Section 29 in The M.P. Swayatta Sahakarita Adhiniyam, 1999
29. Liability of member.
(1)A co-operative may be registered with limited or unlimited liability :Provided that unless the State Government, by a general or special order otherwise directs, the liability of a co-operative of which another co-operative is a member shall be limited.Explanation : - For the purpose of this sub-section-(a)"cooperative with limited liability" means a co-operative in which the liability of its members for the debts of the co-operative is limited by its bye-laws, to such form and extent as they may undertake to contribute to any deficit in the assets of the co-operative, in the event of its being wound up; and(b)"co-operative with unlimited liability" means a co-operative the members of which are, in the event of its being wound up, jointly and severally liable for and in respect of all its obligations, to contribute to any deficit in the assets of the co-operative.(2)Where a co-operative by special resolution amends its bye-laws to change the form and extent of liability, of its members it shall give notice thereof together with a copy of the amendment to its members and creditors and any member other than those who voted in favour of the proposed change of liability and any creditor shall, within a period of thirty days from the date of service of notice upon him, have the option of withdrawing his shares, deposits or loans from the co-operative as the case may be subject to the discharge of his obligations to the co-operative.(3)Any member or creditor who fails to exercise the option within the period specified in sub-section (2) shall be deemed to have assented to the change of liability.(4)An amendment passed under sub-section (2) shall not take effect until-(a)all claims of the members and creditors of the co-operative who have exercised the option under sub-section (2) have been met in full or otherwise satisfied; and(b)notice of the amendment of the bye-laws of the co-operative and information of settlement of claims of members and creditors is sent to the Registrar and his acknowledgment is obtained.(5)Subject to the provisions of sub-section (6), the liability of a past member or of the estate of a deceased member of a co-operative for the debts of the co-operative as they stood-(a)in the case of a past member, on the date on which he ceased to be a member; and(b)in the case of a deceased member, on the date of his death; shall continue for a period of two years from such date.(6)Where a co-operative is ordered to be dissolved under any provision of this Act, the liability of a past member or of the estate of a deceased member, who ceased to be a member or died during the period of two years immediately preceding the dale of order for dissolution, shall continue until completion of the entire liquidation proceedings, but such liability shall be limited only to the debts of the co-operative as they stood on the date of cessation of his membership or his death, as the case may be.
