(l) No liabilities or division of multi state cooperative society with unlimited liability shall be registered after the commencement of multi state cooperative societies Act, 2002:
Provided that where a Multi state cooperative society with unlimited liability was functioning before the commencement of this Act, such a society shall exercise the option within a period of one year from such commencement either to continue to function as such or to convert itself into a multi state co-operative society with limited liability by following the procedure specified in sub-sections (2) to (4).
(2) Subject to the provisions of Multi State Cooperative Societies Act,2002 and the rules, Multi state cooperative society may, by an amendment of its bye-laws, change the extent of its liability.
(3) When a multi state cooperative society has passed a resolution to change the extent of its liability, it shall give notice thereof in writing to all its members and creditors, and, notwithstanding anything contained in the bye-laws or contract of the contrary, any member or creditor shall have the option of withdrawing his shares deposits or loans, as the case may be.
(4) Any member or creditor who does not exercise his option within the period specified in sub-section (3) shall be deemed to have assented to the change.
(5) An amendment of a bye-law of a cooperative society changing the extent of its liability shall not be registered or shall not take effect until either
(a) the assent thereto of all members and creditors has been obtained; or (b) all claims of members and creditors who exercise the option referred in sub-section (3) within the period specified therein have been met in full or otherwise satisfied. Recorded on the balance sheet (right side), liabilities include loans, accounts payable, mortgages, deferred revenues and accrued expenses. Liabilities are a vital aspect of a company's operations because they are used to finance operations and pay for large expansions. They can also make transactions between businesses more efficient. For example, the outstanding money that a company owes to its suppliers would be considered as liability of Past Member and Estate of Deceased Member.