The Government of The Bahamas


COOPERATIVES SOCIETIES ACT, 2005
ARRANGEMENT OF SECTIONS
SECTION
Short Title 1.
Interpretation 2.
PART I
REGISTRATION OF SOCIETIES
Reference to Registrar General 3.
Application of Act and use of the word "Co-operatives" 4.
Co-operative Principles 5.
Director of Societies and Staff 6.
Functions of Director of Societies 7.
Application for Registration 8.
Conditions for Registration 9.
Registration of a Society 10.
Effect of Registration 11.
A Society to be a Body Corporate 12.
Society To Conform Co-operative Principles 13.
Display of Certificate 14.
Suspension and Cancellation of Registration 15.
Board of Directors 16.
Committees 17.
General Meetings 18.
Organisation of Meeting 19.
First Annual Meeting 20.
Special Meetings 21.
Notice of Meetings 22.
Record 23.
Quorum 24.
Delegates 25.
PART II
RIGHTS AND LIABILITIES OF MEMBERS
Qualifications for Membership 26.
Application for Membership 27.
Membership Fees 28.
Withdrawal of Membership 29.
Voting Rights 30.
Liability of Current and Past Members 31.
PART III
BUSINESS OF SOCIETIES
Shares 32.
Limitations on Shareholding 33.
Dormant Accounts 34.
Transfer of Shares Generally 35.
Transfer of Shares of a Member who is of unsound mind 36.
Lien on Shares 37.
Restriction on Transfer of Shares or Interest in Capital 38.
Power of Nomination 39.
Transfer of Share or Interest on death of Member 40.
Disposal of Produce through Society 41.
Creation of Charge in favour of Society 42.
Execution and Registration of Charge 43.
Claims etc. not affected by Section 42 44.
Prior Claim in favour of Society 45.
Enforcement of Charge 46.
Assignment of a Charge 47.
Bond as additional security for loan 48.
PART IV
DIRECTORS AND OFFICERS
First Directors 49.
Directors' Power 50.
Committees 51.
Election of Directors 52.
Qualifications of Directors 53.
Borrowing Powers 54.
Meeting by telephone Etc. 55.
Minutes of Directors 56.
Ceasing to hold office 57.
Removal of Directors 58.
Attendance at meeting 59.
Number of Directors 60.
Notice of change in Directors 61.
Meeting of Directors 62.
Validity of Acts of Directors and Officers 63.
Remuneration of Directors 64.
Remuneration of employees 65.
Duty of care of Directors and Officers 66.
Misuse of confidential information 67.
Liability of Directors 68.
Indemnification of Directors 69.
Duty of a Director not to be limited 70.
Material Contracts 71.
Officers 72.
Bonds 73.
Declaration by Directors and Officers 74.
Obligation to file declaration 75.
PART V
PROPERTY AND FUNDS OF SOCIETIES
Deposits of funds 76.
Loans by Society 77.
Receipt of loans and deposits 78.
Receipt of deposits from minors 79.
Prohibition on borrowing 80.
Statutory Reserve, Liquidity, Development and Stabilization Funds, and Disposal thereof Stabilize] Funds, and Disposal thereof 81.
Pension Fund 82.
Contributions to Co-operative Purpose 83.
Dividend, Bonus, etc. 84.
PART VI
AUDIT, INQUIRY AND INSPECTION
Audit 85.
Annual and special returns 86.
Cost of inquiry 87.
Inspection by Director 88.
Investigations by Director 89.
Request for special investigations 90.
Dissolution of Board of a Society 91.
PART VII
DISPUTES
Settlement of disputes 92.
Registered Societies Appeal Tribunal 93.
Case Stated on question of law 94.
PART VIII
RECONSTRUCTION OF SOCIETIES
Methods of reconstruction 95.
Conversion 96.
Conversion effective upon issue of certificate of registration by Director 97.
Amalgamation of Societies 98.
Transfer of assets of Societies 99.
Claims of objecting creditors 100.
Division of Society into two or more Societies 101.
Effect of registration of Societies 102.
PART IX
WINDING UP AND ANCILLARY MATTERS
Winding up 103.
Winding up by virtue of reduced membership 104.
Voluntary winding up 105.
Power of Director pursuant to a winding up order 106.
Powers of liquidator 107.
Power of Director to control liquidator 108.
Cancellation of registration consequent upon winding up 109.
Disposal of surplus assets 110.
Power of Director to surcharge Officers etc. of a society 111.
Attachment of Property 112.
