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Co-operative Societies Rules


Published: 1974

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Co-operative Societies Rules


1988 Revised Edition






C
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CO-OPERATIVE SOCIETIES RULES

Co-operative Societies Rules CAP. 118A Arrangement of Rules




1988 Revised Edition
to

Page 3



C
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CO-OPERATIVE SOCIETIES RULES

Arrangement of Rules
Rule
1 Short title..........................................................................................................7
2 Register of Societies. .......................................................................................7
3 Original entries. ...............................................................................................7
4 Alteration. ........................................................................................................7
5 Inspection.........................................................................................................8
6 Application for registration..............................................................................8
7 Registration. .....................................................................................................8
8 .........................................................................................................................8
9 Documents to be forwarded. ............................................................................8
10 Register of members. .......................................................................................8
11 Keeping accounts. ............................................................................................9
12 Election and admission of members. ...............................................................9
13 Withdrawal.......................................................................................................9
14 Expulsion. ........................................................................................................9
15 Loss of qualifications for membership.............................................................9
16 No repayment of money upon withdrawal, removal, expulsion. .....................9
17 No limit to number of members.....................................................................10
18 Nominees. ......................................................................................................10
19 Division of profits. .........................................................................................10
20 Maximum liability. ........................................................................................11
21 General meeting. ............................................................................................11
22 First meeting. .................................................................................................11
23 Annual general meeting. ................................................................................11
24 Functions of annual general meeting. ............................................................11
25 Special general meeting. ................................................................................12
26 Quorum at meetings.......................................................................................12

Arrangement of Rules CAP. 118A Co-operative Societies Rules




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27 Chairman of meetings. ...................................................................................13
28 Majority of votes. ...........................................................................................13
29 Votings. ..........................................................................................................13
30 Minutes...........................................................................................................14
31 Election of committee. ...................................................................................14
32 Chairman of committee. .................................................................................15
33 Duties of committee. ......................................................................................15
34 Meetings of committee...................................................................................15
35 Procedure at meetings of committee. .............................................................16
36 Minutes of meetings of committee. ................................................................16
37 Failure to attend meetings of committee. .......................................................17
38 Vacancies on committee.................................................................................17
39 Borrowing powers. .........................................................................................17
40 Banking account.............................................................................................17
41 Employees. .....................................................................................................17
42 Application for a loan.....................................................................................18
43 Sanction of loan..............................................................................................18
44 Security for loans. ..........................................................................................18
45 Purposes of loans............................................................................................18
46 Documents relating to loans. ..........................................................................19
47 Restrictions on loans to defaulters..................................................................19
48 Extensions of loans.........................................................................................19
49 Misapplication of loan....................................................................................19
50 Recovery of loans...........................................................................................19
51 Marketing. ......................................................................................................20
52 Bad debts. .......................................................................................................20
53 Preparation of annual accounts and report. ....................................................20
54 Transfer of shares. ..........................................................................................20
55 Sales of shares of members in default. ...........................................................21
56 Secretary.........................................................................................................21
57 Payment of secretary. .....................................................................................22
58 Security by secretary. .....................................................................................22
59 Suspension of secretary. .................................................................................22
60 Temporary absence of secretary.....................................................................22
61 Duties of secretary..........................................................................................23
62 Treasurer. .......................................................................................................24
63 Security by treasurer.......................................................................................24
64 Duties of treasurer. .........................................................................................24
65 Unfit officers. .................................................................................................25
66 Reserve of fund. .............................................................................................25
67 Audit of accounts. ..........................................................................................25
68 Audit and supervision fund. ...........................................................................26
69 By-laws. .........................................................................................................26
70 Amendment of by-laws. .................................................................................27
71 Copies of entries.............................................................................................27

Co-operative Societies Rules CAP. 118A Arrangement of Rules




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72 Reference of a dispute to the Registrar for decision. .....................................27
73 Reference to arbitration by the Registrar. ......................................................28
74 Proceedings before the arbitrator or arbitrators. ............................................29
75 Proceedings before the Registrar. ..................................................................29

Co-operative Societies Rules CAP. 118A Rule 1




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C
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CO-OPERATIVE SOCIETIES RULES

G.S.1/74, G. 8/75, G. 5/77, G.S. 3/82

Made by the Minister of Agriculture

Commencement [29th March 1974]

1 Short title.
These Rules may be cited as the Co-operative Societies Rules.

2 Register of Societies.
The Registrar shall keep or cause to be kept at his office a register to be called
“the Register of Societies” wherein shall be entered particulars relating to the
registration of societies and their by-laws.

3 Original entries.
All original entries in the Register of Societies shall be made by, or under the
direction of, the Registrar and shall be signed by him.

4 Alteration.
Every alteration, interlineation or erasure in the Register of Societies shall be
initialled by the Registrar.

Rule 5 CAP. 118A Co-operative Societies Rules




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5 Inspection.
The Register of Societies shall be open to inspection by the public at all
reasonable times and free of charge.

6 Application for registration.
(1) Every application for the registration of a society shall be submitted to the

Registrar in the form prescribed by him.

