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Important Aspects of Share Certificate of a Housing Society

Real Estate and Property Law Housing Society Law

Posted by Aditya Pratap on 09 May 24


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Introduction:

In the Indian state of Maharashtra, a comprehensive legal framework for the management and functioning of co-operative societies is provided by the Maharashtra Co-operative Societies Act, 1960, and its implementing Rules. Among the many different kinds of cooperatives, housing societies are essential in giving their members access to residential housing while upholding the values of self-help and mutual support. The ownership of shares, as represented by a share certificate, is one of the essential components of being a member of a housing society. A share certificate entitles a holder to specific rights, benefits, and obligations within the co-operative structure and acts as concrete evidence of membership and ownership in the community.

Under the guidelines of the Maharashtra Co-operative Societies Act, 1960, and the Rules of 1961, it is important to understand the significant features of the share certificate that a housing society issues. To ensure accountability, transparency, and legal compliance, this document outlines the essential components and legal requirements about the issuing, transferring, managing, and enforcing of share certificates within housing societies.

 

Essential Documents for Obtaining a Society Share Certificate:

Documents typically required for obtaining a society share certificate include:

a) Application form for the share certificate.

b) Proof of ownership of the property (such as sale deed, conveyance deed, or allotment letter).

c) Copy of the share certificate allotment letter issued by the society.

d) Copy of the society's registration certificate.

e) Copy of the society's by-laws.

f) Copy of the latest property tax receipt.

g) Copy of the society's resolution approving the issuance of the share certificate.

 

Essential provisions for the Share Certificate of a Housing Society:

1. Share Capital and Membership:

Section 22 of the Maharashtra Co-operative Societies Act, 1960, outlines the provisions regarding the share capital of a co-operative society and the rights and liabilities of its members.

It specifies the conditions under which shares are allotted to members and the amount payable on such allotment.

2. Share Certificates

Section 24 of the Maharashtra Co-operative Societies Act, 1960 mandates that a co-operative society shall issue share certificates to its members for the shares held by them.

It specifies the contents that must be included in the share certificate, such as the name of the society, the name of the member, the share certificate number, etc.

3. Transfer of Shares

Section 28 of the Maharashtra Co-operative Societies Act, 1960 deals with the transferability of shares in a co-operative society.

It specifies the procedure for the transfer of shares, including the endorsement of the transfer on the share certificate and the registration of the transfer in the books of the society.

4. Lien on Shares

Section 29 grants the co-operative society a lien on the shares held by a member for any debt or liability owed by that member to the society.

It outlines the rights of the society to enforce the lien and recover the outstanding dues by selling the shares.

5. Replacement and Duplicate Share Certificates

Section 30 provides for the issuance of duplicate share certificates in case of loss, destruction, or defacement of the original certificate.

It specifies the procedure for obtaining a duplicate share certificate, including the submission of an indemnity bond and compliance with other conditions laid down by the society.

6. Audit and Inspection of Books:  

Section 35 requires every co-operative society to maintain proper books of accounts, including records related to share certificates.

It grants the Registrar of Co-operative Societies the power to audit and inspect the books of the society to ensure compliance with the provisions of the Act and the Rules.

7. Bylaws: 

Section 87 empowers a co-operative society to make its own bylaws for the management and administration of its affairs, including the issuance and management of share certificates.

The bylaws may contain provisions regarding the format, content, and management of share certificates, subject to the provisions of the Act and the Rules.

 

Conclusion:

A number of important clauses of the Maharashtra Co-operative Societies Act, 1960, and its accompanying Rules regulate the issuing and administration of share certificates in housing societies. These rules guarantee legal conformity, responsibility, and openness in the management of membership and share capital in cooperative societies. A share certificate is an essential document that certifies ownership or participation in a society and grants its holder specific rights and benefits.

The Act specifies the procedures for issuing share certificates, transferring shares, enforcing liens, and acquiring duplicate certificates under sections 22, 24, 28, 29, and 30. Furthermore, Section 87 gives societies the authority to create bylaws regulating the issuing and administration of share certificates, while Section 35 highlights the significance of appropriate audit and record-keeping. Housing societies can protect member interests, efficiently manage share capital, and maintain compliance with the regulatory framework set forth by the Maharashtra Co-operative Societies Act, 1960, and its Rules by following these guidelines.

 

 

Aditya Pratap ~Aditya Pratap