Cases[ASSENTED TO 6 OCTOBER 1981] [DATE OF COMMENCEMENT: 1 JANUARY 1982]
(Afrikaans text signed by the State President)
as amended by
Income Tax Act 96 of 1981
Co-operatives Amendment Act 42 of 1985
Co-operatives Amendment Act 80 of 1987
Co-operatives Amendment Act 38 of 1988
Abolition of Racially Based Land Measures Act 108 of 1991
Financial Institutions Amendment Act 83 of 1992
Co-operatives Amendment Act 37 of 1993
General Law Fourth Amendment Act 132 of 1993
Abolition of Restrictions on the Jurisdiction of Courts Act 88 of 1996
Judicial Matters Second Amendment Act 122 of 1998
Prevention and Combating of Corrupt Activities Act 12 of 2004
Regulations under this Act
PRESCRIBED FEES
PRESCRIBED FORMS
ACT
To provide for the formation, incorporation, functioning, winding-up and dissolution of co-operatives; for the appointment of a Registrar of Co-operatives; and for incidental matters.
Cases
ARRANGEMENT OF SECTIONS
Sections
1 Definitions...
CHAPTER I
2-16 Application and administration of Act
CHAPTER II
17-48 Formation, incorporation and dissolution of co-operatives
CHAPTER III
49-56 Powers of and restrictions on co-operatives
CHAPTER IV
57-68 Membership of co-operatives
CHAPTER V
69-104 Capital and application of surplus
CHAPTER VI
105-132 Management of co-operatives
CHAPTER VII
133-156 Accounting records, accounting and auditing
CHAPTER VIII
157-171 Conversions, amalgamations, compromises and arrangements
[Heading to Chapter VIII substituted by s. 12 of Act 80 of 1987.]
CHAPTER IX
172-177 Special statutory pledge
CHAPTER X
178-237 Winding-up of co-operatives
CHAPTER XA
237A-237N Judicial management
[Chapter XA inserted by s. 18 of Act 80 of 1987.]
CHAPTER XI
238-242 General provisions
Schedule 1 .....
[Schedule 1 repealed by s. 20 of Act 80 of 1987.]
Schedule 2 Requirements for annual financial statements
Schedule 3 Laws repealed
(1) In this Act, unless the context otherwise indicates-
'affiliated member', in relation to a co-operative, means a person affiliated to such co-operative by virtue of his membership of a co-operative which either itself is a member of such co-operative or is a member of another co-operative which is a member of such co-operative or is affiliated to such co-operative in any further degree of membership;
'agricultural product' means any article derived from farming operations, and in relation to an agricultural co-operative or a special farmers' co-operative also any product derived from the processing or manufacturing of that article, and declared to be an agricultural product from time to time by the Minister by notice in the Gazette;
[Definition of 'agricultural product' substituted by s. 1 (a) of Act 80 of 1987.]
'annual financial statements' means the financial statements contemplated in section 135 (2);
'annual general meeting' means a meeting referred to in section 122;
'branch', in relation to a co-operative, means a place where or from where a co-operative may carry out any or all of its objects, but does not include a place used exclusively as a place where or from where a co-operative disposes of an agricultural product or any thing which was derived by it from an agricultural product, or of a product or thing into which it was converted by it or an article which was manufactured by it therefrom;
[Definition of 'branch' substituted by s. 1 (a) of Act 42 of 1985.]
'Companies Act' means the Companies Act, 1973 (Act 61 of 1973);
[Definition of 'Companies Act' inserted by s. 1 (a) of Act 37 of 1993.]
'company subsidiary' means a company which is a subsidiary of a co-operative in accordance with the provisions of subsection (3) of this section;
'competent court', in relation to any application or appeal under this Act, means a court having jurisdiction in terms of section 15;
'control board' means a control board within the meaning of the Marketing Act 1968 (Act 59 of 1968);
'co-operative' means a co-operative incorporated in terms of this Act and includes a co-operative society or co-operative company deemed in terms of section 2 to be incorporated in terms of this Act;
'depot', in relation to a co-operative, means a place where the co-operative limits its operations to the receipt, storing or despatch of any agricultural product or thing which is derived from an agricultural product;
'deputy registrar' means the Deputy Registrar of Co-operatives referred to in section 6 (1);
'director-general' means the Director-General: Agriculture;
[Definition of 'director-general' substituted by s. 1 (b) of Act 42 of 1985 and by s. 1 (b) of Act 37 of 1993.]
'Directorate Co-operatives' means the Directorate Co-operatives referred to in section 4;
[Definition of 'Directorate Co-operatives', formerly definition of 'Division of Co-operatives', substituted by s. 1 (c) of Act 37 of 1993.]
'extraordinary general meeting' means a meeting referred to in section 123;
'farming facilities' means facilities contemplated in section 21 (1) (c);
'farming requisites' means requisites contemplated in section 21 (1) (b);
'farming risk' means a risk in connection with farming operations, including a risk of damage to or loss of an agricultural product or a thing from which an agricultural product is derived, or a vehicle or machinery or an implement used for or in connection with farming operations, or a building or other structural work on a farm;
'farming services' means services contemplated in section 21 (1) (d);
'general meeting' means an annual general meeting or an extraordinary general meeting;
'incorporation', in relation to a co-operative, means entering the name of a co-operative in the register of co-operatives, and 'incorporate' shall have a corresponding meaning;
'inspector' means a person designated as an inspector under section 13 (1);
'manager', in relation to a co-operative or company subsidiary, means any person who is the principal executive employee of a co-operative or company subsidiary, by whatever official name he may be designated;
'members' fund' means a fund contemplated in section 85;
'Minister' means the Minister of Agriculture;
[Definition of 'Minister' substituted by s. 1 (c) of Act 42 of 1985 and by s. 1 (d) of Act 37 of 1993.]
