CHAPTER
314
CO-OPERATIVE SOCIETIES |
ARRANGEMENT OF
SECTIONS |
PART I
PRELIMINARY |
SECTION |
|
|
PART II
REGISTRATION |
|
Societies which may be registered. |
Conditions of registration. |
Application for registration. |
|
Societies to be bodies corporate. |
Evidence of registration. |
PART III
DUTIES AND PRIVILEGES OF SOCIETIES |
Power of registered society to make bye-laws. |
|
|
Copy of Act, regulations, bye-laws, etc., to be
open to inspection. |
Disposal of produce to or through a registered
society. |
Creation of charges in favour of registered
society. |
Charges and set-off in respect of interest of
members. |
Shares or interest not liable to attachment or
sale. |
Transfer of interest on death of member. |
Deposits by or on behalf of minors. |
|
Proof of entries in books of society. |
PART IV
RIGHTS AND LIABILITIES OF MEMBERS |
Qualification for membership. |
Members not to exercise rights until due payment
made. |
Restriction of membership of society. |
|
Liability of minors on contracts. |
No individual to hold more than one-fifth of
share capital of any society. |
Restrictions on transfer of shares or interest. |
Liability of past member and estate of deceased
member for debts of society. |
PART V
PROPERTY AND FUNDS OF REGISTERED SOCIETIES |
Loans made by registered societies. |
Deposits and loans received by a registered
society. |
Restrictions on other transactions with
non-members. |
|
|
PART VI
AUDIT, INSPECTION AND INQUIRY |
|
Power of Director to inspect societies' books. |
|
PART VII
DISSOLUTION OF REGISTERED SOCIETY |
|
Cancellation of registration of a society due to
lack of membership. |
Effect of cancellation of registration. |
Liquidation after cancellation of registration
of society. |
|
Powers of Director to control liquidation. |
|
Limitation of the jurisdiction of the civil
court. |
|
PART VIII
DISPUTES |
|
Case stated on question of law. |
PART IX
MISCELLANEOUS |
|
|
|
Conversion of company into society. |
Exemption from stamp duty. |
Prohibition of the use of the word
"co-operative". |
Provisions for fines and penalties against
members. |
Injunction and specific performance. |
Chapters 308 and 313 not applicable to
registered societies. |
|
|
CHAPTER 314 |
CO-OPERATIVE
SOCIETIES |
An Act to
provide for the formation, constitution, registration and control of
co-operative societies within The Bahamas. | 17 of 1974
S.I. 90/1974 |
[Assent 18th
October, 1974]
[Commencement 9th December, 1974] |
PART I
PRELIMINARY |
1. This Act may be cited as the Co-operative Societies
Act. | Short title. |
2. In this Act, unless the context otherwise requires- | Interpretation. |
"bonus"
means a share of the profits of a registered society divided among its members
in proportion to the volume of business done with the society by them from
which the profits of the society were derived; |
"bye-laws"
means the registered bye-laws made by a society in the exercise of any power
conferred by this Act, and includes a registered amendment of the bye-laws; |
"committee"
means the governing body of a registered society to whom the management of its
affairs is entrusted; |
"Director"
means the Director of Co-operative Development appointed under section 3; |
"dividend"
means a share of the profits of a registered society divided among its members
in proportion to the paid up share capital held by them; |
"Government"
means the Government of The Bahamas; |
"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 in accordance with the bye-laws; |
"Minister"
means the Minister responsible for Co-operatives; |
"officer"
includes a chairman, secretary, treasurer, member of committee, or other person
empowered under the regulations or bye-laws to give directions in regard to the
business of a registered society; |
"prescribed"
means prescribed by regulations made under this Act; |
"registered
society" or "society" means a co-operative society registered
under this Act; |
"regulations"
means regulations made under section 49. |
PART II
REGISTRATION |
3. There shall be an officer in the public service to
be designated as the Director for the purposes of this Act, who shall have such
powers and shall perform such duties as are assigned to him by and under the
provisions of this Act, subject to the general supervision and control of the
Minister. | Appointment of Director. |
4. Subject to the provisions of this Part, 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 Director may decide: | Societies which may be registered. |
Provided that the
liability of a society which includes at least one registered society among its
members shall be limited. |
5. (1) No society, other than a society of which a
member is a registered society, shall be registered under this Act, which does
not consist of at least ten persons each of whom is qualified under section 22
for membership under this Act. | Conditions of registration. |
(2) The word
"co-operative" shall form part of the name of every society
registered under this Act. |
(3) The word
"limited" 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 Director, whose decision shall be final. |
6. (1) Every application for registration of a society
under this Act shall be made to the Director on the prescribed form. | Application for registration. |
(2) The
application shall be signed- |
(a) in the case
of a society of which no member is a registered society, by at least ten
persons qualified in accordance with the requirements of section 22; 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 all the members
of the society are not registered societies, by ten other members, or, where
there are less than ten other members, by all of them. |
(3) The
application shall be accompanied by two copies of the proposed bye-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 Director may
require. |
7. (1) Where application for registration is made under
