Co-operative Societies Act

Link to law: http://tuvalu-legislation.tv/cms/images/LEGISLATION/PRINCIPAL/1951/1951-0009/Co-operativeSocietiesAct_1.pdf
Published: 1952-09-01

Co-operative Societies Act


2008 Revised Edition

CAP. 40.20






CO-OPERATIVE SOCIETIES ACT

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CO-OPERATIVE SOCIETIES ACT

Arrangement of Sections
Section

PART I - PRELIMINARY 7
1 Short title................................................................................................................ 7
2 Interpretation.......................................................................................................... 7

PART II - REGISTRATION 8
3 Appointment of Registrar and assistant registrars ................................................. 8
4 Societies which may be registered......................................................................... 8
5 Conditions of registration ...................................................................................... 8
6 Application for registration.................................................................................... 9
7 Registration............................................................................................................ 9
8 Societies to be bodies corporate............................................................................. 9
9 Evidence of registration ......................................................................................... 9

PART III - DUTIES AND PRIVILEGES OF SOCIETIES 10
10 Amendment of the by-laws of a registered society.............................................. 10
11 Address of society................................................................................................ 10
12 Copy of Act, regulation, by-laws, etc., to be open to inspection ......................... 10
13 Disposal of produce to or through a registered society........................................ 10
14 Creation of charges in favour of registered societies ........................................... 11
15 Charge and set off in respect of shares or interest of members ........................... 11
16 Shares or interest not liable to attachment or sale................................................ 12
17 Transfer of interest on death of member.............................................................. 12
18 Deposits by or on behalf of minors...................................................................... 13
19 Register of members ............................................................................................ 13
20 Proof of entries in books of society ..................................................................... 13
21 Amalgamation or transfer of societies ................................................................. 13
22 Division of societies............................................................................................. 14

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PART IV - RIGHTS AND LIABILITIES OF MEMBERS 16
23 Qualification for membership ..............................................................................16
24 Members not to exercise rights till due payment made........................................16
25 Restriction of membership in society...................................................................16
26 Votes of members.................................................................................................16
27 Representation by proxy.......................................................................................16
28 Contracts with society of members who are minors ............................................16
29 No individual to hold more than one-fifth of share capital of any society...........17
30 Restrictions on transfer of share or interest..........................................................17
31 Liability of past member and estate of deceased member for debts of

society ..................................................................................................................17

PART V - PROPERTY AND FUNDS OF REGISTERED SOCIETIES 18
32 Loans made by a registered society......................................................................18
33 Deposits and loans received by a registered society ............................................18
34 Restrictions on other transactions with non-members..........................................18
35 Investment of funds..............................................................................................18
36 Disposal of profits ................................................................................................19

PART VI - AUDIT, INSPECTION AND INQUIRY 19
37 Audit.....................................................................................................................19
38 Power of Registrar to inspect societies' books, etc...............................................19
39 Inquiry and inspection..........................................................................................20
40 Dissolution of the committee of a society ............................................................20

PART VII - DISSOLUTION 22
41 Dissolution ...........................................................................................................22
42 Cancellation of registration of a society due to lack of membership ...................22
43 Effect of cancellation of registration ....................................................................22
44 Liquidation after cancellation of registration of society.......................................23
45 Liquidator's powers ..............................................................................................23
46 Powers of Registrar to control liquidation ...........................................................24
47 Enforcement of order ...........................................................................................24
48 Limitation of the jurisdiction of the civil court. ...................................................24
49 Closure of liquidation...........................................................................................24

PART VIII - SURCHARGE AND ATTACHMENT 25
50 Power of Registrar to surcharge officers, etc., of a registered society .................25
51 Appeal to Minister................................................................................................25

PART IX - DISPUTES 25
52 Settlement of disputes ..........................................................................................25
53 Request Opinion of a Judge .................................................................................26

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PART X - REGULATIONS 26
54 Regulations .......................................................................................................... 26

PART XI - MISCELLANEOUS 28
55 Recovery of sums due to Government................................................................. 28
56 Special powers of Minister to exempt any society from requirements as to

registration ........................................................................................................... 29
57 Special power of Minister to exempt societies from provisions of Act ............... 29
58 Power to exempt from stamp duty and registration fees...................................... 29
59 Prohibition of the use of the word “co-operative” ............................................... 29
60 Punishment of fraud or misappropriation ............................................................ 30
61 Formation of proposed societies .......................................................................... 30
62 Special members of committees of secondary societies ...................................... 30
63 Tenure of office and powers of special members ................................................ 31
64 Certain Acts not to apply ..................................................................................... 31
65 Penalty for non-compliance with certain provisions............................................ 31

Supporting Documents

ENDNOTES 32

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CO-OPERATIVE SOCIETIES ACT

AN ACT TO PROVIDE FOR THE FORMATION AND TO REGULATE
THE OPERATIONS OF CO-OPERATIVE SOCIETIES1

Commencement [1st September 1952]

PART I - PRELIMINARY

1 Short title
This Act may be cited as the Co-operative Societies Act.

2 Interpretation
In this Act unless the context otherwise requires —

“bonus” means a share of the profits of a registered society divided among its
members in proportion to the volume of business done by them with the
society from which the profits of the society were derived;

“by-laws” means the registered by-laws made by a society in the exercise of
any power conferred by this Act, and includes a registered amendment of the
by-laws;

“committee” means the governing body of a registered society to whom the
management of its affairs is entrusted;

“dividend” means a share of the profits of a registered society divided among
its members in proportion to the share capital held by them;

“member” includes a person or registered society joining in the application
for the registration of a society, and a person or registered society admitted to
membership after registration in accordance with the by-laws;

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“officer” includes a chairman, secretary, treasurer, member of committee, or
other person empowered under the regulations or by-laws to give directions in
regard to the business of a registered society;

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

“Registrar” means the Registrar of Co-operative Societies appointed under
section 3 and includes any person when exercising such powers of the
Registrar as may have been conferred upon him under that section.

