(1) No part of the funds, other than net profits, of a multi state cooperative society shall be divided by way bonus or dividend or otherwise distributed among its members. See the descriptive notes on powers and functions of Chief Executive in multi state cooperative society.
(2) The net profits of in multi state cooperative society are referred to in sub-section (1) in respect of a society earning profits shall be calculated by deducting from the gross profit for the year, all interest accrued and accruing in relation to amount which are overdue, establishment charges, interest payable on loans and deposit audit fees, working expenses including repairs, rent, taxes and depreciation, bonus payable to employees under the law relating to payment of bonus for the time being in force, and equalization fund for such bonus, provision for payment of income-tax and making approved donations under the Income-tax Act, 1961 (43 of 1961), development rebate, provision for development fund, bad debt fund, price fluctuation fund, dividend equalization fund, share capital redemption fund, investment fluctuation fund, provision for retirement benefits to employees, and after providing for or writing off bad debts and losses not adjusted against any fund created out of profit. Provisions of Section 62 of the 2002 Act are word to word same an-identical to Section 60 of the 1984 Act. the principle laid down under this section is that no cooperative society shall divide the capital fund by way of bonus, dividend otherwise. Sub-rule (1) of Rule 24 also provides the same. Only profits can divided and not capital. Title dividend shall be paid from the net profit at making the contribution as provided in sub-section (2) of this section toward reserve fund. For calculating net profits of a multi state cooperative society in meetings of board, following amounts are to be deducted from the gross profit for every year: (a) All interests accrued and accruing in relation to amounts which are overdue, (b) Establishment charges, (c) Interest payable on loans and deposits, (d) Audit fees, (e) Working expenses including repairs, rent, taxes and depreciation, (f) Bonus payable to employees.