Enforcement 113.
Limitation or jurisdiction of Civil Court 114.
PART X
APEX BODY
Establishment and Constitution of Apex body 115.
Functions of Apex Body 116.
Management 117.
Consultation of Director of Societies 118.
PART XI
CREDIT UNIONS
Interpretation 119.
Application of this part 120.
Restriction 121.
Reserves and Allowances 122.
Loan Approval 123.
Security for Loans 124.
Loan Limits 125.
Reporting Loans 126.
Interest on Loans 127.
Deposits 128.
Credit Union not bound to see trust 129.
Credit Committee 130.
Duties of Credit Committee 131.
Removal by membership of Credit Committee 132.
Officer to approve loan 133.
Credit Committee Reports 134.
Removal by Members 135.
Supervisory Committee 136.
Duties 137.
Removal by Membership of Supervisory Committee 138.
Clerks 139.
Misappropriation Etc. 140.
Meetings 141.
Removal by members 142.
PART XII
CONSUMER'S SOCIETIES
Interpretation 143.
Application of this part 144.
Restrictions of Directorship 145.
Reserve 146.
PART XIII
HOUSING SOCIETIES
Interpretation 147.
Application of this part 148.
Relationship with members 149.
Bye-laws not to be amended without consent of Director 150.
Bye-laws 151.
No Interest on Share Capital 152.
Reserves 153.
Non-application of Landlord and Tenant Act 154.
Right to possession terminated 155.
Abandoned Goods 156.
PART XIV
INDUSTRIAL SOCIETIES
Interpretation 157.
Application 158.
Member Employee 159.
Workers Bye-laws 160.
Restriction on registration 161.
Bonus Eased 162.
Employees may be Directors 163.
PART XV
FORMER-ACT SOCIETIES
Former-Act Society 164.
Effect of corporate instrument 165.
Continuation as Society 166.
Amending Instrument 167.
Bye-laws 168.
Certificate of continuance 169.
Preservation of Society 170.
Non-Continuance 171.
Effect of earlier references 172.
PART XVI
OFFENCES
Corrupt Practices and Bribery 173.
Falsely obtaining property of Society 174.
Failure to comply with the Act, etc. 175.
Dealing in property subject to charge 176.
Offences with respect to reports 177.
Penalty for offences not otherwise provided for 178.
PART XVII
MISCELLANEOUS
Appeals 179.
Evidence of documents and of entries in books 180.
Exemption from Stamp Duties and other fees 181.
Non-application of certain Acts 182.
Regulations 183.
Repeals 184.
Exemption From Stamp Duty 185.
Power To Amend Bye-laws 186.
TRANSITIONAL
Societies Deemed To Be Registered 187.
No. 15 of 2005
AN ACT RESPECTING THE REGISTRATION,
SUPERVISION AND MANAGEMENT OF
CO-OPERATIVE SOCIETIES, THE MEMBERS OF
WHICH HAVE A COMMON BOND OF PHILOSOPHY
AND SOCIAL AND ECONOMIC OBJECTIVES
Enacted by the Parliament of The Bahamas.
1. This Act maybe cited as the Co-operative Societies Act, 2005.		Short title.
2. In this Act -		Interpretation.
"Apex Body" means a National League or other like body for co-operatives established for the purposes of section 115;
"board" means the board of directors or other directing body to whom the management of the affairs of a society is entrusted;
"bonus" means the equitable return to a member of a co-operative society from net profits after the payment of reserves and dividends in proportion to the production of goods and services by the co-operative during the preceding financial year;
"bye-laws" means the registered bye-laws made by a society pursuant to this Act and includes a registered amendment to the bye-laws;
"co-operative society" means a body corporate registered under this Act which has as its object the operation of any enterprise or service on a co-operative basis or on a basis which, in the opinion of the Director of Societies is substantially similar to a co-operative basis;
"deposits" means savings placed with a society that may be withdrawn on demand;
"director" means a member of the board of a co-operative society; "Director of Societies" means that person appointed under section 6;
"dividend" means a payment made to members from the net surplus subsequent to retained earnings becoming positive and statutory reserves having been deducted;
"equity shares" means those shares held by a member that are in excess of the qualifying shares, the value of which are prescribed by bye-laws;
"management" means persons who are employed by the board to manage, or such committee so designated by the board;
"Minister" means the Minister responsible for co-operatives;
"patronage refund" means the returns to members from net profits, allocated in proportion to the volume of business each individual has done with the cooperative during the financial year;
" provisional directors'" means members of the Steering Committees who will hold office after registration, and until the hoard of directors are elected at the first annual general meeting;
"qualifying shares" means the minimum number of shares required for membership in a registered society, such minimum to be prescribed by the bye-laws; and
"society" or "registered society" means a co-operative registered under this Act.
