(1) Any multi-State co-operative society may, by a resolution passed at general meeting by a majority of members present and voting, promote one or more subsidiary institutions, which may be registered under any law for the time being in force, for the furtherance of its stated objects.
(2) Any subsidiary institution promoted under sub-section (1) shall exist only as long as general body of the multi-State co-operative society deems its existence necessary:
Provided that a multi-State co-operative society while promoting such a subsidiary institution, shall not transfer or assign its substantive part of business or activities undertaken in furtherance of its stated objects.
Explanation.--For the purposes of this section,--
(a) an institution shall be deemed to be a subsidiary institution if the multi-State co-operative society--
(i) controls the management or board of directors or members of governing body of such institution; or
(ii) holds more than half in nominal value of equity shares of such institutions; or
(iii) if one or more members of such multi-State co-operative society, hold whether by themselves or together with subsidiary institution or their relatives, as the case may be, the majority of equity shares in that institution;
(b) a subsidiary institution shall not include a partnership firm.
(3) The annual reports and accounts of any such subsidiary institution shall be placed each year before general meeting of the promoting multi-State co-operative society.