CO-OPERATIVE SOCIETIES ACT

Details: Created: 12 October 1998

Arrangement of Sections

Section

PART I
PRELIMINARY

1. Short title

2. Interpretation

PART II
DEVELOPMENT OF CO-OPERATIVES, CO-OPERATIVE SOCIETIES AND PUBLIC OFFICERS

3. Development of co-operatives and co-operative societies

4. Officers required to furnish information to Minister

5. Annual report on co-operative societies

6. Registrar

7. Deputy Registrar and other public officers

PART III
REGISTRATION AND ORGANISATION OF CO-OPERATIVE SOCIETIES

8. Co-operatives to be registered

9. Application for registration

10. Registration of co-operatives

11. Conversion of company into co-operative society

12. Certificate of registration and name of co-operative society

13. Action to be taken after registration of former company as co-operative society

14. Effect of registration

15. Refusal to register

16. Equity capital

17. Liability of members

18. Display of registered name

19. By-laws

20. Amendments to By-laws

21. Copy of regulations and by-laws and list of members to be open for inspection

PART IV
RIGHTS AND LIABILITIES OF MEMBERS

22. Patronage bonus

23. Membership governed by by-laws

24. Minors

25. Members not to exercise rights until due payment made

26. Certificate of membership

27. Lien on member’s share

28. Co-operative society to keep membership register

29. Meetings, votes of members and delegates

30. Limitation on share holding

31. Assignment, transfer, redemption and re-purchase of shares

32. Shares or interest not attachable

33. Transfer of shares or interest on death of member

34. Liability of past member and estate of deceased member for debts of co-operative society

35. Creation of charges in favour of co-operative societies

36. Withdrawal by member

37. Expulsion of member

PART V
BOARD OF DIRECTORS

38. Board of directors

39. Committees of Co-operative Society

40. Effect of election of directors by districts or zones

41. Functions of board

42. Chairperson and vice-chairperson

43. Term of office of director of board

44. Vacancy on board

45. Liability of directors and other officers for unlawful transactions

46. Procedure and meetings of board

47. Removal of directors from office

PART VI
CHARGES BY CO-OPERATIVE SOCIETIES

48. Registration of charges

49. Registration of enforcement of security and filing of accounts

50. Rectification of register of charges

51. Entry of memorandum of satisfaction on register

52. Failure to submit particulars for registration

53. Co-operative society’s register of charges

54. Right to inspect copies of instruments and register of charges

55. Perpetual charges

56. Agricultural charges

PART VII
ADMINISTRATION OF CO-OPERATIVE SOCIETIES

57. Registered office

58. Seal of co-operative society

59. Books of account and records

60. Audit

61. Liability of auditor

62. Yearly and other returns

63. Investigation by Registrar

PART VIII
AMALGAMATION, TRANSFER OF ENGAGEMENTS AND DIVISION OF CO-OPERATIVE SOCIETIES

64. Amalgamation of co-operative societies

65. Transfer of engagements

66. Registration with other authority

67. Division of co-operative societies

PART IX
SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES

68. Registration of credit union

69. Name of credit union

70. Membership generally

71. Membership of certain bodies corporate to credit unions

72. Maximum loan to member

73. No loans in certain cases

74. Rates of interest on loans

75. Maintenance of cash reserve to meet withdrawals

76. Non-application of Banking and Financial Services Act

PART X
CO-OPERATIVE UNIONS AND FEDERATIONS

77. Registration of co-operative unions and federations

78. Use of word “co-operative”

79. Incorporation and functions of unions and federations

PART XI
WINDING-UP AND CANCELLATION

80. Winding-up of co-operative societies

81. Cancellation of registration of co-operative society

82. Winding up after cancellation of registration

PART XII
MISCELLANEOUS

83. Regulations

84. General penalty

85. Repeal of Co-operative Societies Act, 1970 and savings

SCHEDULE

AN ACT

to revise the law relating to the formation, registration and regulation of co-operative societies; to repeal the Co-operative Societies Act, 1970; and to provide for matters connected with or incidental to the foregoing.

[12th October, 1998]

Act 20 of 1998.

PART I
PRELIMINARY

1. Short title

This Act may be cited as the Co-operative Societies Act, 1998.

2. Interpretation

In this Act, unless the context otherwise requires—

“agricultural charge” has the meaning assigned to it under the Agricultural Credits Act;

“board” means the board of directors of a co-operative society elected under section 38;

“by-laws” means the by-laws of a co-operative society that have been registered under section 19 and includes any amendments made to the by-laws and registered under section 20;

“committee” means a committee established by a co-operative society under section 39;

“co-operative” means any enterprise or organisation owned collectively by its members and managed for their joint socio-economic benefit and whose activities are not prohibited by law;

“co-operative society” means a co-operative registered under this Act as a co-operative society;

“co-operative union” means a co-operative which is registered under this Act as a co-operative union, operating in the same field of business or at district level, whose membership comprises two or more co-operative societies operating in the same field of business or in that district;

“credit union” means a co-operative society which is registered as a saving and credit co-operative union under this Act for the purposes specified under section 68;

“delegate” means—

(a) a representative of a co-operative society which is a member of a co-operative union or a federation, who has been elected to attend the meetings of the co-operative union or federation, and who is entitles to vote at meetings of the co-operative union or federation as provided under the by-laws of the co-operative union or federation;

(b) a representative of members residing in a particular district or a representative of a particular group or class of members, and who has received a mandate from such members or group or class of members to vote at meetings of their co-operative society in accordance with the by-laws;

