Short Answer

Yes, members are generally not personally liable for society debts beyond maintenance.

Detailed Explanation

Section 29 of the Gujarat Cooperative Societies Act, 1961 states that the liability of a member of a cooperative society is limited to the extent of the amount unpaid on the shares held by the member. This means that members are not personally liable for the debts of the society beyond their share capital contribution. In practice, this provision protects individual members from being held responsible for the society's financial obligations.

Furthermore, Rule 74 of the Gujarat Cooperative Societies Rules, 1965 elaborates on the liability of members in case of dissolution of a society. It states that the liability of a member to contribute to the assets of the society upon dissolution is limited to any unpaid amount on the shares held by the member. This rule reinforces the limited liability principle for society debts.

Real-world Scenarios

• Scenario 1: A cooperative society takes a bank loan for a development project. If the project fails and the society is unable to repay the loan, individual members will not be personally liable for the outstanding debt beyond their share capital contribution.

• Scenario 2: In case of a dispute over utility payments by the society, members cannot be held individually responsible for settling the dues, as their liability is limited to their share capital.

Step-by-step process:

• Determine the total debts of the society.

• Calculate the share capital contribution of each member.

• Members are liable only up to the unpaid amount on their shares.

Reference

• Section 29 of the Gujarat Cooperative Societies Act, 1961

• Rule 74 of the Gujarat Cooperative Societies Rules, 1965