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CO-OPERATIVE SOCIETIES ACT, 1968

ARRANGEMENT OF SECTIONS

PA RT I

P R E L I M I N A R Y

Section

1. Short title and comm encem ent.

2. Interpretation.

PA RT I I

R E G I S T R A R

3. Pow er of Presiden t to appoint registrar and assistant registrars.

PART IIIR E G I S T R AT I O N

4. Societies which may be registered.5. Restrictio ns on mem ber of society holdin g share capital.6. Cond ition s of registra tion an d use of word ''limited''.7. Power of registrar to decide certain questions.8. Mem ber shi p subject to registra r's perm issio n in certai n cases.9. Applica tion for registration.

10. Registration.11. Probation ary societies.12. Evide nce of registration .13. Ame ndm ent of the by-l aws of a registered society

14. Ame ndm ent of by-l aws by registrar.PA RT I V

RIGHTS AND LIABILITIES OF MEMBERS

15. Mem be r not to exer cise rights till due pa ym ent is mad e.16. Restricti on on membersh ip in society with unlimit ed liability.17. Votes of mem bers .18. Rest rict ion s on transf er of share or interest.

PA RT V

DUTIES OF REGISTERED SOCIETIES19. Addr ess of so cieties.

20. Copy of A ct, rules , and by-la ws to be open to inspection.21 . Audit.

PRIVILEGES OF REGISTERED SOCIETIES22. Societies to be bodie s corporate.23. Powers of registered societies.24. Priori ty of claim of regis tered society as again st cro ps , agricul

tural pro duc e, cattle , impl emen ts, raw materials and manufactured articles.

1

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No. 27 Co-operative Societies 1968 3

PART VII I

REGISTRATION OF CHARGES

Section

58. Registrati on of cha rges.

59. Duty of soc iety to regis ter char ges create d by society.60. Duty of society to register charges existing on property acquired.

61 . Register of ch arges.62. Endo rseme nt of certificate of registration on debentu res.

63 . Entry of satisfac tion and rectifi cation of register.64. Registration of enforcement of security.

65. Copies of instrumen ts creating charges to be kept by society.

66. Society's regis ter of charg es.67. Right to inspect copies of ins truments creating mortg ages and

charges and society's register of charges.

PA RT I XINSPECTION OF AFFAIRS

68. Inquiry by registrar.69. Inspection.70. Costs of inquir y.71. Surcharge.

PA RT X

AMALGAMATION AND DIVISION

72. Voluntary amalgamation.73. Compulsory amalgamation.74. Voluntary division.

75. Compu lsory divis ion.76. Defect or irregul arity in not ice, etc.

PA RT X I

DISSOLUTION OF SOCIETY

77. Dissolution.78. Cancel lation of registrati on of society.79. Appeal against can cellation of registration.80. Effect of cancellation of registration.

81. Winding-up.82. Powers of liquidator.83. Pow er to stay or restrain p roceed ings against society.84. Avoid ance of dispositio ns of property , etc., after cancellation.85. Avoida nce of attachment, etc.

86. Powe r of registrar to assess damag e against delinquen tpromoters, etc.

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4 No . 27 Co-operative Societies 1968

Section

87. Powe r to arrest abscon ding promoter , officer, etc.88. Debts of all description may be proved.

89. Whe re society is insolv ent.90. Preferential payments .

91. Fraudulent preference.92. Liabi lities and rights of certa in fraudu lently prefe rred pers ons .

93. Effect of floating charge .94. Discla imer of onerou s property in case of society woun d up.95. Restrict ion of rights of creditors as to executi on or attachmen t

in case of society being wound up.

96. Dut ies of co urt as to goo ds tak en in exec utio n.97. Court s no t to have jur isdi ctio n in diss olu tion of societi es.98. Destructi on of books and records.

PA RT X I I

RULES AND REGULATIONS

99. Rules.100. Powe r of registrar to make regulation s.1 0 1 . F e e s .102. Recovery of sums due to Government.

PA RT X I I IOFFENCES

103. Offences.104. Penalty for soliciting violatio n of contracts.105. Prohib ition of the use of word ' 'co-operative' ' .

106. Offen ces by officer of society bein g wou nd up.

PA RT X I V

MISCELLANEOUS

107. Powe r to exempt societies from condition s as to registration.108. Power to exempt registered societies from provisions of the Act.109. Appo intme nt of special memb ers to commi ttees.110. Ter m of appo intme nt and pow ers of special member s.111. Saving.

PA RT X VREPEAL AND TRANSITIONAL

112. Cap. 211 repe aled.

113. Transitional provisions.

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No. 27 Co-operative Societies1968 5

THE UNITED REPUBLIC OF TANZANIA

No. 27 OF 1968

I ASSENT,

President

16TH, MAY 1968

A n A c t t o r e p e a l a n d r e p l a c e t h e C o - o p e r a t i v e S o c i e t i e s O r d i n a n c e

[ ]

EN AC TE D by the Parliam ent of the United Repub lic of Tanzani a.

PA RT I

PRELIMINARY

1. This Act may be cited as the Co-op erativ e Societie s Act, 196 8,and shall c ome into ope rati on on such d ate as the Mini ster ma y, bynotice published m the Gazette, appoint.

2. In this Act, unless the context otherwis e requires -"agricultur al pro duce ' ' means the pro duce of farms, gard ens, orchard

and for ests , and inclu des all dairy pro duc e and all the pro duc ts of fish and fishing;

"annu al net surplus ' ' means such p ortio n of the total income receivedor accrued during any year as remains after deduct ions have beenmade therefrom in resp ect of all recurrent expend iture incurreddurin g that y ear and after adequate provi sion has been made forbad debts, depreciation, taxation and losses;

"ann ual n et balanc e' ' mean s such port ion of the net su rplus for anyyear as remains after deductions have been made therefrom in

respe ct of the reserv e fund , the share transf er fund and such othe rappropriations as it may be necessary or desirable to make forthe prop er conduct of the society's bus ine ss, and after a dividend(if any) has been paid on the share capital;

' 'boa rd of dir ecto rs' ' has the same mea nin g as that assig ned to the wor d"committee*;

' 'bon us' ' means such portion of the annual net balance as may bedistributed to memb ers in conside ration and on the basis of theirpatron age of the society's b usiness or their participation in suchbusiness;

Short title

andcommencement

Interpretat i on

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Power of

Presidentto appointregistraran dassistantregistrars

' 'by- laws'' mean s the by- law s mad e by a socie ty in the exerc ise of thepower conferred by this Act, and duly r egistered in accordan cewith the provisions of this Act and also means any registeredamendment of such by-laws;

"committee' ' means the governing body of a registered society to whomthe man age men t of its affairs is entru sted; -

' 'divid end'' mea ns the sum paid on the share capital Inv ested in asociety;

"member" includes a person or registered society join ing in the applicationfor the regis trat io n of a societ y, and a per son or regis teredsociety ad mitted to membe rship after, registration in accordancewith the by-laws and rules;

' 'Minister' ' means the Minister for the time bei ng responsib le formatters relating to co-operative societies

"national society' ' means a registered society the area of whose operationextends throughout Tanganyika;

''officer'' mean s any officer of a society and inclu des a pre sid ent , chairman , secret ary, treas urer , mem ber of, the committ ee or other pers onempo wered under the rules or by-l aws to give directions in regardto th e bu sine ss of a reg istere d society;

"primar y society' ' means a r egistered society all whos e membe rs are-

(a) natural person s who have attained the apparent age of eighteenyears; or

(b) natural person s who have attained the apparent age of eighteenyears and, subject to the provisio ns of section 8, such bodie sof persons, whether corporate or unincorporated, as the registrarmay approve;

' 'registered society' ' means a co-operativ e society registered, under thisAct;

"registrar' ' means the registrar of co-operative societies appointed undersecti on 3 of this Act;

' 'savings and credit society' ' means a registered society whose principa lobjects is to en cou rage thrift amo ng its mem ber s an d to createa sour ce of credit for its mem ber s at a fair and reas onab le rate of interest;

"secon dary society' ' means a registered society which does not containany members who are individuals.

PART I I

R E G I S T R A R

3 .-(l) The Preside nt may appoint a registrar of co-opera tive societies

and may appoint a deputy registrar and such numb er of assistantregistrars as may be required.

(2) The deput y regis trar and the assis tant regist rars shall act unde rthe contr ol of the regis trar and may exerc ise any of the functio ns of the registrar.

(3) The registrar shall have a seal of such device as may be approvedby the Minister.

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PART IIIR E G I S T R AT I O N

4 .-(1) Subject to the provisions hereinafter contained, a society which Societieshas as its objects the promotio n of the economic interests of its Memb ers which mayin accordance with co-oper ative princi ples, or a society established b e r e g i s t e r e d

for the pur pos e of facili tating the oper ation s of such socie ties, may beregistered under this Act with or without limited liability.

(2) Save wher e the registrar other wise di rects-

(a) the liability of a society -(i) of whi ch a mem ber is a register ed society; or

(ii) whi ch is a savin gs and credit society shall be limited;(b) the liability, of a society of whi ch the primary o bject is the creati on

of funds to b e lent to its m emb ers and of whi ch the majorityof the mem ber s, are agric ultu rists and of wh ich no mem ber is aregistered society shall be unlimited.

5. No m embe r, o ther than a regist ered so ciety, shall hold more thanone-fifth of the share capital of any co- operative society.

