CROSS RIVER – Co-operative Societies Law

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LAWS OF CROSS RIVER STATE

Co-operative Societies Law

C13 – 5 [Issue 1]

(2)      If the registrar refuses to register a society he shall give notice of the application in writing of the reasons for his refusal.

(3)      Where the registrar refuses to register a society an appeal shall lie to the Commissioner within three months of the registrar giving notice under subsection (2), and the decision of the Commissioner thereon shall be final.

 

7. Societies to be bodies corporate

A society when registered shall be a body corporate having as its name the name under which it is registered; it shall have perpetual succession and a common seal, and power to hold movable and immovable property of every description, to enter into contracts, to sue and be sued and to do all things necessary for the purpose of its constitution.

 

8. Evidence of registration

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

PART 2

Duties and privileges of registered societies

9. Power to make by-laws

(1)      A registered society may, subject to the approval of the registrar, make any by-laws that are necessary or desirable for the purposes for which such society is established.

(2)      A registered society shall make by-laws in respect of the following matters—

(i)       the name of the society and the name of the town or village where it will have its registered address;

(ii)      the area of its operation;

(iii)     the objects of the society;

(iv)     the purposes to which the society’s funds may be applied and the mode of custody and investment of funds;

(v)      the qualifications for membership, the terms of admission of members, the entrance or affiliation fees, if any, payable, and the mode of election;

(vi)     the nature and extent of the liability of members;

(vii)    the notice required for withdrawal of membership;

(viii)    the manner of raising the share capital, if any, and other funds and the terms of withdrawal or transfer of shares;

(ix)     the powers and duties of the general meeting and committee other than those specified in the rules;

(x)      the authorisation of an officer or officers to sign documents and to use the seal on behalf of the society;

(xi)     the disposal of the annual net surplus;

(xii)    in the case of a housing society, the duration of the society;

(xiii)    in the case of a secondary society, the method of representation of members at general meetings, the removal of delegates and the manner of voting of delegates.

(3)      If the objects of the registered society include the creation of funds to be lent to the members, additional by-laws shall be made in respect of the following matters—

(a)      the conditions on which loans may be made to members including—

(i)       the maximum rate of interest;

(ii)      the maximum period allowed for the repayment of a loan;

(iii)     the extension of the term and renewal of a loan;

(iv)     the purposes for which a loan may be granted; and

(v)      the security required for repayment;

(b)      the consequences of default in payment of any sum due on account of shares, compulsory savings, or loans, and the consequences of failure to use a loan for the purpose for which it was granted; and

(c)      the occupation or residence of members.

(4)      By-laws made under this section may empower a registered society to impose a fine upon a member for the breach of a by-law which fine shall be recoverable by the society as a civil debt.

 

10. Amendment of by-laws

(1)      Any society may, subject to this Law and the rules, amend its by-laws, including the by-law which declares the name of the society.

Change of name

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

11. Registration of by-laws and amendment

(1)      No by-law of a society or amendment to a by-law shall be valid until it has been registered by the registrar.

(2)      The registrar shall register a by-law or an amendment to a by-law if he is satisfied that it is not inconsistent with the provisions of this Law or the rules.

(3)      If the registrar refuses to register a by-law or an amendment to a by-law, he shall inform the society in writing of the reasons for his refusal.

(4)      Where the registrar refuses to register a by-law or an amendment to a by-law, an appeal shall lie to the Commissioner within three months of the registrar informing the society under subsection (3) and the decision thereon by the Commissioner shall be final.

(5)      When the registrar registers an amendment of a by-law of a registered society, he shall issue to the society a copy of the amendment certified and sealed by him, and such copy so certified and sealed shall be conclusive evidence that the amendment is duly registered.

 

12. Address of society

(1)      Every registered society shall have an address registered in accordance with the rules to which all notices and communications may be sent.

(2)      The address declared in accordance with section 5 (3) shall be registered as the registered address until changed.

(3)      Every change of address shall be notified to the registrar, who will register the new registered address, and to any non-members who may be creditors of the society.

 

13. Copy of Law, rules, by-laws and list of members open to inspection

Every registered society shall keep a copy of this Law and the rules and of its by-laws and a list of its members open to inspection free of charge by any person at all reasonable times at the registered address of the society.

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 by-laws or otherwise contract with its members—

(a)      that every such member who produces any such article shall dispose of the whole or any specified amount, proportion or description thereof to or through the society; and

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

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

 

15. Creation of charges in favour of registered society

Subject to any prior claim of Government or to a charge lawfully registered on the property of the debtor and of a landlord in respect of rent or any money recoverable as rent—

(a)      any debt or outstanding demand owed to a registered society by any member or past member shall be a first charge—

(i)       upon crops or other agricultural produce raised in whole or in part with a loan taken from the society by such member or past member; and

(ii)      upon any cattle, fodder for cattle, agricultural, fishing or industrial implements, or raw materials for manufacture, or workshops, stores or places of business, or stock in trade, or land or buildings, supplied to such member or past member by the society, or purchased by him in whole or in part with any loan, whether in money or goods, given him by the society:

Provided that nothing contained herein shall affect the claims of any bona fide purchaser or transferee for value without notice of any such crops, or other agricultural produce, cattle, fodder for cattle, or raw materials for manufacture or agriculture, fishing or industrial implements, or workshops, stores or places of business, or stock in trade or land or buildings;

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

 

16. Charges and set off in respect of shares or interests of members

A registered society shall have a charge upon the shares or interests in the capital and on the deposits of a member or past member or deceased member and upon any dividend, bonus or surplus payable to a member or past member or to the estate of a deceased member in respect of any debt due to the society from such member or past member or estate and may set off any sum credited or payable to a member or past member or estate of a deceased member in or towards payment of any such debt.

 

17. Share or interest not liable to attachment or sale

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 any court in respect of any debt or liability incurred by such member, and neither his assigns in insolvency nor a receiver duly appointed shall be entitled to or have any claim on such share or interest.

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

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

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

 

19. Deposits by or on behalf of minors

(1)      A registered society may receive deposits from or for the benefit of minors and it shall be lawful for a registered society to pay such minors the interest which may become due on such deposits. Any deposit 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 the minor for the use of the minor.

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

 

20. Register of members

The register of members kept by a registered society shall be prima facie evidence of any of the following particulars entered therein—

(a)      the membership of any member;

(b)      the date at which any member became a member; and

(c)      the date at which any member ceased to be a member.

 

21. Proof of entry in the books of the society

(1)      A copy of any entry in a book of a registered society regularly kept in the course of business shall, if certified in such manner as is prescribed in the rules, 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 same extent as, the original entry itself is admissible.

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

 

22. Staff Provident Fund

(1)      Any registered society may establish a Provident Fund for its employees, or may, with the consent of and on conditions laid down by the Co-operative Union of the State, participate in a Provident Fund established by such Union.

(2)      Any such Provident Fund shall be administered in accordance with and governed by rules made by the general meeting of the society establishing it.

(3)      Any employee who is a depositor in such a fund may nominate, in accordance with any rules made in his behalf, a person or persons to whom in the event of his death his deposit or interest in the fund shall be paid according to any rules made under subsection (2).

At the appointed date for this revised edition no Co-operative Union had been established for Cross River State.

(4)      All payments made under the provisions of subsection (3) shall be valid and effectual against any demand made upon the fund or the society by any other person notwithstanding any written law or any custom to the contrary.

(5)      The society shall have a first charge upon the deposit or interest of an employee, former employee or deceased employee in such fund in respect of any debt due to the society from such employee, former employee or deceased employee, and may set off any sum credited or payable to the employee, former employee or estate of deceased employee in or towards payment of any such debt.

 

PART 3

Rights and liabilities of members

23. Qualification of members

(1)      To be qualified for membership of a registered society an individual must have attained the age of sixteen years and be resident within, or in occupation of land within the area of operations of the registered society as defined in its by-laws.

(2)      To be qualified for membership of a secondary society a registered society must have its registered address within the area of operations of the secondary society as defined in its by-laws.

(3)      Notwithstanding the provisions of subsection (1)—

(a)      a pupil over the age of eight shall be qualified for membership of a registered school society; and

(b)      an apprentice under the age of sixteen shall be qualified for membership of a registered productive society of craftsmen; and

(c)      the person to whom a registered society transfers the share or interest of a deceased member in accordance with any nomination under the provision of section 18 shall be qualified for membership of such registered society.

(4)      When for the purposes of this section any question arises concerning the age, residence, property qualification or status of any person, then the same shall be decided by the committee, subject to an appeal to the registrar.

(5)      Any person aggrieved by a decision of the registrar under the provisions of subsection (4) may appeal in writing to the Commissioner whose decision shall be final.

 

24. Members not to exercise rights until due payment made

No member of a registered society shall exercise the rights of a member unless or until he has made such payment to the society in respect of membership or acquired such interest in the society as may be prescribed by the rules or by-laws.

 

25. Restriction of membership

Except with the sanction of the registrar, no person shall be a member of more than one registered society whose by-laws permit the grant of loans to members in excess of their share or interest in the society.

 

26. Voting

(1)      Subject to the provisions of this section no member of a registered society shall have more than one vote in the conduct of the affairs of the society:

Provided that in the case of an equality of votes the president or other person presiding at the meeting shall have a casting vote.

(2)      A registered society which operates in a town or in more than one village may in its by-laws provide for local meetings or for voting by proxy.

