Section 17 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.
Section 17 lets a multi-State co-operative society transfer its assets and liabilities, divide itself, or amalgamate with another, by a two-thirds resolution of members present and voting. It protects members and creditors with a one-month option to withdraw, and it makes the resolution a sufficient conveyance of assets. The 2023 Amendment Act added sub-section (10), allowing a State co-operative society to merge into an existing multi-State co-operative society.
The text is read as per the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023 (in force from 3 August 2023). Sub-sections (1) to (9) are from the principal copy and were not amended. Mergers need careful due diligence on assets, liabilities and creditor positions; our legal due diligence service supports that work.
A multi-State co-operative society may, by a resolution of not less than two-thirds of members present and voting, transfer assets and liabilities, divide itself, or amalgamate with others (s.17(1)-(2)). Every member and creditor gets written notice and one month to withdraw shares, deposits or loans. The resolution does not take effect until the assent of all members and creditors has been obtained, and claims of those who opt out must be met. New in 2023: a State co-operative society may merge into an existing multi-State co-operative society by a two-thirds resolution, subject to its State Act (s.17(10)).
Sub-sections (1) and (2): what the resolution can do
| Sub-section | Resolution of | Effect |
|---|---|---|
| (1)(a) | A multi-State society, by not less than two-thirds of members present and voting at a general meeting "held for the purpose" | Transfer its assets and liabilities, in whole or in part, to any other multi-State co-operative society or co-operative society |
| (1)(b) | Same | Divide itself into two or more multi-State co-operative societies |
| (1)(c) | Same | Divide itself into two or more co-operative societies |
| (2) | Two or more multi-State societies, each by not less than two-thirds of members present and voting at its own general meeting | Amalgamate and "form a new multi-state cooperative society" |
Sub-section (3) adds that the resolution "shall contain all particulars of the transfer or division or amalgamation, as the case may be".
Sub-sections (4) to (6): notice, option and assent
- Notice. After passing a resolution under (1) or (2), the society "shall give notice thereof in writing to all the members and creditors" (s.17(4)).
- One-month option. "Notwithstanding anything contained in the bye-laws or contract to the contrary", any member or creditor has, "during the period of one month of the date of service of the notice upon him", the option of withdrawing share, deposits or loans (s.17(4)).
- Silence. A member or creditor who does not exercise the option within that period "shall be deemed to have assented to the proposals contained in the resolution" (s.17(5)).
- No effect without assent. "A resolution passed by a multi-state cooperative society under this section shall not take effect until the assent thereto of all the members and creditors has been obtained" (s.17(6)(a)).
- Claims met. The society "shall make arrangements for meeting in full or otherwise satisfying all claims of the members and creditors who exercise the option" (s.17(6)(b)).
The Act does not spell out how the deemed assent in sub-section (5) fits with the words "assent of all" in sub-section (6)(a). The text is given as printed and not reconciled.
Sub-sections (7) to (9): registration and conveyance
- Registration of the new society. On an application to register new societies formed by division, or a new society formed by amalgamation, the Central Registrar, "on being satisfied that the resolution has become effective under sub-section (6) shall, unless for reasons to be recorded in writing he thinks fit to refuse so to do, Register the new society or societies, as the case may be, and the bye-laws thereof" (s.17(7)).
- Section 21 follows. On the order under sub-section (7), "the provisions of section 21 shall, so far as may be, apply" to the society divided or societies amalgamated (s.17(8)). Section 21 provides that the registration of the old society or societies is cancelled; see Section 21.
- Conveyance. Where the resolution involves transfer of assets and liabilities, it "shall, notwithstanding anything contained in any other law for the time being in force, be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance" (s.17(9)).
Sub-section (10): merger of a State co-operative society (inserted in 2023)
The 2023 Amendment Act (section 6 of that Act) added: "Any co-operative society may, by a resolution passed by majority of not less than two-thirds of the members present and voting at a general meeting of such society, decide to merge into an existing multi-State co-operative society: Provided that such resolution shall be subject to the provisions of the respective State Co-operative Societies Act for the time being in force under which such co-operative society is registered."
Points to note:
- "Any co-operative society" means a society registered under a State law (s.3(h)).
- The merger is into an existing multi-State co-operative society, not into a new one.
- The vote is that of the State society's own general meeting, with the same two-thirds measure.
- The proviso makes the resolution subject to the State Act; the State Act is not in the sources, so the reader should check it for the corresponding provision.
- Sub-section (10) does not say what the receiving society must do; sub-sections (4) to (9) speak of "a multi-state cooperative society" passing the resolution, and the Act does not say how they apply to a merger under (10).
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| Section 17(1) to (9) | As printed in the principal copy | No change |
| Section 17(10) | Not in the Act | New: a co-operative society may merge into an existing multi-State co-operative society by a resolution of not less than two-thirds of members present and voting, subject to its State Act |
A practical example
Kosi River Fishers' Co-operative, an invented State society, has 400 members present at a general meeting, and 280 vote to merge into Ganga Basin Fishers' Multi-State Co-operative Society. Two-thirds of 400 is just under 267, so 280 is enough. Under the proviso to sub-section (10), the resolution is also subject to the State Act under which the society is registered. Separately, if two multi-State societies, each with a two-thirds resolution, want to form a new society, they follow sub-sections (2) to (9): written notice, one month for creditors to opt out, claims met, then the application to the Central Registrar. For a view of the earlier steps in conversion from a State society to a multi-State one, read Section 22.
If you are deciding between a merger and another form of restructuring, a company-law route such as a producer company is a different vehicle under the Companies Act, 2013; see Producer company vs co-operative society. The wider Act is described in the complete guide.
Need help with a merger or division?
A restructuring needs accurate asset and liability schedules, creditor notices and resolution wording. Our legal due diligence team can test the books and the paperwork before the general meeting is called.
Key takeaways
- Transfer, division and amalgamation need a resolution of not less than two-thirds of members present and voting (s.17(1), (2)).
- Written notice to all members and creditors; one month to withdraw shares, deposits or loans.
- The resolution does not take effect until all members and creditors have assented, and claims of those opting out must be met.
- The resolution is a sufficient conveyance of assets and liabilities (s.17(9)).
- Since 2023, a State co-operative society may merge into an existing multi-State society by a two-thirds resolution, subject to its State Act (s.17(10)).
Read next
- Sections 18 and 20: co-operative bank amalgamation scheme and deposit insurance
- Section 21: cancellation of registration certificate
- Section 22: conversion of a co-operative society into a multi-State society
- Producer company vs co-operative society (Companies Act, 2013)
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.