6 .-(l) No society, other than a society of w hich a mem ber is aregist ered society, shall be regis tered unde r this Act unless itconsi sts of at least t en pe rso ns who have attaine d the appar ent age of eightee n years , and, w here the object of the society is the creat ion of funds to be lent to its members, unless such persons-

(a) reside in the same town or villa ge or in the same gro up of villages; or

(b) save w here the regis trar oth erwi se di rects , are m emb ers of thesame occupation.

(2) The wor d ''lim ited' ' shall be the last wor d in the name of everysociety with limited liability registered under this Act.

7 .-(l) Whe re for the p urp ose s o f this Act any q uest ion a rises as towhether-

(a) a person is an agriculturist;(b) a per son is a resid ent in a tow n or vill age or a gro up of vil lag es;(c) two o r more villages shall be consider ed to form a group ;(d) a perso n belon gs to any particular occupatio n; or(e) a person has attained the apparent age of eighteen years,

the question shall be decided by the registrar.

(2) Any perso n aggrieve d by a decision of the registrar given undersubsection (1) may in writing appeal to the Minister whose decision shallbe final and shall not be subject to review in any court.

8. No compan y incorpo rated or registered unde r theOrdin ance, and no uninco rporated body of persons shallto become a member of apermission of the registrar,

registered society except withand subject to such rules

Companiesbe entitledthe writtenas may be

Restrictionson memberof societyholdingsharecapital

Conditionsof registration anduse of word"limited"

Power of registrarto decidecertainquestions

made un der section 99 of this Act.

Membershipsubject toregistrar'spermissionin certaincasesCap. 212

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9 .-(1) For the purpos es of registration an application to registertrieognisf troartion shall be made to the registrar.

(2) The a pplica tion shall be signed-

(a) in the case of a society which after regis tration will be a primar ysociety, by at least ten mem ber s thereof qualified in accor danc ewith the requirements of subsection (1) of section 6; and

(b) in the case of a society which after registration will be a secondarysociety by a duly auth ori zed per son on beh alf of every reg ister edsociety or other body which is a member of such society.

(3) The app licat ion shall be acco mpa nie d by three cop ies of theprop osed by-l aws of the society, and the persons by whom or on whos ebehalf such application is made shall furnish such information in regardto the society as the registrar may require.

R e g i s t r a t i o n 10 . -(1) If the regis trar is satisfied that a society has com plie dwith the pro visi ons of thi s Act and of the rules and that its pro pos edby -law s are not co ntrary to th e Act or to the rules , he shall regis terthe society an d its by- law s unless he is of the opi nion that-

(a) pro per prov isio n has not be en made for the finan cing of thesociety; or

(b) ther e is alre ady a society in the sa me local ity wh ic h is performing substantially similar activities for per sons of the sameclass or occup ation and that the registration of another societywould serve no useful purpose; or

(c) the by-l aws do not co ntain sufficient safeguards for the pr operadminist ration of the society; or

(d) hav ing regard to all the circum stan ces it is not desir able toregister the society.

(2) Before r egisteri ng any society or its by-law s the regis trar mayrequ ire that the by -la ws shall be ame nde d so as to conf orm with suchdirections as he may give in that behalf.

(3) An appea l shall lie to the Mini ster from a deci sion of theregis trar refusing to register a society un der subsec tion (1) of thissection , and the Minis ter's decisio n the reo n shall be final and shall notbe subject to review in any court.

(4) Every appea l under sub secti on (3) shall be made wi thin sixtydays from the date of the decision of the registrar.

P r o b a t i o n a r y Wher e by reaso n of non-com plian ce with any prov ision of

societies this Act or of th e rules or of any dire ction give n by him the registra r,acting und er the pow er conferred upo n him by section 10, is unable toregis ter a society bu t is satisfied that steps can be and will be tak enwith diligence by the applicants to comp ly with such prov ision ordirecti on, as the case may b e, he may, in his absol ute discr etion, bynotice in writi ng (hereinafter referred to as a notice of defer ment) , deferregistra tion of that society pend ing complia nce with such prov ision ordirection.

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(2) The registrar shall transmit the notice of deferment to the personsby wh om or on whos e behalf applicat ion for registratio n is made.

(3) A notice of defer ment shall, subject to the pro visio ns of thissection and any conditi ons specified there in, entitle the society inrespect of which it is issued to operate as a registered society.

(4) A s ociety entitle d to opera te as a regis tered society und er theprovi sions of subsection (3) of this sectio n shall be termed a probationa rysociety and shall whil e so entitl ed to oper ate, be dee med to be a bod ycorporate with perpetual succ ession and a com mon seal, and withpow er to hold movable and immov able property of every description,to ente r into contrac ts, to in stitute and def end suits and other legalpro ceed ing s and to do all thing s necess ary for the pur pos e for wh ich itis constituted.

(5) Whe n a probatio nary society is duly registered unde r section

10, its certificate of regis tratio n shall supersed e its notic e of defer mentwh ich sh all thereafter cease to have effect and the s ociety shall bedeemed for all purposes to have been registered from the date onwhich the notice of deferment in respect thereof was issued by theregistrar.

(6) The regis trar may, in his abso lute discr etion , cance l a notice of deferment by notice in wr iting addresse d to the probatio nary societycon cern ed and such canc ellati on shall, from the date thereof, operateas a refusal to regi ster the society for the pur pos es of sectio n 10:

Pro vid ed t hat such canc ellat ion shall n ot affect the validi ty of anytran sact ion enter ed into by or with the society while its notice of deferment was in force.

(7) Whe re the notice of defe rmen t of a pro batio nar y society iscancelled unde r subsection (6) of this section, the registrar may appointa. competent person to be liquidator of the society.

(8) The pro vis ion s of par agr aph (a) of su bse ctio n (2) of secti on 4,subs ectio n (2) of sectio n 6 section 12, subs ectio ns (2) and (3) of sectio n13, sectio ns 22, 34, 48, 56, 77, 78, 79, 80 and 81 shall not apply to a

probationary society.

(9) Subject to the p rovisio ns of subs ection (8) of this section, anyreference in any law, incl udin g this Act, to a regis tered society with inthe m ean ing o f this Act sh all, u nless the con text othe rwis e requ ires,include a reference to a probationary society.

(10) A proba tion ary society shall caus e the fact that it is a probationar y society to b e stated i n leg ible Ro ma n letters in all bil lhea ds,letter paper, notices, advertis ements and other official publica tions of the society and on a sign bo ard in a con spi cuo us pos itio n outsi de any

premises in which it operates.(11) A probation ary society which contravenes any of the provis ions

of subse ctio n (10) and ev ery officer of a pro batio nary society wh ichcon trav enes any such pro vis ion shall be guilty of an offence and liableto a fine of one tho usa nd shillin gs and, in the case of a con tinu ingoffence, to a fine of one hundred shillings for each day during which thedefault continues.

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Evidence of registration

Amendmentof theby-lawso f aregisteredsociety

Amendmentof by-lawsby registrar

12. A certificate of registratio n signed and sealed by the re gistrarshall be conc lusi ve evid ence that the society ther ein men tion ed is dulyregistered unless it is proved that the registration of the society h asbeen cancelled.

13.-(l) A register ed society may, subject to the prov ision s of thissection, amend its by-laws.

(2) No ame ndm ent of the by- law s o f a regi stere d society shall bevalid until the same has been registered under this Act, for whichpurpos e three copies of the amendm ent shall be forwarded to theregistrar.

(3) If the regis trar is satisfied that the ame ndm ent of the by- laws isnot contra ry to this Act or to the rule s he may , if he thi nk s fit,register the amendment.

(4) Wh en the regis trar regis ters an ame nd men t of the by- law s of aregi stere d society, he shall issue to the society a copy of the amen dme ntcertified and sealed by him whi ch shall be conc lusi ve evide nce that thesame is duly registered.

14.-(1) Whe re the regis trar is of the opin ion that it is necess ary ordesir able in the intere st of a regi stere d society or in the intere st of themem ber s of a regis tered society or in the publi c interest that theby -la ws of the regis tered society be ame nde d he may, by notice inwriting require the registered society to amend its by-laws in suchman ner and with in such peri od as may be specified in the notic e.

(2) Whe re a notice under sub sect ion (1) is serve d upo n a regis teredsociety and the society fails to comply with the same the registrarmay, after givi ng the regis tered society an opp ortu nity of be ing heard,

proceed to amend the by- laws and register the amend ment.(3) Whe n under subsecti on (2) the registrar registers an amen dmen t

he shall is sue to the society a copy of the ame nd men t certified andsealed by him.

(4) An app eal shall lie to the Min iste r from any ame nd men t of theby- law s of a reg ister ed s ociety regis tered under this section , and theMiniste r's decis ion ther eon sh all be final and shall not be subject torev iew in any cour t .

(5) Every appeal un der su bsection (4)days of the registration of the amendment.

shall be made with in thirty

Member notto exerciserights till duepaymentis made

Restriction onmembershipin societywi thunlimitedliability

PA RT I VRIGHTS AND LIABILITIES OF MEMBERS

15. No mem be r of a regis tered society shall exerc ise the right s of mem ber unless or until he has made such p aym ent to the society inresp ect of mem ber shi p or acqu ired such inter est m the society as mabe prescribed by the rules or by-laws.

16 . No pe rs on o the r th an a re g i s te re d s oc ie ty sha l l be a me mb e r om o r e t h a n o n e r e g i s t e r e d s o c i e t y w i t h u n l i m i t e d l i a b i l i t y, e x c e p t w i tt h e s a n c t i o n o f t h e r e g i s t r a r f i r s t h a d a n d o b t a i n e d .