“federation” means a co-operative which is registered as a federation under section 77, and whose membership comprises two or more co-operative union, operating in the same field of business or a district level;

“former company” means a company which has converted into a co-operative society in accordance with section 11;

“member” means an individual who, or a body corporate which, has been admitted to the co-operative society as a member in accordance with the by-laws;

“officer” means a chairperson, a vice-chairperson, a director of a board, a member of a committee, a secretary, a treasurer, an employee or other person, empowered under this Act or the by-laws to direct or supervise the business of a co-operative society;

“patronage bonus” means a percentage of the net surplus realised by a co-operative society which is distributed to the members of that co-operative society, in accordance with its by-laws;

“Registrar” means the person appointed Registrar of Co-operatives under section 6;

“Registrar of Agricultural Charges” means a person appointed Registrar of Agricultural Charges under the Agricultural Credits Act;

“Registrar of Companies” means the person appointed Registrar of Companies under the Companies Act;

“repealed Act” means the Co-operative Societies Act, 1970; and

“special resolution” means a resolution passed by a three-quarter majority of the members or delegates present at a meeting called for the purpose specified in the resolution; and where at least twenty-one clear days notice, in writing, was given of the meeting.

PART II
DEVELOPMENT OF CO-OPERATIVES, CO-OPERATIVE SOCIETIES, AND PUBLIC OFFICERS

3. Development of co-operatives and co-operative societies

(1) The Minister shall adopt policies, as the Minister considers necessary, to encourage the development and sustainability of co-operatives and co-operative societies.

(2) The Minister shall, pursuant to subsection (1)—

(a) cause to be collected, classified and analysed information and statistics on co-operatives and co-operative societies; and

(b) provide such other services as may be necessary for the development of co-operatives and co-operative societies.

4. Officers requires to furnish information to Minister

(1) The Minister may direct any officer of a co-operative society to furnish the Minister with any information relating to the operation of the co-operation of the co-operative society and such officer shall comply with such a directive.

(2) Any officer who fails to comply with any directive made by the Minister under subsection (1), or who knowingly make to the Minister a statement which is false in any material particular, shall be guilty of an offence.

5. Annual report on co-operative societies

(1) As soon as practicable, but not later than six months after the expiry of each financial year, every bond shall submit, to the Minister, a report concerning the activities of its co-operative society during such financial year and such other information as the Minister may require.

(2) The Minister shall, after receipt of the reports submitted under subsection (1), cause to be prepared a report on the status and operations of co-operative societies in the country.

(3) The Minister shall, not later than seven days after the first sitting of the National Assembly next, after receipt of the report referred to in subsection (2), lay the report before the National Assembly.

6. Registrar

There shall be a Registrar of Co-operatives who shall be a public officer appointed by the Public Service Commission and who shall exercise the functions prescribed by or under this Act.

7. Deputy Registrar and other public officers

(1) The Public Service Commission may appoint a Deputy Registrar of Co-operatives, who shall be a public officer and such other public officers, as may be necessary, to assist the Registrar in the performance of the Registrar’s functions under this Act.

(2) Any function conferred by or under this Act on the Registrar may be performed by any person acting as Registrar if the Registrar is unable to perform any function due to any cause.

PART III
REGISTRATION AND ORGANISATION OF CO-OPERATIVE SOCIETIES

8. Co-operatives to be registered

Any co-operative with ten or more members shall, within a period of not more than twelve months from the date of adoption of its by-laws, and subject to section 9 and on payment of the prescribed fee, be registered as a co-operative society under this Act.

9. Application for registration

(1) An application for registration as a co-operative society shall be made in the prescribed form to the Registrar.

(2) An application for registration as a co-operative society to be submitted with—

(a) four copies of the by-laws of the co-operative society to be registered; and

(b) a statement by the applicants, seeking registration of the co-operative society, that the capital, to be furnished initially by such applicants and other persons expected to become members, is sufficient for the commencement of operations; and

10. Registration of co-operatives

Subject to the other provisions of this Act, and within thirty days of receipt of the application, the Registrar shall register a co-operative as a co-operative society if the Registrar is satisfied that—

(a) the application complies with subsection (2) of section 9;

(b) the by-laws make adequate provision for—

(i) regular audits to be carried out;

(ii) the education, training and provision of advisory services to the members of the co-operative society; and

11. Conversion of company into co-operative society

(1) A company registered under the Companies Act may, by a resolution made in accordance with the Companies Act, convert itself into a co-operative under this Act.

(2) A company that has converted into a co-operative in accordance with subsection (1), shall apply to the Registrar for the registration of the co-operative as a co-operative society.

(3) An application for registration made under subsection (2) shall be accompanied by—

(a) the resolution made by the company converting itself into a co-operative as provided under subsection (1);

(b) four copies of the by-laws of the co-operative to be registered signed by ten members of the company and the secretary of the company;

(i) authorising the 10 members and the secretary of the company to sign the by-laws;

(ii) authorising the 10 members and the secretary of the company to accept any alterations made by the Registrar without further consultations with the company or authorising such members to submit to the company in a general or extraordinary meeting any alterations made by the Registrar;

(d) a resolution confirming that the capital to be furnished, initially by members of the company, is sufficient for the commencement of operations as a co-operative society; and

(e) notice of situation of registered office.

(4) Subject to the other provisions of this Act, where the Registrar is satisfied that the application, made under subsection (2), complies with subsection (3) and paragraphs (b) and (c) of section 10, the Registrar shall register the co-operative as a co-operative society.

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