COOPERATIVE SOCIETIES ACT.

ARRANGEMENT OF SECTIONS.

   Section

PART I
INTERPRETATION.

   1.   Interpretation.

PART II
REGISTRATION.

   2.   Registrar, deputy registrars and assistant registrars.

   3.   Societies which may be registered.

   4.   Conditions of registration.

   5.   Application for registration.

   6.   Registration of a probationary society.

   7.   Indication of probationary registration.

   8.   Cancellation of registration.

   9.   Amendment of the byelaws of a registered society.

   10.   Appeal to the board.

   11.   Provisions regarding name of a registered society.

   12.   Evidence of registration.

PART III
RIGHTS AND LIABILITIES OF MEMBERS.

   13.   Qualifications for membership.

   14.   Restriction on shareholding.

   15.   Restriction on membership.

   16.   Member not to exercise rights until due payment made.

   17.   Restriction on membership in more than one society.

   18.   Votes of members.

   19.   Restrictions on transfer of share or interest.

PART IV
DUTIES OF REGISTERED SOCIETIES.

   20.   Address of society.

   21.   Copy of the Act, regulations, byelaws, etc. to be open for inspection.

   22.   Audit, annual returns and accounts.

   23.   Qualifications of auditors.

   24.   Estimates and expenditure.

   25.   Voluntary amalgamation of societies.

   26.   Transfer of assets and liabilities to another society.

   27.   Voluntary division of a society.

PART V
DUTIES OF THE BOARD AND PRIVILEGES OF REGISTERED SOCIETIES.

   28.   Societies to be bodies corporate.

   29.   Board of directors of the Uganda Cooperative Alliance Ltd.

   30.   Byelaws to bind members.

   31.   Contract with members to dispose of produce.

   32.   Imposition of fines upon members.

   33.   Charge on agricultural produce and certain other materials and articles.

   34.   Charge and set off in respect of shares or interest of members.

   35.   Share or interest not liable to attachment.

   36.   Liability of past member.

   37.   Liability of estate of deceased member.

   38.   Transfer of interest on death of member.

   39.   Registers and books of societies and copies of them shall be received in evidence in certain circumstances.

   40.   Restriction on the production of a society's books.

   41.   Power to exempt from duty or tax.

PART VI
PROPERTY AND FUNDS OF REGISTERED SOCIETIES.

   42.   Restrictions on loans.

   43.   Restrictions on borrowing.

   44.   Restrictions on other transactions with nonmembers.

   45.   Investment of funds.

   46.   Dividend or bonus.

   47.   Reserve and provident fund.

   48.   Distribution of net balance.

   49.   Contribution to education fund.

   50.   Registration of charges.

PART VII
SUPERVISION AND INSPECTION OF AFFAIRS.

   51.   Production of cash and books of a registered society.

   52.   Ad hoc committee of inquiry.

   53.   Inspection of books of an indebted registered society.

   54.   Cost of inquiry.

   55.   Recovery of an award under section 54.

PART VIII
DISSOLUTION OF A REGISTERED SOCIETY.

   56.   Cancellation of registration after inquiry or inspection.

   57.   Cancellation for other reasons.

   58.   Winding up.

   59.   Application of the Companies Act, etc.

   60.   Effective date of cancellation.

   61.   Copy of order to be filed by the registrar.

   62.   Appointment of a liquidator.

   63.   Powers of a liquidator.

   64.   Powers of the registrar in liquidation.

   65.   Appeal against an order of a liquidator or the registrar.

   66.   Closure of liquidation.

   67.   Commission of offences under the Companies Act.

   68.   Convicted officers not to be officers of a society.

   69.   Offences.

PART IX
SURCHARGE AND ATTACHMENT.

   70.   Powers of the registrar to surcharge officers, etc.

   71.   Appeal to the Minister.

   72.   Attachment of property.

PART X
SETTLEMENT OF DISPUTES.

   73.   Settlement of disputes.

   74.   Protection of an arbitrator.

   75.   Appeal to the court from the decision of the board.

   76.   Legal representative not allowed before an arbitrator.

PART XI
GENERAL.

   77.   Remuneration of officers.

   78.   Prohibition of the use of the word "cooperative".

   79.   Regulations.

   80.   Offences and penalties.

   81.   Penalty for soliciting violation of contracts.

   82.   Application of other laws.

   83.   Certain laws not to apply.

      First Schedule   Registration of charges.

