Short Answer

Yes, there are restrictions on the number of shares one person can hold in a cooperative society as per the Gujarat Cooperative Societies Act, 1961.

Detailed Explanation

Section 22 of the Gujarat Cooperative Societies Act, 1961 states that no individual can hold more than such amount of share capital as may be prescribed by the rules. This means that there is a limit set by the rules on the maximum number of shares that a person can hold in a cooperative society. This provision aims to prevent any single member from exerting undue influence or control over the society by holding a disproportionately large number of shares.

In practice, this restriction ensures a fair distribution of power and decision-making within the cooperative society. It promotes democratic principles by preventing any individual from monopolizing the shareholding and thereby dominating the decision-making processes. By limiting the number of shares one person can hold, the Act safeguards the collective interests of all members and promotes equality among them.

Real-world Scenarios

• In a cooperative housing society, if there was no restriction on the number of shares one person could hold, a wealthy individual could potentially buy up a majority of the shares and dictate all decisions without considering the interests of other members.

• A farmer's cooperative society limits the maximum shares that can be held by a single member, ensuring that each member has an equal say in determining agricultural practices and marketing strategies.

• A credit cooperative society restricts the shareholding of any individual to maintain financial stability and prevent any member from gaining excessive control over the society's lending activities.

Reference

• Section 22 of the Gujarat Cooperative Societies Act, 1961: Official PDF