(3)      The members of a secondary society shall have such voting powers as are laid down in its by-laws.

(4)      A registered society which is a member of a secondary society may appoint a proxy for the purpose of voting in the conduct of the affairs of such secondary society in accordance with its by-laws:

Provided that the person so nominated shall be a member of a registered society.

 

27. The minority or under-age of any person duly admitted as a member of any registered society shall not debar that person from executing any instrument or giving any acquittances necessary to be executed or given under this Law or of any rules made thereunder, and shall not be a ground for invalidating or avoiding any contract entered into by any such person, with the society and any such contract entered into by any such person, with the society, whether as principal or as surety, shall be enforceable by or against such person as though he were of full age and capacity:

Provided that a member who has not attained the age of eighteen years shall not be liable save for payment for necessary things and services, and in respect of contracts entered into for his benefit.

 

28. Restriction of share holding

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

 

29. Restriction of transfer of share or interest

(1)      The transfer or charge of the share or interest of a member or past member or deceased member in the capital of a registered society shall be subject to such conditions as to maximum holding as may be prescribed by this Law or by the rules.

(2)      In the case of a society registered with unlimited liability, a member shall not transfer any share held by him or his interest in the capital of the society or any part thereof unless—

(a)      he has held such share or interest for not less than 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 of the society.

30. Liability of a member

(1)      Notwithstanding the provisions of any by-laws the liability of a member, present or past, of a registered society with limited liability shall extend to the nominal value of any shares held or subscribed by him.

(2)      Where in the by-laws of a registered society with limited liability the amount of the liability of a member is expressed to be greater than the nominal value of any shares held or subscribed by him then the liability of such member shall extend to such greater amount.

(3)      Where the society has received a loan or advance from a co-operative bank or a statutory corporation, every member of that society shall, in addition to any amount for which he may have become liable personally to the society in respect of such loan or advance, be liable to the co-operative bank or statutory corporation as surety for the repayment of the loan or advance, with interest and costs, by the society, in an amount equal to the amount which he has received from the society out of the loan or advance or which has been paid out of the loan or advance for any goods supplied or in respect of any services rendered to him by the society.

 

31. Liability of past member for debt of society

The liability of a past member for the debts of a registered society as they existed on the date on which he ceased to be a member shall not continue for a period of more than two years reckoned from that date.

 

32. Liability of the estate of deceased member for debt of society

The estate of a deceased member shall not be liable for the debts of the society as they existed on the date of his decease for a period of more than two years reckoned from the date of his decease.

 

PART 4

Property and funds of registered societies

33. Restriction of loans

(1)      Subject to the provisions of section 36, a registered society shall not make a loan to any person other than a member of such society, or, with the prior approval of the registrar, to another registered society.

(2)      A registered society shall not lend money upon the security of any movable property other than produce or goods in which the society is authorised to deal without the prior approval of the registrar.

(3)      The registrar may by order prohibit or restrict the lending of money on mortgage of immovable property by any registered society.

(4)      This section shall not apply to a secondary financing society.

 

34. Deposits and loans from non-members

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

 

35. Restrictions of other transactions with non-member

Save as provided for in section 33 and 34, the transactions of a registered society with persons other than members shall be subject to such prohibitions and restrictions as may be prescribed by the rules.

 

36. Investment

A registered society may invest or deposits its funds—

(a)      in any bank, or with any registered society, approved by the registrar; or

(b)      in any other manner approved by the registrar.

 

37. Disposal of surplus

(1)      Subject to the provisions of this section no registered society of limited liability shall pay a dividend or bonus or otherwise distribute any part of its net surplus except as provided in its by-laws and with the prior approval of the registrar.

(2)      A registered society of unlimited liability shall not make any distribution of its surplus without the authority of the registrar.

Reserve fund

(3)      Every registered society shall pay one quarter of its net surplus to a fund to be called the reserve fund of that society:

Provided that the registrar may exempt any registered society of limited liability from further contribution to its reserve fund or reduce the rate of such contribution.

(4)      Any registered society or member or officer of any registered society who distributes any part of the net surplus of such society except as provided under the provisions of this section or in accordance with the by-laws of such society shall be guilty of an offence and shall be liable upon conviction in the case of a registered society to a fine not exceeding ten thousand naira and in the case of a member or officer to a fine not exceeding ten thousand naira or to a term of not more than six months’ imprisonment.

 

PART 5

Audit, inspection and inquiry

38. Audit

(1)      The registrar shall audit or cause to be audited by some person authorised by him by general or special order in writing the accounts of every registered society at least once in every year.

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

(3)      The registrar and every other person appointed to audit the accounts of a society shall have power when necessary—

(a)      to summon at the time of his audit any officer, agent, servant or member of the society who he has reason to believe can give material information in regard to any transactions of the society or the management of its affairs; or

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

(4)      Any officer, agent, servant or member of a registered society wilfully neglecting or refusing to do any act or furnish any information, or furnishing information known to be false or without any reasonable excuse disobeying any summons, requisition or order under subsection

(3)      shall be guilty of an offence, and shall be liable on conviction to imprisonment for not more than six months or to a fine not exceeding ten thousand naira or to both such fine and imprisonment.

 

39. Power of registrar and auditor to inspect books and require returns

(1)      The registrar, and every other person appointed by him in this behalf under the provisions of this section, shall at all reasonable 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.

(2)      The registrar may give directions either generally or specifically prescribing the returns to be submitted and the persons by whom such returns shall be submitted to the registrar by registered societies.

(3)      Any registered society or member or officer of any registered society who fails to comply with a direction given under the provisions of this section, or who submits information or makes a return knowing it to be false, shall be guilty of an offence and liable upon conviction in the case of a registered society to a fine not exceeding ten thousand naira and in the case of a member or officer to a fine not exceeding ten thousand naira or to not more than six months’ imprisonment or to both such fine and imprisonment.

 

40. Inquiry and examination

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

(2)      The registrar shall, on the application of a creditor of the registered society, examine, or direct some person authorised by him in writing to examine, the books of the society, if the applicant—

(a)      proves to his satisfaction that an ascertained sum of money is then due to him and that he has demanded payment thereof and has not received satisfaction within a reasonable time; and

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

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

(4)      Where an inquiry is held under subsection (1) or an examination is made under subsection (2), the registrar may by a certificate under his hand and seal make an award apportioning the costs, including the remuneration of any person appointed to make such inquiry or examination, or such part of the costs, as he may deem right, between the registered society, the members demanding the inquiry, the officers or former officers of the society, and any creditor on whose application the examination was made.

(5)      Any sum awarded by way of costs under subsection (4) shall be recoverable in the same manner as a fine imposed by any court having jurisdiction over the person against whom the award is made, on production before the court of the certificate referred to in subsection (4).

(6)      The registrar or the person authorised by him to conduct an inquiry under subsection (1) may, if he considers that it is in the best interests of the members that the books and property of the society should be deposited with him, order the books and property to be deposited within such time and at such place as is stated in the order.

(7)      Any registered society or member or officer of any registered society who fails to supply information when requested to do so under the provisions of this section or who gives information knowing that it is false or refuses to surrender the books or property of a registered society after an order has been made under subsection (6), shall be guilty of an offence and liable upon conviction in the case of a registered society to a fine not exceeding ten thousand naira and in the case of a member or officer to a fine not exceeding ten thousand naira or to not more than six months’ imprisonment or to both such fine and imprisonment.

 

PART 6

Dissolution

41. Inquiry and examination

(1)      If the registrar, after holding an inquiry or making an examination under section 40, or on receipt of an application made by three-fourths of the members of a registered society present at a special meeting convened for the purpose, is of the opinion that such society ought to be wound up, he may issue an order directing it to be wound up.

(2)      The registrar may, of his own motion, make a winding-up order in respect of a registered society which has not commenced working or has ceased working or the membership of which is reduced to less than the minimum membership prescribed in section 4.

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

(4)      Any member of a registered society may, within two months from the date of a winding- up order under subsection (1) or (2), appeal against such order to the Commissioner and the decision of the Commission thereon shall be final.

(5)      When making a winding-up order under subsection (1) or (2), the registrar may appoint a liquidator for this purpose and fix his remuneration.

(6)      A liquidator shall not wind up a society until any appeal prosecuted under the provisions of subsection (4) has been determined or until two months have elapsed from the date of the winding-up order whichever period is the shorter.

 

42. Powers of liquidator

(1)      Subject to the provisions of any order made by the registrar under section 43 a liquidator appointed by the registrar shall have power—

(a)      to take immediate possession of all assets belonging to the registered society and of all books, records and other documents pertaining to the business thereof;

(b)      to carry on the business of the society so far as may be necessary for winding it up beneficially, provided that he shall not for this purpose be entitled to issue any loan;

(c)      to appoint by notice in the State Gazette a day before which creditors shall state their claims for admission or be excluded from any distribution made before they have proved them;

(d)      to refer any dispute to arbitration and institute and defend suits and other legal proceedings on behalf of the registered society by his name or office;

(e)      to give such directions in regard to the collection and realisation of assets as may be necessary in the course of winding up the society;

(f)      to investigate all claims against the registered society, and, subject to the provisions of this Law, to decide by order questions of priority arising between claimants;

(g)      to pay claims against the registered society (including interest payable up to the date of the winding-up order) according to their respective priorities, if any, in full or to such extent as the assets of such society permit;

(h)      to compromise any claim by or against the society, provided that the approval of the registrar has first been obtained;

(i)       to call such meetings of members as may be necessary for the proper conduct of the liquidation, giving not less than fourteen days’ notice of every such meeting;

(j)      to decide by order, subject to any by-laws limiting the liability of members and to the provisions of section 30, the contributions to be made by members and past members or by estates of deceased members of the society to its assets;

(k)      to arrange for the distribution of the assets of the society in a convenient manner when a scheme of distribution has been approved by the registrar;

(l)       to order by what persons and in what proportions the costs of liquidation are to be borne.