PART II - REGISTRATION

3 Appointment of Registrar and assistant registrars
The Minister may appoint a person to be Registrar of Co-operative Societies for
Tuvalu and may appoint persons to assist such Registrar, and may, by notice, confer
on any such persons all or any of the powers of a Registrar under this Act.

4 Societies which may be registered
Subject to the provisions hereinafter contained, a society which has as its object the
promotion of the economic interests of its members in accordance with co-operative
principles, or a society established with the object of facilitating the operations of
such a society, may be registered under this Act with or without limited liability as
the Registrar may decide:

Provided that the liability of a society which includes at least one registered society
among its members shall be limited.

5 Conditions of registration
(1) No society, other than a society of which a member is a registered society,

which does not consist of at least 10 persons each of whom is qualified under
section 23 for membership under this Act shall be registered under this Act.

(2) The word “co-operative” or its vernacular equivalent shall form part of the
name of every society registered under this Act.

(3) The word “limited” or its vernacular equivalent shall be the last word in the
name of every society with limited liability registered under this Act.

(4) When, for the purposes of this section, any question arises as to age,
residence, or occupation of land constituting the qualification of any person,
that question shall be decided by the Registrar whose decision shall be final.

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6 Application for registration
(1) For the purposes of registration an application shall be made to the Registrar.

(2) The application shall be signed —
(a) in the case of a society of which no member is a registered society, by

at least 10 persons qualified in accordance with the requirements of
section 5(1); and

(b) in the case of a society of which a member is a registered society, by a
duly authorised person on behalf of every such registered society, and,
where the members of the society are not all registered societies, by 10
other members, or, when there are less than 10 other members, by all of
them.

(3) The application shall be accompanied by copies of the proposed by-laws of
the society, and the persons by whom or on whose behalf such application is
made shall furnish such information in regard to the society as the Registrar
may require.

7 Registration
(1) If the Registrar is satisfied that a society has complied with the provisions of

this Act and the regulations, and that its proposed by-laws are not contrary to
this Act or to the regulations, he may, if he thinks fit, register the society and
its by-laws. An appeal shall lie to the Minister against the refusal of the
Registrar to register any society within 1 month from the date of such refusal.

(2) On registration the society shall pay such fee as may be required by
the regulations.

8 Societies to be bodies corporate
The registration of a society shall render it a body corporate by the name under
which it is registered, with perpetual succession and with power to hold property, to
enter into contracts, to institute and defend suits and other legal proceedings, and to
do all things necessary for the purpose of its constitution.

9 Evidence of registration
A certificate of registration signed by the Registrar shall be conclusive evidence that
the society therein mentioned is duly registered, unless it is proved that the
registration of the society has been cancelled.

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PART III - DUTIES AND PRIVILEGES OF SOCIETIES

10 Amendment of the by-laws of a registered society
(1) Any registered society may, subject to this Act and the regulations, amend its

by-laws, including the by-laws which declare the name of the society.

(2) No amendment of the by-laws of a registered society shall be valid until that
amendment has been registered under this Act, for which purpose copies of
the amendment shall be forwarded to the Registrar.

(3) If the Registrar is satisfied that any amendment of the by-laws is not contrary
to this Act or to the regulations, he may, if he thinks fit, register the
amendment; and an appeal shall lie to the Minister against the refusal of the
Registrar to register any amendment of any by-law.

(4) An amendment which changes the name of a society shall not affect any right
or obligation of the society or of any of its members or past members, and any
legal proceedings pending may be continued by or against the society under
its new name.

(5) When the Registrar registers an amendment of the by-laws of a registered
society, he shall issue to the society a copy of the amendment certified by
him, which shall be conclusive evidence of the fact that the amendment has
been duly registered.

(6) In this section, “amendment” includes the making of a new by-law and the
variation or rescission of a by-law.

11 Address of society
Every registered society shall have an address, registered in accordance with the
regulations, to which all notices and communications may be sent, and shall send to
the Registrar notice of every change of that address.

12 Copy of Act, regulation, by-laws, etc., to be open to inspection
Every registered society shall keep a copy, written both in English and in the
vernacular of the place where its registered office is situated, of this Act and of the
regulations and of its by-laws and a list of its members open to inspection, free of
charge, at all reasonable times at the registered address of the society.

13 Disposal of produce to or through a registered society
(1) A registered society which has as one of its objects the disposal of any article

produced or obtained by the work or industry of its members whether the
produce of agriculture, animal husbandry, forestry, fisheries, handicrafts or

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otherwise, may provide in its by-laws or may otherwise contract with its
members —
(a) that every such member who produces any such article shall dispose of

the whole or any specified amount, proportion or description thereof to
or through the society; and

(b) that any member who is proved or adjudged, in such manner as may be
prescribed by the regulations, to be guilty of a breach of the by-laws or
contract shall pay to the society as liquidated damages a sum
ascertained or assessed in such manner as may be prescribed by the
aforesaid regulations.

(2) No contract entered into under the provisions of this section shall be contested
in any court on the ground only that it constitutes a contract in restraint of
trade.

14 Creation of charges in favour of registered societies
Subject to any prior claim of the Crown on the property of the debtor and, to the lien
or claim of a landlord in respect of rent or any money recoverable as rent and in the
case of immovable property to any prior registered charge thereon —

(a) any debt or outstanding demand payable to a registered society by any
member or past member shall be a first charge on all crops or other
agricultural produce, felled timber or other forest produce, marine
produce, fish (fresh-water and salt-water), livestock, fodder,
agricultural, industrial and fishing implements, plant, machinery, boats,
tackle and nets, raw materials, stock in trade and generally all produce
of labour and things used in connection with production raised,
purchased or produced in whole or in part from any loan whether in
money or in goods given him by the society:
Provided that nothing herein contained shall affect the claim of any
bona fide purchaser or transferee without notice;

(b) any outstanding demands or dues payable to a registered housing
society by any member or past member in respect of rent, shares, loans
or purchase money or any other rights or amounts payable to such
society shall be a first charge upon his interest in the immovable
property of the society.

