5.       Prohibition of unregistered society

            (1) No society, association or company shall carry on business in Botswana as a building society unless it is registered in terms of this Act.

            (2) Any society, association or company which contravenes the provisions of subsection (1) shall be guilty of an offence and liable to a fine not exceeding P1000.

6.       Mode of forming society

            Any seven or more persons may form a building society by subscribing their names and addresses to rules agreed to by them for the government of such society, and by obtaining registration under this Act.

7.       Matters which must be provided in rules of society

            (1) The rules of every society shall provide for the following matters-

     (a)     the name of the society and the situation in Botswana of its head office or in the case of a foreign building society registered under this Act the name of the society and the situation and postal address of its principal office in Botswana;

     (b)     the principal objects of the society;

     (c)     the manner in which the funds of the society are to be raised, the purposes to which they are to be applied and the manner in which surplus funds are to be invested;

     (d)     the manner in which a person may become a member and may cease to be a member;

     (e)     the classes of shares to be issued, the conditions of redemption or repayment of shares, and the preferential and other special rights attaching to each class of shares;

     (f)      the manner in and the conditions upon which advances upon the security of a mortgage or cession are to be made and repaid, and the conditions upon which a borrower shall be entitled to repay the amount owing by him before the expiry of the period for which the advance was made;

     (g)     the conditions upon which the society will accept and repay deposits;

     (h)     the fees, fines and charges that may be demanded from or imposed upon shareholders, depositors and borrowers;

     (i)      the manner of appointment of an auditor of the society;

     (j)      the manner in which profits or losses are to be ascertained and dealt with or provided for;

     (k)     the manner of altering and rescinding the rules of the society and of making additional rules;

     (l)      the manner of electing, appointing, removing and fixing the remuneration of directors, their qualifications, powers and duties, and the manner of appointment, removing and fixing the remuneration of members of local boards or committees and of officers of the society;

     (m)    the manner of calling annual general meetings and special general meetings of members, the quorum necessary for the transaction of business at such meetings, and the manner of voting thereat;

     (n)     whether disputes between the society and any of its members, or between the society and any persons claiming under the rules or whose claims are derived from members shall be settled by the court or by arbitration;

     (o)     such other matters as may be prescribed from time to time.

            (2) The registered rules and any registered amendments thereto as hereinafter provided shall be binding on the society and members and officers thereof, and on all persons claiming under the rules or whose claim is derived from a member.

8.       Alteration of rules

            (1) A society may, in the manner directed by its rules, alter or rescind any rule, or make any additional rule, but no such alteration, rescission or addition shall be valid if-

     (a)     it purports to affect the right of a creditor of a society who is not a member thereof;

     (b)     it is directed against any particular individual; or

     (c)     it purports to alter the rights of members in a winding up.

            (2) Two copies of every resolution for the alteration or rescission of any rule or the making of any additional rule shall be signed by two directors and the secretary of the society, and shall be transmitted by the secretary of the society to the Registrar, who, if he is satisfied that such alteration, rescission or addition is in conformity with this Act, shall register the resolution and return one of the copies to the secretary of the society, with the date of registration endorsed thereon, and as from the date of registration the alteration, rescission or addition, as the case may be, shall take effect.

9.       Rules open to public

            (1) Every society shall make a copy of its rules available for inspection by members of the public during the normal business hours of the society.

            (2) Any society which contravenes the provisions of subsection (1) shall be guilty of an offence and liable to a fine not exceeding P200.

10.     Registration of societies

            (1) Any persons intending to establish a building society shall lodge with the Registrar the rules agreed upon by them for the government of the society and signed by them, together with such particulars relating to the signatories thereto as the Registrar may require.

            (2) The Registrar shall, after consideration of such rules and particulars and such further information and arguments as may be submitted to him by such persons, determine whether, according to its rules, the society to be established is or is not a building society.

            (3) If it is determined in terms of subsection (2) that the society to be established is not a building society, the Registrar shall inform such persons accordingly:

            Provided that-

     (a)     the decision of the Registrar under this subsection shall be subject to an appeal to the President, if such appeal is made within one month after the decision of the Registrar has been announced; and

     (b)     the decision of the President on any such appeal shall be subject to an appeal to the court, if such appeal is noted within three months after the decision of the President has been announced.

            (4) If it is determined in terms of subsection (2) that the society to be established is a building society, the Registrar, if he finds that the rules are in conformity with the provisions of this Act, and if he is satisfied that the rules are financially sound and that the methods of transacting the business of the society as laid down are not undesirable, shall recommend to the President that permission be granted to register the society as a building society.

            (5) On receipt of a recommendation from the Registrar under subsection (4), and after consideration of all such matters as he may consider relevant, the President may in his discretion direct the Registrar to register the society as a building society.

            (6) The decision of the President under subsection (5) shall be final, and shall forthwith be communicated to all persons interested therein.