(2) Two copies of the by-laws in Tongan and English which the society
proposes to adopt shall be submitted together with the application.

7 Registration.
Where the Registrar decides to register a proposed society the society and its by-
laws shall be registered in the Register of Societies.

8 Documents to be forwarded.
Upon the registration of a society the Registrar shall forward to the society, free
of charge —

(a) a Certificate of Registration;
(b) a copy of the by-laws in Tongan and English of the society as

approved by him and certified under his hand as having been
approved by him;

(c) a copy of the Act and of the rules.

9 Refusal to register.
When the Registrar refuses to register a society or its by-laws he shall record in
writing his reasons for doing so.

10 Register of members.
Every registered society shall keep a Register to be called “the Register of
Members” wherein shall be entered—

(a) the name, address and occupation of each member and a statement
of the shares, if any, held by him;

(b) the date on which each member's name was entered in the register;
(c) the date on which any member ceased to be a member; and
(d) the nominee, if any, appointed under Rule 18.

Co-operative Societies Rules CAP. 118A Rule 11




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11 Keeping accounts.
Every registered society shall keep such accounts and shall use such books and
shall submit such returns as may from time to time be prescribed by the
Registrar. (Amended by G. 5/77.)

12 Election and admission of members.
The election and admission of members to a registered society, other than
original members, shall be in such manner and on such conditions as the by-laws
shall prescribe.

13 Withdrawal.
A member may withdraw from a registered society by giving written notice to
the secretary, but such withdrawal shall be without prejudice to Section 33(1) of
the Act.

14 Expulsion.
If a member acts in contravention of the rules or by-laws or acts in any way
detrimental to the interests of the registered society such member may be
expelled by a vote of two-thirds of the members present at a general meeting
upon a charge communicated to him in writing by the committee no less than
one week before the meeting. Such expulsion shall, however, be without
prejudice to Section 33(1) of the Act.

15 Loss of qualifications for membership.
Any member who loses any of the qualifications for membership prescribed by
the Act or the rules or the by-laws shall cease to be a member of the registered
society and the committee shall cause his name to be struck off the Register of
Members without prejudice to any liabilities of such person under Section 33(1)
of the Act.

16 No repayment of money upon withdrawal, removal, expulsion.
In the case of any registered society of limited liability holding deposits or loans
from non-members, no member withdrawing, removed or expelled therefrom
shall be entitled to a repayment of any money paid by him towards the purchase
of shares.

Rule 17 CAP. 118A Co-operative Societies Rules




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17 No limit to number of members.
No registered society shall fix any limit to the number of its members.

18 Nominees.
(1) Every appointment of a nominee by any member of a registered society

for the purposes of Section 18 of the Act shall be made in writing signed
by the member in the presence of two attesting witnesses.

(2) No member of a registered society with share capital shall be entitled to
appoint more than one nominee unless that member holds more than one
share.

(3) In any case, where more than one nominee is appointed by any member
the number of shares to be transferred or the exact proportion of the
amount available that is to be transferred to each of these nominees shall
be specified at the time of the appointment.

(4) Every appointment of a nominee shall be recorded in the Register of
Members.

(5) For the purpose of a transfer to a nominee, the value of any share or
interest shall be represented by the sum actually paid for that share or
interest by the member holding it unless the by-laws of the registered
society otherwise provide.

(6) Where any money is paid to a nominee who is a minor, a receipt given
either by the minor or by his guardian shall be sufficient discharge to the
registered society.

19 Division of profits.
(1) Unless otherwise authorised by the Minister under the proviso to Section

38, subsection (1) of the Act no dividend or payment on account of profits
shall be made by a society registered with unlimited liability until the
reserve fund has reached a proportion of not less than one-tenth of the
society's total liabilities.

(2) No registered society shall pay a dividend if the rate of interest on loans
granted by it to its members exceeds the maximum rate laid down from
time to time by the Minister in writing. (Amended G.S.3/82.)

(3) No registered society shall pay a dividend on share capital exceeding the
maximum rate laid down from time to time by the Minister in writing.
(Amended G.S. 3/82.)

(4) A bonus based on wages or on the value of the products of a member, or a
bonus or rebate on patronage calculated in proportion to the amount of the

Co-operative Societies Rules CAP. 118A Rule 20




1988 Revised Edition
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business done by each member with the registered society may be
distributed periodically to the members from surplus funds after the
deduction of all expenditure and after making provision for bad and
doubtful debts and making allocation to the reserve fund.

20 Maximum liability.
(1) Every registered society shall, from time to time, fix at a general meeting

the maximum liability it may incur in loans or deposits whether from
members or non-members.

(2) The maximum so fixed shall be subject to the sanction of the Registrar,
who may at any time reduce it. No registered society shall receive loans or
deposits which will make its liability exceed the limit sanctioned by the
Registrar.

21 General meeting.
The supreme authority in a registered society shall be vested in the general
meeting of members at which every member has a right to attend and vote on all
questions. Subject to the provisions of Sections 28 and 29 of the Act each
number shall have one vote only which shall be exercised in person and not by
proxy.

22 First meeting.
The first meeting of members shall have the same powers as are given to the
annual general meeting, and shall be held immediately or not later than one
month after the receipt of the certificate or registration of the society.