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17. Eve ry me mb er of a regist ered society shall hav e one vote onlyas a mem ber in the affairs of the s ociety a nd shall be entitle d toattend a gen eral meeti ng of the society and to record his vote inregard to any matter for decision at such meeting:

Pro vid ed that the b y-l aws of a second ary society may pro vide forthe attendan ce at general meeting s of delegates from the societies orother bodies who are members of such secondary society, and the membersocieties and othe r bod ies shall eac h be entitled to, such numb er of votes ,and to vot e in such mann er, as may be pre scri bed by the rules and theby- laws of the secondary society.

18.-( 1) The transf er or charge of the share or interest of a memb erin the capital of a regis tered society shall be subject to such cond ition sas to maximum holding as may be prescribed by this Act or by the rules.

(2) In the case of a society registered with unlimited liability a membershall not transf er any share held by him or his intere st in the capitalof the society or any part thereof, un les s-

(a) he has held such share or interest for not less tha n one ye ar ; and(b) the transfe r or charg e is mad e to the society or to a me mb er of

the society.

PA RT VDUTIES OF REGISTERED SOCIETIES

19 . Ever y regis tered society s hall have an add ress , reg ister ed inaccorda nce with the rules, to which all notices and commu nicatio nsmay be sent, an d shall send to the registr ar notice of every chang ethereof.

20. Ever y register ed society shall ke ep a copy of this Act and of therules and of its by- laws open to inspec tion, free of charg e, at all reasonable time s at the regis tered addre ss of the society.

Votes o f members

Registrationson transferof share orinterest

21.-(1) The registrarauthorized by him by

shall cause to be audit ed by some per songeneral or special order in writing in this behalf

the accou nts of every registe red society once at least, in every year .(2) The co mmit tee of every re giste red society shall take all such

steps as may be neces sary to ensur e that the acco unts of the regis teredsociety are mad e up and ready for audit wit hin three month s from theclose of the fina ncial year of the society.

(3) The audit und er subsectio n (1) shall include an exami natio n of over due debt s, if any, and a valu atio n of the assets and liabili ties of the society.

(4) The regis trar or any perso n auth oriz ed by gener al or special orderin writ ing in this behalf by the regist rar shall at all time s have acces s toall bo ok s, acco unt s, pape rs and securitie s of a society, and every officerof the society shall furni sh such info rmat ion in rega rd to the transactions and wor king of the society as the pers on making such inspectio nmay require.

(5) The registr ar and every other per son appo inte d to audit theaccounts of a society shall have power when necessary-

Address of societies

Copy of Act, ruleand by-lawsto be opento inspectionAudit

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Societiesto be bodiescorporate

Powers of registeredsocieties

Priority

of claimof registeredsociety asagainstcrops ,agriculturalp roduce ,cattle,implements ,raw materialan dmanufacturedarticles

(a) to su mm on at the time of the audit any officer, age nt, servan tor mem be r of the society who he has reason to , beli eve can giverelev ant info rmati on in regar d to any tran sacti ons of the societyor the management of its affairs; or

(b) to require the prod uctio n of any bo ok or docum ent relating tothe affairs of, or any cash or securiti es belo ngi ng to , the societyby the officer, ag ent, servant or memb er in posse ssion of suchbook, document, cash or securities.

(6) The duly audited acc ounts of every r egistered society shall besubmitted to the registrar for approval.

(7) Wh en the acco unt s of a society have be en aud ited and ado ptedby a general meeting of the society and approved by the registrar,they shall be conclusive except as regards any error discover ed thereinwith in six mon ths next after th e date of appr oval by the registr ar andexcept as regards any all egation of fraud. Wh enev er any suc h erroris disc over ed with in that perio d the acco unts shall f orth with becorrected with the approval of the registrar and thereafter shall beconclus ive exce pt as regards any allegation of fraud.

PRIVILEGES OF REGISTERED SOCIETIES22. The regis tratio n of a society shall rend er it a bod y corp orate by

the name under whic h it is regist ered, with perpe tual success ion and acommon seal .

23 . A regi stere d society shall have po we r to hold mov able andimmov able property of every de scriptio n, to e nter into contr acts, toinstitute and defen d suits and o ther legal pr oce edi ngs and to do allthings necessary for the purpose of its constitution.

24 . -(l) Subject to the prio r cl aims of the Gov ern men t on the

property of its debtors and of landlords in respect of rent, or anymone y recov erab le as ren t, a regist ered society shall have a first cha rge-

(a) upo n the crops or other agr icult ural pro duc e of a mem be r orpast me mb er , at any time with in two yea rs from the date wh enseed, fertilizer o r insecticide was suppli ed, or money was lent,to such mem ber or past me mb er, in respe ct of the unpai dpor tion of t he cost of the seed , fertilizer or insec ticide suppliedor of the unpaid portion of the money lent;

(b) in resp ect of the supply of ca ttle , fodde r for catt le, agric ultur alor industrial implem ents or mach iner y, or raw material formanu factu re or of the lo an of mone y for the pur cha se of anyof the fo regoing animals or thi ngs , u pon any such animals or

thin gs so supp lied or pu rch ased in who le or in part from anysuch l oan o r on any articl es m anu fact ured from raw mater ialssupplied or purchased.

(2) Where the prod uce of memb ers or past memb ers has bee nmar kete d in bu lk and a loss has ens ued a regi stere d society may dedu ctin any future yea r or yea rs from the proc eed s of any si milar produ ce somark eted a sufficient sum to cover such loss. If a mem ber resig ns froma society befor e such loss is reco vere d the society ma y, if it thin ks fit,institute civil pro ceed ings for the r ecover y o f any s um due withi n aperiod of two years from the date whe n such memb er resigned.

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Charge andset-off respect of share orinterestof members

Share orinterestsnot liable toattachment

Transferof intereston deathof member

25 . A registered society shall have a charge upon the shares or interestin th e capital and on the depo sits of a mem be r or past mem ber andupo n any dividend, bonus, or accumul ated funds payable to a memb eror past me mb er in resp ect of any debt due from such mem be r or pastmem ber to the society, and may set-off any sum credit ed or pay ableto a member or past member in or towards payment of any suchdebt.

26 . Subject to the pro visio ns of sectio n 25 the share or interestof a mem ber in the capital of a regis tered society shall not be liable toattach ment or sale und er any decre e or ord er of a court in respec t of any debt or liability incur red by such memb er, and the official receiv erund er the law relatin g to ban kru ptc y for the time bei ng in force shallnot be entitled to or have any claim on such share or interest.

27 .-(1) Notwith standin g the provisions of any written law to thecontrary on the dea th of a memb er a registe red so ciety may transferthe share or interest of the deceased mem ber to the person nomin ated inacco rda nce wit h the rules made in this behalf, or, if there is no per sonso nomi nated to the legal personal repres entative of the deceas ed memberor pay to such n omi nee or lega l re pres enta tive, as the case may be,a su m repr esen ting the v alu e of suc h mem ber 's share or interest, asascertained in accordance with the rules or by-laws:

Provided that-(a) in the case of a society with unl imit ed liability , such nom inee or

legal per son al rep rese ntat ive, as the cas e may be, may requi repay men t by the society of the va lue of the share or interes t of the deceased member ascertained as aforesaid; or

(b) in the ca se o f a society wi th limi ted l iabili ty t he socie ty shall

transfer the share or interest of the deceas ed membe r to suchnominee or legal personal representative, as the case may be, beingqualified in accord ance with the rules and by- laws for membership of the society, or on his applic ation with in one mon th of thedeath of the deceased member to any person specified in theapplication who is so qualified.

(2) A regis tered society may pay all other mon eys due to thedeceased member from the society to such nominee or legal representative, as the case may be.

(3) All transfers and payments made by a registered society in accordance with th e pr ovi sio ns of this s ectio n shall b e valid and effectualagain st any dem and made up on the society by any othe r pers on.

28 . The liability of a past mem be r for the deb ts of a register ed society L i a b i l i t yas they existed at the time when he ceased to be a member shall, o f p a s tnotwith standin g the provisio ns of any written law to the contrary, membercontin ue for a pe riod of two year s from the date o f his ceasi ng to,be a member.

29 . The estate of a decea sed m emb er sh all, n otwi thst and ing the Liabilityprovisions of any written law to the contrary, be liable for a period o f t h e

of one yea r from the time of his death for the debts of the regis tered e d s e t c a e t a e s s e o d f

society as they existed at the time of his death. d e c e a s e dmembers

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14 N o. 27 Co-operative Societies 1968

Register 30 . -(1) Every register ed society shall main tain a regist er of itsof members memb ers in such manne r as may be prescrib ed and shall enter therein

such particulars as may be prescribed.

(2) The r egist er of mem ber s shall be pr ima facie evidence of anymatters required by rules to be entered therein.

Proof o f entries insocieties'books

31 . A copy of any entry in a bo ok of a regis tered society regular lykep t in the course of bu sin ess , shal l, if certified in such manner as maybe pres crib ed by the rul es, be received in any , suit or legal pro ceed ing sas prima facie evid ence of the ex isten ce of such entr y and shall beadmitted as eviden ce of the matt ers, transact ions and accounts thereinrecor ded in every case wh ere , and to the same extent as , the origin alentry itself is admis sible .