(2)      Any person aggrieved by any order of the liquidator made under the provisions of paragraphs (f), (j) or (l) of subsection (1) may appeal to the registrar within thirty days from the date of such order.

(3)      Any person aggrieved by a decision of the registrar given under the provisions of subsection (2) may appeal in writing to the Commissioner within thirty days of such decision; and the decision of the Commissioner shall be final and conclusive.

(4)      Subject to the rules, any liquidator appointed under this Law shall, in so far as such powers are necessary for carrying out the purposes of this section, have all such powers as are vested in a magistrate on the occasion of any action in respect of summoning parties, enforcing the attendance of witnesses and compelling the production of documents.

(5)      Any person wilfully neglecting or refusing to do any act or to furnish any information, or furnishing information known to be false, required for the purposes of this section, or without reasonable excuse disobeying any summons, requisition or order issued thereunder, shall be guilty of an offence and shall be liable on conviction to imprisonment for not more than six months or to a fine not exceeding ten thousand naira or to both such fine and imprisonment.

 

43. Registrar may control liquidation

(1)      A liquidator shall exercise his powers subject to the direction and control of the registrar, who may—

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

(b)      remove a liquidator from office;

(c)      call for any books, documents and assets of the society;

(d)      by order in writing limit any of the powers of a liquidator referred to in section 42;

(e)      require accounts to be rendered to him by the liquidator;

(f)      procure the auditing of the liquidator’s accounts and authorise the distribution of the assets of the society;

(g)      make an order for the remuneration of the liquidator; or

(h)      refer any subject of dispute between a liquidator and any third party to arbitration if that party shall have consented in writing to be bound by the decision of the arbitrator.

(2)      The registrar may insert a notice in the Cross River State Gazette stating the name or names of any society in respect of which a winding-up order has been made. Any such notice shall contain the name of the liquidator who has been appointed in each case and his address, and shall state the day before which creditors shall state their claims for admission or be excluded from any distribution made before they have proved them.

(3)      Any person wilfully neglecting or refusing to do any act or to furnish any information, or furnishing information known to be false, required for the purposes of subsection (1), or without reasonable excuse disobeying any order issued thereunder, shall be guilty of an offence and shall be liable on conviction to imprisonment for not more than six months or to a fine not exceeding ten thousand naira or to both such fine and imprisonment.

 

44. Enforcement of order

(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 registrar under that section.

(2)      An order made by the liquidator or by the registrar under section 42 or 43 shall be enforced by any civil court, having jurisdiction over the place where the registered address of the society is situated, in like manner as a decree of that court.

 

45. Disposal of assets on liquidation

Upon the winding up of a registered society, the assets, including the reserve fund, shall be applied to the payment of the share capital, provided—

(a)      to the cost of liquidation;

(b)      be the discharge of the liabilities of the society;

(c)      to the payment of the share capital; and

(d)      provided that the by-laws of the society permit to the payment of a dividend or members’ bonus at a rate not exceeding that laid down in such by-laws for any period during which no dividend or members’ bonus was in fact paid.

 

46. Appeal

(1)      When the affairs of a registered society for which a liquidator has been appointed have been wound up or, where no liquidator has been appointed, after two months from the making of an order under section 41 by the registrar or after confirmation of such order on appeal, the registrar shall make an order cancelling the registration of such society and the society shall be dissolved from the date of such order.

(2)      The claim of any creditor of the society who has not received what is due to him under the approved scheme of distribution shall be prescribed when two years have elapsed from the date of cancellation of registration.

(3)      Any surplus remaining after the application of the funds to the purposes specified in section 45 and any sums unclaimed after two years under subsection (2) shall not be divided among the members, except in the case of the liquidation of a secondary society, but shall be disposed of by the registrar in accordance with the rules.

 

PART 7

Surcharge and attachment

 

47. Surcharge

(1)      Where in the course of an audit of a registered society held under the provisions of section 38, or in the course of an inquiry into the affairs of a registered society held under the provisions of section 40, or in the course of the winding up of a registered society, it appears that any person—

(a)      who has taken part in the organisation or management of the society has misapplied or retained or become liable or accountable for any money or property or of that society; or

(b)      has been guilty of misfeasance or breach of trust in relation to the society, the registrar may, on his own volition, or on the application of the liquidator or of any creditor or contributor, examine the conduct of the person and make an order requiring him to repay or restore the money or property or any part thereof with interest at such a rate as the registrar thinks just or to contribute such sum to the assets of the society by way of compensation in regard to the misapplication, retention, dishonesty or breach of trust as the registrar thinks fit.

(2)      Any person who, without reasonable excuse, fails to comply with the provisions of an order issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to imprisonment for not more than six months or to a fine not exceeding ten thousand naira.

 

48. Appeal

(1)      Any person aggrieved by any order of the registrar made under section 47 may, within a period of three months of the order, appeal to the Commissioner.

(2)      The Commissioner on appeal shall have power to confirm, vary or quash the order of the registrar and to remit the matter with such directions as he thinks fit for giving effect to his decision.

(3)      Subject to the provisions of this section any order made by the registrar or by the Commissioner under its provisions shall be final.

 

49. Attachment

(1)      Where the registrar is satisfied that any person with intent to defraud, or with intent to delay the execution of any order or award which may be made against him under sections 42, 43, 47, 48 or 50—

(a)      is about to dispose of the whole or any part of his property; or

(b)      is about to remove the whole or any part of his property from the local limits of the jurisdiction of the registrar, the registrar may, unless adequate security is furnished, direct the interim attachment of the said property or such part thereof as he thinks necessary; and such attachment shall have the same effect as if it had been made by a court of competent jurisdiction.

(2)      Any person who without reasonable excuse fails to comply with the provisions of an order issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to imprisonment for not more than twelve months or to a fine not exceeding ten thousand naira.

PART 8

Disputes

50. (1) If any dispute touching the business of registered society arises—

(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, agent or servant of the society; or

(c)      between the society or its committee and any officer, agent or servant of the society; or

(d)      between the society and any other registered society; such dispute shall be referred to the registrar.

(2)      Without prejudice to the generality of subsection (1)—

(a)      a claim by registered society for any debt or demand due to it by a member, past member or the nominee or legal personal representative of a deceased member, whether such debt or demand be admitted or not; and

(b)      a claim by a member who was guarantor of a loan against the member whose loan he guaranteed, resulting from the repayment by the guarantor of the loan to the society, for the repayment of the amount by the borrower to the guarantor,

shall be deemed to be disputes touching the business of the society within the meaning of subsection (1).

(3)      The registrar shall on receipt of a reference made under the provisions of subsection (1)—

(a)      decide the dispute himself; or

(b)      subject to the provisions of the rules, refer it to an arbitrator or arbitrators to be appointed by him.

(4)      Subject to the provisions of the rules, the registrar may withdraw any reference made under paragraph (b) of subsection (3) and decide the dispute himself under paragraph (a) of subsection (3).

(5)      Any party aggrieved by an award of an arbitrator or arbitrators may appeal within thirty days of the date of the award to the registrar, specifying that part of the award against which he is appealing and stating in detail the grounds of his appeal.

(6)      The registrar, of his own motion, on review or on appeal under subsection (5), may confirm, vary or quash the award made by the arbitrator or arbitrators.

(7)      The registrar and any arbitrator or arbitrators appointed by him under the provisions of this section shall for the purposes of any proceedings brought under the provisions of this section have all such powers as are vested in a magistrate on the occasion of any action in respect of summoning parties, enforcing the attendance of witnesses and compelling the production of documents.

(8)      Any person aggrieved by the decision of the registrar under subsection (6) may within thirty days of the date of such decision appeal to the Commissioner, who shall have power to confirm, vary or quash the decision of the registrar and to remit the matter to the registrar with such directions as he deems fit for giving effect to his decision.

(9)      Subject to the provisions of this section any award made by an arbitrator or arbitrators or any decision given by the registrar or the Commissioner shall be final.

(10)    The award of the arbitrator or arbitrators or the decision of the registrar or the Commissioner as the case may be shall, on the application of the party in whose favour it is given, be enforced by any court which would have jurisdiction in civil suits between the parties to the dispute in the same manner as if the award or decision had been a judgment or decision of the court.

(11)    Notwithstanding the provisions of any written law an application made under the provisions of subsection (10) may be made by a public officer authorised by the registrar in that behalf.

 

PART 9

Rules and rules of Court

 

51. Rules

(1)      Subject to the provisions of section 52 the Commissioner may make all such rules as may be necessary for the purpose of carrying out or giving effect to the principles and provisions of this Law.