23 Annual general meeting.
The annual general meeting of members shall be convened by the committee as
soon as the report on the audit of the accounts of the registered society by the
Registrar or person authorised by him is received by the committee. At least 8
days' notice shall be given before any such general meeting is held:

Provided that the Registrar may at any time after the audit of the accounts has
been completed convene the annual general meeting which shall proceed as if it
had been convened by the committee.

24 Functions of annual general meeting.
The functions of the annual general meeting shall be—

Rule 25 CAP. 118A Co-operative Societies Rules




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(a) to confirm the minutes of the previous annual meeting and of any
intervening special general meeting; meeting;

(b) to consider the reports of the committee and the balance sheet
together with the report on the audit of the accounts of the
registered society for the previous year as prepared by the Registrar
or the person authorised by him.

(c) to approve the accounts or if the accounts are not approved to cause
the secretary to notify the Registrar who shall consider the matter
and make his decision thereon, and such decision as to the
correctness of the accounts shall be final and conclusive.

(d) to hear and decide upon any complaints brought by members
aggrieved by a decision of the committee:
Provided that notice of such complaints to be brought before the
meeting has been given to the secretary at least two days prior to
the meeting; and

(e) to transact any other general business of the registered society.

25 Special general meeting.
A special general meeting of members may be convened at any time by the
committee; and on receipt of a demand stating the object of the proposed
meeting signed by not less than one-fifth of the members of the registered
society, if such society is composed of less than 100 members, or by 25
members if such society consists of more than 100 members, it shall be the duty
of the chairman of the committee to convene such a meeting giving 8 days'
notice. If the chairman of the committee fails to convene a meeting within 14
days from the receipt of a demand as aforesaid the members applying for such a
meeting will have the right to convene the meeting by notice which must contain
the object of the proposed meeting and a statement to the effect that the meeting
is convened on the failure of the chairman of the committee to convene the
meeting demanded:

Provided that the Registrar or a person authorised by him may at any time
summon a special general meeting of the registered society in such manner and
at such time and place as he may direct. He may also direct what matters shall be
discussed at the meeting. Such meeting shall have all the powers of a meeting
called according to the rules.

26 Quorum at meetings.
(1) When a registered society consists of not more than 40 members one-half

of the number of the members or 10 members, whichever is the less, shall
form a quorum for the purposes of the annual or a special general meeting,

Co-operative Societies Rules CAP. 118A Rule 27




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and when a registered society consists of more than 40 members one-
fourth of the total number of the members of such society shall form a
quorum for the purposes of the annual or a special general meeting:

Provided that when any meeting is summoned by the Registrar any
members present at such meeting shall be deemed to form a quorum.

(2) If within one hour after the time fixed for any meeting other than a
meeting convened by the Registrar the members present are not sufficient
to form a quorum such meeting shall be considered as dissolved if
convened on the demand of members; in all other cases it shall stand
adjourned to the same day in the next week at the same time and place and
a notice to that effect shall be posted by the secretary within 24 hours, and
if at the adjourned meeting a quorum is not present within one hour from
the time appointed for the meeting the members present shall form a
quorum.

27 Chairman of meetings.
(1) The chairman of the committee or in his absence the vice-chairman or in

his absence any other person elected by a majority of those present shall
preside at the annual or special general meeting:

Provided that the Registrar or a person appointed by him shall preside at
any meeting convened by himself or on his demand.

(2) The secretary or in his absence any other person nominated in writing by
the chairman shall act as secretary at the meeting. The chairman, if
necessary, may nominate other officers to assist at the meeting.

(3) The chairman may by the decision of the meeting adjourn the meeting
from time to time and from place to place but no business shall be
transacted at any meeting so adjourned other than the business left
unfinished at the meeting from which the adjournment took place.

(4) The chairman shall have the right to order the closure of a discussion and
put the matter to the vote.

28 Majority of votes.
Any question submitted to the decision of the members present at a meeting,
unless otherwise dealt with in the rules, shall be decided by a majority of votes.

29 Voting.
(1) At any meeting a resolution put to the vote shall be decided on a show of

hands unless voting by call of names or a ballot is demanded by at least 5

Rule 30 CAP. 118A Co-operative Societies Rules




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of the members present before the declaration of the result of the show of
hands, and in such case voting by call of names or a ballot shall be taken
as the case may be.

(2) The chairman shall have an ordinary vote and in case of an equality of
votes shall be entitled to a casting vote. In the case of an equality of votes
shall be entitled to a casting vote. In the case of a meeting convened by
the Registrar and presided over by him or his representative, he or his
representative shall not be entitled to vote except on an equality of votes,
in which case they shall have a casting vote.

(3) In respect of every resolution put to the vote the chairman shall declare
whether it has been carried or lost, and whether on a show of hands or
unanimously or by a particular majority, and an entry to that effect in the
minute book shall be conclusive evidence of anything therein contained.