15 Charge and set off in respect of shares or interest of members
A registered society shall have a charge upon the shares or interest in the capital and
on the deposits of a member or past member or deceased member and upon any
dividend, bonus, or profits payable to a member or past member or to the estate of a
deceased member in respect of any debt due to the society from such member or
past member or estate, and may set off any sum credited or payable to a member or

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past member or estate of a deceased member in or towards payment of any such
debt.

16 Shares or interest not liable to attachment or sale
Subject to section 15, the share or interest of a member in the capital of a registered
society shall not be liable to attachment or sale under any decree or order of a court
in respect of any debt or liability incurred by such member, and a trustee in
bankruptcy shall not be entitled to, or have any claim on, such share or interest:

Provided that where a society is dissolved the property and the shares of any
member who has been adjudicated in bankruptcy shall be vested in the trustee
in bankruptcy.

17 Transfer of interest on death of member
(1) On the death of a member, a registered society may transfer the share or

interest of the deceased member to the person nominated in accordance with
the regulations made in this behalf, or, if there is no person so nominated, to
such person as may appear to the committee to be the heir or legal
representative of the deceased member, or may pay to such nominee, heir or
legal representative, as the case may be, a sum representing the value of such
member's share or interest, as ascertained in accordance with the regulations
or by-laws:

Provided that —
(a) in the case of a society with unlimited liability such nominee, heir or

legal representative, as the case may be, may require payment by the
society of the value of the share or interest of the deceased member
ascertained as aforesaid;

(b) in the case of a society with limited liability, the society may transfer
the share or interest of the deceased member to such nominee, heir or
legal representative, as the case may be, being qualified in accordance
with the regulations and by-laws for membership of the society, or, on
his application within 6 months of the death of the deceased member, to
any person specified in the application who is so qualified.

(2) A registered society shall pay all other moneys due to the deceased member
from the society to such nominee, heir or legal representative, as the case may
be.

(3) All transfers and payments made by a registered society in accordance with
the provisions of this section shall be valid and effectual against any demand
made upon the society by any other person.

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18 Deposits by or on behalf of minors
(1) A registered society may receive deposits from or for the benefit of minors

and it shall be lawful for a registered society to pay such minors the interest
which may become due on such deposits. Any deposits made by a minor may,
together with the interest accrued thereon, be paid to that minor; and any
deposit made on behalf of a minor may, together with the interest accrued
thereon, be paid to the guardian of that minor for the use of the minor.

(2) The receipt of any minor or guardian for money paid to him under this section
shall be a sufficient discharge of the liability of the society in respect of that
money.

19 Register of members
Any register or list of members kept by any registered society shall be prima facie
evidence of any of the following particulars entered therein —

(a) the date at which the name of any person was entered in such register or
list as a member;

(b) the date at which any such person ceased to be a member.

20 Proof of entries in books of society
(1) A copy of any entry in a book of a registered society regularly kept in the

course of business shall, if certified in such manner as may be prescribed by
the regulations, be received in any legal proceedings, civil or criminal, as
prima facie evidence of the existence of such entry, and shall be admitted as
evidence of the matters, transactions and accounts therein recorded in every
case where, and to the same extent as, the original entry itself is admissible.

(2) No officer of any such society shall, in any legal proceedings to which the
society is not a party, be compelled to produce any of the society's books the
contents of which can be proved under subsection (1), or to appear as a
witness to prove any matters, transactions or accounts therein recorded unless
the court for special reasons so directs.

21 Amalgamation or transfer of societies
(1) Any 2 or more registered societies may by a resolution passed by a three-

fourths majority of the members present at a special general meeting of such
society held for the purpose, amalgamate as a single society:

Provided that no such resolution may be put to the meeting without the prior
approval of the Registrar in writing and that each member shall be given a
clear 15 days' written notice of the resolution and the date of the meeting.
Such amalgamation may be effected with or without any dissolution or
division of the funds of the amalgamating societies or either of them and the

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resolution of the societies concerned shall on such amalgamation be a
sufficient conveyance or assignment to vest the assets and liabilities of the
amalgamating societies in the amalgamated society.

(2) Any registered society may by a resolution passed in accordance with the
procedure laid down in subsection (1) transfer its assets and liabilities to any
other registered society which is prepared to accept them and such resolution
shall be a sufficient conveyance or assignment to vest the assets and liabilities
in the other society:

Provided that when any such amalgamation or transfer of its liabilities
involves the transfer of its liabilities by any society to any other society, it will
not be made without giving 3 months' notice to the creditors of both or all
such societies:

Provided further that if any creditor of any of the societies concerned objects
to such amalgamation or transfer of assets and liabilities and gives written
notice to that effect to the society or societies concerned 1 month before the
date fixed for such amalgamation or transfer the amalgamation or transfer
shall not be made until the dues of such creditor have been satisfied.

22 Division of societies
(1) Any registered society may, with the approval of the Registrar, by a resolution

passed by a three-fourths majority of the members present at a special general
meeting of the society held for the purpose, resolve to divide itself into 2 or
more societies, provided that each member has had 15 clear days written
notice of the resolution and the date of the meeting. The resolution
(hereinafter in this section referred to as a preliminary resolution) shall
contain proposals for the division of assets and liabilities of the society among
the new societies in which it is proposed to divide it and may prescribe the
area of operation of, and specify the members who will constitute, each of the
new societies.

(2) A copy of the preliminary resolution shall be sent to all the members and
creditors of the society. A notice of the resolution shall also be given to all
other persons whose interests will be affected by the division of the society.

(3) Any member of the society may, notwithstanding any by-law to the contrary,
by notice given to the society within a period of 3 months from his receipt of
the resolution, intimate his intention not to become a member of any of the
new societies.