      Second Schedule   Provisions of the Companies Act which shall apply to the winding up of a society.

CHAPTER 112
COOPERATIVE SOCIETIES ACT.

Commencement: 15 November, 1991.

   An Act to amend and consolidate the law relating to the constitution and regulation of cooperative societies and for other matters connected therewith.

PART I
INTERPRETATION.

1.   Interpretation.

   In this Act, unless the context otherwise requires—

   (a)   "agricultural produce" means the produce of farms, gardens, orchards and forests, including all dairy produce and all products of animal husbandry, and shall be deemed to include all the products of fishes and fishing and peasant handicrafts;

   (b)   "apex society" means a registered society under this Act, the membership of which is restricted to cooperative unions and includes a society established to serve the cooperative movement by providing facilities for banking, insurance and the supply of goods or services;

   (c)   "board" means the Board of Directors of the Uganda Cooperative Alliance Ltd.;

   (d)   "bonus" means a share of the surplus of a registered society divided among its members in proportion to the volume of business done with the society by them from which the surplus of the society was derived;

   (e)   "byelaws" means the registered byelaws made by a society in the exercise of any power conferred by this Act, and includes a registered amendment of those byelaws;

   (f)   "commissioner" means the commissioner for cooperative development and includes the deputy commissioners for cooperative development when acting for the commissioner;

   (g)   "committee" means the governing body of a registered society to which the management of its affairs is entrusted and includes a board of directors;

   (h)   "cooperative union" means a registered society under this Act, the membership of which is restricted to primary societies;

   (i)   "court" in relation to a registered society means a court presided over by a chief magistrate or magistrate grade I, and in relation to a union of two or more registered societies means the High Court;

   (j)   "date of dissolution" means the date on which the registrar's order cancelling the registration of a society takes effect;

   (k)   "dividend" means a share of surplus of a registered society divided among its members in proportion to the share capital held by them;

   (l)   "member" includes a person or a registered society joining in the application for the registration of a society to membership after registration in accordance with the byelaws;

   (m)   "Minister" means the Minister responsible for cooperatives and marketing;

   (n)   "officer" includes a chairperson, secretary, treasurer, member of a committee, employee, or other person empowered under any regulations made under this Act or the byelaws of a registered society to give directions in regard to the business of a registered society;

   (o)   "primary society" means a registered society under this Act, the membership of which consists of individual persons and includes other bodies approved by the registrar under section 15;

   (p)   "probationary society" means a society registered provisionally under section 6(1);

   (q)   "registered society" means a cooperative society registered or deemed to be registered under this Act;

   (r)   "registrar" means the registrar of cooperative societies and includes the deputy registrars of cooperative societies;

   (s)   "winding up" means all proceedings subsequent to the cancellation of the registration of a society.

PART II
REGISTRATION.

2.   Registrar, deputy registrars and assistant registrars.

   (1) There shall be a registrar for cooperative societies who shall also be the commissioner for cooperative development for the purposes of this Act.

   (2) The registrar shall be a public officer responsible for providing and administering the services required by societies for their formation, organisation, registration, operation and advancement and for carrying out the provisions of this Act.

   (3) There shall be three deputy registrars who shall be deputy commissioners, one of whom shall be responsible for the administration of cooperative societies, while the other shall be responsible for the implementation of the legal provisions of this Act.

   (4) All officers of the rank of assistant cooperative officer and above shall be assistant registrars of cooperative societies for the purpose of this Act.

   (5) The Minister may, by statutory order, confer or impose on any assistant registrar of cooperative societies all or any of the powers and duties conferred or imposed on the registrar of cooperative societies by this Act.

3.   Societies which may be registered.

   Subject to this Act, a society which has for its object the promotion of the economic and social interests of its members in accordance with cooperative principles and which, in the opinion of the registrar, is capable of promoting those interests may be registered under this Act with or without limited liability; except that a cooperative union or any apex society shall be registered with limited liability.

4.   Conditions of registration.

   (1) No society shall be registered under this Act unless—

   (a)   it consists of at least 30 persons all of whom are qualified for membership of the society under section 13;

   (b)   in the case of a secondary society, it consists of at least two registered primary societies among its registered members;

   (c)   in the case of a tertiary society, it consists of at least two registered secondary societies among its registered members; or

   (d)   in the case of an apex society, it consists of two or more secondary societies.