Restrictionon theproduct ionof societies'books

32. In the case of such regis tered societies as the registra r by genera lor special orde r may dire ct, no officer of a society shall in any legalpro ceed ing s to whic h the society is not a party be compel led to produ ceany of the society's bo oks , the contents of which can be prov ed undersection 31 , or to appear as a witness to prove the matters, transactionsand accou nts the rein recor ded, unless by ord er of the court made forspecial cause.

Exemptionfromcompulsoryregistrat ion of instrumentsrelating to

shares anddebenturesof registeredsociety

33 . Subject to the prov ision s of Part VIII, nothing in any writtenlaw requiri ng registra tion of instru ments relating to shares anddebentures shall apply to-

(a) any ins trum ent relatin g to shares in a regist ered society,

notwith standin g that the assets of such society consist in wholeor in part of immov able pro pert y; or

(b) any debentu re issu ed by any such society and not creatin g,declar ing, assig ning , limitin g o r ext ingu ishi ng any right, title orinter est to or in imm ova ble prop erty except insof ar as it entitl esthe hold er to a security afforded by a regis tered instr umen twhereby the society has mortgage d, conve yed or otherwisetrans ferre d the who le or pa rt of its imm ova ble prop erty or anyinterest therein to trus tees upon trust for the benefit of theholders of such d eben tures; or

(c) any en dorse ment u ponany such society.

or trans fer o f any debe ntur es issue d by

Power toexemptfrom dutyor tax

34 .-(1) Not with stan din g the prov ision s of any law to the contrar ythe President may, by notice in the Gazette, in the case of any registeredsociety or class of regis tered societies reduc e or remit -

(a) the duty or tax wh ich unde r any law for the time bei ng in forcemay be payabl e in resp ect of the accumu late d funds of thesociety or of the dividends or other payments received by thememb ers of the society on account of the accumu lated fund s;

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No. 27Co-operative Societies 1968 15

(b ) the stamp duty wit h wh ich , und er any law for the time bei ng infor ce, inst rume nts executed by or on beha lf of a regist eredsociety or by an officer or member and relating to the business of such society or any class of such instruments, are respectivelychargeable;

(c) any regis tratio n fee paya ble und er any law for the time bei ng inforce.

(2) Not hin g in subsecti on (1) shall be constr ued as restri cting orlimiting any power conferred on any authority to grant exem ptio n fromany tax , du ty, stamp duty or fee by the wri tten law imp osi ng the tax ,duty, stamp duty or fee.

PA RT V I

MANAGEMENT OF REGISTERED SOCIETIES

35. The contr ol of the affairs of a regis tered society shall be ves ted in Generalthe general meeting summo ned in accordance with the by-la ws of the m e e t i n g

society and the rules.

36.-(1) Every commit tee shall consist of not less than four memb ers Constitutionincluding the chairman of the committee and the vice-chairman (if any). of committee

(2) The mem ber s of the com mitte e shall be electe d by the gene ralmeet ing of the society and shall hold office for a peri od of three yea rsfrom the date of their election and shall be eligibl e for re- elec tion :

Pro vid ed that in the case of thos e mem ber s of the commi ttee electedat the first general meeting of the society, one-third of such mem ber s,to be det erm ined by ball ot dra wn by the cha irm an at the first meet ingof the com mitt ee held after such elec tion , shall retire at the expi rati onof a perio d of one ye a r from the date of their elect ion an d of theremai ning memb ers one half, to be determ ined as aforesaid, shall retireat the exp irati on of a perio d of two year s from the date of theirelection.

(3) Whe re any per son is electe d to the Com mit tee to fill a vac anc ycaused by death , resignation or removal of a memb er of the committe e,such per son shall hold office, for the remai nde r of the term of office of his predecessor.

(4) For the pur pos e of the pro viso to subs ectio n (2), the exp ress ion" one- thir d'' shall mean , whe re the nu mbe r of the mem ber s is not threeor a multiple of th ree, the nearest whol e numb er belo w one-third and

the expre ssion ' 'one-half ' ' shall mean, where the n umbe r of the memb ersis not an eve n numb er, the neare st who le num ber be lo w one-half.

37.-(1 ) The com mitt ee shall exerci se all th e pow ers necess ary to p o w e r o f ensur e the full and p rop er a dmin istr ation of the society subject to the committeeby- law s of the society, the rules and any resolu tions pass ed at a gen eralmeeting.

(2) The com mitt ee may, wit h the app rova l of the regist rar, appo inta suitable per son to admi niste r a nd mana ge the affairs of the societyand may employ such numb er of perso ns as the committe e may think fit to assist such person in the discharge of his functions.

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16 N o . 27 Co-operative Societies 1968

Restrictionsrelating tomembers of commit tee

Dissolutionof thecommittee of a society

(3) Where in the opinion of the registrar any perso n employ ed undersubsection (2) is not performing his functions satisfactorily the registrarmay direct the committee to terminate the emplo ymen t of such pers on

and the committee shall, subject to the law for the time being regulatingemployment, terminate the employment of such person.

38.-( 1) No me mb er of the co mmi ttee of a registe red society shallof hold any office of profit under the society:

Provi ded that where the Minister is satisfied that any registeredsociety is the type of society commo nly k now n as a work ers' join tenterp rise society he may, by notice in the Gazette, declare theregis tered society to be a society to whi ch the pro visio ns of thissubsect ion shall no t apply.

(2) A member of the committee of a registered society may receive anhon ora riu m from the society if-

(a) the pay men t of an ho nor ari um is autho rized by a reso luti on tothat effect pas sed at a gene ral meet ing of the socie ty;

(b) the amo unt of the hon ora riu m does not exce ed the sum of fivehun dre d shillings per ann um in the case of a mem be r of aprimary society and two th ousan d shillings per annu m in thecase of a mem ber of the comm ittee of a secon dary societ y;

(c) the regis trar has granted per mis sio n in writ ing for the pay men t of such honorarium:

Pro vid ed that the total sum paid by way of hon ora riu ms by anyregis tered society to the mem ber s of its comm ittee shall notexce ed fifty per cen tum of the annu al net surplu s of theregistered society.

(3) A mem ber of a com mitt ee wh o is in the emp loy men t of theregistered society and is in receipt of emolum ents for such emplo ymen tshall no t be entitled to receiv e any hon ora riu m as a me mbe r of the

committee.(4) Whe re a per son is a me mb er of the com mit tee s of two or mor e

regis tered societi es he shall not be entitled to receive an hon ora riu m inrespect of more than one registered society.

39.-(l) If the regis trar is of the opi nio n that the comm ittee of anyregis tered society is not p erfo rmin g its duties pro perly , he may, aftergivin g an oppo rtunity to the comm ittee to state its objectio ns, if any, to

its dissolution, and after considering such objections at a general meetingof the so ciety s umm on ed by hi m, by orde r in wri tin g dissolv e thecommit tee and by the same or subseq uent order-

(a) direct the society within such time as may be specified in the orderto elect a new commit tee in accord ance with the by-l aws of thesociety; or

(b) app oin t a fit and pro per per so n or two or more such per son s toass ume all the funct ions of the com mit tee and to man age andadm inis ter the affairs of the society, and may from time to timeremove or replace any person so appointed.

(2) Every order under subsection (1) shall be published in the Gazette.

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(3) Every appoin tment under parag raph (b) of subsection (1) shallhave effect for such period not exceeding two years as may be specifiedin the order containing such direction:

Pro vide d that the regis trar may in his disc retio n from time to timeamend the order for the purpo se of extendin g the period duringwhich the appointm ent shall have effect, so howeve r that the aggregateperio d durin g wh ich the appo intm ent shall so ha ve effect shall notexceed four years.

(4) The registr ar may fix t he rem une rati on paya ble to any per son orperso ns appoin ted by him under this section to assume the functions of a com mitt ee of a regist ered society. The amou nt of such rem une rati onand other exp ens es, if any, incurred in the man age men t of the society,or such por tion of suc h am oun t as the regis trar may direct, shall bepaya ble from the funds of the socie ty.

(5) It shall be the duty of the pe rso n or perso ns a ppo inte d und erthis section to mana ge the affairs of a regis tered society and to comp lywith the directions, if any, which the registrar may give.

(6) The perso n or person s appointed under this section to managethe affairs of a regi stered society an d who h old office imme diate lyprio r to the date on whi ch the appoi ntm ent under par agr aph (b) of subsection (1) ceases to have effect, shall, prior to the date aforesaid,arran ge fo r the electi on of a n ew com mitte e in acco rda nce wit h theby-l aws of the society.

(7) No orde r under subs ection (1) shall be made by the registr ar inresp ect of any regis tered society if the society is indebted to any ban k,except after prior consultation with the bank in regard to the dissolutionof the committe e and to the pers ons by wh om and the manne r in whichthe affairs of the society are to be man age d and admi niste red.

(8) No thin g in this sectio n shall be deem ed to affect the pow er of

the regist rar to cancel the registrati on of the society under section 77.(9) An app eal shall lie to the Mini ster from any ord er mad e by the

regis trar unde r subs ectio n (1) and the deci sion of the Mini ster on anysuch appeal shall be final and shall not be subject to review in any court:

(10) Every appea l und er s ubse ction (9) shall be made with in sixtydays from the date of the publication in the Gazette of the orderappealed against.

40. Subject to the gener al dire ction and contr ol of the registr ar, anypers on or person s appoin ted und er section 39 to assume the functionsof the c omm itte e of any regi stere d society shall have all the pow ers ,rights and privi lege s of a duly constitu ted commi ttee of the soc iety.