(2)      In particular and without prejudice to the generality of the foregoing power, such rules may—

(a)      prescribe the forms to be used and the conditions to be complied with in the making of applications for the registration of societies and the procedure to be followed with regard to such applications;

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

(c)      subject to the provisions of section 28, prescribe the maximum number of shares or portion of the capital of a society which may be held by one member;

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

(e)      provide for the withdrawal or expulsion of members and for the payments, if any, 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, empower the registrar or any person authorised by him to summon such meetings, provide for the procedure at such meetings, and the powers to be exercised at such meetings, and the appointment and voting powers of delegates of affiliated societies to the meetings of secondary societies;

(g)      provide for the appointment, tenure of office, 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 for the procedure to be followed in making, altering and rescinding bylaws, and the conditions to be satisfied prior to such making, alteration or correction;

(i)       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 periods for which loans may be made or credits granted and the maximum amount which may be lent and the maximum credit which may be allowed to individual members with or without the consent of the registrar;

(j)      provide for the mode in which the value of a deceased member’s interest shall be ascertained and for the nominating of a person to whom such interest may be paid or transferred in accordance with the provisions of section 18;

(k)      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;

(l)       provide for the formation and 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 the society;

(m)     prescribe the conditions under which accumulated funds may be distributed to the members of a society and the maximum rate of dividend which may be paid by a society;

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

(o)      provide for the audit of the accounts of registered societies and for the charges if any to be made for such audit and for the payment thereof to a registered society;

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

(q)      provide for the formation and maintenance of a register of members, and, where applicable, of a register of shares;

(r)      provide for the inspection of documents and registers at the registrar’s office, and the fees to be paid therefor and for the issue of copies of such documents or registers;

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

(t)      prescribe the mode of appointing an arbitrator or arbitrators and subject to any rules of court made under the provisions of section 52 the procedure to be followed in proceedings before the registrar or such arbitrator or arbitrators;

(u)      prescribe the procedure to be followed by a liquidator appointed under section 41;

(v)      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 Law or the rules;

(w)     provide for the amalgamation or division of registered societies.

(3)      In any case where the registrar is satisfied that a substantial number of members of any society is unacquainted with the English language, he shall cause such rules to be translated into a language with which such members are acquainted, and additionally to be made known in such manner as is customary for the community concerned.

 

52. Rules of Court

Without prejudice to any power to make rules of court under the High Court Law, the High Court Rules Committee may after consultation with the Commissioner make rules of court subject to the provisions of this Law for regulating that pleading, practice and procedure of the High Court or of a Magistrate’s Court in any matter brought before such courts under the provisions of this Law and the practice and procedure to be adopted and the forms to be employed by a liquidator in the exercise of his powers under the provisions of subsection (1) of section 42 and by the registrar in the exercise of his powers under the provisions of subsection (2) of section 49.

53. Case stated

(1)      Notwithstanding anything contained in section 50 the registrar at any time when proceeding to a decision under this Law, or the Commissioner at any time when an appeal has been preferred to him against any decision of the registrar under this Law, may refer any question of law arising out of such decision for the opinion of the High Court.

(2)      Any Judge, or Judges, of the High Court as the Chief Judge may direct, may consider and determine any question of law so referred, and the opinion given on such question shall be final.

54. Recovery of sums due to Government

(1)      Such sums as may be due from a registered society or from an officer or from an officer or member or past member of a registered society as such to the Government may be recovered in the manner provided the time being in force.

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

 

55. Prohibition of use of word “co-operative”

(1)      No person other than a registered society shall trade or carry on business under or use any name or title of which the word “co-operative” is part without the sanction of the registrar.

(2)      Any person who contravenes the provisions of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five thousand naira and in the case of a subsisting offence to a further fine not exceeding hundred naira for each day during which the offence subsists.

 

56. Information in society’s books exempt from disclosure for certain purposes

All information contained in the books and accounts of a registered society relating to the property or the financial situation of the society’s members shall be wholly exempt from disclosure for any purpose relating to any income or other tax or to rating, unless the Commissioner shall direct to the contrary.

 

57. Power to exempt from certain duties and fees

(1)      The Governor by a notice published in the State Gazette may in the case of all or any registered societies reduce or remit—

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

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

(2)      The Governor may by a notice published in the Cross River State Gazette cancel or modify any notice published under subsection (1).

 

58. Restriction on application of certain laws

(1)      The provisions of the Companies and Allied Matters Act 1990, and of the Moneylenders Law shall not apply to societies registered under this Law.

[Cap. C20. LFN. Cap.M7.]

(2)      The provisions of the Arbitration Law shall not apply to proceedings under section 53 of this Law.

(3)      The provisions of the Pawnbrokers Law shall not apply to agricultural produce or the produce of handicraftsmen or stock in trade pledged, pawned or otherwise delivered to a society registered under this Law by members of the society.

[Cap. P3.]

 

59. Exemption from compulsory registration of instruments relating to shares, etc. Of registered society

Nothing in the Law relating to the registration of instruments for the time being in force shall apply to—

(a)      any instrument relating to shares in a registered society, notwithstanding that the assets of such society consist in whole or in part of immovable property;

(b)      any charge created in favour of a registered society by a member of that society in respect of any produce of his agriculture, his land, his craftsmanship or in respect of his stock in trade; or

(c)      any instrument relating to a deposit by a member in or a loan to a member by a registered society.

 

60. Offences

(1)      If any person obtains possession by false representation or imposition of any property of a society or having the same in his possession withholds or misapplies the same, or wilfully applies any part thereof to purposes other than those expressed or directed in the rules or in the by-laws of the society he shall, on the complaint of the society or of any member authorised by the society or the committee thereof or by the registrar or by any person authorised by order in writing by the registrar, be liable on summary conviction to a fine not exceeding ten thousand naira with costs, and to be ordered to deliver up all such property or to repay all moneys applied improperly, and in default of such delivery or repayment of such fine to be imprisoned for a term not exceeding six months.

(2)      Any member of a registered society who has received a loan from his society for a specified and approved purpose and applies it to some other purpose without the consent of the committee of the society, and any surety of such member who wilfully fails to report such misapplication to the committee shall be guilty of an offence and shall be liable on conviction to imprisonment for not more than twelve months or to a fine not exceeding twenty naira.

 

61. Saving

(1)      Nothing in this Law shall affect any Order in Council, order, rule, regulation, appointment, conveyance, mortgage, deed or agreement made, resolution passed, direction given, proceeding taken, instrument issued or thing done under the Co-operative Societies Ordinance, but any such Order in Council, order, rule, regulation, appointment, conveyance, mortgage, deed, agreement, resolution, direction, proceeding, instrument or thing shall, if in force at the commencement of this Law, continue in force, and, so far as it could have been made, passed, given, taken, issued or done under this Law, shall have effect as if made, passed, given, taken, issued or done under this Law.

[L. of N. 1948, Cap. 39.]

(2)      Any document referring to the Co-operative Societies Ordinance shall be construed as referring to the corresponding enactment of this Law.

(3)      Any register kept under the Co-operative Societies Ordinance shall be deemed part of the register to be kept under the corresponding provisions of this Law.

(4)      All funds and accounts constituted under this Law shall be deemed to be in continuation of the corresponding funds and accounts constituted under the Co-operative Societies Ordinance.

(5)      Where any offence, being an offence for the continuance of which a penalty was provided, has been committed under the Co-operative Societies Ordinance, proceedings may be taken under this Law in respect of the continuance of the offence after the commencement of this Law in the same manner as if the offence had been committed under the corresponding provisions of this Law.

 

PART 11

Citation and interpretation

62. Interpretation

In this Law, unless the context otherwise requires—

“by-laws” includes the registered by-laws made by a society in the exercise of any power conferred by this Law, and any registered amendment thereof, such amendment being either a new by-law or the variation or revocation of an existing by-law;

“Commissioner” means the member of the State Executive Council for the time being charged with responsibility for this Law;

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

“council of inspection” means the elected council of members who are not members of the committee to whom the supervision of the committee is entrusted;

“delegate” means the representative of a society elected to be its proxy in meetings of a secondary society with which the society is affiliated;

“dividend” means a share of the net surplus of a registered society dividend among its members in proportion to the paid-up share capital held by them;

“Gazette” means Cross River State Gazette;

“honorarium” means a share of the net surplus of registered society dividend amongst some or all of the members of the committee or the Council of Inspection or scrutinisers of the society in recognition of services for which otherwise no payment is received;

“liability of member” means the extent to which a member may be obliged to contribute money to meet the debts of a society on liquidation thereof;

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

“member’s bonus” means a share of the net surplus of a registered society dividend among its members in proportion to the volume of business done by them with the society from which the surplus of the society was derived;

“net surplus” means the difference between income received or accrued during the financial year and the total of expenditure made or accrued during the year and provisions and allowances for the depreciation of fixed assets or the writing off of losses or bad debts and for the creation or maintenance of reserves against bad debts or deprecation of stocks;

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

“primary society” means a registered society consisting of individual as members;

“productive society” means a registered society whose principal object is the carrying on of agricultural or forest production, fishing or manufacturers and whose members are respectively working farmers, forest workers, fishermen, or craftsmen or industrial workers;

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

“registrar” means the registrar of co-operative societies appointed under section 1 of this Law and also any person when exercising such powers of the registrar as may have been conferred upon him under that section;

“rules” means made under this Law;

“school society” means a co-operative society whose members are pupils or students attending school;

“scruitiniser” means a member of a society who is not a member of the committee of such society and who is elected to supervise the work of the committee on behalf of the members of the society;

“secondary financing society” means a registered society of which the principal object is to make loans to other registered societies;

“secondary society” means a registered society of which some registered societies are members established to facilitate the operations of registered societies in accordance with cooperative principles and also a secondary financing society;

“staff bonus” means a share of the net surplus of a registered society divided amongst some or all of the employees of the society;

“State” means Cross River State;

 

63. Short title

This Law may be cited as the Co-operative Societies Law.