   (2) The Uganda Cooperative Alliance Ltd. shall be the apex body for all registered cooperative societies.

   (3) Notwithstanding subsection (1), registered societies which are not affiliated to any secondary society may be admitted as associate members to a tertiary society.

5.   Application for registration.

   (1) For the purpose of registration, an application to register shall be made to the registrar.

   (2) The application shall be signed—

   (a)   in the case of a primary society, by at least 30 persons qualified for membership of the society under section 13; and

   (b)   in the case of a secondary, tertiary or apex society, by a person duly authorised for that purpose by each registered society, who is a member of that society.

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

6.   Registration of a probationary society.

   (1) If the registrar is satisfied that a society has complied with this Act and regulations made under it and that its proposed byelaws are not contrary to the provisions of this Act, he or she shall register the society and its byelaws on probation for a period not exceeding 24 months.

   (2) If at the expiration of 24 months the registrar is satisfied with the performance of the society, he or she shall register the society permanently.

   (3) If at the expiration of 24 months the registrar is not satisfied with the performance of the society, he or she may either cancel the registration or extend the probationary period by a period not exceeding 12 months; and if after the extension he or she is still not satisfied with the performance of the society, he or she shall cancel the registration of the society.

   (4) If the registrar cancels the registration of a society under subsection (3), then the provisions of sections 62 and 63 concerning the appointment of a liquidator and his or her powers shall apply.

   (5) Any society registered under subsection (1) shall become a body corporate by the name under which it is registered probationary, with perpetual succession and a common seal, and with power to hold movable and immovable property of every description, to enter into contracts, to institute and defend suits and other legal proceedings and to do all things necessary for the purpose of its constitution; and any reference in any written law to a registered society shall include a society which is registered under this section.

7.   Indication of probationary registration.

   A society which is registered under section 6(1) shall state in legible letters in all its receipt heads, letter-papers, notices, advertisements or other official publications that it is registered probationary and shall indicate the same on a signboard in a conspicuous position outside any premises or office in which it carries on its business.

8.   Cancellation of registration.

   (1) At any time during the period of registration of a society under section 6(1), the registrar may, by notice in writing to the person responsible for the running of the society, cancel the probationary registration of the society stating reasons for the cancellation; and the society shall, from the date of service of the notice, cease to be a registered society.

   (2) The cancellation referred to in subsection (1) shall be gazetted and published in at least one of the English newspapers in Uganda.

   (3) If a society registered under section 6(1) contravenes or fails to comply with section 7, that society and any officer or person who purports to act on its behalf commits an offence and is liable on conviction to a fine not exceeding 10,000 shillings and in the case of a continuing offence to a further fine not exceeding 1,000 shillings for each day on which the offence is continued after conviction of the offence.

9.   Amendment of the byelaws of a registered society.

   (1) Any registered society may, subject to this Act, amend its byelaws, including a byelaw which declares the name of the society.

   (2) No amendment of the byelaws of a registered society shall be valid until the amendment has been registered under this Act, for which purpose a copy of the amendment shall be forwarded to the registrar.

   (3) If the registrar is satisfied that an amendment of the byelaws is not contrary to the provisions of this Act, he or she shall register the amendment.

   (4) An amendment which changes the name of a registered 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 its new name.

   (5) When the registrar registers an amendment of the byelaws of a registered society, he or she shall issue to the society a copy of the amendment certified by him or her which shall be conclusive evidence of the fact that the amendment has been duly registered.

   (6) If it appears to the registrar that an amendment of the byelaws of a society is necessary or desirable in the interest of the society, he or she may call upon the society, subject to any regulations made under this Act, to make the amendment within the time as he or she may specify.

   (7) If the society fails to make the amendment within the time specified, the registrar may, after giving the society an opportunity of being heard, himself or herself make and register the amendment and issue to the society a copy of that amendment, certified by him or her.

   (8) With effect from the date of registration of an amendment under subsection (7), the byelaws shall be deemed to have been duly amended accordingly; and the byelaws as amended shall, subject to any appeal made in accordance with this Act, be binding on the society and its members.

   (9) Any society aggrieved by an amendment of its byelaws made and registered by the registrar under subsection (7) may appeal against that amendment to the board in writing within two months of the date of issue of the copy of the amendment.

   (10) The decision of the board on an appeal under subsection (9) shall, subject to section 75, be final.