41 . The com mitte e shall withou t delay comply wi th any direc tionscont aine d in an insp ectio n repo rt of the regis trar or in an audi t report.

Power of personappointedundersection 39

Committeeto complywithdirectionscontained inreports

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Restrictionson loans

Restrictionson borrowingfrom non-members

Restrictionson othert ransact ionswith non-membersInvestmentof funds

PA RT V I IPROPERTY AND FUNDS OF REGISTERED SOCIETIES

42.-( 1) A registe red society shall not make a loan to any perso nother than a member:

Pro vid ed that, wit h the approv al of the regist rar, a regi stere d societymay make loans to another registered society.

(2) Sav e wit h the sanc tion of the regi strar a regis tered society withunl imit ed liability shall not lend mo ney on the security of mov ableproperty.

(3) The r egistra r may by direc tion prohib it or restrict the len dingof mone y on a char ge of imm ov abl e prop erty by any registe red societyor class of registered societies.

(4)-(a) A registe red society w hos e main object is to su pply commod ities , to its mem ber s shall not make any loan s nor allow any credit

wit hou t the sanc tion of the regi strar who may imp ose such limits onloans or credit as he thinks fit.(b) A reg ister ed society wh ich ma rkets the agricu ltural pro duce or

handicrafts or mineral p rodu cts of its me mber s may make advance sonly up to a limit not exc eedi ng 75 per centu m of the local valu e asestim ated by the comm ittee of agricultu ral pr odu cts or handicr afts ormineral products delivered to the society for marketing.

(5) In givi ng any such sanct ion the regist rar may impo se suchlimitations, requirements and restrictions as he deems fit.

(6) Notw ithstan ding the provisio ns of this section a registered societymay, with the per miss ion in writ ing of the regis trar and subject to anyrules made und er this Act, make a loan to any per son for agric ultur alpurposes.

43. A registered society shall receive deposits and loans from personswho are not mem ber s only to such extent and und er such cond ition s as

may be prescribed by the rules or by-laws.

44. Save as pro vid ed in section s 42 and 43 the tran sactio ns of aregistered society with person s other than memb ers shall be subject tosuch proh ibitio ns and restr iction s, if any, as the Mini ster may, by rules,

prescribe.

45.- (1) A regi stere d society may inves t its fund s-(a) in deposits in the Post Office Savings Bank;(b) in interest bearin g deposits in the Nationa l Bank of Com merc e

or the National Co-operative Bank;(c) in the shares of any other registered society; or(d) in such other investments as the Minister may, by order published

in the Gazette, decla re to be aut hor ized in vest men ts for t hepur pos e of this sectio n.

(2) The regis trar may direct any registere d society to inves t its fundsor any p ort ion of its funds in any one or more of the inve stme ntsauth oriz ed by or u nde r sub secti on (1) and it shall be the duty of theregistered society to comply with such directions.

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(3) If a regis tered society fails to comply with any dire ction giv enby the registrar under subsection (2) the society and every officer thereof who is kno win gly a party to the default shall be guilty of an offenceand shall be liable on con vic tion to a fine not exc eedi ng five hun dred

shillings.46 .- (1) The by- laws of a regist ered society shall pro vide for therais ing of funds to finance its activities either by the issue of shares orby a cess or levy on agricultural or other produce or handicrafts marketedthr oug h the society or by a co mbi nat ion o f any of these meth ods orby such other means as may be approved by the registrar.

(2) Whe re the funds of a regis tered society to finance its activitiesare obtained by the issue of shares, the following provisions shalla p p l y : -

(a) the share capita l shall not be red uced with out the cons ent of theregistrar;

(b) unless the regis trar o ther wise in w ritin g d irects , a fund, wh ichshall be kn ow n as the share transf er fund, shall be form ed and

maintain ed to meet ex penditur e which may be incurred by thesociety in purc hasin g the shares of memb ers whose members hiphas terminated wi th the consent of the com mitte e;

(c) no pay men t from the share transf er fund shall be made for thepurch ase of the shares of any memb er whose memb ershi p hasterminated without the consent of the committee;

(d) no purch ase of the shares of a mem ber whos e memb ersh ip hasterminated by reason of any cause other than death shall bemade except with monies then available in the share transferfund;

(e) the amou nt stand ing to the credit of a share transfer fund shallinclude the value of any unallocated shares purch ased frommemb ers under the forego ing prov isions , and such amoun t shallnot exceed ten per centum of the subscribed share capital;

(f) wher e the share of a mem ber is pur chas ed by the society unde rthe foregoing provi sions, the amoun t paid therefor shall notexceed the par value of the share, and it shall be lawful forthe society to pay such less sum than the par value as it considersreas onab le, rega rd bei ng had to the financial pos itio n of thesociety at the time of pur chas e;

(g) the shares of memb ers purch ased as aforesaid shall be re-issue dbefore any new allocation of shares is made.

47.-( 1) A regist ered society, havi ng as one of its objects the dispo salof any prod uce of agricu lture or anima l husb andr y or handicr afts ormini ng, may cont ract with its mem ber s, either in its by- law s or by asepar ate doc ume nt, that they shall disp ose of all their pro duce , or of such amoun ts or descripti ons as may be stated therein, to or thro ugh

the society, and may in the contr act prov ide for pay men t of a specificsum pe r unit of weight or oth er mea sur e as liqu idate d dam ages forinfrin gemen t of t he contr act, and such sum shall be a debt due to thesociety.

Financialprovisions

Contractwithmembers todispose of produce

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(2) Any such contr act shall c reate in favou r of the society a firstcharge upo n all produ ce mention ed therein, wh ether existing or future,in orde r to secure the due mar ket ing of the same in acco rda nce wit hthe contract.

(3) The cov enants or obliga tions impo sed by the contract shall runwith any lands, trees, building s or other structures mention ed therein,and shall be bin din g on all assig nees and trans feree s, and any trans feror conve yan ce of pro pert y subje ct to suc h a con tract shall be dee med toopera te also as a like transfe r or assi gnm ent of the cont ract and of allshares whic h may have been issued in respect of the contract.

Compulsory 48.-(l ) If, u po n app lica tion ma de by a regis tered society , thes a l e o f registra r i s satisfied that-produce

(a) the appl icat ion is made in pur sua nce of a reso lutio n in that

behalf appro ved at a general meetin g of the membe rs ordeleg ates of the r egist ered society at whi ch n ot less tha n two -third s of the mem ber s or deleg ates were pre sent and held afterreas ona ble notic e give n of the place and time of the mee tin g andthe intention to move such resolution thereat; and

(b) the mem ber shi p of the register ed society in the who le of Tanganyika or in any region, district or other area comprises not less thansevent y-fiv e per cen tum of all the pro duc ers , or all the pro duc ersof any particu lar class or classes of pro duce r in the whol e of Tang any ika or in that region , district or other area, of any kindof commod ity mentio ned in section 47, and that during the twoyears prece ding the date of the ap plication the membe rs havepro duc ed and deliv ered to the society not less than sevent y-fiveper centum of the total output of all producers of that commodity,or the total outp ut of such class or classe s of pro duc er of thatcommodity, in Tanganyika or in that region, district or otherarea; and

(c) the maki ng of an order is in the genera l interest of the industryaffected thereby,

the registrar may, by order, declare that each producer or each producerof such class or classes of pro duc er (or each pro duc er of any class orclasses of pro du cer specified in the order) of such com mod ity (or suchdesc rip tion ther eof as may be specified in the orde r) in Tan gan yik a orin that region, district or other area (or in such area, whether thewho le of Tan gan yik a o r not, as may be specified in the order ) shallsell such commodity produced by him in accordance with any directionsgive n by the regis tered society (inc ludin g any direc tion s to sell to orthro ugh such registered society), wheth er such prod ucer be a memb eror not:

Prov ided that no such order shall apply to any prod ucer who , duringeach of the two year s immed iately pre ced ing the date of ope rat ion of such order, prod uced not less than such amoun t as shall be prescr ibedin such order, so ho wev er that such ord er (if still in force) shall applyto such produ cer at the expir ation of any period of two successive yearsduring each of whic h his productio n was less than the prescribedamo unt, and every such order shall, with out preju dice to the genera lityof this subsection, pr ovide accor dingly.

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(2) No ord er shall be made und er sub secti on (1) until the regis trarshall have notified his intention of maki ng such order by publish ing anotice in the Gaze tte setting out the term s of the pro pos ed ord er andtwo mon ths shall have elap sed since the pub lica tio n in the Gaz ette of such notice:

Provided that nothing in this subsection shall require any order madeunde r sub secti on (1) to be in th e same term s as those set out in thenotice published under this subsection.

(3) Any per son who objects to the mak ing of an ord er und er subsection (1) may send his writt en objectio ns to the registrar so that theyshall be recei ved by the regis trar prio r to the expi ratio n of thirty daysafter the date upo n whi ch the notice referred to in sub sect ion (2) shallhave been published m the Gazette.

(4) The registrar shall consider all written objections received by himwithin the period mentio ned in subsec tion (3) before making an orderunder subsection (1).

(5) Every ord er made und er sub sect ion (1) shall be pub lish ed in theGazette and shall be expressed to, come into operation on a date which

shall not be earlie r tha n twen ty- eigh t days after the date of the publication of the order in the Gazette.

(6) The wor d ''Pr odu cer' ' in par agr aph (b) of subs ectio n (1) does notinclude any perso n to who m an order made under subsec tion (1) willnot apply by virt ue of the pro viso , to that sub secti on and who is not amember of the registered society.