30 Minutes.
Minutes of the meeting shall be recorded in the minute book by the Secretary or
by a person other than the Secretary appointed by the members for the purpose,
and signed by him and the Chairman, before the dissolution or adjournment of
the meeting or not later than the next committee meeting and shall contain—

(a) The number of the members present at the meeting and the name of
the chairman or of the person who presided at the meeting
(Amended G.S. 3/82.);

(b) the time fixed for the meeting and the time the meeting
commenced;

(c) the total number of members on the date on which the meeting was
held; and

(d) all resolutions passed or decisions made at the meeting.

31 Election of committee.
(1) The committee shall be elected at the annual general meeting. The number

of members shall not be even and the size of the committee and its
quorum shall be in accordance with the by-laws of the registered society.

(2) Each member on election shall serve for a period of 3 years and be
eligible for election thereafter:

Provided that at the first annual general meeting members receiving the
lowest number of votes in ascending order of votes shall serve for periods
of one or 2 years as the by-laws of the society shall prescribe; and

Provided further that a special general meeting convened for the purpose
by or on the demand of the Registrar may remove the committee or any

Co-operative Societies Rules CAP. 118A Rule 32




1988 Revised Edition
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Page 15



members thereof before the expiration of their period of office by majority
of three-fourths of the members present, who shall proceed at the same
meeting to the election of others in their stead who shall hold office until
the election of a new committee at the next annual general meeting.

(3) The committee shall elect from amongst itself a Chairman, Vice-
Chairman, and may elect a Treasurer and if deemed necessary an
Assistant Treasurer to serve for a period of one year. (Amended G.S.
3/82.)

(4) A member who is a paid officer or servant of the society shall not be a
member of the committee:

Provided that such a person may be nominated for membership, and, if
elected, shall thereupon resign from service of the society. He shall not be
allowed to take any part in the deliberations of the committee until such
resignation has become effective.

32 Chairman of committee.
The chairman shall preside at all meetings at which he is present. In his absence
the vice-chairman shall preside. In the absence of both, the committee shall
appoint one of its own members to perform the duties of the officer. The
chairman shall have an ordinary vote and on an equality of votes shall be entitled
to a casting vote.

33 Duties of committee.
(1) The committee shall represent the registered society before all competent

public authorities and in all dealings and transactions with third persons,
with power to institute or defend suits brought in the name of or against
the society, and in general it shall carry out such duties in the management
of the affairs of the registered society as have not been specially assigned
by the rules or the by-laws to general meetings or to any other officer of
the society.

(2) The committee shall always keep a copy of the latest annual balance sheet
of the registered society together with the report referred to in Rule 23,
hung in a conspicuous place at the registered office of the society.

34 Meetings of committee.
The committee shall meet as often as the business of the registered society may
require and in any case not less frequently than once a month, save that the
Registrar may for exceptional reasons permit in writing the committee of a
secondary society to meet not less than once every 3 months.

Rule 35 CAP. 118A Co-operative Societies Rules




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(Amended G.S. 3/82.)

Meetings of the committee shall be summoned by the secretary in writing.

35 Procedure at meetings of committee.
At each committee meeting the secretary shall—

(a) read the minutes of the preceding meeting; provided that when
reproductions of each have been circulated to and received by each
member of the committee prior to the meeting, the committee may
resolve to dispose of this requirement;

(b) produce in a form previously approved by the committee, a
statement showing the income and expenditure of the society since
the last meeting, and the balance remaining after such transactions
have been recorded in the accounts;

(c) produce a statement showing the loans due and unpaid, for
determination by the committee as to the action to be taken in each
case;

(d) produce applications for loans, if any, for determination by the
committee in accordance with the priority of receipt; and

(e) submit any other business for consideration by the committee.

36 Minutes of meetings of committee.
(1) Minutes of committee meetings shall be recorded in the minute book by

the Secretary or by a person, other than the Secretary, appointed by the
committee for the purpose, and shall contain the following particulars—
(a) the names of the members present and the date of the meeting;
(b) the name of the chairman or other presiding member; and
(c) a short statement of all matter discussed and decisions made and a

record as to whether each decision was made unanimously or by a
majority.

(2) These minutes when confirmed at the next following meeting of the
committee, shall be signed by the presiding member at the meeting at
which they were confirmed, and the secretary or other person who
recorded them, and thereafter shall stand a true record of the proceedings
of the meeting to which they refer.

Co-operative Societies Rules CAP. 118A Rule 37




1988 Revised Edition
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37 Failure to attend meetings of committee.
Any member of the committee who, without due excuse approved by the
committee, fails to attend at 3 consecutive meetings of the committee shall be
deemed to have vacated his office which shall thereupon be filled as provided by
Rule 38.

38 Vacancies on committee.
Vacancies occurring on the committee shall be filled as far as is practicable and
in any case within 3 months of their occurrence. Such vacancies shall be first
offered to the unsuccessful candidates at the last previously held elections to the
committee in descending order of votes cast for each, or should it prove
impossible to fill any vacancy in such manner, the committee may co-opt for the
remainder of the period before the next annual general meeting any person who
is a member of the society, and the annual general meeting shall elect a member
to serve for the remainder of the period for which the member causing the
vacancy was originally elected:

Provided when such election does not take place the Registrar may appoint the
required substitute.