section 6, the Director shall satisfy himself that the society has complied
with the provisions of this Act and the regulations, and that its proposed
bye-laws are in conformity with this Act or the regulations, and for these
purposes may make such enquiries and obtain such information as he thinks fit. | Registration. |
(2) The Director
may, on being satisfied of the foregoing matters, register the society and its
bye-laws and shall publish notice thereof in the Gazette. |
(3) If the
Director refuses to register a society, any person aggrieved by such refusal
may within twenty-eight days from the date of such refusal appeal in respect
thereof in writing to the Minister. Upon any such appeal the decision of the
Minister shall be final. |
(4) On
registration the society shall pay such fees as may be prescribed. |
8. Upon registration, a society shall be a body
corporate by the name under which it is registered, with perpetual succession
and with power to acquire, hold and dispose of property, to enter into
contracts, to sue and be sued in its registered name and to do all things
necessary for the purpose of its constitution. | Societies to be bodies corporate. |
9. A certificate of registration signed by the Director
shall be conclusive evidence that a society therein mentioned is duly
registered, unless it is proved that the registration of the society was
subsequently cancelled. | Evidence of registration. |
PART III
DUTIES AND PRIVILEGES OF SOCIETIES |
10. Every registered society may, subject to the
approval of the Director, make bye-laws for any such things as are necessary or
desirable for the purposes for which such society is established. | Power of registered society to make bye-laws. |
11. (1) Every registered society may, subject to this
Act and the regulations, amend its bye-laws, including the bye-law which
declares the name of the society. | Amendment of bye-laws. |
(2) An amendment
to the bye-laws of a registered society shall not be valid until the amendment
has been registered under this Act, for which purpose two copies of the
amendment shall be forwarded to the Director. |
(3) If the
Director is satisfied that any amendment of the bye-laws is not contrary to
this Act or to the regulations, he may, if he thinks fit, register the
amendment. If the Director refuses to register any amendment of any bye-law any
person aggrieved by such refusal may within twenty-eight days from the date of
such refusal appeal in respect thereof in writing to the Minister. Upon any
such appeal the decision of the Minister shall be final. |
(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
may be continued by or against the society under its new name. |
(5) When the
Director registers an amendment of the bye-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 bye-law and the
variation or rescission of a bye-law. |
12. 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 Director notice of every
change of that address. | Address of society. |
13. Every registered society shall keep a copy of this
Act and of the regulations and of its bye-laws and a list of its members open
to inspection, free of charge, at all reasonable times at the registered
address of the society. | Copy, of Act, regulations, bye-laws, etc., to be open
to inspection. |
14. (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 otherwise, may provide in its bye-laws or
may otherwise contract with its members- | Disposal of produce to or through a registered
society. |
(a) that every
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 judged in such manner as may be prescribed to be guilty
of a breach of the bye-laws or contract, shall pay to the society as liquidated
damages a sum to be ascertained or assessed in such manner as may be prescribed. |
(2) A contract
entered into under the provisions of this section shall not be questioned in
any court on the ground only that it constitutes a contract in restraint of
trade. |
15. (1) Subject to any prior claim of the Government
on the property of a debtor in respect of taxes or money recoverable as such
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- | Creation of charges in favour of registered society. |
(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 to him by the society: |
Provided
that nothing herein contained shall affect the claim of any bona fide
purchaser for value 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. |
16. 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 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 past member or estate of a deceased member
in or towards payment of any such debt. | Charges and set-off in respect of interest of members. |
17. Subject to the provisions of section 16, 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 neither his assignee in
bankruptcy nor a receiver duly appointed shall be entitled to, or have any
claim on, such share or interest. | Shares or interest not liable to attachment or sale. |
18. (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, or, if there is no person so
nominated, to such person as appears 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, ascertained in accordance with the regulations or
bye-laws: | Transfer of interest on death of member. |
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 bye-laws
for membership of the society, or on his application within six 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 the 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. |
19. (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 interests 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. | Deposits by or on behalf of minors. |
(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. |
20. Any register or list of members kept by any
registered society shall be prima facie evidence of any of the following
particulars entered therein- | Register of members. |