   (11) In this section, "amendment" includes the making of a new byelaw and the variation or revocation of a byelaw.

10.   Appeal to the board.

   From every refusal of the registrar to register a society or its byelaws or any amendment of its byelaws, an appeal shall lie, in accordance with any regulations made under this Act, to the board whose decision, subject to section 75, shall be final.

11.   Provisions regarding name of a registered society.

   (1) No society shall be registered under a name identical with that under which any other existing society is registered, or under any name likely in the opinion of the registrar to mislead the members of the public as to its identity.

   (2) The word "Cooperative" shall form part of the name of every society registered under this Act, and the word "Limited" shall be the last word in the name of every society with limited liability registered under this Act.

12.   Evidence of registration.

   (1) A certificate of registration signed by the registrar shall be conclusive evidence that the society mentioned in it is duly registered unless it is proved that the registration of the society has been cancelled.

   (2) If the registrar is satisfied that a society's original certificate of registration has been lost or destroyed, he or she may issue a duplicate certificate.

PART III
RIGHTS AND LIABILITIES OF MEMBERS.

13.   Qualifications for membership.

   (1) In order to be qualified for membership of a registered society, a person, other than a registered society or a company incorporated under the Companies Act or an unincorporated body of persons permitted to become a member under section 15, shall—

   (a)   have attained the age of 18 years; and

   (b)   be a resident within or in occupation of land within the society's area of operation as prescribed by the relevant byelaw.

   (2) A person above the age of 12 years may become a member of a society, but such a person shall not be eligible to act as a committee member of the society until he or she has reached the age of 18 years.

   (3) When, for the purpose of this section, any question arises as to the age of any person, that question shall be decided by the registrar, whose decision shall be final.

14.   Restriction on shareholding.

   No member, other than a registered society, shall hold more than one-third of the paid-up share capital of any cooperative society.

15.   Restriction on membership.

   No company incorporated or registered under the Companies Act and no unincorporated body of persons shall be entitled to become a member of a registered society, except with the written permission of the registrar.

16.   Member not to exercise rights until due payment made.

   No member of a registered society shall exercise any of the rights of a member until he or she has made such payment to the society in respect of membership or has acquired such interest in the society as may be prescribed by any regulations made under this Act or by the byelaws of the society.

17.   Restriction on membership in more than one society.

   No person shall be a member of more than one registered society with unlimited liability, and except with the written consent of the registrar, no person shall be a member of more than one registered society having the same or similar objects.

18.   Votes of members.

   (1) Each member of a registered society shall have one vote only as a member in the affairs of the registered society.

   (2) A registered society, a cooperative union or an apex society which is a member of any other registered society shall have as many votes as may be prescribed by the byelaws of the other society, and may, subject to those byelaws, appoint any number of its committee members, not exceeding the number of those votes, to exercise its voting power.

19.   Restrictions on transfer of share or interest.

   (1) The transfer or charge of the share or interest of a member in the capital of a registered society shall be subject to the conditions as to maximum holding for which provision is made in section 17.

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

   (a)   he or she has held the 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.

PART IV
DUTIES OF REGISTERED SOCIETIES.

20.   Address of society.

   (1) Every registered society shall have a registered address to which notices and communications may be sent and shall send to the registrar notice of every change of address within one month of the change.

   (2) Every registered society shall display its name and address on a signboard in a conspicuous position outside its place of business.

21.   Copy of the Act, regulations, byelaws, etc. to be open for inspection.

   Every registered society shall keep a copy of this Act and of the regulations made under it and of its byelaws and a list of its members open to inspection by any person, free of charge at all reasonable times during business hours at the office of the society.

22.   Audit, annual returns and accounts.

   (1) Every registered society shall cause its accounts to be audited at least once in every year by an auditor appointed by the annual general meeting and approved by the registrar, and the cost of the audit shall be borne by the society; except that—

   (a)   no auditor chosen by a registered society to audit its books shall perform that function for more than three annual audits in succession unless authorised by the registrar;

   (b)   where the registered society is unable to appoint its own auditors, the registrar may appoint the auditors.

   (2) Audits shall be conducted in accordance with generally accepted professional audit standards and, in addition, include audit of management efficiency.

   (3) The auditor shall at all times have access to all books, accounts, papers and securities of a registered society, and every officer of the society shall furnish such information in regard to the transactions an

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