39 Borrowing powers.
The committee may borrow money on behalf of the registered society to an
amount not exceeding such total amount as may have been fixed in accordance
with Rule 20.

40 Banking account.
The committee may, subject to the approval of the Registrar, open a banking
account. All cheques shall be signed by two members of the committee and the
secretary:

Provided that with the authority in writing of the Registrar previously obtained,
cheques may be signed by one member of the committee and the secretary.

41 Employees.
(1) The committee may—

(a) appoint such clerks or employees as it considers necessary; and
(b) fix the salary, wages or remuneration and determine the conditions

of employment of every such clerk or employee.

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(2) Every clerk or employee appointed under this rule shall hold office during
the pleasure of the committee.

42 Application for a loan.
Members who desire to obtain a loan shall submit an application to the
committee stating the amount and the purpose for which the loan is required, the
term for which it is asked, whether it is desired to repay it by instalments, and
the names of the proposed sureties or any other security which is offered.

43 Sanction of loan.
(1) The committee shall consider at a meeting every application for a loan and

if the committee is satisfied with the trustworthiness of the applicant, the
sufficiency of the security offered and the prospects of advantage to the
borrower, in the way of increased production or economy or otherwise, it
may sanction the loan.

(2) No person other than members of the committee and secretary and the
Registrar and his staff shall be present at any meeting of the committee
when an application for a loan is under consideration. A member of the
committee who applies for a loan or who is proposed as surety for a loan
must withdraw while the relevant application is being discussed. If there is
a difference of opinion concerning the granting of a loan, the voting shall
be taken by ballot. The proceedings with regard to loans at committee
meetings shall be kept secret, and any member of the committee or officer
of the registered society infringing this rule shall be liable to immediate
expulsion or dismissal.

44 Security for loans.
Loans, when approved by the committee, shall be granted to members who are
able to obtain two sureties approved by the committee, or who can give other
security to the satisfaction of the committee.

45 Purposes of loans.
(1) No loan shall be made except for a purpose to be approved in each case by

the committee.

(2) All loans made shall be applied by the borrowing members to such
purpose as the committee has approved.

Co-operative Societies Rules CAP. 118A Rule 46




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46 Documents relating to loans.
When a loan is sanctioned by the committee a notice shall be sent to the
borrower to that effect, and, before the amount is advanced, the borrower and his
sureties shall execute an instrument in writing setting out the terms of repayment
of the loan and containing such other terms and conditions as the committee may
consider necessary.

47 Restrictions on loans to defaulters.
Where a member—

(a) is in default in the payment of a loan or of an instalment of a loan;
and

(b) does not satisfy the committee that such default is due to a good
cause,

such member shall not be entitled to receive another loan from the registered
society.

48 Extensions of loans.
If, by reason of sickness or some other cause, a member finds that he will be
unable to discharge his obligations to the registered society and notifies the
secretary in writing before a loan is due the committee may extend the time
fixed for payment on such conditions as it thinks fit.

49 Misapplication of loan.
Where the committee is satisfied that a member of the registered society who has
obtained a loan has applied the proceeds thereof to a purpose other than the
purpose which is stated in the application therefore under Rule 43, the
committee may, by notice in writing to the debtor, demand payment of the loan
before the agreed date of payment.

50 Recovery of loans.
Where—

(a) a loan or an instalment of a loan has not been paid on the date on
which it became due; and

(b) no extension for the payment thereof has been given to the debtor
by the committee under Rule 48,

the committee shall take steps for the recovery of the same by referring the
matter to the Registrar as prescribed in Section 54 of the Act.

Rule 51 CAP. 118A Co-operative Societies Rules




1988 Revised Edition Page 20
to



51 Marketing.
(1) Every member of the society shall deliver to the society at such place as

the committee shall direct such amount of articles produced or obtained
by him as may be prescribed in the by-laws or in the relevant contract to
be disposed of by the society.

(2) Any member who is approved or adjudged in accordance with the
provisions of Section 54 of the Act to be guilty of a breach of the by-laws
or the relevant contract as the case may be shall pay to the society as
liquidated damages such sum as may be specifically assessed or
ascertained in manner prescribed by the by-laws or by the relevant
contract and such sum shall be deemed to be a debt to the society.

52 Bad debts.
The committee may, with the approval of the Registrar, cause bad debts to be
written off the books of the registered society in such manner and at such times
as the Registrar may deem fit.

53 Preparation of annual accounts and report.
The committee shall in every year and as soon as conveniently possible within
such time as the Registrar may direct—

(a) cause the secretary to prepare and send to the Registrar the yearly
balance sheet closed on the day and month as prescribed in the by-
laws of the preceding year together with a detailed statement of the
profit and loss account; and

(b) prepare a report on the year's working of the registered society to be
presented to the annual general meeting.

54 Transfer of shares.
(1) Any share may be transferred with the approval of the committee to any

other member at the option of the transferor, but if the transferee is not a
member, he must be approved of as a member by the committee, or the
general meeting according to the by-laws relating to the admission of
members before the transfer can be registered; and if the by-laws require a
member to hold more than one share, the transferee must acquire by the
transfer, or by the transfer and allotment, the number so required to be
held before the transfer can be registered.