(4) Any creditor of the society may, notwithstanding any agreement to the
contrary, by notice given to the society within the said period intimate his
intention to demand a return of the amount due to him.

(5) Any other person whose interest will be affected by the division may by
notice given to the society object to the division unless his claim is satisfied.

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(6) After the expiry of 3 months from the receipt of the preliminary resolution by
all the members and creditors of the society and of the notice by other persons
given under subsection (2), another special general meeting of the society, of
which at least 15 clear days notice shall be given to its members, shall be
convened for considering the preliminary resolution. If at such meeting the
preliminary resolution is confirmed by a resolution passed by a majority of
not less than two-thirds of the members present, either without changes or
with such changes as in the opinion of the Registrar are not material, he may,
subject to the provisions of section 7 and of subsection (9), register the new
societies and the by-laws thereof. On such registration, the registration of the
old society shall be deemed to have been cancelled and the society shall be
deemed to be dissolved from the date of such cancellation.

(7) The opinion of the Registrar as to whether the changes made in the
preliminary resolution are or are not material shall be final and no appeal shall
lie therefrom.

(8) At the special general meeting referred to in subsection (6) provision shall be
made by another resolution for —
(i) repayment of the share capital of all the members who have given

notice under subsection (3);
(ii) satisfaction of the claims of all the creditors who have given notice

under subsection (4); and
(iii) satisfaction of the claims of such of the other persons who have given

notice under subsection (5) as the Registrar decides or securing their
claims in such manner as the Registrar directs:

Provided that no member or creditor or other person shall be entitled to such
repayment or satisfaction until the preliminary resolution is confirmed as
provided in subsection (6).

(9) If within such time as the Registrar considers reasonable the share capital of
the members referred to in subsection (8) is not repaid or the claims of the
creditors referred to in that subsection are not satisfied, or the claims of the
other persons are not satisfied or secured as provided in paragraph (iii) of that
subsection, the Registrar may refuse to register the new societies.

(10) The registration of the new societies shall be a sufficient conveyance or
assignment to vest the assets and liabilities of the original society in the new
societies in the manner specified in the preliminary resolution as confirmed
under subsection (6).

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PART IV - RIGHTS AND LIABILITIES OF MEMBERS

23 Qualification for membership
In order to be qualified for membership of a co-operative society a person other than
a registered society, must —

(a) have attained the age of 16 years;
(b) be resident within or in occupation of land within the society's area of

operations as described by the by-laws.

24 Members not to exercise rights till due payment made
No member of a registered society shall exercise the rights of a member unless or
until he has made such payment to the society in respect of membership or acquired
such interest in the society, as may be prescribed by the regulations or by-laws.

25 Restriction of membership in society
Except with the sanction of the Registrar, no person shall be a member of more than
one registered society whose primary object is to grant loans to its members.

26 Votes of members
No member of any registered society shall have more than one vote in the conduct
of the affairs of the society:

Provided that in the case of an equality of votes the Chairman shall have the casting
vote:

Provided further that in the case of societies of which a registered society is a
member that society may have such voting powers as are provided in
the regulations.

27 Representation by proxy
A registered society which is a member of any other registered society may appoint
any one of its members or, with the consent of the Registrar, any other person as its
proxy for the purpose of voting in the conduct of the affairs of such other registered
society.

28 Contracts with society of members who are minors
The minority of any person duly admitted as a member of any registered society
shall not debar that person from executing any instrument or giving any acquittance

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necessary to be executed or given under this Act or the regulations made thereunder,
and shall not be a ground for invalidating or avoiding any contract entered into by
any such person with the society; and any such contract entered into by any such
person with the society, whether as principal or as surety, shall be enforceable at law
or against such person notwithstanding his minority.

29 No individual to hold more than one-fifth of share capital of any society
No member, other than a registered society, shall hold more than one-fifth of the
share capital of any co-operative society.

30 Restrictions on transfer of share or interest
(1) The transfer or charge of the share or interest of a member or past member or

deceased member in the capital of a registered society shall be subject to such
conditions as to maximum holding as may be prescribed by this Act or by the
regulations.

(2) In the case of a society registered with unlimited liability, a member shall not
transfer any share held by him or his interest in the capital of the society or
any part thereof, unless —
(a) he has held such share or interest for not less than 1 year; and
(b) the transfer or charge is made to the society, or to a member of the

society, or to a person whose application for membership has been
accepted by the committee.

31 Liability of past member and estate of deceased member for debts of
society
(1) The liability of a past member for the debts of a registered society as they

existed on the date on which he ceased to be a member shall not continue for
a period of more than 1 year reckoned from that date.

(2) The estate of a deceased member shall not be liable for the debts of the
society as they existed on the date of his decease for, a period of more than 1
year reckoned from the date of his decease.

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PART V - PROPERTY AND FUNDS OF REGISTERED
SOCIETIES

32 Loans made by a registered society
(1) A registered society shall not, except as provided in section 35, make any loan

to any person other than a member: Provided that, with the consent of the
Registrar, a registered society may make loans to another registered society.

(2) Except with the permission of the Registrar, a registered society shall not lend
money on the security of any movable property other than the produce or
goods in which the society is authorised to deal.

(3) The Minister may, by general or special order, prohibit or restrict the lending
of money on mortgage of any description of immovable property by any
registered society.

33 Deposits and loans received by a registered society
A registered society shall receive deposits and loans from persons who are not
members only to such extent and under such conditions as may be prescribed by the
regulations or by-laws.

34 Restrictions on other transactions with non-members
Save as provided in sections 32 and 33, the transactions of a registered society with
persons other than members shall be subject to such prohibitions and restrictions as
may be prescribed by the regulations.

35 Investment of funds
A registered society may invest or deposit its funds —

(a) with any bank or person carrying on the business of banking approved
for this purpose by the Registrar; or

(b) in any securities issued or guaranteed by a Government under the
British Crown; or

(c) with any other registered society approved for this purpose by the
Registrar; or

(d) in any other mode approved by the Registrar.

