Section 57 in Karnataka Co-Operative Societies Act, 1959
57. Net profits and their disposal.
(1)The net profits of co-operative societies shall be determined in accordance with such rules as may be prescribed and different rules may be made for different classes of co-operative societies.(2)A co-operative society shall, out of its net profit in any year transfer an amount not being less than twenty-five per cent of the profits to the reserve fund.(2A)[ A Co-operative Society shall, from out of the balance of its net profits, contribute two percent to the Co-operative Education Fund to be administered by the Karnataka State Co-operative Federation Limited, Bangalore.(2B)No Co-operative Society which has failed to contribute to the Co-operative Education Fund shall pay dividend to its members.] [Sub-sections (2A) & (2B) inserted by Act 40 of 1964 w.e.f. 26.06.1965 and substituted by Act 25 of 1998 w.e.f. 15.08.1998 and again substituted by Act 13 of 2004 w.e.f. 22.03.2004.](3)The balance of the net profits may [***] [Inserted by Act 40 of 1964 w.e.f. 26.06.1965 and Omitted by Act 25 of 1998 w.e.f. 15.08.1998.] be utilised for all or any of the following purposes, namely:-(a)[ *** [Omitted by Act 40 of 1964 w.e.f. 26.06.1965.](b)***](c)payment of bonus to members on the amount or volume of business done by them with the society to the extent and in the manner specified in the bye-laws:Provided that no bonus shall be payable to members in a credit society;(d)constitution of, or contributions to, such special funds as may be specified in the bye-laws;(e)donations of amounts not exceeding ten per cent of the net profits for any charitable purpose as defined in section 2 of Charitable Endowments Act, 1890 (Central Act VI of 1890); and(f)payment of bonus to employees of the society, to the extent and in the manner specified in the bye-laws:Provided that the bonus payable in any year to any employee shall not exceed two months' pay.(4)[ A co-operative society may pay dividend to its members from out of the balance of net profits available after making deductions as provided for under sub-sections (2), (2A) and (3) and the bye-laws of the society.] [Inserted by Act 40 of 1964 w.e.f. 26.06.1965 and Omitted by Act 25 of 1998 w.e.f. 15.08.1998.]