(a) the date on
which the name of any person was entered in the register or list as a member; or |
(b) the date on
which any such person ceased to be a member. |
21. (1) A copy of any entry in any register, book or
other record of a registered society regularly kept in the course of business
of such society shall, if certified in such manner as may be prescribed, be
received in any legal proceeding, 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 would, if produced, have been
admissible to prove such matters. | Proof of entries in books of society. |
(2) No officer of
any such society may in legal proceedings to which the society is not a party be
compelled to produce any of the registers, books or other records of the
society, 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 so directs. |
PART IV
RIGHTS AND LIABILITIES OF MEMBERS |
22. No person other than a registered society shall be
a member of a registered society unless- | Qualification for membership. |
(a) he has
attained the age of sixteen years; and |
(b) there
exists between himself and the other members of society some common bond of
occupation or association or of residence in a defined neighbourhood, community
or district. |
23. No member of a registered society shall exercise
the right of a member unless or until he has made payment to the society in
respect of membership or acquired such interest in the society, as may be
prescribed by the regulations or bye-laws. | Members not to exercise rights until due payment made. |
24. Except with the sanction of the Director, no
person shall be a member of more than one registered society whose primary
object is to grant loans to its members. | Restriction of membership of society. |
25. (1) No member of a registered society shall have
more than one vote in the conduct of the affairs of the society: | Votes of members. |
Provided that in
the case of an equality of votes the chairman shall have a second or casting
vote. |
(2) A registered
society which is a member of any other registered society shall have such
voting rights as are provided in the regulations or bye-laws. |
(3) A registered
society which is a member of any other registered society may appoint one of
its members as its proxy for the purpose of voting in the conduct of the
affairs of such other registered society. |
26. A minor duly admitted as a member of a registered
society shall enjoy all the rights and be subject to all the liabilities of an
ordinary member and any contracts made by such person as a member of such
society shall be enforceable at law. | Liability of minors on contracts. |
27. No member, other than a registered society, shall
hold more than one-fifth of the share capital of any society. | No individual to hold more than one-fifth of share
capital of any society. |
28. (1) The transfer of or the creation of a charge on
the shares or interest of a member, past member or deceased member in the share
capital of a registered society shall be subject to such conditions as to
maximum holding as may be prescribed by this Act or the regulations. | Restrictions on transfer of shares or interest. |
(2) In the case of
a society registered with unlimited liability, a member shall not transfer or
create a charge on any shares held by him or his interest in the capital of the
society or any part thereof unless- |
(a) he has held
such shares or interest for not less than one 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. |
29. The liability of a past member or of the estate of
a deceased member for the debts of a registered 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 reckoned from that date. | Liability of past member and estate of deceased member
for debts of society. |
PART V
PROPERTY AND FUNDS OF REGISTERED SOCIETIES |
30. (1) A registered society shall not make a loan to
any person other than a member: | Loans made by registered societies. |
Provided that,
with the consent of the Director, a registered society may make loans to
another registered society. |
(2)
Notwithstanding anything to the contrary contained in the Banks
and Trust Companies Regulation Act, a registered society shall not be deemed to
be engaged in the banking business so as to be obliged to obtain a licence
under that enactment. |
(3) Except with
the permission of the Director, a registered society shall not lend money on
the security of any movable property other than produce or goods in which the
society is authorised to deal. |
(4) 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. |
31. A registered society may receive deposits and
loans from persons who are not members thereof only to such extent and under
such conditions as may be prescribed by the regulations or bye-laws. | Deposits and loans received by a registered society. |
32. Save as provided in sections 30 and 31, the
transactions of a registered society with persons other than members shall be
subject to such prohibitions and restrictions as may be prescribed. | Restrictions on other transactions with non-members. |
33. A registered society may invest or deposit its
funds- | Investment of funds. |
(a) in the Post
Office Savings Bank, or with any other bank licensed under the provisions of
the Banks and Trust Companies Regulation Act
for the purpose of engaging in the banking business; or |
(b) in any
securities issued or guaranteed by the Government; or |
(c) in any
other manner approved by the Director. |
34. (1) Every registered society which does or can
derive profits from its transactions shall establish and maintain a reserve
fund. | Disposal of profits. |
(2) At least
one-fourth of the net profits of every registered society, as ascertained by an
audit made in accordance with the provisions of section 35, shall be carried to
the reserve fund, which shall be employed in such manner as may be prescribed.