3. In this Act, a reference to the Registrar General shall also be construed as a reference to any other public officer who has the responsibility for the receipt and registration of documents relating to registered societies.		Reference to Registrar General.
4.(1) This Act applies to societies which are registered under this Act or deemed, by virtue of section 187 to be registered under this Act.		Application of Act and use of the word "Co-operatives".
(2) No person other than a registered society shall trade or carry on business under any name or title of which the word "Co-operative" or "Co-operation" or any abbreviation thereof or the words "credit union" or "credit unions" or any abbreviation thereof, is a part.
5. For the purposes of this Act, a society conforms to the co-operative principles if -		Co-operative principles.
(a) no member or delegate has more than one vote;
(b) no member or delegate is entitled to vote by proxy;
(c) its business is carried on primarily for the benefit of its members;
(d) its membership is voluntary and available without any artificial restriction or any unlawful basis of discrimination to any person who can use its services and is willing to accept the responsibilities of membership;
(e) the limit on the interest or dividends on share capital that it pays does not exceed the prescribed rate;
(f) any surplus or savings out of the co-operative's operations is used for one or more of the following purposes -
(i) to develop its business;
(ii) to provide or improve common services to members;
(iii) to be distributed among members in proportion to their patronage with the society;
(iv) to educate its members, officers or employees or the general public in the principles and techniques of economic and democratic co- operation;
(v) to be contributed to non-profit charitable benevolent organisations;
(vi) to be contributed to equity until total equity equals 10% of total assets; and
(vii) co-operation with other co-operatives is pursued.
PART I
REGISTRATION OF SOCIETIES
6.(1) There shall be a Director of Societies who shall perform such functions and shall have such powers as prescribed by this Act.		Director of Societies and Staff.
(2) The Director of Societies shall have such professional and administrative staff as are determined by the Minister.
7.(1) The Director of Societies shall perform the following functions -		Functions of Director of Societies.
(a) the registration of all societies;
(b) the supervision of all societies;
(c) the initiation and encouragement of organised activities for the development of societies;
(d) the management of the Department of Co-operative Development; and
(e) ensuring that records arc kept up-to-date and that reports from societies are current.
(2) The Director of Societies may, in writing delegate a function specified in subsection (1) other than the function specified in paragraph (e), to an individual or organization and a function so delegated shall be performed in such a manner as the Director of Societies may determine.
8.(1) No society may commence or continue business unless it is registered under this Act.		Application for Registration.
(2) Subject to subsection (3), an application for registration under this Act must be submitted to the Director of Societies in the prescribed form.
(3) An application for registration under this Act must be signed -
(a) in the case of a society of which no member is a registered society by at least ten members who satisfy the requirements for membership;
(b) in the case of a society of which a member is a registered society, by an authorised person on behalf of every such registered society, and where all the members of the society are not registered societies by at least ten other members;
(c) in the case of a society of which all the members are registered societies by at least two such societies.
(4) An application made pursuant to subsection (1) shall be accompanied by -
(a) three copies of the proposed bye-laws of the society;
(b) the prescribed application fee; and
(c) such other information with respect to the society as the Director of Societies may require.
9.(1) Subject to subsections (2) and (3), no group may be registered or no society having been registered may continue to be so registered under this Act -		Conditions for registration.
(a) unless its membership consists of individuals who are fifteen years and older;
(b) unless it is considered to be economically viable by the Director, having assessed the demand for its proposed services, the potential size of the society, the capital base and the membership use;
(c) unless there is conformity among membership, none of which is another society, with all co-operative principles as set out in section 5;
(d) unless the word "co-operative" forms a part of the name of each such society, and a society whose membership falls within the description contained in subsection (2) is called a junior co-operative society;
(e) unless the word "limited" is the last word of the name of a society to be registered with limited liability;
(f) if the name of the society is identical with that of another registered society or which so nearly resembles that name as to be likely to mislead the members of the public as to its identity;
(g) unless it has and maintains an address to which all notices and communications may be sent;
(h) unless its bye-laws arc in conformity with this Act; and
(i) unless, within a reasonable time after the issue of the certificate of registration, the society paints or affixes its registered name in letters easily legible in a conspicuous position on the outside of every office or place in which the business of the society is carried on.