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36 Disposal of profits
(1) At least one-fourth of the net profit of every registered society, as ascertained

by the audit prescribed by section 37, shall be carried to a fund to be called
the general reserve fund, which shall be employed as prescribed by the
regulations; and the remainder of such profits and any profits of past years
available for distribution may be divided among the members by way of
dividend or bonus, or allocated to any funds constituted by the society to such
extent or under such conditions as may be prescribed by the regulations or by-
laws:

Provided that in the case of a society with unlimited liability, no distribution
of profits shall be made without the general or special order of the Minister.

(2) Any registered society may, with the sanction of the Registrar, after one-
fourth of the net profits in any year has been carried to the general reserve
fund, contribute an amount not exceeding 10 per cent of the remaining net
profits to any charitable purpose or to a common-good fund.

PART VI - AUDIT, INSPECTION AND INQUIRY

37 Audit
(1) The Registrar shall audit or cause to be audited by some person authorised by

him by general or special order in writing the accounts of every registered
society once at least in every year.

(2) The audit under subsection (1) shall include an examination of overdue debts,
if any, and a valuation of the assets and liabilities of the registered society.

(3) The Registrar and every other person appointed to audit the accounts of a
society shall have power when necessary —
(a) to summon at the time of his audit any officer, agent, servant or

member of the society who he has reason to believe can give material
information in regard to any transactions of the society or the
management of its affairs; or

(b) to require the production of any book or document relating to the affairs
of, or any cash or securities belonging to, the society by the officer,
agent, servant or member in possession of such book, document, cash
or securities.

38 Power of Registrar to inspect societies' books, etc.
The Registrar, or any person authorised by general or special order in writing by the
Registrar, shall at all times have access to all the books, accounts, papers and
securities of a registered society, and shall be entitled to inspect the cash in hand;

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and every officer of the society shall furnish such information in regard to the
transactions and working of the society as the person making such inspection may
require.

39 Inquiry and inspection
(1) The Registrar may of his own motion, and shall on the application of a

majority of the committee, or of not less than one-third of the members of a
registered society, hold an inquiry or direct some person authorised by him by
order in writing in this behalf to hold an inquiry into the constitution,
working, and financial condition of a registered society; and all officers and
members of the society shall furnish such information in regard to the affairs
of the society and produce the cash in hand and such books, accounts, papers
and securities of the society as the Registrar or the person authorised by him
may require.

(2) The Registrar shall, on the application of a creditor of the registered society,
inspect or direct some person authorised by him in writing in this behalf to
inspect the books of the society, if the applicant —
(a) proves that an ascertained sum of money is then due to him and that he

has demanded payment thereof and has not received satisfaction within
a reasonable time; and

(b) deposits with the Registrar such sum as security for the costs of the
proposed inspection as the Registrar may require.

(3) The Registrar shall communicate the results of any such inspection to the
creditor and to the society into whose affairs inquiry has been made.

(4) Where an inquiry is held under subsection (1) or an inspection is made under
subsection (2), the Registrar may apportion the costs or such part of the costs,
as he may think right, between the registered society, the members demanding
an inquiry, the officers or former officers of the society, and the creditors, if
any, on whose application the inquiry was made.

(5) Any sum awarded by way of costs against any society or person under this
section may be recovered, on application to the court in the place where the
registered office of the society is situated or the person resides or carries on
business for the time being, in like manner as a fine imposed by the court.

40 Dissolution of the committee of a society
(1) If the Registrar is of the opinion that the committee of any registered society

is not performing its duties properly he may, after giving an opportunity to the
committee to state its objections, if any, to its dissolution, and after
considering such objections at a general meeting of the society summoned by
him, by order in writing —
(a) dissolve the committee; and

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(b) direct that the affairs of the society shall be managed and administered
by a suitable person or persons appointed as hereinafter provided.

(2) Every direction under paragraph (b) of subsection (1) shall have effect for
such period not exceeding 2 years as may be specified in the order containing
such direction:

Provided that the Registrar may in his discretion from time to time amend the
order for the purpose of extending the period during which the direction shall
have effect so, however, that the aggregate period during which the direction
shall so have effect shall not exceed 4 years.

(3) Where any order is made under subsection (1) the Registrar shall by the same
or a subsequent order appoint a fit and proper person or 2 or more such
persons to manage and administer the affairs of the society, and may from
time to time remove or replace any person so appointed.

(4) Subject to the general direction and control of the Registrar, any person or
persons appointed under this section to manage the affairs of a
registered society —
(a) shall have the power to recover the assets and discharge the liabilities

of the society and take such other steps as may be necessary in its
interests; and

(b) may exercise all the powers, rights and privileges of a duly constituted
committee of the society.

(5) The Registrar may fix the remuneration payable to any person car persons
appointed by him under this section to manage the affairs of a registered
society; and the amount of such remuneration and other expenses, if any,
incurred in the management of the society shall be payable from its funds.

(6) It shall be the duty of the person or persons appointed under this section to
manage the affairs of a registered society, and who are holding office
immediately prior to the date on which the direction given under paragraph
(b) of subsection (1) ceases to have effect, to arrange, prior to the date
aforesaid, for the appointment of a new committee in accordance with the by-
laws of the society.

(7) No order under subsection (1) shall be made by the Registrar in respect of any
registered society without the Minister's prior approval.

(8) Nothing in this section shall be deemed to affect the power of the Registrar to
cancel the registration of the society under section 41.

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PART VII - DISSOLUTION

41 Dissolution
(1) If the Registrar, after holding an inquiry or making an inspection under

section 39 or on receipt of an application made by three-fourths of the
members of a registered society, is of the opinion that the society ought to be
dissolved, he may make an order for the cancellation of the registration of the
society.

(2) Any member of a registered society may, within 2 months from the date of an
order under subsection (1), appeal from such order in the prescribed manner
to the Minister.