(2) Special transfer forms shall be provided by the Registrar.

Co-operative Societies Rules CAP. 118A Rule 55




1988 Revised Edition
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Page 21



(3) No transfer of a share shall be valid and effective unless and until such
transfer has been registered by the secretary on the direction of the
committee.

(4) No transfer of a share shall be registered if made by a member indebted to
the registered Society without special order of the committee, and until the
transfer of a share is registered no right shall be acquired against the
registered society by the transferee, nor shall any claim of the registered
society upon the transferor be effected thereby.

55 Sales of shares of members in default.
The committee may in default of payment by any member indebted to the
registered society to an amount not less than three-fourths of the sum paid up for
the time being on any transferable share held by him, sell, transfer and register in
the books of the registered society such share to any person entitled to hold the
same under the rules or by-laws for the best price obtainable therefor, and apply
the proceeds in or towards the discharge of the debt so due and of any expense
incurred in or about the same, paying over the balance (if any) to the member,
without being responsible for any loss occasioned thereby, and the defaulting
member shall cease to have any further claim in respect of such share.

56 Secretary.
(1) The committee shall appoint a secretary and, unless the person so

appointed is a member of the committee, shall have power to fix the
remuneration and determine the conditions of employment for his service.

(2) The secretary, if a member of the committee, shall be unpaid.

(3) No appointment made under paragraph (1) of this rule shall be valid and
effective, and no remuneration fixed thereunder shall be payable or
recoverable, unless approved by the general meeting.

(4) In the event of failure on the part of the committee to appoint a secretary,
the Registrar shall appoint a secretary and, unless the person so appointed
is a member of the committee, the Registrar shall fix his remuneration.
Every appointment made by the Registrar under this paragraph shall be
valid and effective, and every remuneration fixed by the Registrar shall be
payable and recoverable, as if made or fixed by the committee.

(5) The secretary shall occupy his office until his services are determined by
one month's notice in writing given by the committee:

Provided that no determination as aforesaid shall be valid and effective
unless acting upon a resolution of a previous general meeting.

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(6) The secretary may resign his office by giving one month's notice to the
committee in writing.

(7) On the occurrence of a vacancy in the office of the secretary, the
provisions of this rule shall apply mutatis mutandis to the filling of such
vacancy.

57 Payment of secretary.
The remuneration of the secretary, if any, shall be paid from the funds of the
registered society monthly in arrears.

58 Security by secretary.
(1) The secretary may be required to give security in such amount as the

committee may from time to time determine.

(2) Every such security and the amount thereof shall be subject to the
approval by the next general meeting.

59 Suspension of secretary.
(1) The committee may at any time suspend the secretary for any irregularity

in the performance of his duties.

(2) Such suspension shall be reported forthwith to the next general meeting
for their decision to retain, or dismiss the secretary without further notice.

(3) In the event of the suspension of the secretary the committee shall
forthwith appoint a substitute to hold office during the period of such
suspension.

60 Temporary absence of secretary.
(1) The secretary shall not absent himself from duty save with the permission

of the committee previously obtained: provided that in circumstances
where it is not practicable to obtain such permission from the committee
the chairman shall be authorised to grant it in its stead.

(2) During the absence of the secretary, the committee shall appoint a
temporary secretary and shall report the appointment to the next general
meeting.

(3) In case the secretary desires to be absent from duty for more than one
month at any time, the committee shall, before granting permission for
such absence, obtain the previous approval of the general meeting.

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61 Duties of secretary.
The duties of the secretary shall be—

(a) To summon and attend all meetings of the registered society and of
the committee and carry out all the instructions in accordance with
the Act, Rules and By-laws by such meetings and by the
committee;

(b) To attend to the business of the society at the office of the society
during the normal hours of business and at such other times as may
be required by the committee:
Provided that nothing in this rule shall be construed to prevent the
secretary from attending to the business of the society elsewhere;

(c) To receive produce of such quality as is required by law or, as
approved by the committee subject to the law, into the society's
stores from members only, and conduct weighing and grading
where necessary;

(d) To be responsible for the safety of the society's stores and their
contents;

(e) To record, or cause to be recorded to his entire satisfaction the
whole of the transactions of the registered society in the books
provided for that purpose; to conduct correspondence on behalf of
and in the name of the registered society; to prepare or cause to be
prepared to his entire satisfaction the annual statement of accounts
and balance sheet; and to have charge of the documents, books, and
vouchers for payment and receipts on behalf of the registered
society;

(f) To receive all applications for loans and bring the same before the
committee; to prepare receipts and other documents in the form
prescribed for signature by the borrowers prior to their taking the
loans sanctioned; and with the authority of the committee to supply
information about the registered society which may be applied for
by members;

(g) To receive all moneys due or payable to the registered society and
to acknowledge or cause to be acknowledged in an approved form
such receipt;

(h) To deposit, or cause to be deposited, in an approved bank, all
money received by him in excess of any sum authorised by the
committee and to obtain receipts for such deposits in an officially
approved form;

(i) To keep separate all moneys belonging to the registered society and
on no account to mix them with other moneys; and to produce at
any reasonable time when called upon to the committee or the

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treasurer or assistant treasurer, or the Registrar or any person
authorised by him or by law, all properties including the moneys in
his hands belonging to the registered society;

(j) To make, or cause to be made to his entire satisfaction, payments
on behalf of the registered society in respect of expenditure
legitimately incurred in the conduct of the business of the registered
society, and to obtain receipts in respect of such payments from the
payees; and

(k) To summon meetings as provided in the rules and by-laws.

