A multi state cooperative society earns profits out of the commercial transactions carried out to achier objects of the society and to lift the economic status of the members. The member’s society looks to the society for their share in the profits earned by the society. There are contributions towards cooperative education fund on distribution of profits to the members. These are very restrictions.

The dividends or the profits are distributed to the members only out of profits. The net profit of the society means that profit which remains after allowing following charges : -

(i) Establishment charges, contingent charges, interest payable on loans and at approved rates and the audit fee approved by the Registrar. The establish charges include the pay and allowances on the rates determined by the to employees fulfilling the prescribed qualification.

(ii) All usual working charges such as repairs, rent, taxes and the like, duperies and irrecoverable book debts written off with the prior approval .

(iii) Capital expenditure written off either wholly or in part.

(iv) Capital loss actually incurred and not adjusted against funds credited 0 profits.

(v) Provisions for estimated bad debts, if any.

(vi) Any other charges allowed by the Registrar in writing. Once the net profit has been arrived at after allowing the charges stated above, L of this net profit has to be carried to the reserve fund. Thereafter, out of the available dividend or profit can be distributed to the members. However, in case agricultural cooperative society 10% of net profits remaining after contributes the reserve fund has to be credited to agricultural stabilization fund.

multi state cooperative society zany contribute an amount not exceeding 5% of the remaining net profits  of the profits to the reserve fund, to any purpose connected with the operative movement or charitable purpose as defined in Section 20 of mint Act, 1890 after obtaining sanction of the Registrar. profits of the society it has to credit a sum calculated at 2% of its net 3. maximum of Rs. 10,000 per year to the Cooperative Education Fund. The society can pay dividend more than 18%3 per annum on the paid up •  rate of dividend has to be approved by the general body and no ore is entitled to dividend unless it is declared and approved by the dividend is paid to all members within three months of the approval of However, where there remains unsatisfied claim from any depositors cannot pay dividend before satisfaction of this claim. The Registrar society not to pay any dividend or pay dividend at a lesser rate. remaining after the distribution of the profits is distributed in accordance any multi state cooperative society which pays dividend may give incentives/gift' to the approval of the general body not exceeding 5% of its net profit, two hundred rupees per member. However, the primary urban coal be governed by directions of RBI in this behalf. Further, the house housing societies are not eligible to give such incentive/gift or funds credited every year out of the net profits of the society may be used of the society in the following manner after approval of the general body as per constitution of powers and functions.