(3) Where no appeal is presented within 2 months from the making of an order
cancelling the registration of a society, the order shall take effect on the expiry
of that period; and where an appeal is presented within 2 months, the order
shall not take effect until it is confirmed.

(4) Where the Registrar makes an order for the cancellation of the registration of
a society under subsection (1) he may make such further order as he may
think fit for the custody of the books and documents and the protection of the
assets of the society until the order cancelling registration takes effect.

(5) No registered society shall be wound up save by an order of the Registrar.

42 Cancellation of registration of a society due to lack of membership
The Registrar may, by order in writing, cancel the registration of any registered
society other than a society which includes among its members one or more
registered society, if at any time it is proved to his satisfaction that the number of the
members has been reduced to less than 10, and every such order shall take effect
from the date thereof.

43 Effect of cancellation of registration
Where the registration of a society is cancelled by an order under section 41 or
under section 42 the society shall cease to exist as a corporate body from the date on
which the order takes effect, hereinafter referred to as the date of dissolution:

Provided that any privileges conferred on the society by or under sections 14, 15, 16
and 17 shall be deemed to be vested in any appointed for that society by
the Registrar.

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44 Liquidation after cancellation of registration of society
Where the registration of a society is cancelled under section 41 or section 42 the
Registrar may appoint one or more persons to be, subject to his direction and
control, the liquidator or liquidators of the society.

45 Liquidator's powers
(1) A liquidator appointed under section 44 shall, subject to the guidance and

control of the Registrar and to any limitations impose by the Registrar by
order under section 46 have power to —
(a) determine from time to time the contribution to be made by members

and past members or by the estate of deceased members of the society
to its assets;

(b) appoint a day by notice before which creditors whose claims are not
already recorded in the books of the society shall state their claims for
admission or be excluded from any distribution made before they have
proved them;

(c) decide any question of priority which arises between creditors;
(d) refer disputes to arbitration and institute and defend suits and other

legal proceedings on behalf of the society by his name or office;
(e) decide by what persons and in what proportions the costs of liquidation

are to be born;
(f) give such directions in regard to the collection and distribution of assets

as may be necessary in the course of winding up the society;
(g) compromise any claim by or against the society provided the sanction

of the Registrar has the first been obtained;
(h) call such general meetings of members as may be necessary for the

proper conduct of the liquidation;
(i) take possession of the books, documents and assets of the society;
(j) sell the property of the society;
(k) carry on the business of the society so far as may be necessary for

winding it up beneficially:
Provided that nothing herein contained shall entitle the liquidator of a
credit society to issue any loan; and

(l) arrange for the distribution of the assets of the society in a convenient
manner when a scheme of distribution has been approved by the
Registrar.

(2) Subject to such regulations as may be made in this behalf, any liquidator
appointed under this Act shall in so far as such powers are necessary for
carrying out the purposes of this section, have power to summon and enforce
the attendance of parties and witnesses and to compel the production of
documents by the same means and so far as may be in the same manner as it
is provided in the case of a civil court.

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46 Powers of Registrar to control liquidation
A liquidator shall exercise his powers subject to the control and revision of the
Registrar, who may —

(a) rescind or vary any order made by a liquidator and make whatever new
order is required;

(b) remove a liquidator from office;
(c) call for all books, documents and assets of the society;
(d) by order in writing limit the powers of a liquidator under section 45;
(e) require accounts to be rendered to him by the liquidator;
(f) procure the auditing of the liquidator's accounts and authorise the

distribution of the assets of the society;
(g) make an order for the remuneration of the liquidator;
(h) refer any subject of dispute between a liquidator and any third party to

arbitration if that party shall have consented in writing to be bound by
the decision of the arbitrator.

47 Enforcement of order
(1) The decision of an arbitrator on any matter referred to him under section 46

shall be binding upon the parties, and shall be enforceable in like manner as
an order made by the Registrar under that section.

(2) An order made by a liquidator or by the Registrar under section 45 or section
46 may be enforced by the court having jurisdiction over the place where the
registered office of the society is situated in like manner as a decree of the
court.

48 Limitation of the jurisdiction of the civil court.
Save in so far as is hereinbefore expressly provided, no civil court shall have any
jurisdiction in respect of any matter concerned with the dissolution of a registered
society under this Act.

49 Closure of liquidation
(1) In the liquidation of a society whose registration has been cancelled, the

funds, including the general reserve fund, shall be applied first to the costs of
liquidation, then to the discharge of the liabilities of the society, then to the
payment of the share capital and then, provided the by-laws of the society
permit, to the payment of a dividend at a rate not exceeding 10 per cent per
annum for any period for which no disposal of profits was made.

(2) When the liquidation of a society has been closed and any creditor of the
society has not claimed or received what is due to him under the scheme of

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distribution, notice of the closing of the liquidation shall be published in the
manner provided for subsidiary legislation and in such other manner as the
Registrar may require; and all claims against the funds of the society
liquidated shall be proscribed when 2 years have elapsed from the date of the
publication.

(3) Any surplus remaining after the application of the funds to the purposes
specified in subsection (1) and the payment of any claims for which an action
is instituted under subsection (2) shall be available for use by the Registrar for
any co-operative purpose at his discretion.

PART VIII - SURCHARGE AND ATTACHMENT

50 Power of Registrar to surcharge officers, etc., of a registered society
(1) Where, in the course of the winding up of a registered society, it appears that

any person who has taken part in the organisation or management of such
society or any past or present officer of the society has misapplied or retained
or become liable or accountable for any money or property of such society or
has been guilty of misfeasance or breach of trust in relation to such society,
the Registrar may, on the application of the liquidator or of any creditor or
contributory, examine into the conduct of such person and make an order
requiring him to repay or restore the money or property or any part thereof
with interest at such rate as the Registrar thinks just or to contribute such sum
to the assets of such society by way of compensation in regard to the
misapplication, retainer, dishonesty or breach of trust as the Registrar thinks
just.

