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(1) Not less than one-fourth of the net surplus disclosed in the profit and loss account for the year shall be carried to a fund to be called the Reserve Fund, so, however, that the Registrar shall have the power to prescribe the manner in which such Fund shall be invested or deposited.

(2) The remainder of the net surplus, together with any balance remaining from previous years and available for distribution, may be divided among the members by way of dividend, bonus, or otherwise, or allocated to any funds constituted by the society, to such extent or under such conditions as may be prescribed by regulations or bye-laws.

(3) The Registrar may exempt any society of limited liability from further contributions to the Reserve Fund, or reduce the rate of contribution and may revoke or vary any such exemption or reduction.