Section 3 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.
This is the third and last article on section 3. It covers clauses (q) to (w): the limited-liability society, the national co-operative society, "notification" (the only one of these clauses the 2023 Amendment Act changed), "officer", "prescribed", "Reserve Bank" and "rules".
The text is as per the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023. If your society is unsure whether it counts as national, or who its "officers" are for the penalties in the Act, a legal consultation can help.
A multi-State co-operative society with limited liability limits members' liability to the unpaid amount on their shares, or to what they undertake to contribute on winding up. A national co-operative society is a multi-State co-operative society specified in the Second Schedule. A notification is one "published in the Official Gazette", and since 2023 the word "notified" is construed accordingly. "Prescribed" means prescribed by rules, and the detail is left to rules.
The clauses, one by one
(q) "Multi-State co-operative society with limited liability" means "a society having the liability of its members limited by its bye-laws to the amount, if any, unpaid on the shares, respectively, held by them or to such amount as they may, respectively, thereby undertake to contribute to the assets of the society, in the event of its being wound up". Two things follow: the limit must be in the bye-laws, and it bites on winding up. Section 5(2) requires "limited" (or its equivalent in an Indian language) to be suffixed to the name of such a society, and section 16 deals with changing the extent of liability.
(r) "National co-operative society" means "a multi-state cooperative society specified in the Second Schedule". The status therefore depends on being named in that Schedule, not on size or reach. The Schedule lists 21 societies as printed in the copy consulted; section 116 allows it to be amended by notification, and no such notification is in the sources. Section 25(2) bars individuals from membership, and section 4's proviso bars State officers from exercising the Central Registrar's powers over such societies. The Schedule is explained in Second and Third Schedules.
(s) "Notification" means "a notification published in the Official Gazette". The 2023 Amendment Act added after the words "Official Gazette" the words "and the expression 'notified' with its cognate meanings and grammatical variations shall be construed accordingly". The clause therefore reads: "notification" means a notification published in the Official Gazette, and the word "notified" (with its cognates and grammatical variations) is construed accordingly. Provisions that depend on a notification, such as the Central Government's power in section 4(2), take their meaning from this clause.
(t) "Officer" means "a president, vice-president, chairperson, vice-chairperson, managing director, secretary, manager, member of a board, treasurer, liquidator, an administrator appointed under section 123" and "includes any other person empowered under this Act or the rules or the bye-laws to give directions in regard to the business of a multi-state cooperative society". The list is wide. A member of the board is an officer; so is a manager or secretary; and any person with power to give directions about the business is covered even if his title is not in the list.
(u) "Prescribed" means "prescribed by rules". Wherever the Act says "as may be prescribed", the detail is left to the rules. The Multi-State Co-operative Societies (Amendment) Rules, 2023 were notified on 4 August 2023 (G.S.R. 591(E)); the consolidated Rules should be checked for the subject at hand.
(v) "Reserve Bank" means "the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of 1934)". The reader should check the current law for the corresponding provision of the Reserve Bank of India Act, 1934. In this Act the Reserve Bank appears in provisions on co-operative banks, such as section 18 and, after 2023, in sections 7 and 26.
(w) "Rules" means "the rules made under this Act". Rule-making power is in section 124, which the 2023 Amendment Act expanded.
What the 2023 Amendment Act changed
| Clause | Before | After the 2023 Amendment Act |
|---|---|---|
| (s) "notification" | "a notification published in the Official Gazette" | The same, plus: "and the expression 'notified' with its cognate meanings and grammatical variations shall be construed accordingly" |
| (q), (r), (t), (u), (v), (w) | As printed above | No change |
Printing oddities
- The principal copy prints "multi-state cooperative society" and so on; the 2023 Act prints "multi-State co-operative society". This site uses the 2023 spelling in its own sentences.
- Page numbers of the print sit alone on lines inside the section and are not part of the law.
- Clause (r) points to the Second Schedule, whose list is "as printed in the copy consulted".
How these terms play out
- Liability. A society that chooses limited liability must say so in its bye-laws, suffix "limited" to its name, and cannot be registered as an unlimited society after the commencement of the Act (s.16(1)); see Sections 15-16.
- National status. Because "national co-operative society" is defined by the Second Schedule alone, the list matters more than the society's size. For a society that is not on the list, the ordinary multi-State rules apply.
- Officers. Where the Act imposes duties or penalties on "officers", the wide clause (t) decides who can be caught, including a liquidator and an administrator appointed under section 123.
- Notifications. Where the Act says "notified" or "by notification", the thing must be published in the Official Gazette to count.
A practical example
Tapti Valley Growers' Federation, an invented society, has in its bye-laws that each member's liability is limited to the unpaid amount on shares held. It is a multi-State co-operative society with limited liability under clause (q) and must suffix "limited" to its name. A neighbouring society is not named in the Second Schedule, so it is not a national co-operative society even though it has members across several States. The Federation's secretary, its treasurer and every board member are "officers" under clause (t). If the Central Government issues a direction under the Act, it counts only if published in the Official Gazette, as clause (s) requires.
For the wider picture of the Act, see the complete guide.
Need help with national status or liability wording?
Whether a society's liability clause is worded correctly, or whether a power in the Act depends on a gazette notification, are questions to settle early. Our team offers a legal consultation to read the clauses against your constitution.
Key takeaways
- A limited-liability society's members are liable only for the unpaid amount on shares or the amount they undertook to contribute (clause (q)).
- "National co-operative society" means one specified in the Second Schedule (clause (r)).
- 2023 added that "notified" is construed in line with "notification" (clause (s)).
- "Officer" is wide and includes a board member, a liquidator and an administrator appointed under section 123 (clause (t)).
- "Prescribed" means prescribed by rules; the detail is left to the Rules (clause (u)).
Read next
- Section 3, clauses (a) to (h): area of operation, board, bye-laws and Central Registrar
- Section 3, clauses (i) to (p): federal co-operative, financial year, member and society
- Section 4: Central Registrar and delegation of powers
- MSCS vs State co-operative society: 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.