(2) Notwithstanding subsection (1), the Director of Societies may register as a Junior Co-operative or Junior Society, a group, the substantial majority of whose members are under the age of fifteen years.
(3) In the case of a producer or service co-operative its membership must consist of at least ten members and in the case of a credit union, its membership must consist of at least thirty members.
10.(1) Once the Director of Societies is satisfied that the application is made in accordance with this Act, he shall register the society and its bye-laws and issue that society with a certificate of registration in the prescribed form.		Registration of a Society.
(2) The Director of Societies shall cause the name under which a society is registered-
(a) to be published in the Gazette; and
(b) to be noted in the register known as the "Register of Societies" and which shall be kept at the office of the Director of Societies.
(3) Where the Director of Societies refuses to register a society he shall give the applicant reasons in writing for the refusal.
11.(1) A society comes into being on the date inscribed on the certificate of registration.		Effect of registration.
(2) A certificate of registration issued by the Director of Societies to a society is admissible in evidence as conclusive proof that the society named in the certificate is registered pursuant to this Act and has complied with all the requirements for registration under this Act.
(3) A society registered under this Act has the capacity to carry on its business in accordance with its bye-laws.
(4) No society may engage in any business other than that which is connected with its objectives or which is reasonably incidental thereto.
12. 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 purposes of its bye-laws.		A Society to be a body corporate.
13. A society registered under this Act shall conform to the co-operative principles as set out in section 5.		Society to conform to co-operative principles.
14.(1) Every society shall have its certificate of registration prominently displayed at its registered address.		Display of certificate.
(2) Without prejudice to subsection (1), there shall be made available at all reasonable times at the registered address of the society -
(a) a copy of this Act and any regulations made thereunder;
(b) a copy of the bye-laws of the society; and
(c) the register of members and such other records as may be prescribed.
15.(1) Subject to this Act, the Director of Societies may by order in writing suspend the registration of a society if the Director of Societies is satisfied that –		Suspension and cancellation of registration.
(a) the society is in breach of any condition of registration;
(b) the society is in breach of any requirement of section 13 or 14;
(c) the society or any officer, board or committee member thereof has failed or refused to comply with any obligation imposed by this Act, the regulations or bye-laws; or
(d) the society or any officer, board or committee member thereof has failed or refused to comply with any order or request made by the Director of Societies under this Act.
(2) The Director of Societies may by order in writing cancel the registration of any registered society if -
(a) at any time it is proven that the number of members has been reduced to less than thirty members who are above the age of fifteen years in the case of credit unions and ten for other co-operatives;
(b) it is proven that the registration has been obtained by fraud or mistake, but cancellation under paragraph (a) shall not apply to a society which includes among its members one or more registered societies.
(3) An order under subsections (1) or (2) shall take effect from the date of the order.
(4) No suspension or cancellation may be made by the Director of Societies until he has given the society an opportunity to be heard, and any suspension may not exceed twelve months.
(5) Where after a period of suspension a society has not rectified the circumstances leading to its suspension, the Director of Societies may cancel the registration of that society.
(6) Where the registration of a society is cancelled by order under this section the society shall, except for the purpose of winding up, cease to exist as a body corporate from the date on which the order takes effect.
16.(1) Every society shall be directed by a board which shall be constituted in accordance with the bye-laws of the society.		Board of Directors.
(2) A person may not constitute part of the management of a society who -
(a) has been sentenced by a court in any country for any offence involving dishonesty and has not received a full pardon for that offence;
(b) is in default of debts owed to a society or compounds with his creditors; or
(c) is or becomes bankrupt.
17.(1) Without prejudice to section 16, the members of a society in each year shall -		Committees.
(a) elect members to fill the vacancies on the supervisory committee; and
(b) elect the majority of the members of the credit committee.
(2) "the Board shall appoint at least one member of the credit committee.
(3) Without prejudice to subsection (1), the hoard of a society may establish committees for the more efficient management of various aspects of the business or affairs of the society.
(4) A committee established for the purposes of subsection (3) may consist of a member of the board and other members of the society.
18. General meetings of members must be held in The Bahamas -		General Meetings.
(a) at the place provided in the bye-laws; or
(b) where the bye-laws contain no provision, at the place determined by the directors.
19.(1) This section does not apply to a society that is continued pursuant to this Act.		Organisation of meeting.
(2) The provisional directors shall hold a meeting as soon as possible after the issue of the society's certificate of registration.