(2) This section shall apply notwithstanding that the act is one for which the
offender may be criminally responsible.

51 Appeal to Minister
Any person aggrieved by any order of the Registrar made under section 50 may
appeal to the Minister within 21 days from the date of such order and the decision of
the Minister shall be final and conclusive.

PART IX - DISPUTES

52 Settlement of disputes
(1) If any dispute touching the business of a registered disputes society arises —

(a) among members, past members and persons claiming through
members, past members and deceased members; or

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(b) between a member, past member, or person claiming through a
member, past member or deceased member, and the society, its
committee, or any officer of the society; or

(c) between the society or its committee and any officer of the society; or
(d) between the society and any other registered society,

such dispute shall be referred to the Registrar for decision; and a claim by a
registered society for any debt or demand due to it from a member, past
member or the nominee, heir or legal representative of a deceased member,
shall be deemed to be a dispute touching the business of the society within the
meaning of this subsection.

(2) The Registrar may on receipt of a reference under subsection (1) —
(a) decide the dispute himself; or
(b) refer it for disposal to an arbitrator or arbitrators.

(3) Any party aggrieved by the award of the arbitrator or arbitrators may appeal
therefrom to the Registrar within such period and in such manner as may be
prescribed.

(4) A decision of the Registrar under subsection (2) or under subsection (3) shall
be final and shall not be called in question in any civil court.

(5) The award of the arbitrator or arbitrators under subsection (2) shall, if no
appeal is referred to the Registrar under subsection (3), or if any such appeal
is abandoned or withdrawn, be final and shall not be called in question in any
civil court and shall be enforced in the same manner as if the award had been
a judgment of a civil court.

53 Request Opinion of a Judge
Notwithstanding anything contained in the last foregoing section, the Registrar at
any time when proceeding to a decision under this Act, or the Minister at any, time
when an appeal has been referred to him against any decision of the Registrar under
this Act, may refer any question of law arising out of such decision for the opinion
of a judge, whose opinion given on such question shall be final and conclusive.

PART X - REGULATIONS

54 Regulations
(1) The Minister may make all such regulations as may be necessary for the

purpose of carrying out or giving effect to the principles and provisions of this
Act.

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(2) In particular and without prejudice to the generality of the power conferred by
subsection (1), such regulations may —
(a) prescribe the forms to be used, the fees to be paid and the conditions to

be complied with in applying for the registration of a society and the
procedure in the matter of such applications;

(b) prescribe the conditions to be complied with by persons applying for
admission or admitted as members, and provide for the election and
admission of members from time to time, and the payment to be made
and interest to be acquired before exercising rights of membership;

(c) subject to section 29, prescribe the maximum number of shares or
portion of the capital of a registered society which may be held by a
member;

(d) prescribe the extent to which a registered society may limit the number
of its members;

(e) provide for the withdrawal and expulsion of members and for the
payments to be made to members who withdraw or are expelled and for
the liabilities of past members;

(f) provide for general meetings of the members and for the procedure at
such meetings and the powers to be exercised by such meetings;

(g) provide for the appointment, suspension and removal of the members of
the committee, and for the powers to be exercised and the duties to be
performed by the committee and other officers;

(h) prescribe the matters in respect of which a society may or shall make
by-laws and for the procedure to be followed in making, altering and
rescinding by-laws, and the conditions to be satisfied prior to such
making, alteration or rescission;

(i) regulate the manner in which funds may be raised by means of shares
or debentures or otherwise;

(j) prescribe the conditions to be observed by a registered society applying
for financial assistance from Government;

(k) prescribe the payments to be made, the conditions to be complied with,
and the forms of the bonds, instruments or other documents to be
executed, by members applying for loans or cash credits, the period for
which loans may be made or credits granted, and the maximum amount
which may be lent and the maximum credit which may be allowed to
individual members with or without the consent of the Registrar;

(l) provide for the mode in which the value of a deceased member's
interest shall be ascertained, and for the nomination of a person to
whom such interest may be paid or transferred;

(m) provide for the mode in which the value of the interest of a member
who has become of unsound mind and incapable of managing himself
or his affairs shall be ascertained and for the nomination of any person
to whom such interest may be paid or transferred;

(n) provide for the formation and the maintenance of reserve funds, and the
objects to which such funds may be applied, and for the investment of
any funds under the control of any registered society;

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(o) prescribe the conditions under which profits may be distributed to the
members of a society with unlimited liability and the maximum rate of
dividend which may be paid by societies;

(p) prescribe the accounts and books to be kept by a registered society, and
for the periodical publication of a balance sheet showing the assets and
liabilities of a registered society;

(q) provide for the audit of the accounts of registered societies and for the
charges, if any, to be made for such audit, and provide for the levy of
contributions from all or any registered societies to a fund to be used
for the audit and supervision of existing societies and co-operative
propaganda and prescribe for the administration of such a fund;

(r) prescribe the returns to be submitted by registered societies to the
Registrar, and the persons by whom and the form in which the same are
to be made;

(s) provide for the persons by whom, and the form in which, copies of
entries in books of registered societies may be certified;

(t) provide for the formation and maintenance of a register of members
and, where the liability of members is limited by shares, a register of
shares;

(u) provide for the inspection of documents and registers at the Registrar's
office and the fees to be paid therefor and for the issue of copies of such
documents or registers;

(v) prescribe the manner in which any question as to the breach of any by-
law or contract relating to the disposal of produce to or through a
society may be determined, and the manner in which the liquidated
damages for any such breach may be ascertained or assessed;

(w) prescribe the mode of appointing an arbitrator or arbitrators and the
procedure to be followed in proceedings before the Registrar or such
arbitrator or arbitrators;

(x) prescribe the procedure to be followed by a liquidator appointed under
section 44;

(y) prescribe the forms to be used, the fees to be paid, the procedure to be
observed and all other matters connected with or incidental to the
presentation, hearing and disposal of appeals under this Act or the
regulations.