(7) For the avoidance of doubt but without prejudice to the generalityof subsection (i), the expres sion ' 'class or classes of prod ucer' ' meansany class or descrip tion or classes or descriptio ns of produ cer, whet herdetermined by reference to the amount of commodity produced orotherwise.

49. Subject to the provisi ons of this sect ion a contr act shall notunless any term thereof otherwise provides, be void or unenforceable by order on

reas on on ly th at the perf orm ance of any te rm of such cont ract is or e c x o i n s t t r i a n c g twould be in contravention of any directions given by a registered society c o n t r a c tund er an orde r mad e und er sectio n 48, and any party to such cont ractwho sells or otherwis e disposes of any commo dity in accordan ce withany term of such cont ract shall be dee med to be exe mpt ed from compliance with such directions:

Provided that-

(a) the pro visio ns of this sectio n shall apply only in respec t of acontract made prior to the date of the resolut ion in purs uanceof which an application was made by the registered society undersubsection (1) of section 48 for the making of the order underwhich the directions were given;

(b) the pro visi ons of this sectio n shall cease to apply to any contr act

up on the exp irat ion of twel ve month s from the date when directions were first given by the registered society, and the exemptionconferred by this section shall thereupon terminate.

Effect of

contracts

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Appeal

againstdirectionsas tosale

Revocat ionof ordermade undersection 48

Obligationsof producerst o w h o mo r d e runde rsection 48applies

50 .-(1) Any pers on to wh om any order made unde r section 48applies who is aggrieved by any directions given thereunder may at anytime appeal in writing to the Minister.

(2) Up on receip t of any writ ten appea l, the Mini ster shall cause acopy of the same to be sent to the regis tered society wh ich may, withinsuc h per iod as the Min iste r shall have notified to it advi se the Minist erm. writing whether it consents or objects to the exercise by the Ministerof any of the power s conf erred by par agr aph (a) of subsec tion (3),and shall give reasons for such consent or objection.

(3) The Minis ter, after cons ider ing any writ ten reply from theregistered society received within the period notified to such registeredsociety under subsection (2), may-

(a) by certific ate und er his hand, e xem pt the appellan t from theoper atio n of all or any of the pro visi ons of the direc tion s, ormodify all or any of the provisions of the directions in theirapplication to the appellant; or

(b) dismiss the appeal.(4) Any certificate of exempti on or modifi cation giv en und er this

section may be granted for such period and subject to such conditio nsas may be specified, by the Minister.

(5) The decisio n of the Ministe r on any appeal shall be final andshall not be subject to review in any court.

51 .-(1 ) The regis trar ma y revo ke any order mad e und er sectio n 48if he is satisfi ed tha t-

(a) the cont inua nce of the ord er is not in the gene ral intere sts of theindustry affected thereby; or

(b) less than two-thir ds of the prod ucers to wh om such order appliesare mem ber s of the registere d society and that the membe rs

of the society deliver ed to the register ed society durin g the lastpre ced ing yea rs less th an two- thir ds of the total o utput of thecommo dity prod uced by all the produ cers to who m such orderapplies; or

(c) not less tha n one- thir d of the memb ers or dele gate s of theregis tered society have vot ed in f avou r of such rev ocat ion at agenera l meeti ng of the society held after reaso nable notice giv enof the place and time of the meetin g and of the intent ion to takea vote upon the question of revocation.

(2) The regis trar shall revo ke any ord er made unde r secti on 48 if heis satisfied that at least seventy-five per centum of the primary societiesin the area to which the order applies (being primary societies to whos emembe rs such order applies) have voted in favour of such revoca tionat a gener al meeting held by each of the m after reaso nabl e notice givenof the place and time of the meet ing and the inte ntio n to take a voteupon the question of revocation.

52 .-(1) Every pro duc er to w ho m any o rder ma de unde r secti on 48appli es who is n ot a m emb er of the reg istered society in respec t of whi ch the orde r is mad e sh all, wh ile such orde r applies to him, besubject to all the conditions and obligations to which he would besubject if he were a member, other than an obligation to, pay anymembership fee or share subscription.

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(2) If any such pro duc er wish es to bec om e a mem ber of the registered society, the society shall admit him to memb ership on paym entof the share subsc ript ion sufficient to qualify him for mem ber shi p and

of the membership fee, if any.53.-( 1) Subject to the pr ovi sion s of this A ct, any per son wh o-

(a) fails to com ply wit h any dire ction giv en by a regi stere d societyunder an order made under section 48; or

(b) buys or otherwise acquires any commo dity sold or disposed of in contrav ention of any such directions know ing, or havingreason to believe, that such sale or disposal is in contravention of such directions,

shall be guilty of an offence and shall be liable on con vict ion to a finenot exceedin g ten thousand shillings or to imprisonm ent for a term notexceed ing six months , or to both such fine and imprisonme nt.

(2) Wher e any perso n is charged with an offence against para grap h

(a) of sub secti on (1), the onus of proo f that he was at the relevan t timea pers on to wh om any order made unde r section 48 did not apply orwas exemp ted from comp liance with any direction made thereun der orthat any such dire ction was at the relev ant time modi fied in its applicatio n to him, or that any certificate of exe mpt ion or mod ifica tion was inforce at the relev ant time or t hat any cond itio n attac hin g to any suchcertificate had been compli ed with, and, where any pers on is charge dwith an offence against parag raph (b) of su bsection (1), the onus of

proo f tha t he did not kno w or had no reas on to beli eve that any saleor disposal was in contravention of any directions giv en by a registeredsociety, shall be upon the person charged.

(3) Every offence again st subs ectio n (1) shall b e triable by a courtpresided over by a district magistrate or a resident magistrate and,notwit hstand ing the p rovision s o f any oth er law for the time bein g

in for ce, a resid ent magis trate may impo se any fine wit hin the limitsspecified in subsection (1).

(4) In any pro ceed ing s for an offence again st sub sect ion (1), acertificate pur por ting to be und er the han d of the registrar to the effectthat an order under section 48 has been made and that the direction wasgive n b y the regis tered society shall be adm issib le m evide nce with outany further proo f and shall be conclusiv e evidence of the matters statedin such certificate.

Penaltiesf o r n o n -compliancew i t hdirect ionsas to sale

54.-( 1) No society s hall pay a divid end or bo nus or distr ibute any D i v i d e n d spart of its accu mul ated funds befor e the bala nce sheet has bee n audi ted a n d b o n u sby a duly auth oriz ed aud itor and app rov ed by the registr ar.

(2) No society shall pay a divi dend to its mem ber s on their pai d-u pshares exceeding five per centum per annum.

(3) No society with un limited liability, w hich ad vances money orgoo ds to any mem be r in exces s of the money or the val ue of the goodsdep osit ed by him, shall pay a divi den d dur ing the per iod of ten year sfrom the date of its registration.

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Reservefund

Distributionof netbalances

Contr ibut ionfo rcharitable,educationalan dmedicalpurposes

Registrationof charges

Cap. 210

55 .-(l) Every society wh ich does or can derive a profit from itstransactions shall maintain a reserve fund.

(2) A society with unlimited liability, which advances money or goodsto any mem be r in exce ss of mon ey or goo ds depo sited by him, shallcarry one- fou rth of the ann ual net surpl us to the reser ve fund.

(3) All other societies shall carry to the reserve fund such por tion of the annu al net surplu s as may be pres crib ed by the rules and by- law s.

56 . Subject to the provi sio ns of this Act and of any rules m adether eund er, a regis tered society may apply the ann ual net bala ncetogethe r with any sum available for distribut ion from previou s years topaym ent of bo nuses and to any staff incentive bonu s scheme in suchman ner and in su ch pro por tion as may b e p resc ribe d by the rules orby its by-laws.

57 . Subject to the cons ent of he regis trar a regis tered society may,by reso lutio n in gener al meeti ng, appr opri ate from its f unds andexpend on any charitable, educationa l or medical purpose or suchothe r object as the Mini ster may a ppr ove , an amo un t not exce edin gfifty per centum of the annual net balance of that society.

PART VIIIREGISTRATION OF CHARGES

58 .-(1) Subject to the pro visio ns of this Part, every charg e to wh ichthis secti on appli es, creat ed by a regis tered society shall, so far as anysecurity on the society 's prop erty is thereb y conferr ed, be voi d agains tthe liquid ator and any credi tor of the society unles s the pres crib edparticulars of the charge, toge ther with the instrument, if any, by whic hthe char ge is created or ev iden ced, or a copy thereo f verifie d in thepres crib ed manne r, are deliv ered to the registr ar for regis tration with inthirty days after the date of the creat ion of the cha rge, bu t with outpreju dice to any contr act or obl igat ion for pay men t of the moneythereby secured, and whe n a charge beco mes void unde r this sectionthe money secured thereby shall immediate ly beco me payable.

(2) This section applies to the following charges: -(a) a charge for the purpo se of securing any issue of deben tur es;(b) a charge created or evidenced by an instrument which, if executed

by an in dividual, would require registration under the ChattelsTransfer Ordinance;

(c) a char ge on immo vab le pro perty , whe rev er situate, or any interest therein;

(d) a charge on book debts of the society;(e) a floating charge on the property of the society.(3) Where a negotiable ins trument has been given to secure the

pay men t of any boo k debts of a registe red society, the depo sit of theinstr umen t for the purp ose of secur ing an adva nce to the society shallnot fo r the pur pos es of this secti on be treat ed as a charg e on thosebook debts.

