Section 41 of MSCS Act, 2002 : Section 41: Board Of Directors

Explanation using Example

Imagine a multi-state cooperative society named "GreenFarm Co-op" that operates in several states, providing agricultural supplies and support to its members. According to Section 41 of The Multi-State Co-operative Societies Act, 2002, GreenFarm Co-op is required to have a board of directors.

During the Annual General Meeting (AGM), the members of GreenFarm Co-op pass a resolution to elect new directors for their board. As specified in their bye-laws, the board is to consist of 15 directors.

However, the board sees the need for expertise in organic farming and technology. They decide to co-opt two additional directors who are experts in these fields, making the total number of directors 17. This is within the legal limit, as the Act allows for up to 21 elected directors and permits co-opting two additional directors.

Moreover, the CEO of GreenFarm Co-op, who is a functional director due to his role, also serves on the board. His membership does not count towards the limit of 21 directors, ensuring that the board remains compliant with the Act.