CO-OPERATIVE SOCIETIES LAW

SUBSIDIARY LEGISLATION

CHAPTER C13

 

List of Subsidiary Legislation

1. Co-operative Societies Rules.
2. Co-operative Societies (Audit and Supervision Fees) Assessment Notice.
3. Co-operative Societies (Removal of Exemption) Order.

CO-OPERATIVE SOCIETIES RULES

ARRANGEMENT OF RULES

RULE

1. Application for registration.
2. Name of society.
3. Register of societies.
4. Registration.
5. Register of members.
6. Books and accounts.
7. Membership.
8. Nominees.
9. Shares; subscription, transfer, revaluation, withdrawal.
10. Division of surplus.
11. Maximum liability.

General meetings

12. General meetings.
13. First meeting.
14. Annual general meeting.

15.

16. Quorum at general meetings.

17.

18. Voting at general meetings.
19. Minutes of general meeting.

Committee

20. Qualifications.
21. Election and term of office.
22. Removal from office.
23. Vacancies.
24. Meetings.
25. Duties of committee.
26. Banking account.
27. Delegates.
28. Employees.
29. Loans to members.
30. Maximum credit limit.
31. Produce marketing.
32. Bad debts.
33. Annual accounts.
34. Reserve Fund.

35.

36. Audit.
37. Audit and supervision fees.
38. Amendment of by-laws.
39. Copies of entries.
40. Disputes.
41. Disposal of balance after liquidation.

42.

43.

44. President.
45. Division and amalgamation.
46. Deposit interest.
47. Council of Inspection and scrutinisers.

48.

CO-OPERATIVE SOCIETIES RULES

1. Application for registration

Every application for registration under section 5 of the Law shall be submitted to the registrar in the form prescribed or approved by him.

2. Name of society

Every society shall include in its name a word or words clearly indicating the nature and situation or area of operations of the society.

 

3. Register of societies

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

(2)      All original entries in the Register of Societies shall be made by or under the direction of the registrar and shall be signed by him.

(3)      Every alteration, interlineation or erasure in the Register of Societies shall be initialled by the registrar.

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

 

4. Registration

(1)      Where the registrar decides to register a society which has applied for registration the society shall be registered in the Register of Societies.

(2)      Upon the registration of a society the registrar shall forward to the society free of charge (a) a Certificate of Registration sealed and signed by him (b) a copy of the Law and of the rules in English.

(3)      The registrar shall also forward to the society a copy of the by-laws of the society as approved by him and certified under his hand as sealed and as approved by him.

 

5. Register of members

(1)      Every registered society shall keep a register to be called “the register of members” wherein shall be entered—

(a)      the name, address and occupation of each member;

(b)      the date on which each member’s name was entered in the register;

(c)      the date on which any member ceased to be a member; and

(d)      the nominee, if any, appointed under rule 10, or the reference to a confidential nomination under rule 10 (4).

(2)      Every member shall be required to sign the register of members on admission.

 

6. Books and accounts

Every registered society shall keep such accounts and shall use such books as may from time to time be prescribed by the registrar.

 

7. Membership

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

(2)      No registered society shall fix any limit to the number of its members, save with the registrar’s consent.

(3)      A member may withdraw from a registered society by giving such notice as the bylaws may prescribe to the secretary.

(4)      A member who acts in contravention of the rules or by-laws or acts in any way detrimental to the interests of the registered society may be expelled by a vote of two-thirds of the members present at a general meeting upon a charge of which he is informed in writing by the committee not less than one week before the meeting.

(5)      A member who loses any of the qualifications for membership prescribed by the Law or the rules or the by-laws shall cease to be a member of the registered society and the committee shall cause his name to be struck off the register of members.

 

8. Nominees

(1)      Every appointment of a nominee by any member or employee of a registered society for the purposes of sections 18 and 22 of the Law shall be made in writing and signed by the member or employee in the presence of two attesting witnesses.

(2)      Where desired by the member or employee, the nomination may be confidential and may be kept in a sealed envelope.

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

(4)      Every appointment of a member’s nominee under section 18 shall be recorded in the register of members; in the case of a confidential nomination by reference to the serial of the sealed envelope.

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

(6)      Any nomination made by a member or employee may be varied when the member or employee so desires.

(7)      Subject to the provisions of rule 9, for the purpose of a transfer to a nominee, the value of any share or interest shall be represented by the sum actually paid for that share or interest unless the by-laws of the registered society otherwise provide.

 

9. Shares; subscription, transfer, revaluation, withdrawal

(1)      A society’s by-laws may provide that every person admitted as a member shall be deemed to have subscribed to a stated number of shares by virtue of his admission.

(2)      Any share may be transferred with the approval of the committee to any other member or to a person admitted as a member in accordance with the by-laws at the option of the transferor; provided that—

(a)      such transfer shall not be approved if it would reduce the transferor’s paid-up shares below the minimum share-holding laid down in the by-laws;

(b)      such transfer shall not be approved save by special order of the committee where the transferor is indebted to the registered society;

(c)      no such transfer shall be valid and effective unless and until it has been registered by the secretary on the direction of the committee;

(d)      such transfer shall not affect any claim of the registered society upon the transferor.

(3)      On the application of a registered society by resolution of its general meeting or of his own motion after an inquiry under section 40, the registrar may revalue the shares of a society by writing them down in value, provided that he shall first (a) value the assets of the society and (b) write off a deficit against reserve fund or other reserves.

(4)      On the application of a registered society by resolution of its general meeting, the registrar, if satisfied that the society’s general reserve is larger than is necessary, may revalue the shares of a society by approving the use of all or part of the general reserve to enhance the value of shares.

(5)      Shares shall be withdrawable as well as transferable subject to the following exceptions and restrictions—

(a)      in a secondary society or in a primary productive society the by-laws may provide that no share is withdrawable;

(b)      in a society which has a deficit which exceeds its reserves withdrawal of shares shall not be permitted until a revaluation has been made by the registrar under subrule (3);

(c)      withdrawal of shares shall not be permitted if such withdrawal would reduce the maximum liability fixed in accordance with rule 11 below the actual liability of the society to non-members;

(d)      subject to (b) and (c), where a registered society of limited liability holds deposits or loans from non-members, no member withdrawing, expelled or removed from membership shall be entitled to withdraw shares until the deposits or loans from non-members have been refunded or a period of one year has elapsed whichever is earlier; and

(e)      in the interpretation of this sub-rule withdrawal shall include the withdrawal of shares by the nominee of a deceased member.

(6)      A register of shares shall be maintained by every registered society showing shares subscribed and paid up by every member.

 

10. Division of surplus

(1)      No bonus or dividend shall be distributed to members by a society registered with unlimited liability until the reserve fund has reached a proportion of not less than one-tenth of the society’s total liabilities.

(2)      No registered society shall pay a dividend on shares if the rate of interest on loans granted by it to its members exceeds twelve and one-half per centum per annum.

(3)      No registered society shall pay a dividend on shares at a rate in excess of ten per centum per annum.

(4)      In order to ascertain the net surplus, such allowances and provisions shall be made for the depreciation of fixed assets or the writing off of losses or bad debts, and for the creation or maintenance of reserves against bad debts or depreciation of stocks, as the registrar may prescribe or approve.

(5)      When for the purpose of section 37 or this rule any question arises concerning the net surplus of a registered society, the decision of the registrar after audit shall be final.

(6)      A bonus based on wages or on the value of the products of a member in a productive society or a bonus or a rebate on patronage calculated in proportion to the amount of the business done by each member with the registered society may be distributed periodically to the members from the net surplus.

(7)      Any bonus under (6) shall be calculated on the basis of the total business done with both members and non-members, but the bonus calculated in respect of business with non-members shall on no account be distributed to members but shall be allocated either to the general reserve or in whole or in part to a deposit account from which the share account of any non-member subsequently admitted as a member may be credited with all or part of the bonus in respect of business done by him as a non-member.

(8)      Part of the net surplus of a registered society may or, if so directed by the registrar, shall be appropriated to creating or increasing reserves for bad debts or for depreciation of stock or of investments.

(9)      Any society may set aside part of its net surplus as provision for expenditure in the forthcoming year, or for payment of honoraria to officers and committee or of staff bonuses, or for the pay of interest or additional interest on members’ savings or deposits, or for donations to charitable and welfare purposes.

(10)    No part of the net surplus deriving from special or non-recurrent income, such as fines, entrance fees, donations and penal interest shall be distributed to members but, except in the first year of a society’s operations, shall be allocated to the reserve fund.

 

11. Maximum liability

(1)      Every registered society shall, from time to time, fix at a general meeting the maximum liability it may incur in loans or deposits from members and from non-members.

(2)      The registrar may limit either generally or specifically the maximum fixed under this rule.

(3)      No registered society shall accept loans or deposits which will make its liability exceed the maximum liability fixed under this rule.

 

General meetings

12. General meetings

The supreme authority in a registered society shall be vested in the general meeting of members at which every member has a right to attend and vote on all questions. Subject to the provisions of section 26 of the Law, each member shall have one vote only which shall be exercised in person and not by proxy.