(3) The provisional directors may, at the meeting mentioned in subsection (2) -
(a) pass resolutions establishing policies of the society;
(b) adopt forms of corporate records;
(c) authorise the issue of securities;
(d) appoint officers;
(e) appoint an auditor to hold office until the first general meeting of the members;
(f) make banking or other financial arrangements;
(g) appoint authorised signing officers;
(h) adopt operating policies; and
(i) transact any business in addition to that described in paragraphs (a) to (h).
(4) A provisional director may call the meeting of directors mentioned in subsection (2) by giving not less than five days' notice of the meeting to each provisional director, stating the time and place of the meeting.
(5) The notice mentioned in subsection (4) maybe waived where all provisional directors are in attendance at the meeting of provisional directors.
20.(1) Within one month of the date of its registration, a society shall hold a general meeting at which all members are entitled to be present and to vote and this general meeting shall be considered its first annual general meeting.		First annual meeting.
(2) Notwithstanding subsection (1), where the directors apply to the Director of Societies, he may extend the time for holding the general meeting.
(3) The business at the first annual general meeting mentioned in subsection (1) must include -
(a) the adoption of the bye-laws;
(b) the election of directors; and
(c) the appointment of an auditor.
(4) A society shall hold an annual general meeting in each year not later than five months after the end of the financial year of the society and within thirty days after acceptance by the board of directors of the annual audited financial report.
(5) The annual financial report must be made available to members at least seven days prior to the annual general meeting.
(6) The bye-laws may provide for holding semi-annual or other periodic meetings.
21.(1) The directors may, at any time, call a special meeting of members..		Special meetings.
(2) Subject to subsection (3), the directors shall call a special meeting of the members on receiving a written request, specifying the purpose of the meeting, from such number of members as may be specified in the bye-laws.
(3) The directors shall call the special meeting mentioned in subsection (2) within twenty days of receiving the written request and the special meeting is required to dispose of the specific business outlined in the request.
(4) The Director of Societies may call a special meeting of the society -
(a) for the purpose of reporting to the members the results of any audit, examination or other investigation of the society's affairs ordered or made by him; or
(b) where the society fails to hold an annual general meeting in accordance with subsections (1) or (2) of section 20, for the purpose of enabling members to secure any information regarding the affairs of the society that they are entitled to receive pursuant to this Act and to deal with any matters affecting the society.
22.(1) A society shall give at least ten days' notice of an annual or special meeting to its members -		Notice of meetings.
(a) by sending the notice by mail to the members at the address given in the register of members;
(b) by publishing the notice in not less than two issues of a newspaper circulated in The Bahamas and posting the notice in a place that, in the opinion of the directors, is prominent and accessible to members; or
(c) by way of electronic media.
(2) Notwithstanding any other provision of this Act, where a society is required to send a statement, agreement, proposal or other document to its members with a notice of a meeting and decides to publish the notice of a meeting in a newspaper pursuant to paragraph (1)(b), the society shall -
(a) in the notice, inform the members of the document, giving a description of the document that, in the opinion of the directors, is adequate to describe its nature; and
(b) make a copy of the document available to any member or delegate who requests it.
(3) The notice of any special meeting must specify the purpose for which the meeting is being called.
(4) The proceedings or the business transacted at a general meeting are deemed not to be invalidated by reason only of the non-receipt by a member of notice of the meeting.
23.(1) Subject to subsection (2), for the purpose of determining members -		Record date.
(a)entitled to receive payment of a bonus or dividend;
(b)entitled to participate in a distribution on liquidation; the directors may fix in advance a date as the record date for the determination of members.
(2) The record date mentioned in subsection (1) is not to precede by more than fifty days the particular action to be taken.
(3) Subject to subsection (4), for the purpose of determining members entitled to receive notice of and to vote at a general meeting, the directors may fix in advance a date as the record date for the determination of members.
(4) The record date mentioned in subsection (3) is not to precede by more than fifty days nor less than eleven days the date on which the meeting is to be held.
(5) Where the directors do not fix a record date -
(a) the record date for the determination of members entitled to receive notice of and to vote at a general meeting is -
(i) the close of business on the day immediately preceding the day on which the notice is given; or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of members for any purpose other than that described in paragraph (a) is deemed to be at the close of business on the day on which the directors plan a resolution relating to that purpose.
24.(1) Subject to subsection (2), the quorum at any annual, general or special meeting of members is that fixed by regulations.		Quorum.
