(1) Deficit, if any, arising out of the business of a cooperative in a financial year, shall be fully settled by debiting a part or all of the deficit to the deficit cover funds if any, and/or as deficit charge, among its members :
Provided that nothing in this sub-section shall preclude a cooperative from also proceeding against its directors or staff for recovery of amounts contributing to the deficit, where such deficit is the result of deviation from the approved plan and/or budget, and where such deviation does not receive the approval of the general body, or is the result of gross negligence or mismanagement :
Provided further where such amounts are recovered, the general body may resolve to credit a part or all of the amount to be deficit cover fund and/ or to the account of each member in proportion to the deficit charge levied on him/her in this regard.
(2) No member shall be permitted to withdraw from the membership of the cooperative without paying his/her share towards clearing the deficit, if any.
Provided that nothing in this sub-section shall preclude a cooperative from also proceeding against its directors or staff for recovery of amounts contributing to the deficit, where such deficit is the result of deviation from the approved plan and/or budget, and where such deviation does not receive the approval of the general body, or is the result of gross negligence or mismanagement :
Provided further where such amounts are recovered, the general body may resolve to credit a part or all of the amount to be deficit cover fund and/ or to the account of each member in proportion to the deficit charge levied on him/her in this regard.
(2) No member shall be permitted to withdraw from the membership of the cooperative without paying his/her share towards clearing the deficit, if any.
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More sections of this act
Section 1 · Short title, extent and commencement.Section 2 · Definitions.Section 3 · Registration of a new cooperative.Section 4 · Conversion of a cooperative society into a cooperative under this Act.Section 5 · Cooperative to be body corporate.Section 6 · Articles of association.Section 7 · Amendment of articles of association.Section 8 · Name of a cooperative.India Code, Government of India. Text fetched 15 Oct 2026. Check the linked official text and subsequent notifications when applying a provision.