Sections 33-35 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.
Three linked sections deal with a member's shares. Section 33 caps how much of the total share capital one member may hold, in no case more than one-fifth. Section 34 applies the same cap to transfers. Section 35, wholly substituted by the 2023 Amendment Act, governs redemption of shares held by the Central Government, a State Government and certain Government bodies, and fixes redemption at face value.
The sections are 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). Sections 33 and 34 were not amended; section 35 was replaced. If your society is planning a share issue or redemption, a legal consultation can test the plan against these sections.
No member, other than the Government bodies in clauses (c) to (g) of s.25(1), may hold more than the portion of share capital prescribed in the rules or bye-laws, in no case exceeding one-fifth (s.33). Transfers are subject to the same cap (s.34). Under the substituted s.35, shares of the Central or a State Government cannot be redeemed without their prior approval; shares of other listed Government bodies are redeemed under the bye-laws; and all redemption is at face value.
Section 33: the one-fifth ceiling
"No member, other than the authorities referred to in clauses (c) to (g) of sub-section (1) of section 25 of a multi-state cooperative society or a cooperative society, shall hold more than such portion of the total share capital of the society (in no case exceeding one-fifth thereof) as may be prescribed in the rules or bye-laws of such multi-state cooperative society."
Taking it apart:
- Who is capped. Any member other than the "authorities" in clauses (c) to (g) of section 25(1): the Central Government, a State Government, the National Cooperative Development Corporation, any other Government-owned or controlled corporation and any Government company. See Section 25.
- The cap. The portion is "as may be prescribed in the rules or bye-laws", and "in no case exceeding one-fifth thereof". The ceiling in the Act is one-fifth; the actual portion for a society is left to rules or bye-laws and no figure from the rules is given here.
- A wording point. The text reads "authorities ... of a multi-state cooperative society or a cooperative society", with the words "or a cooperative society" placed oddly after the reference to clauses (c) to (g). It is quoted as printed and not corrected.
A bye-law on "the manner in which the maximum capital to which a single member can subscribe" can be made under section 10(2)(l); see Section 10.
Section 34: transfers
"The transfer of share or interest of a member in the capital of a multi-state cooperative society shall be subject to such conditions as to maximum holding as specified in section 33." So a transfer that would take the transferee above the section 33 limit is outside the rule. The section does not say what the transferee's holding is if a transfer breaches the limit, nor what the consequence is; the Act is silent on that.
Section 35: redemption of shares (substituted in 2023)
The 2023 Amendment Act (section 13 of that Act) replaced the old section 35 with a new section. The structure now has three sub-sections.
| Sub-section | Who | Rule |
|---|---|---|
| (1) | "The shares of the authorities referred to in clauses (c) and (d) of sub-section (1) of section 25, held in multi-State co-operative societies" (the Central Government and a State Government) | "(a) shall not be redeemed without the prior approval of such authorities; and (b) may be redeemed in such manner as may be agreed upon between the multi-State co-operative society and such authorities" |
| (2) | "The shares held in a multi-State co-operative society by any of the authorities referred to in clauses (e) to (g) of sub-section (1) of section 25" (the National Cooperative Development Corporation, other Government-owned or controlled corporations and Government companies) | "shall be redeemed in accordance with the bye-laws of such multi-State co-operative society and in case, where the bye-laws do not contain any provision, in such manner as may be agreed upon between the multi-State co-operative society and such authorities" |
| (3) | Shares referred to in sub-sections (1) and (2) | "The redemption of shares referred to in sub-sections (1) and (2), shall be on the face value of shares." |
Reading it
- Prior approval for Governments. Under sub-section (1)(a), a society cannot redeem the shares of the Central Government or a State Government unless that Government has approved in advance. This is the main new protection.
- Agreed manner. The manner of redemption of those shares is whatever the society and the Government agree (sub-section (1)(b)).
- Bye-laws for the other bodies. For the bodies in clauses (e) to (g), the bye-laws decide the manner; if they are silent, the manner is agreed between the society and the body.
- Face value. All redemption under the section is "on the face value of shares", so there is no premium or discount.
- What is not covered. The section deals with clauses (c) to (g). It does not mention shares held by ordinary members, by societies under clause (b) or by classes permitted under clause (h); the Act is silent on redemption for them in this section.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| Sections 33 and 34 | As printed above | No change |
| Section 35(1) | One sub-section: shares of the authorities in clauses (c) to (g) "redeemable in accordance with the bye-laws" or as agreed | Substituted: clauses (c) and (d) need prior approval and agreed manner; clauses (e) to (g) follow the bye-laws or agreement (sub-section (2)) |
| Section 35(2) (old) | Redemption "on the face value of the shares" | Now sub-section (3): face value, for shares under sub-sections (1) and (2) |
A practical example
Deccan Cotton Co-operative, an invented multi-State society, has share capital of one hundred units. Its bye-laws fix the individual cap at ten per cent, which is within the one-fifth ceiling in section 33. A member offers to buy another member's holding that would take him to twelve per cent; section 34 subjects the transfer to the section 33 conditions, so the bye-law cap applies. Separately, a State Government holds shares in the society. The society wants to return them, but section 35(1)(a) says it may not do so without that Government's prior approval; if approved, redemption happens in the manner agreed and at face value.
For the next sections on the death of a member and past-member liability, see Sections 36-37, and for the full Act, the complete guide.
Need help with a share issue or redemption?
The one-fifth ceiling, the bye-law cap and the prior-approval rule for Government shares all affect how a society plans its capital. A legal consultation can check the plan against sections 33 to 35.
Key takeaways
- No member except the Government bodies in clauses (c) to (g) of s.25(1) may hold more than the prescribed portion, in no case exceeding one-fifth (s.33).
- Transfers are subject to the same maximum-holding conditions (s.34).
- Section 35 was wholly substituted in 2023.
- Shares of the Central and State Governments cannot be redeemed without their prior approval.
- Redemption of shares of those bodies is on face value.
Read next
- Section 31-32: vote of members and manner of exercising vote
- Sections 36-37: transfer of interest on death and past-member liability
- Section 25: persons who may become members
- Multi-State Co-operative Societies Act, 2002: complete guide
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.