(4) The hol ding of deben ture s en titlin g the h old er to a charg e onimmo vab le prope rty sha ll not for the purpo ses of this sec tion be deem edto be an interest in immovable property.

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(5) Wher e a series of deben tures contain ing or giving by referenceto any other instrument, any charge to the benefit of which the debenturehold ers of that series are entitled pari passu is created by a registeredsociety, it shall, for the purposes of this section, be sufficient if there aredeliv ered to or re ceive d by the registra r, with in thirty days after theexe cuti on of the deed con tain ing the charge or, if there is no such deed,after the exec utio n of any deben ture s of the series, the follo wingparticulars: -

(a) the total amount secured by the whole series; and(b) the date of any reso lutio n auth orizi ng the issue of the series and

the date of the cov erin g deed, if any, by whi ch the security iscreated or defined; and

(c) a general description of the property charged; and

(d) the name s of the trust ees, if any, for the debe ntur e hold ers,

tog ethe r wit h the deed con tain ing the char ge, or, if ther e is no suchdeed, one of the deben tures of the se ries:

Pro vide d that, whe re more than one issue is made of debe ntur es inthe series, there shall be sent to the regis trar for entry in the regist erparticulars of the date and amount of each issue, but an omissionto do this shall not affect the validity of the debe ntur es iss ued .

(6) In this and the succ eedi ng p rov isio ns of this Part ' 'charg e'' includ es a mor tgag e and a letter of hyp oth ecati on, and referen ces to theprop erty and assets of a regis tered society inclu de pro perty and assetswhich the registered society is authorized to charge.

59.-(l) It shall be the duty o f the re gist ered soci ety to sen d to theregist rar for regis tration the partic ulars of every charg e created by thesociety to wh ich secti on 58 appli es, but regi strat ion of any such char gemay be effected on the a ppli catio n of any per son interes ted therein .

(2) Whe re regi stra tion is effected on the app licat ion of some per sonothe r than the society, that per son shall be entitled to recov er from thesociety the amo unt of any fees prop erly paid by him to the regis trar onregistration.

(3) if any regis tered society make s default in sen ding to the regi strarfor registration the particulars of any charge, to which section 58 applies,create d by the society, then, u nless the regis tratio n has be en effected bysome other pers on, the society and every officer thereo f w ho iskno win gly a party to the default shall be guilty of an offence and shallbe liable on conviction to a fine not exceeding one hundred shillings forevery day during which the default continues.

Duty of society toregisterchargescreated bysociety

60 .-(l) Whe re a regis tered society a cquir es any prop erty wh ich issubject to a charg e to wh ich section 58 wou ld apply if the charge hadbe en created by the society after the acqu isitio n of the prop erty ,the society shall cause the prescrib ed particular s of the charge, togeth erwith a copy (certified in the pres crib ed man ner to be a corre ct copy) of the instr umen t, if any, by whic h the charg e was created or is eviden ced,to be delivered to the registrar for registration within thirty days after thedate on which the acquisition is completed.

Duty of society toregisterchargesexistingon propertyacquired

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Registerof charges

Endorsementof certificateof registration ondebenture

(2) If default is made in complying with the provisions of this section,the society and every officer th ereof w ho is kno win gly a party to thedefault shall be guilty of an offence and shall be liable on con vict ionto a fine not exc eed ing one h und red sh illings for ever y day dur ing

which the default continues.

61.-( 1) The registrar shall keep , with respe ct to each regist eredsociety , a regis ter in the pres crib ed form of all charg es requir ingregistration unde r the provisio ns of this Part, and shall, on paym ent of the pres crib ed fee, enter in the register with respect to any such charg ethe follow ing p articular s: -

(a) in the case of a ch arge to the benefit of whic h the holde rs of a series of debentures are entitled, such particulars as are specifiedin subsection (5) of section 58;

(b) in the case of any oth er cha rg e-(i) if the cha rge is a c har ge cre ated by the soc iety, the date of

its creation, and if the charge wa s a charge existin g on propertyacqu ired by the society, the date of the acq uisit ion of the

property;(ii) the am oun t secure d by the c harge;

(iii) short parti cular s of the prop erty charg ed; and(iv) the pers ons entitled to the char ge.

(2) The registr ar shall give a certificate und er his hand of theregistration of any charge registered in pursu ance of the provis ions of this Part, stating the amou nt t hereb y secured , and the certificate shallbe conc lusi ve evid ence that the requir emen ts of this Part as to registration have been complied with.

(3) The regis ter k ept in p urs uan ce of this sectio n shall be ope n toinspec tion by any perso n on paym ent of the prescribe d fee, not exceeding one shilling for each inspection.

(4) The regis trar shall kee p a chr ono log ical inde x, in the pre scri bed

form and containi ng the prescrib ed particulars , of the charges enteredin the register.

62.- (1) Every reg istere d society shall cause a copy of every certificateof registration given under section 61 to be endorsed on every debentureor certificate of debe ntur e stock whi ch is issued by the society, and thepaym ent of whic h is secured by the charge so r egister ed:

Provi ded that nothin g in this subsecti on shall be constru ed asrequ irin g a society to cause a certificate of regi stra tion of any charg eso giv en to be end ors ed on any deb entu re or certificate of debe ntur estock issued by the society before the charge was created.

(2) If any per son kno win gly and wilfully auth orize s or perm its thedelive ry of any debe ntur e or certificate of debe ntur e stock wh ich un derthe pro visi ons of this section is requ ired to have endo rsed on it a copy

of a certificate of regi strat ion with out the copy bei ng so endo rsed up onit, he shall, without prejudice to any other liability, be guilty of anoffence and liable on con vic tion to a fine not exc eed ing one tho usan dshillings.

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63 .-(1) The registrar may, on evidence being given to his satisfaction E n t r y o f that the debt for w hic h any regis tered char ge was giv en satisfactionpaid or satisfied, order that a mem oran dum of satisfaction be entered a n d

on the register , and shall, if requir ed, furnish the society with a copy r e c t i f i c a t i o n

thereof. o f r e g i s t e r

(2) The registra r, on be ing satisfied tha t th e omi ssio n to regis ter acharg e with in the time requ ired b y this Part, or that the omi ssio n ormis- state ment of an y part icula r with respec t to any such char ge or ina memo ran dum of satisfaction, was accidental, or due to inadverten ceor to some other sufficient ca use, or is not of a natur e to preju dicethe pos itio n of cre dito rs or mem ber s of the society, or that on othergro und s it is ju st and equit able to gran t relief, may , on the appl icati onof the regis tered society or any per son intere sted, and on such term sand cond ition s as seem to him ju st and expe dient , orde r that the timefor registr ation shall be exten ded, or, as the case may be, that theomission or mis-statement shall be rectified.

64 .-(1) If any perso n obtai ns an ord er for the app oin tmen t of areceiv er or man age r of th e prop erty of a regis tered society, or appo ints

such a recei ver or man age r u nde r any pow ers cont ained in any instrument, he shall, wit hin seve n days from the date of the orde r or of theapp oint men t und er the said pow ers , give notic e of the fact to theregistrar, and the registrar shall, on payment of the prescribed fee,enter the fact in the register of charges.

(2) Where any perso n appointe d receiver or manag er of the propertyof a registered society unde r the power s contained in any instrumentceases to act as such receiv er or manag er, he shall, on so ceasing , givethe regis trar notic e to that effect, and the registr ar shall enter the noticein the register of charges.

(3) If any per son mak es default in com ply ing with any of therequ irem ents of this section , he shall be guilty of an offence and shallbe liable on conviction to a fine not exceeding one hundred shillings for

every day during which the default continues.65 .-(1) Ever y regis tered society shall cause a cop y of every instru

ment cr eatin g any ch arge requ irin g to be re giste red un der the provisions of this Part to be kept at the registered address of the society.

(2) If any regis tered society fails to comply with the prov isio ns of bysubs ectio n (1) the society and every officer there of who is knowin gly apar ty to the def ault shal l be guilty of an offen ce and shall be liab leon con vic tio n to a fine not exc eed ing one hun dre d shillin gs for everyday during which the default continues.

66 .-(1) Ever y reg ister ed society shall keep a t the re giste red addr essof the society a regist er of charg es and enter ther ein all char gesspecifically affecting property of the society and all floatin g char ges onthe prop erty or assets of the so ciety, g iving in each case a short description of the prope rty charg ed, the amou nt of the charg e and the name sof the persons entitled thereto,.

Registrationof enforce

ment of security

Copies of instrumentalcreatingchargesto be keptby society

Society'sregisterof charge

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Right toinspectcopies of instrumentscreatingmortgagesand chargesand society'sregisterof charges

(2) If any officer of the society know ing ly and wilfully auth oriz es orper mits the omi ssi on of any entry requi red to be made in pur sua nce of this sectio n in any such register , he shall be guilty of an offence andshall be liable on co nvi ctio n to a fin e not e xce edin g five hun dredshillings.

67.-(1) The cop ies of the inst rume nt creating any cha rge requ iredto be regis tered with the registrar under the pro visi ons of this Part, andthe regis ter of char ges kep t by the regis tered society in pur sua nce of sectio n 66, shall be op en du ring b usi nes s hour s (but subject to suchreasonable restrictions as the society in general meeting may impose, sohow ever that not less than two h ours in each day shall be allow ed

for insp ection ) to the inspec tion of any creditor or mem ber of thesociety with out fee, and the register of char ges shall also be ope n to theinspecti on of any other perso n on payme nt of such fee, not exceedin gone shilling for each inspection, as the society may determine.

