Individuals or Co-operatives intending to form into a Co-operative Society under this Act shall frame bye-laws conforming to the following principles of co-operation, namely,-
(a) membership of a Co-operative Society shall be voluntary and available without restriction of any social, political, racial or religious discrimination, to all persons who can make use of its services and are willing to accept the responsibilities of membership;
(b) Co-operative Societies are democratic organisations; their affairs snail be administrated by persons elected or appointed in a manner agreed by the members and accountable to them. Members of primary Co-operative Societies shall enjoy equal rights of voting (one member one vote) and participation in decisions affecting their Co-operative Societies. In other than primary Co-operative Societies, the administration shall be conducted on a democratic basis in a suitable form;
(c) share capital shall only receive a strictly limited rate of interest, if any;
(d) the economic results, arising out of the operations of a Co-operative Societies belong to the members of that Co-operative Societies and shall be distributed in such a manners as would avoid one member gaining at the expense of others, which shall be achieved,-
(i) by provision for development of the business of the Co-operative Society;
(ii) by provision of common services; or
(iii) by distribution among the members in proportion to their transactions with the Co-operative Society;
(e) all Co-operative Societies shall make provision for education of their members, office-bearers and employees and the general public, in the principles and techniques of co-operation, both economic and democratic;
(f) all Co-operative Societies, in order to best serve the interest of their members and their communities, shall actively co-operate in every practical way with other co-operatives at local, national and international levels having as their aim the achievement of unity of action by co-operatives throughout the world.