First Schedule explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The First Schedule lists seven co-operative principles. Section 3(g) defines "cooperative principles" as the principles specified in the First Schedule, and several sections of the Act test a society against them, from registration to winding up. Since 2023 the Central Government may add to the list by notification, but not take anything out.
This article follows the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023, which amended s.116 by its section 42 and came into force on 3 August 2023 (notification S.O. 3493(E)). The First Schedule itself was not amended in the sources used here.
The Schedule is headed " Cooperative Principles" and has seven numbered principles: voluntary and open membership; democratic member control; member's economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community. Under s.116(1A), inserted in 2023, a notification amending the First Schedule "shall be used only for adding to the co-operative principles in the list".
Where the Act uses the principles
- Definition. Section 3(g): "cooperative principles" means the cooperative principles specified in the First Schedule.
- Registration. Under s.7(1)(c) the Central Registrar must be satisfied "that its bye-laws provide for social and economic betterment of its members through self-help and mutual aid in accordance with the cooperative principles" before he may register a society and its bye-laws.
- Winding up. Under s.86(2)(b) the Central Registrar may, of his own motion and after giving the society a reasonable opportunity of making its representation, direct winding up where the society "has ceased to function in accordance with cooperative principles". See our article on winding up of multi-State co-operative societies.
These are two of the places where a society's conduct is measured against the Schedule, and a legal consultation can help a society see where its own bye-laws stand. For a general introduction, see our guide to the Multi-State Co-operative Societies Act, 2002.
The seven principles as printed
| No. | Heading | What the text says |
|---|---|---|
| 1 | Voluntary and Open Membership | Cooperatives are voluntary organisations, open to all persons capable of using their services and willing to accept the responsibilities of membership, "without discrimination on bases of gender, social inequality, racial, political ideologies or religious consideration" |
| 2 | Democratic Member Control | Democratic organisations controlled by their members, who actively participate in setting policies and decision making; elected representatives are responsible and accountable to members |
| 3 | Member's Economic Participation | Members contribute equitable and control the capital democratically; at least a part of the surplus would be the common property of the cooperatives; the remaining surplus could be utilised benefiting the members in proportion to their share |
| 4 | Autonomy and Independence | Autonomous, self-help organisations controlled by members; agreements with other organisations including Government, or capital from external sources, must ensure democratic control by members and maintenance of cooperative autonomy |
| 5 | Education, Training and Information | Education and training for members, elected representatives and employees; awareness among the general public, particularly young people and leaders, of the nature and benefits of cooperation |
| 6 | Cooperation among Cooperatives | Serve members most effectively and strengthen the movement "by working together through available local, regional, national and international structures" |
| 7 | Concern for Community | While focusing on members' needs, work for the sustainable development of communities through policies accepted by members |
Reading the text
Principle 1. The principle is stated about access: open to all persons capable of using the services and willing to accept the responsibilities of membership. How the Act and the bye-laws set out qualifications and admission is dealt with in the sections on members, not here.
Principle 2. It links control to members and accountability to elected representatives. The Act's provisions on general meetings and the board give effect to it in detail; this article does not list them.
Principle 3. The printed sentence "Members contribute equitable and control the capital of their cooperative democratically" appears to have a word missing, and "cooperatives.The remaining surplus" has no space after the full stop. The text is quoted as printed and not corrected. The surplus is shown in two parts: at least a part as the common property of the cooperatives, and the remaining surplus that "could be utilised" for members in proportion to their share. Surplus on winding up is a separate matter in s.91; see our article on surplus assets.
Principle 4. It speaks to agreements with Government and external capital. It sits alongside the Act's provisions on Government-linked societies, such as s.122 directions to specified societies; see our article on Central Government directions.
Principle 5. The print reads "Cooperative provide education" (without the final "s"); quoted as printed. The 2023 Act separately changed the co-operative education fund provision in s.63, which is outside this article.
Principles 6 and 7. These deal with working together and with the community.
Example. The promoters of the invented Chenab Multi-State Weavers' Society draft bye-laws that admit only members of one family. Section 7(1)(c) asks whether the bye-laws provide for betterment of members "in accordance with the cooperative principles", and principle 1 is about open membership.
Section 116(1A): adding to the list
Inserted in 2023: "If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification, amend the First Schedule and the Third Schedule and thereupon such Schedules shall be deemed to have been amended accordingly: Provided that in case of the First Schedule, such notification shall be used only for adding to the co-operative principles in the list."
So a notification can add an eighth principle, but the proviso does not allow it to be used to change or remove one of the seven. No notification under s.116 is in the sources, and this article states the list as printed in the copy consulted. Under s.116(2) and s.124(3), as amended, a copy of a s.116 notification is laid before Parliament. See our article on sections 114 to 116.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| First Schedule | Seven principles | Same seven as printed; not itself amended |
| s.116 | Power to amend the Second Schedule only | Also the First and Third Schedules by notification (new s.116(1A)); First Schedule only by adding principles |
Need help aligning bye-laws with the principles?
The principles matter at registration, in the bye-laws and when the Central Registrar looks at how a society works. We can help you check draft or existing bye-laws against the Schedule and the sections that use it through legal consultation.
Key takeaways
- The First Schedule lists seven co-operative principles, defined by s.3(g).
- Registration under s.7(1)(c) and winding up under s.86(2)(b) both refer to the principles.
- Section 116(1A) lets the Central Government add to the list by notification, and only add.
- The print has small slips, notably in principle 3, quoted as they stand.
- No notification amending the Schedule is in the sources.
Read next
- Multi-State Co-operative Societies Act, 2002: complete guide
- Second and Third Schedules: national co-operative societies and specified Acts
- Sections 114 to 116: liquidator as public servant, notice in suits and Schedules
- MSCS vs State co-operative society: complete comparison
Disclaimer: Based on the Ministry of Cooperation copy of the Multi-State Co-operative Societies Act, 2002 read with the Multi-State Co-operative Societies (Amendment) Act, 2023 (in force from 3 August 2023), as consulted on 2 October 2026. The Multi-State Co-operative Societies Rules, 2002 as amended, later notifications and later amendments are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.