(2) If insp ectio n of the said copie s or regis ter is refused, any officerof the society refusing inspectio n, or who knowin gly and wilfully permitssuch refusal, shall be guilty of an offence and shall be liable on convic

tion to a fine not exc eed ing ten shillin gs for every day dur ing wh ichsuch refusal continues, and any court may by order compel an immediateinspection of the copies or register.

PA RT I X

INSPECTION OF AFFAIRS

Inquiry by 68 .-(1 ) The registrar may of his ow n motio n, and shall on ther e g i s t r a r appl icati on of a majority of the c omm ittee, or of not less tha n one -

third of the memb ers, direct some pers on authori zed by him by orderin writ ing in this beha lf to hold an inquir y into the constit ution ,activities and financial affairs of a registered society.

(2) All officers and membe rs of the society shall pro duce su ch of theboo ks and, docum ents of the society and furnish such informatio n inrega rd to the affairs of the society, as the per son autho rized by theregistrar may require.

Inspect ion 69 .-(1) The regi strar shall, on the appli cati on of a creditor of aregi stere d society , insp ect or direct some per son auth orize d by him byord er in writi ng in this beha lf to inspe ct, the bo oks of the soc iety :

Provid ed that no inspectio n u nder this subsectio n shall be carriedout or directed unles s-

(a) the cred itor satisfies the regis trar that the debt is a sum then due,and that he has dema nded paym ent thereof and has not receivedsatisfaction within a reasonable time; and

(b) the credi tor depo sits wit h th e registr ar such sum as security for

costs of the prop osed inspectio n as the registrar may require.(2) The regi strar shall commu nica te the results of any insp ectio n

carried out under subsection (1) to the creditor.

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70.-(l) Wher e an inquiry is held und er sectio n 68 or an insp ectio n Costs of is mad e-u nde r sectio n 69, the registr ar may, by a certificate und er his i n q u i r y

hand and seal, make an award apportioning the costs, or such part of thecosts as he may think right, between the society, the members orcreditor demanding an inquiry or inspection, and the officers or former

officers of the society.

(2) The registrar may lodge a certified copy of a certificate issued byhim und er subse ction (1) in a court of a resident magi strat e or adistrict court and upon being so lodged such certificate shall be deemedto be a d ecree pas sed b y suc h co urt f or the pay men t by the per sonnam ed in the certificate to the regis trar of the sum specified in thecertificate and such sum may be recovered in any mann er prescr ibedby the Civil Proce dure Cod e, 1966 for the enforcemen t of decrees and Acts, 1966

the provis ions o f that Code relating to execu tions o f decrees shall apply, N o 4 9

mutatis mutandis, to proceedings for the recovery of costs awarded underthis section.

71.-(l) Where u pon an inquiry unde r section 68 or upo n an Surchargeinspection under section 69 the registrar is satisfied that a past or presentofficer or member has made or author ized an unlawful payment or hasby negl igen ce or mis con duc t cause d a deficien cy or a loss or failureto bring to account or has by negligence or misconduct caused loss of ordam age to any pro perty of the re gister ed soci ety, the regis trar maysurcharge such person with the unlawful payment, deficiency or loss, orthe sum whi ch oug ht to have be en bro ugh t to accou nt or the valu e of the property lost or damaged or the cost of repairing the damage, as thecase may be, or with such portion of such unlawful payment, deficiency,loss, sum, value or cost as, the registrar may consider reasonable havingregard to all the circumstances of the case.

(2) The regis trar shall give notice in wr iting to every per son surcharg ed und er the provisio ns of subs ection (1) of the amou nt surchar gedand the g rou nds upo n whi ch the su rcha rge is mad e and every such

per son may, not later tha n thirty days from the recei pt of such notic e,app eal to the Min iste r or, whe re the amo un t of the surch arge exce edstwo thou sand shilling s, to the Hig h Court.

(3) The dec isio n of the Minis ter on any appe al made und er subsec tion(2) shall be final and shall not be sub ject to revi ew in any court.

(4) Where a pers on has bee n surcha rged with an amou nt under thissectio n and he fails to pay such amo unt with in thirty days after theservice of the notice upon him in acco rda nce with sub secti on (2) or, if he has appealed to the Minister or the High Court and he fails to pay theamo unt of the surc harg e, if any , decid ed upon by the Mini ster or theHi gh Cour t on app eal withi n fifteen days from the date of the decis ionof the Min iste r or the Hi gh Court, the regis trar may issue a certificateund er his hand and seal specifyin g the name and addr ess of the per so n

who has been surchar ged and the amoun t of the surcharg e and suchcertificate or a certified copy thereo f may be lodg ed in a court of aresid ent mag istra te or a district co urt and u pon bein g so lodg ed it

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Voluntaryamalgamation

Compulsoryamalgamation

shall be dee med to be a decr ee pas sed by such cour t for the pay men tby the person named in the certificate to the registrar of the sumspecified in the certificate and such sum may be recovered in anyman ner pre scr ibed by the Civil Pro ced ure Code, 1966 for the enforcement of decrees and the prov isions of that Code relating to execu tionof decrees shall apply, mutatis mutandis, to proceedings for the recoveryof such amount specified in the certificate.

(5) The Chief Justic e may make rules regula ting the proce dur e on anappeal to the High Court under this section.

PA RT XAMALGAMATION AND DIVISION

72.-(1 ) Any two or more register ed societies may, wit h the appr ovalin writing of the registrar and after comp lying with such conditions asmay be pres crib ed, res olve , by a reso lutio n app rov ed at a gener al meeting of eac h o f the societi es at w hic h n ot less tha n two -thi rds of thememb ers or delegat es of the society are pr esent and held after reasonablenotice g ive n of the place an d time of the me etin g and of the in tenti on tomove such resolutio n thereat, to amalga mate as a single society.

(2) where the registrar is satisfied that-(a) two or mor e regi ster ed societ ies have reso lved to ama lga mate as

a single society in accordan ce with the provisio ns of subsecti on(1);

(b) the propo sed by-la ws of the prop osed amalga mated society areunobjectionable; and

(c) the pro pos ed amal gam ati on is not again st the int erests of thememb ers of the societies proposin g to amalgam ate or against thepublic interest,

he may, by order publi shed in the Gazette, amalgamate the societies.(3) Ever y ord er made unde r sub sectio n (2) shall specify-(a) the date on whic h the so cieties sh all amalg amat e (her einafter

referred to as ' 'the effective date'');

(b) the names of the amalg amati ng societies; and(c) the name of the amalgamated society,and may c onta in such dire ction s as the r egistr ar may con side rnecessa ry for th e purp ose of g iving effect to the amal gam atio n or forsafeguardin g the interests of any person.

(4) Whe re an o rder is mad e und er sub secti on (2)-(a) all the assets and liabiliti es of the ama lga mati ng societ ies shall,

by virtue of such order and withou t further assurance , vest inthe amalgamated society;

(b) the reg istrar shall cance l the regis tratio n of the am alga mati ngsocieties and such cancellation shall be effective as from theeffective date; and

(c) the reg istrar shall, not with stan ding the pr ovis ion s of section 9and section 10, register the amalgamated society and the by

laws of the amalg amated society.73.-(1 ) Whe re the registra r is satisfied that it is in the interest of two or more regis tered societies to ama lgam ate as a single society andthat such ama lga mat ion will not be again st the publ ic intere st he may,by notice in writin g, require the societies to amal gama te.

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(2) Where a notice is given to two or more registered societies undersubsection (1), the societies shall, within such time as may be specifiedin the notice, prepare by-law s for the prop osed amalg amated societyand submit the by-laws for the approval of the registrar; and theregis trar may, after con sult atio n with the societ ies, vary or amen d theproposed by-laws.

(3) When the registrar has approved the proposed by-laws he may, byorder published in the Gazette, amalgamate the registered societies andthe pro visi ons of subs ectio n (3) of sectio n 72 shall apply to every suchorder.

(4) Every order made under subsection (3) shall have the same effectand consequences as an order made under subsection (2) of section 72.

(5) Where a notice is given to a registered society under subsection (1)and the society fails to comp ly wit h any of the term s of such noticewith in such time as may be pres crib ed, the regis trar may, by ord er inwritin g, cance l the regis tration of the society.

74.-(1 ) An exist ing regis tered society (herein after referred to asV o l u n t a r y

"exi sting society'') may, with the appr oval in writi ng of the regis trar division

and after complying with such conditions as may be prescribed, resolve,by a reso lutio n app rov ed at a gene ral meet ing at wh ich not less thantwo -thi rds of the mem ber s or dele gate s of the society are pre sent andheld after reas onab le notice gi ven of the place and time of the mee tingand of the inten tion to mov e such reso lutio n therea t, to divide itself into t wo or mo re new regist ered societies (herein after referred to as''new societies'').

(2) A resolut ion passe d under subsec tion (1) shall contain proposalsfor the div ision of the assets and liabiliti es of the exis ting societyamong the proposed new societies, and may prescribe the area of ope rati on of, and specify the mem ber s who will const itute , each of theproposed new societies.

(3) Where the registrar is satisfied that-

(a) an exis ting society has resolved to divid e itself into two or mor enew societies in accordance with subsection (1);

(b) such resolution complies with the provisions of subsection (2); and

(c) the pro pos ed div isio n is not again st the intere sts of the mem ber sof the existing society or against the public interest,

he may, by ord er pub lish ed in the Gazette, divide

coop act 1968

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