(2) Where a quorum is not present one hour after the time fixed for the commencement of an annual general or special meeting of members, the Director of Societies shall summon a meeting at a time and place as the Director of Societies may determine but that meeting shall not be held less than fourteen or later than thirty days after the date of the originally scheduled meeting.
(3) At a meeting summoned by the Director of Societies pursuant to subsection (2) any number of members present at such meeting shall constitute a quorum.
25.(1) Where the bye-laws of a society provide for the nomination and appointment of delegates to a general meeting -		Delegates.
(a) the delegates shall exercise the powers of membership at any annual or special meeting; and
(b) any reference in this Act with respect to the exercise of any power mentioned in paragraph (a) shall be construed as a reference to delegates.
(2) The members who elect delegates may, at a special meeting called for that purpose or at an annual general meeting -
(a) remove the delegates in any manner provided for in the bye-laws; or
(b) notwithstanding subsection (1), amend the bye-laws to eliminate the nomination and appointment of delegates.
PART II
RIGHTS AND LIABILITIES OF MEMBERS
26.(1) A person, other than a registered society, qualifies for membership of a society of his choice if that person -		Qualifications for membership.
(a) is either a citizen or a resident of The Bahamas;
(b) has attained the age of fifteen;
(c) is of sound mind;
(d) has with the other members of the society some common bonds of philosophy, occupation or association or of residence in a defined neighborhood or district; and
(e) in the case of a Junior Co-operative, is a member of a school, youth club or any other like organization.
(2) Subject to the approval of the Director of Societies -
(a) a registered society may be a member of a society; or
(b) a person may be a member of more than one society with similar objectives.
(3) A purchaser under any execution or any other person succeeding by operation of law or otherwise to the share or interest of another member in a society shall not be entitled to membership by virtue only of such purchase or transfer.
(4) A person, including a minor, who is duly admitted membership shall enjoy all the rights of that society and shall be subject to all the liabilities of membership and any other liabilities existing in law.
(5) Without prejudice to anything contained in this section, provision may be made in the bye-laws of a society respecting membership.
27. An application for membership of a society must be submitted to the board of the society in the approved form.		Application for membership.
28.(1) No person may exercise the rights of membership of a society unless and until he has paid the prescribed membership fee and has satisfied any other requirement which may be prescribed by the bye-laws.		Membership fees and membership register.
(2) A registered society shall keep a register of members and shares in which shall be recorded -
(a) the names and addresses of members and the number of shares held by each member; and
(b) the date on which each member became a member, and the date if any, on which he ceased to be a member.
29.(1) A member of a society may at any time withdraw from membership on such condition as may be prescribed by the bye-laws or regulations.		Withdrawal of membership.
(2) Withdrawal from a society shall be by written notice addressed to the secretary of the board.
(3) Withdrawal from a society does not affect any existing liability of the member of the society.
30.(1) There shall be no voting by proxy and subject to any provision in the bye-laws relating to the voting rights of members who are themselves other societies, a member of a society shall have one vote except where such member is the Chairman of any meeting of the society in which case if there is an equality of votes he shall have a casting vote in addition to his original vote.		Voting rights.
(2) A society that is a member of another society shall exercise its voting rights in that other society through one of its members duly appointed in that behalf.
31.(1) Subject to this Act, the liability of a current member of a society is limited to the paid up amount of his qualifying and equity shares.		Liability of current and past members.
(2) The liability of a past member or the estate of a deceased member for the debts of a society as they existed on the date on which such member ceased to be a member or died shall continue for a period of two years after the cessation of membership or death.
PART III
BUSINESS OF SOCIETIES
32.(1) A registered society with a share capital may sell shares to its members but such shares shall have their par value set out in the bye-laws of the society.		Shares.
(2) Unless a society is required by law to have limited shareholding, a society shall have an unlimited number of equity shares.
(3) A society shall sell its shares at their par value.
(4) A society shall issue qualifying shares, and may issue equity shares.
(5) A share in a society is personal property and a shareholder is entitled to an annual statement showing the number of shares that he owns.
33. Where the liability of the members of a society is limited by shares, no member, except where a registered society is a member of that society, may hold more than one-fifth of the outstanding paid up shares of that society.		Limitations on shareholding.
34. Where a member of a society fails to transact business with that society for a period of one year, that member's qualifying shares and deposits accounts may be transferred to a dormant account that may be reactivated in a manner prescribed by regulations.		Dormant Accounts.