 

13. First meeting

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

 

14. Annual general meeting

(1)      The annual general meeting of members shall be convened by the committee as soon as the annual accounts have been approved by the registrar or audited. At least eight days’ notice shall be given.

(2)      The functions of the annual general meeting shall be—

(a)      to confirm the minutes of the last general meeting;

(b)      to consider the committee’s annual report and the annual accounts and balance sheet as approved by the registrar or audited;

(c)      to decide upon the disposal of the net surplus of the preceding year subject to the registrar’s approval;

(d)      to elect officers and committee members and where applicable delegates and members of the Council of Inspection or scrutinisers for the coming year;

(e)      to deal with any other business of a general meeting.

15. (1) General meetings shall be held at such intervals as the by-laws may specify.

(2)      In addition, special general meetings may be convened at any time by the committee or by the registrar or by the scrutinisers or Council of Inspection or at the written request of at least one-fifth of the members or delegates or twenty members or delegates whichever is least:

Provided that—

(a)      such written request shall state the object of the proposed meeting;

(b)      if the committee fails to call a meeting within fourteen days from the receipt of such written request the scrutinisers or Council of Inspection or the members or delegates requesting the special meeting may convene the meeting by notice which must contain the object of the proposed meeting and a statement to the effect that the meeting is convened on the failure of the committee to convene the meeting demanded; and

(c)      where the registrar convenes a special meeting, he may direct what matters shall be discussed at the meeting.

(3)      The business of general meetings shall include—

(a)      the fixing of a maximum liability under rule 11 if not already fixed;

(b)      the fixing of maximum credit limits for members where applicable;

(c)      the consideration of inspection reports and communications from the registrar;

(d)      the dealing with complaints by members;

(e)      the amendment of by-laws.

 

16. Quorum at general meetings

(1)      One quarter of the members or delegates of a society shall form a quorum, provided that, where the total number of members or delegates shall form a quorum.

(2)      When any meeting is summoned by the registrar, any members or delegates present at such meeting shall be deemed to form a quorum:

Provided that at least four days’ notice of such meeting is given by the registrar.

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

17. (1) The society’s president, or in his absence the vice-president, or in the absence of both any other person elected by a majority of those present shall preside at general meetings:

Provided that the registrar or a person appointed by him may preside at any meeting convened by the registrar.

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

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

(a)      a special resolution of the meeting to accept new business is passed by at least twothirds of the members present; or

(b)      at least eight days’ notice has been given of the new business to be transacted.

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

(5)      Any society may make standing orders subject to the registrar’s approval to regulate the conduct of meetings.

18. Voting at general meetings

(1)      Any question submitted to the decision of the members or delegates present at a meeting, unless otherwise dealt with in the rules, shall be decided by a majority of votes.

(2)      At any meeting a resolution put to the vote shall be decided on a show of hands unless voting by call of names or a ballot is demanded by at least five of the members or delegates present before the declaration of the result of the show of hands and in such case voting by call of names or a ballot shall be taken as the case may be.

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

19. Minutes of general meeting

(1)      Minutes of the meetings shall be entered in the minute book and shall contain—

(a)      the number and names of the members or delegates present at the meeting, unless the names are recorded in an attendance register instead, and the name of the chairman who presided;

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

(c)      all resolutions and decisions made at the meeting.

(2)      The minutes of the preceding meeting shall be read at the next meeting and if confirmed or after amendment signed by the chairman of that meeting and the secretary.

Committee

 

20. Qualifications

Officers and committee members shall not be elected for a period exceeding one year:

Provided that in secondary societies the by-laws may specify that the maximum length of office shall be three years and an equal proportion of the members shall retire annually in such manner as the by-laws may specify.

 

21. Election and term of office

A member is not eligible for the committee of a society if—

(a)      except in a school society, he is under twenty-one years of age; or

(b)      he is entrusted with secretarial or managerial duties of that society (other than the joint business of the committee), and receives a salary on that account; or

(c)      in a credit society, he lends money on his own account; or

(d)      in a marketing society, he deals in the commodities which the society markets otherwise than through his society.

 

22. Removal from office

A member of the committee shall cease to hold office if—

(a)      he ceases to be a member or shareholder; or

(b)      he is declared insolvent; or

(c)      he becomes of unsound mind; or

(d)      he is convicted of any offence involving dishonesty or is imprisoned for three months or longer; or

(e)      he is not eligible under the provisions of rule 21;

(f)      he fails to attend three consecutive meetings of the committee without due excuse approved by the committee;

(g)      he is removed by a resolution of the general meeting for conduct prejudicial to the interests of the society:

Provided that by resolution of the committee a member of the committee may be suspended pending the next general meeting and may be required to hand over to a person nominated by the committee any property of the society in his possession.

 

23. Vacancies

Vacancies occurring on the committee shall be filed by election at a general meeting unless otherwise provided in the by-laws.

 

24. Meetings

(1)      The committee shall meet as often as the business of the registered society may require and in any case not less frequently than once a month. Where committee meetings are not at a fixed day and time agreed by the committee, the secretary shall summon meetings in writing.

(2)      The quorum for a meeting of the committee shall be half of the number of committee members.

(3)      The president of the society shall be chairman, or in his absence the vice-president, or in the absence of both a member of the committee elected by the committee to preside at that meeting.

(4)      At each committee meeting—

(a)      the minutes of the preceding committee meeting shall be read by the secretary and when adopted or after amendment signed by the chairman of that meeting and the secretary;

(b)      the secretary shall produce the cash book, detail entries of receipts and payments made therein since the last meeting, and produce receipted vouchers in support of payments for checking, and the treasurer shall produce the cash for verification by the committee with the cash book;

(c)      the secretary shall produce a statement of overdue loans and arrears of dues by members for determination by the committee as to the action to be taken;

(d)      the secretary shall read correspondence received from the registrar, secondary societies and others; and

(e)      any other business pending shall be transacted by the committee.

(5)      Minutes of committee meetings shall be recorded by the secretary in the minute book and shall include—

(a)      the number and names of those present;

(b)      the name of the chairman of the meeting;

(c)      a brief record of business done and decisions taken including whether each decision was taken unanimously or by a majority.

 

25. Duties of committee

(1)      The committee shall represent the registered society before all competent public authorities and in all dealings and transactions with third persons, with power to institute or defend suits brought in the name of or against the society, and in general it shall carry out such duties in the management of the affairs of the registered society except those reserved for the general meeting, and subject to any instructions or restrictions duly laid down by the society in a general meeting or in the by-laws.

(2)      In particular the duties of the committee shall include—

(a)      to comply with the Law, the rules and the by-laws of the society and to enforce them;

(b)      to maintain true and accurate accounts, and a true account of the society’s assets and liabilities;

(c)      to lay before the annual general meeting an annual report and annual accounts approved by the registrar or audited;

(d)      to assist the inspection of the books by any person authorised to inspect and to facilitate the annual audit;

(e)      to take adequate security from employees;

(f)      in a credit society, to supervise the application of loans to the purposes for which they are granted;

(g)      in a marketing society, to ensure that produce marketed is of the highest quality;

(h)      to take adequate measures for the safe custody and maintenance of the society’s money, stocks and property;

(i)       to ensure that money is not borrowed in excess of the society’s maximum liability and that money is not lent to members in excess of their maximum credit limits; and

(j)      to take prompt action to put right faults pointed out in audit reports, registrar’s audit comments or inspection reports.

(3)      In their conduct of the affairs of the society the committee shall exercise the prudence and diligence of ordinary men of business. They may be held responsible for any loss sustained through failure to exercise such prudence and diligence or through acts contrary to the Law, the rules or the by-laws.

 

26. Banking account

(1)      With the approval of the registrar, a registered society may open a banking account.

(2)      Unless otherwise specified in the by-laws or approved by the registrar, all cheques shall be signed by two members of the committee and the secretary.

 

27. Delegates

A delegate representing a society in meetings of a secondary society to which it is affiliated shall either be a member of the society’s committee or, if not a member of the committee, shall be required to attend meetings of the committee to receive instructions and report back.

 

28. Employees

Unless the by-laws shall otherwise specify, the committee may—

(a)      appoint such employees at it considers necessary, discipline and terminate their appointment; and

(b)      fix the salary, wages or remuneration and other conditions of service of every such employee.

