein mentioned, is duly registered, unless it is proved that the registration of the society has been cancelled.

4. Formation of Managing Committee: Section 73

Upon registration, the society must form a managing committee responsible for the day-to-day management and administration of the society. Section 73 of the Act outlines the composition, powers, and functions of the managing committee, which is elected or appointed from among the society's members.

5.  Allocation of Shares and Membership: Section 19

Shares are allotted to society members based on their contributions or as per the bye-laws. Section 19 of the Act governs the issuance of shares to society members and outlines the procedures for membership approval.

6. Appointment of Auditors and Bank Account Opening:  Sections 81 & Section 87

To ensure transparency and accountability, Section 81 of the Act mandates the appointment of auditors to audit the society's accounts periodically.

Additionally, Section 87 of the Act requires the opening of a bank account in the name of the society to facilitate financial transactions.

 7. Allotment of Units: Section 22

If the society is involved in construction, units are allotted to members based on predetermined criteria, such as seniority, contributions, or through a lottery system, as per Section 22 of the Act.


Cooperative housing societies are becoming increasingly popular in India because to its affordability, investment security, democracy, and superior facilities and services. Any member over the age of 18 with similar interests is welcome to join the housing society and benefit from its services. Because housing co-operatives are separate legal organizations, they are controlled by different agencies and have their own methods of support.

The formation of a housing society under the Maharashtra Cooperative Societies Act, 1960, requires meticulous planning, adherence to legal formalities, and collaboration among members. By following this comprehensive guide and referencing relevant sections from the act, aspiring residents can establish a well-functioning housing society that caters to the needs and aspirations of its members while complying with regulatory frameworks. However, the society must continually adhere to the provisions of the Maharashtra Cooperative Societies Act, including holding regular general body meetings, maintaining proper accounts, and complying with statutory requirements.




Aditya Pratap Law Offices ~Aditya Pratap Law Offices