35.(1) A share may be transferred to any other member at the option of the transferor, but where the transferee is not a member, the board, or the general meeting, according to the bye-laws relating to the admission of members must approve that transfer before the transfer can be registered.		Transfer of shares generally.
(2) A transfer of shares shall be effected in such form as the Director of Societies determines.
(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 board.
(4) No transfer of a share shall be registered without the written permission of the board where that transfer is made by a member indebted to the registered society, and where that transfer of a share is registered by the transferee, any claim by the society upon the transferor is not affected by the transfer.
36.(1) Where a member or person claiming through a registered society is of unsound mind or is incapable of managing his affairs and no committee. receiver or guardian has been appointed, the society may. subject to this section and section 35, transfer the share or interest of such member to any person nominated by such member for the purposes of section 39 or may pay to the person nominated a sum representing the value of the share or interest of such member ascertained in accordance with subsection (5).		Transfer of shares of a member who is of unsound mind.
(2) Subject to subsection (3), if no nominee has been appointed, the society may pay a sum representing the value of the member's share or interest to the Registrar of the Supreme Court.
(3) If the value of the share or interest does not exceed five hundred dollars, the board may, subject to any conditions it thinks fit, pay the whole or any portion of such sum to the person who appears to have the care of such member or the management of his affairs.
(4) A transfer and payment made by a registered society in accordance with this section shall be valid and effective against any demand made upon the society by any person.
(5) For the purposes of this section, the value of any share or interest (including group insurance, where applicable) shall be represented by the sum actually paid for that share or interest by the member holding it unless the bye-laws of the society otherwise provide.
37.(1) A registered society has a lien on the shares or amount outstanding to the credit of a member or his legal representative for a debt due by that member or shareholder to that society.		Lien on shares.
(2) A registered society may enforce a lien mentioned in subsection (1) in the manner set out in its bye-laws.
(3) The board may, in default of payment by any member indebted to a registered society, apply the sum paid up for the time being on any equity shares or deposits held by the member in or toward the discharge of the debt so due and in any expense in or about the same, and the defaulting member shall cease to have any further claim in respect of such shares and or deposits.
38.(1) Subject to subsection (2), the transfer of a share or interest of a member or deceased member in the capital of a society shall be subject to such conditions as may be prescribed by or under this Act.		Restriction on transfer of shares or interest in capital.
(2) No share or interest or any part thereof in the capital of a society may be transferred unless the transfer is made to a member thereof or to a person whose application for membership has been accepted.
39.(1) A member of a society may, by instrument in writing signed by such member in the presence of two attesting witnesses and delivered at or sent to the registered office of the society during the lifetime of such member or made in any book kept at the registered office, nominate any person to or among whom there shall be transferred at his death such property in the society of which he is the owner at the time of his death, or as may have accrued thereon, whether in shares, or deposits, or so much thereof as is specified in such nomination if the nomination does not comprise the whole.		Power of nomination.
(2) A nomination made pursuant to subsection (1) may be revoked or varied by a subsequent nomination, signed, attested and delivered or sent or made as aforesaid, or by any similar document in the nature of a revocation or variation signed by the nominator in the presence of two attesting witnesses and delivered, sent or made as aforesaid but any such nomination may not be revoked or varied by the will of the nominator or by any codicil thereto.
(3) All nominations and all revocations or variations thereof delivered or sent to a society shall be recorded in a book kept at the registered office of the society.
40.(1) Where a person has been nominated as beneficiary by a member in accordance with the bye-laws of a society and such nominee is admitted to membership in that society, the society shall within one year of the death of the member by whom the nomination was made, transfer the share or interest of the deceased member to the limit specified in subsection (4) to the nominee.		Transfer of Share or Interest on death of member.
(2) Where no nominee is admitted to membership in the society or where the deceased member made no such nomination, the society shall within one year of the death of such deceased member pay to the nominee or legal personal representative of the deceased member as the case may be, such sum, not exceeding the said limit, representing the value or part thereof of the deceased member's shares or interest in the society.
(3) Nothing in this section shall be construed as prohibiting a nominee who has been admitted to membership from electing to receive payment representing the value of the deceased member's shares or interest instead of accepting a transfer.
(4) Subject to section 31, and unless prevented by order of a court of competent jurisdiction, a society shall pay such nominee or legal personal representative as the case may be, the sum due to the deceased member from the society.
41.(1) A registered society which has as one of its objects the disposal of any article or produce obtained by the work or industry of its members, may by its bye-laws or otherwise contract with its members -		Disposal of produce through society.