29. Loans to members

In a primary society whose objects include the making of loans to members—

(a)      a member who desires to obtain a loan shall submit an application in writing to the committee stating the amount and the purpose for which the loan is required, the term for which is it asked, whether it is desired to repay it by instalments, and the names of the proposed sureties and any other security which is offered;

(b)      at every committee meeting the committee shall consider all applications for loans in the order in which they were received. If satisfied with the trustworthiness of the applicant, the sufficiency of the security offered and the prospects of advantage to the borrower in the way of increased production or economy or otherwise, it may sanction the loan;

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

(d)      except where the amount of the loan does not exceed the member’s share, interest or savings in the society, two sureties approved by the committee with or without other security shall be required for every loan. For the purpose of a surety’s maximum credit limit only, a surety’s commitment shall be taken as half the value of the loan;

(e)      the purpose of each loan must be approved by the committee and the loan must be applied to that purpose only. If the committee is satisfied that a borrower has applied a loan to a purpose other than the purpose for which it was approved, the committee may recall the loan forthwith;

(f)      no loan shall be granted for a period exceeding one year unless it be made repayable by instalments;

(g)      before any loan is paid, the borrower and his sureties shall execute an instrument in writing setting out the amount and terms of repayment of the loan and containing such other terms and conditions as the committee may consider necessary;

(h)      it shall be lawful for the committee to refuse to grant a loan solely on the grounds that the applicant is in arrears with compulsory savings or share instalments or has defaulted on a previous loan or an instalment thereof or on payment of interest thereon;

(i)       if, by reason of sickness or some other cause, a member finds that he will be unable to discharge his obligations to the registered society and notifies the secretary in writing before the loan is due, the committee may, with the consent of the loan sureties, extend the time fixed for repayment on such conditions as it deems fit:

Provided that—

(i)       no such extension shall be for longer than one year at a time; and

(ii)      every such extension shall be reported to the next general meeting for confirmation;

(j)      where a loan or an instalment of a loan or interest on a loan has not been paid on the date on which it became due and no extension of time for the payment thereof has been granted, the committee shall take steps for the recovery of the loan from borrower and sureties and if payment is not voluntarily made within one month shall refer the matter to the registrar as a dispute under section 50 of the Law.

30. Maximum credit limit

(1)      In every registered society whose objects include and whose by-laws permit the making of loans to members in excess of a member’s shares or interest on savings in the society, a maximum credit limit shall be fixed for each member by the general meeting.

(2)      The registrar may prescribe generally or specifically limits to such maximum credit limits.

(3)      Subject to any limits prescribed by the registrar, the general meeting may from time to time revise such maximum credit limits.

 

31. Produce marketing

(1)      In a society whose objects include produce marketing, every member of the society shall deliver to the society, at such place and in such manner as the committee may direct, such amount of articles produced or obtained by him as may be prescribed in the by-laws or in the relevant contract to be disposed of by the society.

(2)      Any member who is proved or adjudged under section 53 of the Law to be guilty of a breach of the by-laws or the relevant contract shall pay to the society as liquidated damages such sum as may be specifically assessed or ascertained in the manner prescribed by the bylaws or by the relevant contract and such sum shall be deemed to be a debt due to the society.

32. Bad debts

The committee may cause bad debts to be written off the books of the registered society in such manner and at such times as the general meeting and the registrar may approve.

 

33. Annual accounts

(1)      The committee of every registered society shall prepare or cause to be prepared yearly in such form as may be prescribed by the registrar—

(a)      an account of the registered society’s trading operations for the year;

(b)      an income and expenditure account;

(c)      a balance sheet; and

(d)      such statistical information as the registrar may require.

(2)      The account shall be made up to 31st December or such other date as the registrar may direct and shall be submitted to the registrar within one month of such date.

 

34. Reserve fund

(1)      The reserve fund of a registered society, created in pursuance of the provisions of section 37 (3) of the Law, shall be indivisible and no member shall be entitled to claim a specified share in it.

(2)      The reserve fund shall be invested or deposited as the registrar may direct, or with the sanction of the registrar and subject to such conditions as he may prescribe may be utilised in the business of the registered society.

(3)      The reserve fund may, with the sanction of the registrar and subject to such conditions as he may prescribe, be applied to meet annual deficits, bad debts or occasional deficiencies incurred by the registered society for which the committee is not held responsible under rule 25 (3).

 

35. (1) The general reserve of a registered co-operative society may be utilised with the approval of the general meeting for minor, special and non-recurrent expenditure.

(2)      With the consent of the general meeting and the registrar the general reserve may be utilised for equalisation of dividends or bonuses distributed under rule 10.

 

36. Audit

(1)      The annual audit of every registered society’s books and accounts under section 38 shall be conducted in such manner as the registrar may prescribe.

(2)      The faults reported by auditors shall be notified by the registrar to the registered society.

(3)      Such audit report or notification shall be considered at the next meeting of the society’s committee after its receipt and read out at the next general meeting.

 

37. Audit and supervision fees

(1)      Every society shall pay annually such fee, if any, for audit and supervision as the registrar may assess.

(2)      Any general assessment of rates of audit and supervision fees for various types of societies by the registrar shall be notified in the Gazette.

(3)      Notwithstanding such general assessment, the registrar may—

(a)      reduce assessments for particular societies or exempt particular societies;

(b)      assess additional audit fees where an extra audit is arranged at the society’s request or where extra visits are necessary by or additional work caused to the auditor because the society’s books or accounts are not available or ready for audit or have not been kept in the manner prescribed by the registrar.

(4)      Except where otherwise directed by the registrar, such audit and supervision fees shall be payable within a specified period to the Co-operative Union of Cross River State of Nigeria, Limited, and shall be regarded as a debt to the Co-operative Union of Cross River State of Nigeria.

38. Amendment of by-laws

(1)      No amendment of by-laws shall be registered under section 11 of the Law unless—

(a)      due notice of such proposed amendment has been given in accordance with the by-laws; and

(b)      a resolution to amend the by-laws is passed either—

(i)       by not less than three-fourths of the members present at a general meeting at which not less than one-half of the members of the registered society are present; or

(ii)      by the written vote of a clear majority of the total number of members of the society, provided that voting papers have been sent to all members of the society and that the written votes are examined and counted at a general meeting at which a quorum is present.

(2)      Three copies of such amendment and resolution shall be submitted to the registrar accompanied by (a) a certificate that the provisions of rule 38 (1) have been fully complied with; and (b) an application that the amendment be registered and signed by at least two officers of the society and the secretary.

 

39. Copies of entries

For the purpose of section 21 of the Law, a copy of any entry in the book of a society may be certified by a certificate written at the foot of such copy, declaring that it is a true copy of such entry, and that the book containing the entry is still in the custody of the society, such certificate being dated and signed by the secretary of the society and another member of the committee.

 

40. Disputes

(1)      Reference of a dispute may be made to the registrar under section 50 of the Law either by the committee or by the society by resolution in general meeting or by any party to the dispute, or if the dispute concerns a sum due from a member of the committee to the society, by any member.

(2)      Such reference shall be made by a statement in writing addressed to the registrar. Such statement shall—

(a)      be dated;

(b)      specify the dispute in detail and state the amount claimed or the decisions sought; and

(c)      be signed by the person making it.

(3)      Where the registrar decides to refer the dispute to more than one arbitrator, such reference shall be to three arbitrators, of whom one shall be nominated by each of the parties to a dispute, provided that no legal practitioner shall be so nominated, and the third shall be nominated by the registrar and shall act as chairman.

(4)      Where reference is made to three arbitrators, the following provisions shall have effect—

(a)      if any party to the dispute fails to nominate an arbitrator within fifteen days, the registrar may make the nomination himself;

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

(c)      if the arbitrator nominated by the registrar dies or refuses or neglects to act or becomes incapable of acting, a new arbitrator shall be nominated by the registrar; and

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

(5)      The proceedings before the arbitrator or arbitrators shall, as nearly as possible, be conducted in the same way as proceedings before a court of law, and in particular the following provisions shall have effect in respect thereof—

(a)      notice of the time and place at which the proceedings are to be held shall be given to the parties to the dispute, and such notice shall be at least ten days;

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

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

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

(6)      The award of the arbitrator or arbitrators shall—

(a)      be in writing;

(b)      be dated and signed by the arbitrator or arbitrators;

(c)      state the amount of the costs and expenses of the arbitration, if any, and by which party or parties to the dispute the same are to be paid; and

(d)      be handed to each party to the dispute by the arbitrator or arbitrators.

(7)      Upon the completion of the proceedings, the arbitrator or arbitrators shall forward to the registrar the file of the proceedings including the award.

(8)      Where the registrar exercises the power of deciding a dispute himself, the proceedings before him in relation thereto shall, as nearly as possible, be conducted in the same way as proceedings before a court of law and the provisions of subsection (5) shall apply mutatis mutandis to such proceedings.

(9)      In all arbitration proceedings under this rule the registrar or arbitrators shall have all such powers as are vested in a magistrate on the occasion of any action in respect of summoning parties, enforcing the attendance of witnesses and compelling the production of documents.

 

41. Disposal of balance after liquidation

(1)      Any surplus remaining after the winding up of a registered co-operative society and distribution of assets in accordance with section 45 may be disposed of by the registrar for any object of local of public utility or tending to promote the co-operative movement as may be selected by the former members of the liquidated society and approved by the registrar.

(2)      Any unclaimed balances under section 49 (2) shall be handed over, when the period of two years from the date of cancellation of registration has elapsed, to the Co-operative Union of Cross River State of Nigeria, Limited, to be used for the development of the co-operative movement.

42. (1) Subject to rule 28, the committee shall either appoint a secretary and, unless the person so appointed is a member of the committee, shall fix the remuneration for his services and require him to give security, or may obtain the services of a travelling secretary employed by a secondary society.

(2)      The duties of the secretary shall be—

(a)      to attend all meetings of the registered society and of the committee and to carry out all the instructions of the committee;

(b)      to be present at the society’s office during the hours of business as fixed from time to time by the committee;

(c)      to record the whole of the transactions of the registered society in the books prescribed for that purpose; to conduct correspondence on behalf of the registered society; to prepare the annual statement of accounts and balance sheet, and to have charge of the documents, books and vouchers for payments and receipts on behalf of the registered society;

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

(e)      to summon, attend and record minutes of meetings as prescribed in the rules or by-laws.

