Section 56: Disposal of net profits

1[xxx] (1) A Society shall, out of its net profits in any year–

(a) transfer an amount not less than ten percent in the case of a Cooperative Farming Society and not less than twenty-five per cent in any other case, of the profits to the reserve fund; and 2[(b) credit four per cent of such profits to the Co-operative Education Fund constituted under Section 56-A.]

(2) The balance of the net profits may be utilised for all or any of the following purposes, namely :–

(a) payment of dividend to members on their paid-up share capital at a rate not exceeding 3[twelve per cent] of such share capital;

(b) 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;

(c) constitution of or contributions to such special fund as may be specified in the Bye-laws;

(d) donations of amounts not exceeding ten per cent of the net profits for any charitable purpose as defined in Section 2 of the Charitable Endowments Act, 1890 (6 of 1890).

(e) payment of bonus to employees of the Society, to the extent and in the manner specified in the Bye-laws;

1. Substituted by Orissa Act 28 of 1991.