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 bye-laws. |
PART VI
AUDIT, INSPECTION AND INQUIRY |
35. (1) The Director 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 at least once in every year. | Audit. |
(2) The audit
under subsection (1) shall include an examination of overdue debts, if any, the
verification of cash balances and securities, and a valuation of the assets and
liabilities of the registered society. |
(3) The Director
and every other person appointed to audit the accounts of a society shall have
power at the time of the audit- |
(a) to summon
any officer, agent, servant or member of the society or any other person who,
he has reason to believe, can give material information regarding any
transaction of the society or the management of its affairs, to give such
information; |
(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 any officer, agent, servant or
member of the society or any other person in possession of such book, document,
cash or securities. |
36. The Director, or any person authorised in writing
by the Director, 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, 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. | Power of Director to inspect societies' books. |
37. (1) The Director 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 in writing 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 Director or the person
authorised by him may require. | Inquiry and inspection. |
(2) The Director
shall, on the application of a creditor of the registered society, inspect or
direct some person authorised by him in writing to inspect the books of the
society, if the applicant- |
(a) proves that
an ascertained sum of money is then due and owing to him and that he has
demanded payment thereof and has not received satisfaction within a reasonable
time; and |
(b) deposits
with the Director such sums as security for the costs of the proposed
inspection, as the Director may require. |
(3) The Director
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 Director 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 creditor, 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 a magistrate having jurisdiction in the place
where the registered office of the society is situated, in like manner as money
payable under a judgment of a magistrate's court. |
PART VII
DISSOLUTION OF REGISTERED SOCIETY |
38. (1) If the Director, after holding an inquiry or
making an inspection under section 37 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 by order cancel the registration of
the society and shall publish notice thereof in the Gazette. | Dissolution. |
(2) Any member of
a registered society may, within two months from the date of an order made
under subsection (1), appeal from such order to the Minister. Upon any such
appeal the decision of the Minister shall be final. |
(3) Where no
appeal is made within two months from the making of an order cancelling the
registration of the society, the order shall take effect on the expiry of that
period. Where an appeal is made within two months, the order shall not take
effect unless and until it is confirmed by the Minister. |
(4) Where the
Director cancels the registration of a society under subsection (1), he may
make such 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 except by an order of the Director. |
39. The Director 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 societies, if at any time it is proved
to his satisfaction that the number of the members thereof has been reduced to
less than ten. Every such order shall take effect from the date thereof. | Cancellation of registration of a society due to lack
of membership. |
40. Where the registration of a society is cancelled
by an order under section 38 or 39 the society shall, except for the purposes
of winding up as hereinafter provided, cease to exist as a corporate body from
the date on which the order takes effect, hereinafter referred to as the date
of dissolution. | Effect of cancellation of registration. |
41. Where the registration of a society is cancelled
under section 38 or 39, the Director may appoint one or more persons to be,
subject to his direction, and control, the liquidator or liquidators of the
society. | Liquidation after cancellation of registration of
society. |
42. (1) A liquidator appointed under section 41 shall,
subject to the guidance and control of the Director and to any limitations
imposed by the Director by order under section 43, have power to- | Powers of a liquidator. |
(a) determine
the contribution to be made by members and past members or by the estates of
deceased members of the society respectively to the assets of the society; |
(b) appoint a
day by notice published in the Gazette 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 such
claims have been proved; |
(c) investigate
all claims against the society and, subject to the provisions of this Act,
decide questions of priority arising between claimants; |
(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) determine
from time to time by what persons and in what proportions the costs of
liquidation are to be borne; |
(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 approval of the Director has
first been obtained; |
(h) call such
general meetings of members as may be necessary; |
(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 grant 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 Director. |
(2) A liquidator
appointed under this section shall, in so far as such powers are necessary for
carrying out the purposes of this section, have power to summon witnesses and
to compel the production of documents by the same means and (so far as may be)
in the same manner as is provided in the case of a magistrate exercising civil
jurisdiction. |
43. A liquidator shall exercise his powers subject to
the control and revision of the Director, who may- | Power of Director to control liquidation. |
(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 42; |
(e) require
accounts to be rendered to him by the liquidator; |
(f) procure
the auditing of the accounts of the liquidator and authorise the distribution
of the assets of the society; |
(g) make an
order for the remuneration of the liquidator; or |
(h) refer any
subject of dispute between a liquidator and any third party to arbitration if
that party consented in writing to be bound by the decision of the arbitrator. |