(3)      Where the work assigned to the secretary by the committee includes the handling of the society’s money transactions, his duties shall also be—

(a)      to receive all moneys due or payable to the registered society and issue receipts to the payer for same from a counterfoil or duplicate receipt book of a type approved by the registrar, obtaining at the same time the signature of the person making the payment on both original and counterfoil or duplicate, or recording thereon the numbers of the cheques, money orders or postal orders;

(b)      to deposit with the treasurer all moneys collected by him on behalf of the registered society daily or at such intervals as may be specified by the committee or to deposit with the treasurer from such moneys all sums in excess of an amount to be fixed from time to time by the committee; and to obtain from the treasurer a receipt on a form to be taken from the prescribed counterfoil book;

(c)      to keep separate all moneys belonging to the registered society and on no account to mix them with any other moneys; and to produce at all times when called upon to the committee or the registrar or any person authorised by him all moneys in his hands belonging to the registered society;

(d)      to make payments as authorised by the committee, obtaining the payee’s signature on the payment voucher or his official receipt;

(e)      to issue a receipt on a form to be taken from the prescribed counterfoil book when receiving money from the treasurer.

43. (1) The treasurer shall be generally responsible for the safe custody of the cash and other valuables belonging to the society and for ensuring that all cash transactions of the society are accurately recorded and properly receipted.

(2)      The treasurer shall receive all moneys due or payable to the registered society and issue receipts to the payer for same from an approved counterfoil receipt book obtaining at the same time the signature of the person making the payment on both original and counterfoil or duplicate or recording thereon the numbers of the cheques, money orders or postal orders; or shall receive from the secretary as provided in rule 42 (3) (b) moneys collected by the latter on behalf of the registered society, furnishing him with a receipt on a form taken from an approved counterfoil book and obtaining at the same time the signature of the secretary on the counterfoil.

(3)      The treasurer shall make payments as authorised by the committee obtaining the payee’s signature on the payment voucher or his official receipt, or shall advance money as provided in rule 44 (3) (d) to the secretary for payments and obtain from him a receipt from the prescribed counterfoil book.

(4)      The treasurer shall place to the account of the registered society in such bank or cooperative society as may be approved by the registrar any amount in his hands in excess of the amount fixed from time to time by the committee.

(5)      The treasurer shall keep separate all moneys belonging to the registered society and on no account shall mix them with any other moneys; and shall produce at all times, when called upon, to the committee, the registrar or any person authorised by him, all moneys in his hands belonging to the registered society.

(6)      The treasurer shall keep a record in the prescribed form of all moneys received by him and of all moneys paid by him.

(7)      The treasurer may be required to give security for such amount as may be determined by and to the satisfaction of the committee.

 

44. President

(1)      The president shall be the principal officer of the registered society and shall be responsible for ensuring that the Law, rules and by-laws are observed by all other officers and members and that all decisions and directions of the general meeting are given effect to.

(2)      Unless otherwise specified in the standing rules approved by the registrar, the president shall preside at general meetings and committee meetings and shall ensure that meetings are summoned as prescribed in the rules and by-laws.

(3)      The president or in his absence the chairman of the committee shall sign all authorities for the disbursement of funds in accordance with decisions of the committee.

 

45. Division and amalgamation

(1) (a) Any registered society may, at a general meeting specially called for the purpose after due notice, resolve to divide itself into two or more societies.

(b)      A copy of such resolution shall be forwarded to the registrar who may issue a winding-up order and appoint a liquidator under section 41 of the Law and shall issue such instructions as he may consider for the protection of members and creditors and for the division of the society’s assets and liabilities.

(2)      Where at least one-third of the members of a registered society apply to withdraw from the society with the consent of the general meeting in order to establish a new society, the assets and liabilities of the society may be divided in such manner as the registrar may approve.

(3) (a) Two or more registered societies may at general meetings specially called for the purpose after due notice resolve to amalgamate into one society.

(b)      A copy of each such resolution shall be forwarded to the registrar who may issue winding-up orders and appoint a liquidator under section 41 and shall issue such instructions as he may consider necessary for the protection of members and creditors.

(4)      Under this rule the registrar may revalue shares in accordance with rule 9 before any division or amalgamation.

(5)      Nothing in this rule shall prevent a member of a society which, is being divided or amalgamated from withdrawing from membership in accordance with rule 7 and the by-laws.

(6)      Any decision or instruction by the registrar under this rule shall be taken only after due consultation with the members of the society or societies concerned.

 

46. Deposit interest

(1)      The maximum rate of interest on members’ savings which may be charged in the income and expenditure account of a society shall not exceed 2½ per cent:

Provided that additional interest not exceeding 7½ per cent may be paid in accordance with rule 10 (9).

(2)      The rate of interest on deposits and savings shall not exceed 10 per cent.

 

47. Council of Inspection and scrutinisers

(1)      Where the by-laws of a registered society provide for a Council of Inspection or for scrutinisers, such Council of Inspection or scrutinisers shall be elected at the annual general meeting after the election of the officers and committee and no member of the committee may be elected or may vote for any person at their election.

(2)      The Council of Inspection or any member thereof or any scrutiniser shall at all times have free access to all books, papers and documents of the society, and the committee and officers of the registered society shall whenever called upon render an account or supply information to the Council or scrutinisers and produce the cash in hand and other assets of the registered society for their inspection.

(3)      The Council of Inspection or scrutinisers shall prepare at such intervals as the by-laws may prescribe a report on the management and financial position of the society and shall submit it to the committee who shall place it before the next general meeting.

(4)      The Council of Inspection or scrutinisers may summon a general meeting at any time when it or they consider that members should be informed immediately of the position of the society and shall in any event summon a general meeting if the committee fails to summon a general meeting within one month of their submitting their report under (3).

(5)      The provisions of rules 22 and 23 shall apply to scrutinisers and a member of the Council of Inspection mutatis mutandis.

48. (1) Any person shall be permitted on payment of three hundred naira for each occasion of inspecting, to inspect in the office of the registrar for any lawful. purpose the following documents—

(a)      the registrar of societies;

(b)      the registered by-laws of a society and amendments affected in such by-laws;

(c)      a winding-up order or an order of cancellation of registration;

(d)      the annual statements of a society.

(2)      The fee prescribed for the issue of a certified copy of a registration certificate shall be five hundred naira.

(3)      The fees prescribed for certified copies of any of the documents listed in (1) shall be at the rate of twenty-five naira for each hundred words of the copy of extract or part thereof.

CO-OPERATIVE SOCIETIES (AUDIT AND SUPERVISION FEES) ASSESSMENT NOTICE

1. Assessment of audit and supervision fees

The Co-operative Societies named in the Schedule to this Notice are hereby assessed the audit and supervision fees shown in the said Schedule.

 

2. Fees to whom payable

The fees assessed by virtue of paragraph 1 of this notice shall be payable to any of the following officers in charge of co-operative activities in a Local Government Area of the State, that is to say—

(a)      an Assistant Registrar of Co-operative Societies; or

(b)      a Higher Co-operative Officer; or

(c)      a Co-operative Officer; or

(d)      an Assistant Co-operative Officer, each of whom, is, for the purposes of the Notice, hereby appointed a revenue collector in and for the respective areas where each such officer is in charge.

 

3. Avoidance of doubt

No audit and supervision fee assessed under this Notice shall be payable by an organisation mentioned in the Schedule to this Notice unless an assessment notice is served upon such organisation.

 

4. Accountability for revenue collected

Every revenue collector shall pay weekly into the Sub-Treasury the total amount of fees collected by him during the week and shall furnish on prescribed forms to the Registrar of Cooperative Societies monthly the details of the fees collected by him and of the Sub-Treasury receipts issued in respect thereof.

 

5. Citation

This notice may be cited as the Co-operative Societies (Audit and Supervision Fees) Assessment Notice.

CO-OPERATIVE SOCIETIES (REMOVAL OF EXEMPTION) ORDER

made under section 57

 

1. Citation

This order may be cited as the Co-operative Societies (Removal of Exemption) Order.

 

2. Removal of exemption

For the purposes of income tax assessment, the exemption from disclosure granted to registered societies by section 59 of the Law shall cease to have effect in relation to Co-operative

Produce Marketing Societies.

3. Annual returns

(1)      These societies shall submit to the Tax Assessment Authority in their area an annual return in form as set out in the Schedule duly completed.

(2)      The annual return shall be 31st December.

 

SCHEDULE

Return of Produce transactions with members during the year to 31st March …………………

Name of Society …………………………………………………………………………………………..

Address …………………………………………………………………………………………………….

 

Name of Member or Non-member

Address

(a) Tonnage sold to Society during current year

(b) Payment made

(c) Bonus

 

Date …………………………………Signed …………………………………………………Secretary

 

SCHEDULE—continued

CERTIFICATE

I certify that the information given in the foregoing return is a correct record of the transactions with members and non-members as shown in the books of the society.

Date …………………………………………………………………………………………………….. President of the Society.

(a)      The quantity of each type of produce, should be shown separately.

(b)      The total amount paid at time of purchase, including any commission, share of Block Buying Allowance, etc., should be inserted, showing the amount paid in respect of each type of produce separately.

(c)      The bonus should be the actual amount paid in cash or credited to members during the year in respect of which the return is made, even though the bonus was in respect of the previous year’s trading.