(a) that every such member who produces any such article shall dispose of the whole or any specified amount, portion or description thereof to, or through the society;
(b) that any member who is proved or adjudged to be guilty of a breach of the bye-laws or contract shall pay to the society liquidated damages in a sum ascertained or assessed in such manner as maybe prescribed in the bye-laws.
(2) In the event of any breach or the intended breach by a member of any registered society of any provision of a contract made in accordance with this section, such society shall be entitled to an injunction to restrain such member, his agent and servants from selling or delivering the agricultural or manufactured products otherwise than in accordance with the contract and to a decree of specific performance of the said contract by such member.
(3) Pending the adjudication of any action brought by any society under this section and upon ex-parte application to the Supreme Court and upon evidence by affidavit of the breach or threatened breach and upon giving of suit or under-taking of security as may be approved by the Supreme Court, the society shall be entitled to an interim injunction restraining such breach or threatened breach.
(4) A contract entered into under this section shall not be questioned in any court on the ground only that it is a contract in restraint of trade.
42.(1) A person to whom money has been lent by a society or who is otherwise indebted to the society may be required to create a charge in favour of the society in such form as may be prescribed.		Creation of charge in favour of society.
(2) A charge shall, so long as it continues in force, confer on the society the following obligations -
(a) the right upon the happening of any event specified in the charge as being an event authorising the chargee to seize the property subject to the charge to take possession of any property so subject;
(b) after an interval of five clear days or such less time as may be specified in the charge from the date of taking possession of any property subject to the charge, to sell such property either by auction or, if the charge so provides, by private treaty and either for a lump sum or payment by installments;
(c) to apply the proceeds of sale in or towards discharge of the debt secured by the charge and the costs of seizure and sale and to pay any surplus of such proceeds to the member whose property was sold.
(3) A charge shall, so long as it continues in force, impose on the member the obligation to pay to the society towards the discharge of his indebtedness the proceeds of sale of any property comprised in the charge or any money received under a policy of insurance or by way of compensation in respect of any such property, except insofar as the charge otherwise allows.
(4) For the avoidance of doubt, it is hereby declared that a charge under this section is not a bill of sale within the meaning of the Sale of Goods Act.		Ch. 310.
43.(1) A charge created under section 42 shall be duly executed if the person to whom money has been lent signs four copies of the document evidencing the charge in the presence of -		Execution and registration of charge.
(a) the Secretary of the society and/or;
(b) the manager or loan officer of the society.
(2) The Secretary shall file one copy of the charge, transmit one copy to the Registrar General, one copy to the Director of Societies, and deliver one copy to the member.
(3) The Registrar General shall keep a book to be known as the "Registered Societies Charges Book" in which he shall register every charge transmitted to him by the society, and issue to the society a certified copy of the registration.
(4) The registration of a charge under subsection (3) shall constitute a first charge and security in favour of the society and shall be deemed to affect with notice any person dealing with property comprised in the charge.
(5) Where a loan or other indebtedness in respect of which a charge was created is discharged, the Secretary, manager or loan officer of the society shall -
(a) cause four copies of a document to that effect to be prepared indicating that the charge has been discharged;
(b) file one copy of such document and transmit one copy to the Registrar General who shall forth-with make an entry of satisfaction in the Registered Societies Charges Book; and
(c) deliver one copy to the Director of Societies and one copy to the member.
(6) Any person may, on payment of the prescribed fee, inspect the Registered Societies Charges Book and take extracts therefrom.
(7) Notwithstanding anything contained in this section, every charge subsisting at the commencement of this Act in favour of a registered society, shall be deemed to be registered in the Registered Societies Charges Book and any such charge shall, without prejudice to anything contained therein, have the same force and effect as a charge created under this Act.
44. Nothing in section 42 shall affect -		Claims etc. not affected by section 42.
(a) any claim of the Government in respect of taxes or money recoverable as such or of a landlord in respect of rent or money recoverable as rent;
(b) the rights of any bona fide purchaser for value without notice of the charge; or
(c) the rights of any prior charge.
45.(1) Subject to any claim in respect of debts due to the Government or to a landlord in respect of rent or any money recoverable as rent, any debt or outstanding demand to a society by a member or past member shall notwithstanding anything contained in section 42 be a first charge -		Prior claim in favour of society.
(a) upon the crops or other agricultural produce whether standing or severed, raised in whole or in part with the loan from the society by such member or past member; and
(b) upon any cattle or other livestock, fodder