44. (1) The decision of an arbitrator on any matter
referred to him under section 43 shall be binding upon the parties, and shall
be enforceable in like manner as an order made by the Director under that
section. | Enforcement of order. |
(2) An order made
by a liquidator or by the Director under section 42 or 43 shall be enforced in
the same manner in all respects as an order made by a stipendiary and circuit
magistrate. |
45. 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. | Limitation of the jurisdiction of the civil court. |
46. (1) In the liquidation of a society whose
registration has been cancelled, the funds, including the 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 bye-laws of the society permit, to the payment of a dividend at a
rate not exceeding ten per centum per annum for any period for which no
disposal of profits was made. | Closure of liquidation. |
(2) When the
liquidation of a society has been closed and any creditor of that society has
not claimed or received what is due to him under the scheme of distribution,
notice of the closing of the liquidation shall be published in the Gazette;
and, all claims against the funds of the society liquidated shall be proscribed
when two years have elapsed from the date of the publication of the notice in
the Gazette. |
(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 distributed among the members of the society. |
PART VIII
DISPUTES |
47. (1) If any dispute relating to the business of a
registered society arises- | Settlement of disputes. |
(a) among members,
past members and persons claiming through members, past members and deceased
members; or |
(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 Director for decision. 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 relating to the business of the society within the meaning of this
subsection. |
(2) The Director
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 a decision of the Director or by an award of an arbitrator or
arbitrators under subsection (2) may appeal in respect thereof to a judge of
the Supreme Court within such period and in such manner as may be prescribed
and the decision given in any such manner shall be final and conclusive. |
(4) The award of
the arbitrator or arbitrators under subsection (2) shall, if no appeal is made
in respect thereof to a judge of the Supreme Court 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 stipendiary and circuit magistrate. |
48. (1) Notwithstanding anything contained in section
47, the Director at any time when proceeding to a decision under this Act, or
the Minister at any time when an appeal has been made to him against any
decision of the Director under this Act, may refer any question of law arising
out of such decision for the opinion of the Supreme Court. | Case stated on question of law. |
(2) Any judge of
the Supreme Court, may consider and determine any question of law so referred
and the opinion given on such question shall be final and conclusive. |
PART IX
MISCELLANEOUS |
49. The Minister may make regulations for the purpose
of carrying out or giving effect to the principles and provisions of this Act
and such regulations may- | Regulations. |
(a) prescribe
the forms to be used 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 member, 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
the provisions of section 27, prescribe the maximum number of shares or
portions 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
other officers, and for the procedure at meetings 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 bye-laws and for
the procedure to be followed in making, altering and rescinding bye-laws, and
the conditions to be satisfied prior to such making, alteration or rescission; |
(i) regulating
the manner in which funds may be raised by means of shares or debentures or
otherwise; |
(j) prescribing
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
Director; |
(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; |
(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 will be
paid by societies; |
(p) prescribe
the accounts and books to be kept by a registered society, and for the
periodical publication of 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 education and prescribe for the
administration of such a fund; |
(r) prescribe
the returns to be submitted by registered societies to the Director, and the
persons to 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 the maintenance of a register of members, and, where the
liability of members is limited by shares, of a register of shares; |
(u) provide for
the inspection of documents and registers at the Director'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 bye-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 Director or such arbitrator or arbitrators; |
(x) prescribe
the procedure to be followed by a liquidator appointed under section 41 and the
cases in which appeals shall lie from the orders of such liquidator; |
(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. |
50. Any two or more registered societies may, with the
approval of the Director, by a resolution passed by not less than three-fourths
majority of the members present at a special meeting of each such society held
for the purpose, amalgamate as one society with or without any dissolution or a
division of funds of such societies or either of them; and the resolutions of
the societies concerned shall, on such amalgamation, vest the assets in and
transfer the liabilities of the amalgamating societies to the amalgamated
society which shall be deemed to be duly registered under this Act: | Amalgamation. |
Provided that
before the passing of such a resolution each member of the societies concerned
shall be given not less than fourteen days' notice of such a resolution
together with the date and the place of the meeting: |
Provided further
that amalgamation in pursuance of this Act shall not prejudice any right of a
creditor of any registered society which is a party thereto. |
51. (1) Any society may, with the approval of the
Director, by a resolution passed by not less than three-fourths majority of the
members present at a special general meeting of the society held for the
purpose, resolve to divide itself into two or more societies, provided that
each member has had fourteen days' written notice of the resolution and the