            (7) On receipt of a direction by the President under subsection (5), the Registrar shall, upon payment to him of the prescribed fee, register the society under this Act as a building society and record his approval of the rules, and shall endorse on a copy of the rules presented to him for that purpose the date of registration of the society, and shall issue a certificate of registration.

11.     Registrar may inspect books and accounts of any association

            The Registrar may at any time make an inspection or cause an inspection to be made of the books, accounts and records of any association of persons for the purpose of determining whether the association is a building society or not.

12.     Effect of registration

            (1) From the date of registration of a society under this Act such society shall be a body corporate which shall be capable of suing and of being sued in its registered name and subject to the provisions of its rules and of this Act, of doing all such acts as a body corporate may by law perform.

            (2) Whenever a society which is registered under a law relating to companies is registered under this Act, the Registrar shall notify the Registrar of Companies in writing of such registration, and the Registrar of Companies shall thereupon strike the name of the society off the register of companies.

13.     Conclusiveness of certificate of registration

            A certificate of registration of a society issued by the Registrar shall, upon its mere production, in the absence of proof of fraud, be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with and that the society is duly registered.

14.     Cancellation or suspension of registration

            (1) Where the Registrar has reasonable grounds for believing-

     (a)     that a certificate of registration has been obtained for a society by fraud or mistake;

     (b)     that a society exists for an illegal purpose;

     (c)     that a society has wilfully and after notice from the Registrar exceeded its powers or contravened any of the provisions of this Act applicable to it; or

     (d)     that a society has ceased to conduct business as a building society,

the Registrar, with the approval of the President, may apply to the court for an order for the cancellation or suspension of the registration of the society.

            (2) The Registrar shall, before making any such application, give to the society not less than two months previous notice in writing of his intention to make the application, specifying briefly the grounds of the proposed application.

            (3) The court may order the cancellation of the registration of the society or order the suspension of such registration for such period as it thinks fit, and may attach to any order such conditions as it thinks desirable, or may make any other order which in the circumstances it thinks desirable; and the Registrar shall forthwith give effect to any order for cancellation or suspension of registration.

            (4) Unless the court otherwise orders, the costs in connection with the application shall be paid by the society and shall be a first charge upon the assets of the society.

            (5) The Registrar shall cancel the registration of a society if the society by resolution, passed, by a majority of the members voting in accordance with the rules of the society, at a special general meeting convened for that purpose, resolves that the registration of the society be cancelled:

            Provided that where the members so voting in favour of such resolution do not hold more than one half of the value of shares of the society, as shown in the books of the society, the resolution shall not become effective until the concurrence in writing is obtained of other members whose shares together with the shares of the members who voted in favour of the said resolution exceed in value one half of the total value of shares of the society, as shown in the books of the society.

            (6) The Registrar shall, as soon as practicable after any cancellation or suspension under subsection (3) or (5), cause notice thereof to be published in the Gazette and in a newspaper circulating in the district in which the head office is situate or, in the case of a foreign building society registered under this Act, in the district in which the principal office of the society is situate.

            (7) Any cancellation or suspension of registration shall be without prejudice to any right acquired by any person against the society before the publication in the Gazette of the notice referred to in subsection (6).

15.     Name of society

            (1) No society shall be registered by a name which is identical with that of a registered society or which so nearly resembles such name as to be calculated to deceive unless the registered society is in liquidation and consents to the registration.

            (2) The Registrar may refuse to register a society by a name which in his opinion is calculated to mislead the public or to cause offence to any person or class of persons or is suggestive of blasphemy or indecency, and shall so refuse, if, in his opinion the name imports or suggests that the society enjoys the patronage of the President, of the Government of Botswana or of any department of such Government.

16.     Change of name of society

            (1) A society may change its name by resolution passed, by a majority of the members voting in accordance with the rules of the society, at a special general meeting called for that purpose:

            Provided that where the members so voting in favour of such resolution do not hold more than one half of the value of shares of the society as shown in the books of the society, the resolution shall not become effective until the concurrence in writing is obtained of other members whose shares together with the shares of the members who voted in favour of the said resolution exceed in value one half of the total nominal or face value of the shares of the society as shown in the books of the society.

            (2) Upon receipt by the Registrar of notice of such change of name, the Registrar, subject to the provisions of section 15, shall enter the new name in his records in place of the former name and shall issue a certificate of registration to the society under its new name.

            (3) The change of name shall not affect any right or obligation of the society or of any member thereof, or other person concerned, or render defective any legal proceedings by or against the society and any legal proceedings that may have been commenced or continued by or against it under its former name may be commenced or continued under its new name.

            (4) The Registrar of Deeds upon production to him by the society of any mortgage bond or of the title deeds of any immovable property belonging to the society and a certificate by the Registrar of the registration of the society under its new name and upon payment of the fees that may be payable in terms of any law relating to deeds registries, shall make such endorsements upon such bond or title deeds and such alterations in his registers as are necessary by reason of the change of name.