(1) A cooperative may, by a special resolution, decide to divide itself into two or more cooperatives.
(2) Where a special resolution is passed under sub-section (1), the cooperative shall give notice thereof together with a copy of the resolution to all its members and creditors and, notwithstanding any provision in the articles of association or contract to the contrary, any member other than those who voted in favour of the proposed transfer of assets and liabilities and any creditor shall, during a period of fifteen days from the date of service of the notice upon him/her, have the option of withdrawing his/her shares, deposits or loans from the cooperative, as the case may be, subject to discharge of his/her obligations to the cooperative..
(3) Any member or creditor who does not exercise his/her option within the period specified in sub-section (2) shall be deemed to have assented to the resolution.
(4) A special resolutions passed under sub-section (1) shall not take effect until :––
(a) all claims of the members and creditors of the cooperative who have exercised the option under sub-section (2) have been met in full or otherwise satisfied ;
(b) information of the intended division and settlement of claims of members and creditors is sent to the Registrar and his/ her acknowledgment of receipt of the information is obtained ;
and
(c) the certificates of registration and the copies of the registered articles of association of the resultant cooperatives, signed and sealed by the Registrar, are issued in accordance with section 4.
(5) When a cooperative divide itself into two or more cooperatives under this section the registration of the cooperative shall stand cancelled and it shall be deemed to have been dissolved and shall cease to exist as a corporate body and the Registrar shall delete the name of the cooperative from the register of cooperatives.
(6) When a cooperative divides itself into two or more cooperatives, each member who has assented to the division shall be deemed to have become a member of that newly formed cooperative to which his/her interests were transferred, in accordance with the scheme of division approved by the general body.
(7) When a special resolution passed under sub-section (1) takes effect, the resolution shall be sufficient conveyance to vest the assets and liabilities to the transferees without any further assurance.