62 Treasurer.
The office of Treasurer and Assistant Treasurer shall be honorary, but the
general meeting may approve of an allowance covering a certain period, or
honoraria as eligible in accordance with the by-laws of the registered society.

63 Security by treasurer.
The treasurer and assistant treasurer may be required to give security for such
amount as may be determined by, and to the satisfaction of, the committee.

64 Duties of treasurer.
(1) The duties of the treasurer shall be—

(a) To satisfy himself from time to time that all moneys received and
paid in the name of, and on behalf of the registered society are
properly recorded in the books of the registered society and
faithfully accounted for;

(b) To report his findings to the committee at frequent intervals;
(c) To ensure that all moneys at the registered society are kept in safe

custody in accordance with the by-laws;
(d) To accompany cash remittances to and from the registered society

to or from its Bank or other authorised premises as approved by
these rules;

(e) To sign on behalf of the committee the annual balance sheet and
accounts to be presented at the annual general meeting;

(f) To sign on behalf of the registered society all cheques and legal
documents concerning the transfer of funds and the acquisition of,
and disposal of property of society.

(2) It shall be the duty of the assistant treasurer to assist the treasurer in the
exercise of his office in every reasonable way when called upon to do so,

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and in the absence of the treasurer for any reason whatsoever, to assume
the duties of his office.

(3) Where no treasurer or vice-treasurer is appointed the duties of the
treasurer shall be performed by the secretary. (Inserted G.S. 3/82.)

65 Unfit officers.
If in any society, in the opinion of the Registrar, any member of the committee
or other officer is unfit for the discharge of his duties, the society shall on the
requirement of the Registrar dismiss him.

66 Reserve of fund.
(1) The reserve fund of a registered society, created in pursuance of the

provisions of Section 38(1) of the Act, may, with the sanction of the
Registrar—
(a) be utilised in the business of the registered society; or
(b) be applied to meet occasional deficiencies incurred by the

registered society.

(2) In sanctioning the utilisation or application of the reserve fund under
paragraph (1) of this rule, the Registrar may impose such terms and
conditions as he may deem fit.

(3) The reserve fund shall be indivisible and no member shall be entitled to
claim any specified share in it.

67 Audit of accounts.
In pursuance of the provisions of Section 39 of the Act the accounts of every
registered society shall be audited once at least in every year by some person
authorised by the Registrar. Such person shall have access to all the books and
accounts of the registered society and shall examine every balance sheet and
annual return of the receipts and expenditure, funds and effects of the registered
society, and shall verify the same with the accounts and vouchers relating
thereto, and shall either sign the same as found by him to be correct, duly
vouched and in accordance with the Act, and shall report to the Registrar
accordingly, or shall specially report to the Registrar in what respects he finds
the same incorrect unvouched or not in accordance with the Act. The Registrar
shall thereupon forward the report of such person to the committee.

No distribution of net surplus shall take place until such report has been
forwarded by the Registrar to the committee. (Amended G.S. 3/82.)

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68 Audit and supervision fund.
(1) There shall be constituted a fund to be known as the Audit and

Supervision Fund and every registered society shall, when called upon to
do so by the Registrar, make annually a contribution to such fund.

(2) Until such time as a society has been established and registered for the
purposes of supervision and audit, such contributions shall be held by the
Registrar and administered by him on behalf of the contributing registered
societies.

(3) So long as the Registrar administers the fund on behalf of the contributing
registered societies, he shall report in every year to the government in
respect of the income derived from contributions, the expenditure he has
sanctioned from the fund and return of the receipts and expenditure, funds
and effects and of the balance in his hands.

(4) As soon as a society for supervision and audit has been established and
registered the fund shall be credited to such society and shall be utilised
by such society in accordance with its objects and by-laws.

(5) Until a society for supervision and audit has been established and
registered, the Registrar shall fix the amount of the annual contribution to
the fund of every registered society called upon to contribute to the fund.
The amount of every such annual contribution shall be subject to a
maximum of either 10 per cent (10%) on the net annual profits of the
registered society or of 1 per cent (1%) of the working capital of the
registered society, and shall not in any case be less than an amount as
prescribed by the Registrar from time to time.

69 By-laws.
(1) The by-laws of a proposed society shall contain provision in respect of the

following matters—
(a) the name of the society;
(b)

(i) the registered address of the society;
(ii) area of operation;

(c) the objects for which the society was established;
(d) the purposes to which the funds may be applied;
(e) the qualifications for membership, the terms of admission of

members, and the mode of election;
(f) the nature and extent of the liability of members; and
(g) the manner of raising funds, including the maximum rate of interest

on deposits.