date of the meeting. The resolution (hereafter 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. | Division of 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 bye-law to the contrary, by notice given
to the society within a period of three 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 a period of three months 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. |
(6) After the
expiry of three 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 fourteen 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 Director are not material, he may,
subject to the provisions of subsection (9) and section 7, register the new
societies and the bye-laws thereof. On such registration, the registration of
the old society shall be deemed to be dissolved from the date of such
cancellation. |
(7) The opinion of
the Director 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- |
(a) repayment
of the share capital of all the members who have given notice under subsection
(3); |
(b) satisfaction
of the claims of all the creditors who have given notice under subsection (4); |
(c) satisfaction
of the claims of such of the other persons who have given notice under
subsection (5) as the Director decides or securing their claims in such manner
as the Director 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 Director 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 (c) of subsection
(8), the Director may refuse to register the new societies. |
(10) The
registration of the new societies shall be a sufficient conveyance 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). |
52. (1) A company registered under the
Companies Act may by a special resolution, determine to convert itself into a
registered society. | Conversion of company into society. |
(2) A resolution
for the conversion of a company into a registered society shall be accompanied
by a copy of the bye-laws of the society therein referred to, and shall appoint
ten persons, member of the company, who, together with the secretary, shall
sign the bye-laws, and who may either be authorised to accept any alterations
made by the Director therein, without further consulting the company, or may be
required to lay all such alterations before the company in general meeting for
acceptance as the resolution may direct. |
(3) With the
bye-laws a copy of the special resolution for conversion of the company into a
registered society shall be sent to the Director, who shall thereupon proceed
to deal with the resolution as if it were an application for registration under
section 6. |
(4) A copy of the
resolution for the conversion of the company into a registered society under
the seal of the company, together with the certificate of registration issued
by the Director shall be sent for registration to the office of the Registrar
General, and upon the registration of such resolution and certificate, the
conversion shall take effect. |
(5) Upon the
conversion of a company into a registered society the registry of the company
under the Companies Act shall become void, and shall be cancelled by the
Registrar General; but the registration of a company as a registered society
shall not effect any right or claim for the time being subsisting against the
company, or any penalty for the time being incurred by such company, and for
the purpose of enforcing any such right, claim, or penalty, the company may be
sued and proceeded against in the same manner as if it had not become
registered as a society. And every such right or claim, and the liability to
such penalty, shall have priority as against the property of such society over
all other rights and claims against or liabilities of the society. |
53. Notwithstanding anything contained in the Stamp
Act, all instruments executed by or on behalf of a registered society or by an
officer or member thereof relating to the business of such society shall be
exempt from stamp duty. | Exemption from stamp duty. |
54. (1) From and after the commencement of this Act,
no person other than a registered society shall, without the approval of the
Minister, trade or carry on business under any name or title of which the word
"co-operative" is part: | Prohibition of the use of the word
"co-operative". |
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 guilty of an offence and
shall be liable on summary conviction to a fine not exceeding fifty dollars,
and in the case of a continuing offence to a further fine not exceeding ten
dollars for each day during which the offence continues. |
55. A registered society shall have the power to
provide under its bye-laws or in any contract made in accordance with section
14, for the payment by its members of fines and penalties or specific or
ascertainable sums of money by way of liquidated damages for any infringement
of its bye-laws or any breach of such contract or any term thereof. | Provisions for fines and penalties against members. |
56. (1) 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 section 14, 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. | Injunction and specific performance. |
(2) 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 the giving of such undertaking or
security as may be approved by the Supreme Court, the society shall be entitled
to an interim injunction restraining such breach or threatened breach. |
57. The Companies Act and the Friendly Societies Act
shall not apply to any society registered under this Act. | Chapters 308 and 313 not applicable to registered
societies. |
58. (1) Every registered society and every officer or
a member thereof who- | Offences. |
(a) wilfully
neglects or refuses to do any act or to furnish any information required for
the purposes of this Act by the Director or other person duly authorised by him
in writing in this behalf; or |
(b) wilfully
makes a false return or furnishes any false information, |
shall be
guilty of an offence against this Act. |
(2) Every person
who- |
(a) wilfully or
without any reasonable excuse disobeys any summons, requisition or lawful
written order issued under the provisions of this Act; or |
(b) fails 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 against this Act. |
59. Every person who is guilty of an offence against
this Act for which no special punishment is otherwise provided, shall, upon
summary conviction be liable to a fine not exceeding two hundred dollars or to
imprisonment for a term not exceeding six months. | Penalties. |