PART XI - MISCELLANEOUS

55 Recovery of sums due to Government
(1) All sums due from a registered society or from an officer or member or past

member of a registered society as such to the Government may be recovered
in the manner provided for the recovery of debts due to the Government under
the law for the time being in force.

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(2) Sums due from a registered society to the Government and recoverable under
subsection (1) may be recovered, first from the property of the society;
secondly, in the case of a society of which the liability of members is limited,
from the members subject to the limit of their liability; and thirdly, in the case
of other societies, from the members.

56 Special powers of Minister to exempt any society from requirements as
to registration
Notwithstanding anything contained in this Act the Minister may by order in each
case and subject to such conditions as he may impose, exempt any society from any
of the requirements of this Act as to registration.

57 Special power of Minister to exempt societies from provisions of Act
The Minister may by order exempt any registered society or class of societies from
any of the provisions of this Act, or may direct that such provisions shall apply to
any society or class of societies with effect from such date or with such
modifications as may be specified in the order.

58 Power to exempt from stamp duty and registration fees
The Minister by notification in the Gazette may, in the case of any registered society
or class of registered societies, remit —

(a) the stamp duty with which, under any law for the time being in force,
instruments executed by or on behalf of a registered society, or by an
officer or member, and relating to the business of such society, or any
class of such instruments are respectively chargeable; or

(b) any fee payable under the law of registration for the time being in force.

59 Prohibition of the use of the word “co-operative”
(1) No person other than a registered society shall trade or carry on business

under any name or title of which the word “co-operative” is part without the
sanction of the Minister:

Provided that nothing in this section shall apply to the use by any person or
his successor in interest of any name or title under which he traded or carried
on business at the commencement of this Act.

(2) Any person who contravenes the provisions of this section shall be liable on
summary conviction to a fine of $10, and in the case of a continuing offence
to a further fine not exceeding $2 for each day during which the offence
continues.

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60 Punishment of fraud or misappropriation
If any person obtains possession by false representation or imposition of any
property of a society, or having the same in his possession withholds or misapplies
the same, or wilfully applies any part thereof to purposes other than those expressed
or directed in the rules of the society, and authorised by this Act, he shall on the
complaint of the society, or of any member authorised by the society, or the
committee thereof, or of the Registrar or any assistant registrar by his authority, be
liable on summary conviction to a fine of $40 with costs, and to be ordered to
deliver up all such property or to repay all moneys applied improperly, and in
default of such delivery or repayment or of the payment of such fine to be
imprisoned for 3 months, but nothing in this section shall prevent any such person
from being proceeded against for an indictable offence if not previously convicted of
the same offence under this Act.

61 Formation of proposed societies
(1) No person shall collect moneys in the nature of subscriptions for the purpose

of the formation of a society to be registered under this Act without first
obtaining the permission in writing of the Registrar.

(2) Any person who contravenes this section shall be liable on summary
conviction to a fine of $20 and to imprisonment for 3 months.

62 Special members of committees of secondary societies
(1) Notwithstanding any other provision of this Act, the Minister may in

accordance with this section appoint special members to the committee of any
secondary society if the society is in receipt of financial assistance from the
Government or if the Minister considers such appointments to be necessary in
the interests of the national economy.

(2) Special members appointed under this section —
(a) shall be appointed from among persons who in the opinion of the

Minister possess suitable academic or professional qualifications or
sufficient experience in business, trade or commerce or a co-operative
movement to enable them properly to discharge their functions; and

(b) may be appointed from among persons who are not members of any
registered society.2

(3) The number of special members appointed to a committee under this section
shall not exceed one-third of the number of ordinary members including the
chairman of the committee.

(4) For the purposes of this section a society shall be deemed to be in receipt of
financial assistance from the Government if —

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(a) within the immediately preceding 3 years the society has received any
grant of money from the Government; or

(b) any money has been lent to the society by the Government and the loan
has not been repaid; or

(c) any loan made to the society has been guaranteed by the Government
and either the guarantee is still outstanding or the guarantee has been
honoured by the Government and the society has not paid to the
Government all sums (including interest, if any, thereon) paid by the
Government under the terms of the guarantee.

(5) In this section “secondary society” means a registered society the members of
which are registered societies.

63 Tenure of office and powers of special members
(1) A special member of a committee appointed under section 62 shall remain a

member of the committee until his appointment is terminated by the Minister.
(2) Where the Minister has appointed special members to a committee under

section 62 any such special member may require in writing that any decision
taken by the committee shall not have effect until the approval of the Minister
has been obtained and, where any such requirement is made in respect of any
such decision, the decision shall be of no force or effect and shall not in any
way be acted upon until the Minister has signified his approval thereof.

(3) In addition to the power conferred by subsection (2), a special member
appointed to a committee under section 62 shall, unless the Minister otherwise
directs, have all the powers had by the Ordinary members of that committee.

64 Certain Acts not to apply
The provisions of the Companies and Business Registration Act and the Trade
Unions Act shall not apply to a registered society.

65 Penalty for non-compliance with certain provisions
(1)

(a) Any registered society or an officer or a member thereof, wilfully
neglecting or refusing to do any act or to furnish any information
required for the purposes of this Act by the Registrar or other persons
duly authorised by him in this behalf; or

(b) any person wilfully or without any reasonable excuse disobeying any
summons, requisition or lawful written order issued under the
provisions of this Act, or failing to furnish any information lawfully
required from him by a person authorised to do so under the provisions
of this Act, shall be guilty of an offence under this Act.

(2) Every offence referred to in subsection (1) shall be punishable with a fine of
$200.

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ENDNOTES


1 1990 Revised Edition, - Cap. 64 - Acts 9 of 1951, 5 of 1960, 8 of 1968, 9 of 1971, 31 of 1974, 5 of

1985, 1 of 1988 and LN 16/1974
Amended by Act 4 of 1996, commencement 30 August 1996, (by Act 4 of 2009)
2 Amended by Act 4 of 1996
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