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(2) If the objects of the proposed society include the creation of funds to be
lent to the members, the proposed by-laws shall, in addition, contain
provision in respect of the following matters—
(a) the occupation or residence of the members;
(b) the conditions on which loans may be made to members,

including —
(i) the rate of interest, and
(ii) the maximum amount which may be lent to a member; and

(c) the consequences, if any, of default in the payment of any sum due
on account of shares.

70 Amendment of by-laws.
(1) Where, in pursuance of the provisions of Section 11(1) of the Act, a

registered society amends its by-laws, such amendment shall be made by a
resolution of the members of the registered society at a general meeting.

(2) Every resolution under paragraph (1) of this rule shall not be valid and
effective unless it was taken by a majority of not less than three-fourths of
the members present at the general meeting at which the resolution was
proposed.

(3) A copy of a resolution under paragraph (1) of this rule shall be forwarded
to the Registrar together with two copies in Tongan and English of the
amendment.

71 Copies of entries.
For the purposes of Section 21 of the Act a copy of an entry in the book of a
society may be certified by a certificate written at the foot of such copy,
declaring that it is a true copy of such entry and that the book containing the
entry is still in the custody of the society; such certificate being dated and signed
by the secretary and one member of the committee.

72 Reference of a dispute to the registrar for decision.
(1) Reference of a dispute to the Registrar for decision under the provisions of

Section 54(1) of the Act may be made—
(a) by the committee; or
(b) by the registered society in pursuance of a resolution in that behalf

taken in general meeting; or
(c) by any party to the dispute; or

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(d) where the dispute concerns a member of the committee and the
registered society, by any member of the registered society.

(2) Every reference under this rule shall be made by a statement in writing
addressed to the Registrar. Such statement shall—
(a) be dated;
(b) specify the dispute;
(c) set out full particulars of the dispute; and
(d) be signed by the party making it.

73 Reference to arbitration by the Registrar.
(1) Where, in pursuance of the provisions of Section 54(2)(b) of the Act the

Registrar decides to refer a dispute to arbitration, such decision shall be
embodied in an order of reference under his hand.

(2) Every order of reference under this rule shall—
(a) specify the name, surname, place of abode and occupation of the

arbitrator or arbitrators;
(b) set out the dispute and full particulars thereof; and
(c) limit the time within which the award shall be forwarded by the

arbitrator or arbitrators to the Registrar;
Provided that, on good cause shown to his satisfaction, the
Registrar may by a further order enlarge the time whether before or
after the time limited by the order of reference has expired.

(3) Where the Registrar decides to refer a dispute to more than one arbitrator,
such reference shall be to 3 arbitrators, of whom one shall be nominated
by each of the parties to the dispute and the third shall be nominated by
the Registrar and shall act as chairman.

(4) Where under paragraph (3) of this rule reference is made to 3 arbitrators,
the following provisions shall have effect —
(a) if any party to the dispute fails to nominate an arbitrator within such

time as the Registrar may specify, the Registrar may make the
nomination himself;

(b) if an arbitrator nominated by one of the parties to the dispute dies,
or refuses or neglects to act, or by absence or otherwise becomes
incapable of acting, the Registrar shall call upon the party
concerned to nominate a new arbitrator within such time as the
Registrar may specify, and if no new arbitrator is nominated
accordingly, the Registrar may nominate one himself;

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(c) if the arbitrator who dies, or refuses or neglects to act, or becomes
incapable of acting, was nominated by the Registrar, a new
arbitrator shall be nominated in his place by the Registrar; and

(d) the opinion of the majority of the arbitrators shall prevail.

74 Proceedings before the arbitrator or arbitrators.
(1) The proceedings before the arbitrator or arbitrators shall, as nearly as

possible, be conducted in the same way as proceedings before a court of
law, and in particular the following provisions shall have effect in respect
thereof —
(a) notice of the time and place at which the proceedings are to be held

shall be given to the parties to the dispute, and such notice shall be
a 10 days' notice;

(b) a record of the evidence adduced before the arbitrator or arbitrators
shall be made, dated and signed by the arbitrator or arbitrators;

(c) documents produced as exhibits before the arbitrator or arbitrators
shall be marked, dated and initialled by the arbitrator or arbitrators
and shall be attached to the file of the proceedings; and

(d) in the absence of any party duly notified to attend, the dispute may
be decided by the arbitrator or arbitrators ex parte.

(2) The award of the arbitrator or arbitrators shall—
(a) be, in writing;
(b) be dated and signed by the arbitrator or arbitrators;
(c) state the amount of the costs and expenses of the arbitration, if any,

and by which party or parties to the dispute the same are to be paid.

(3) Upon the completion of the proceedings, the arbitrator or arbitrators shall
forward to the Registrar—
(a) the file of the proceedings;
(b) the award.

75 Proceedings before the Registrar.
Where, in pursuance of the provisions of Section 54(2)(a) of the Act the
Registrar exercises the power of deciding a dispute himself, the proceedings
before him in relation thereto shall, as nearly as possible, be conducted in the
same way as proceedings before a court of law and the provisions of Rule 73
shall apply mutatis mutandis to such proceedings.