'nominal value', in relation to the shares of a co-operative, means the amount fixed in the statute of a co-operative as the amount at which a share of the co-operative shall be issued;
'non-member' means a person who is not a member of a co-operative;
[Definition of 'non-member' inserted by s. 1 (e) of Act 37 of 1993.]
'officer', in relation to a co-operative or company subsidiary, includes a manager or secretary of a co-operative or company subsidiary, but excludes a secretary who is a juristic person;
'patronage proportion' means the proportion which the value of the transactions conducted by a member during any particular period with or through his co-operative bears to the value of the transactions conducted by all the members during the same period with or through the co-operative: Provided that-
(a) transactions conducted by a member with or through a co-operative in the co-operative's capacity as agent of a control board, shall for the purposes of the said proportion be deemed to be transactions conducted by such member with or through the co-operative itself;
(b) the statute of a co-operative-
(i) may provide that the value of the transactions conducted by a member or the members with or through the co-operative shall for the said purposes be calculated on a basis set out in the statute;
(ii) may determine the circumstances in which transactions conducted by a member with or through the co-operative shall for the said purposes not be taken into account;
(iii) may determine the circumstances in which transactions conducted by a member with any person may for the said purposes be deemed to be transactions conducted by such member with or through the co-operative;
'prescribed' means prescribed by regulation under section 240;
'register of co-operatives' means the register referred to in section 24 (1);
'registrar' means the Registrar of Co-operatives referred to in section 6 (1);
'repealed Act' means the Co-operative Societies Act, 1939 (Act 29 of 1939);
'secretary', in relation to a co-operative or company subsidiary, means any person performing the duties which are normally performed by a secretary of a co-operative or company;
'self-governing territory' means an area declared under section 26 of the National States Constitution Act, 1971 (Act 21 of 1971), as a self-governing territory;
'share', in relation to a co-operative, means a share in the share capital of a co-operative;
'special resolution' means a resolution passed in terms of section 130 at a general meeting;
'statute', in relation to a co-operative, means the statute of a co-operative for the time being in force;
'this Act' includes the regulations made under section 240.
(2) ......
[Sub-s. (2) deleted by s. 1 (b) of Act 80 of 1987.]
(3) (a) For the purposes of this Act a company shall subject to the provisions of paragraph (c) be deemed to be a subsidiary of a co-operative if-
(i) that co-operative either is a member of that company and controls the composition of its board of directors or holds more than one-half of its share capital;
(ii) that company is a subsidiary within the meaning of the Companies Act, 1973 (Act 61 of 1973), of another company which in terms of a provision of this subsection is a subsidiary of that co-operative;
(iii) companies which in terms of a provision of this subsection are subsidiaries of that co-operative together hold more than one-half of that company's share capital; or
(iv) that co-operative and one or more companies which in terms of a provision of this subsection are subsidiaries of the co-operative together hold more than one-half of that company's share capital.
(b) For the purposes of paragraph (a) the composition of a company's board of directors shall be deemed to be controlled by a co-operative if the co-operative may, by the exercise of any power, without the consent of any other person, appoint or remove the majority of the directors, and for the purpose of this paragraph a co-operative shall be deemed to have power so to appoint a director if-
(i) a person cannot be so appointed as a director without the co-operative's consent; or
(ii) a person's appointment as a director follows necessarily from his appointment as a director of the co-operative.
(c) In determining whether a company is a subsidiary of a co-operative-
(i) any shares held or power exercisable by that co-operative in a fiduciary capacity shall be treated as not held or exercisable by it;
(ii) any shares held or power exercisable-
(aa) by any person as a nominee for that co-operative (except where that co-operative is concerned only in a fiduciary capacity); or
(bb) by a company which in terms of a provision of this subsection is a subsidiary of that co-operative or is a nominee of such subsidiary (except where such subsidiary is concerned only in a fiduciary capacity),
shall, subject to the provisions of subparagraph (iii), be deemed to be held or exercisable by that co-operative;
(iii) any power exercisable by virtue of any debentures held, shall be disregarded.
CHAPTER I
APPLICATION AND ADMINISTRATION OF ACT (ss 2-16)
Application of Act (ss 2-3)
[a91y1981s2]2 Application of Act to co-operative societies and co-operative companies registered under repealed Act
(1) A co-operative society or co-operative company registered or deemed to be registered in terms of the repealed Act and existing at the commencement of this Act, shall be deemed to be a co-operative formed and incorporated in terms of this Act, and the regulations of any such society or company shall for such purposes be deemed to be a statute registered in terms of this Act.
(2) Notwithstanding the provisions of subsection (1)-
(a) any reference in this Act to the date of incorporation of a co-operative shall in the case of a co-operative society or co-operative company referred to in the said subsection be deemed to be a reference to the date on which the society or company was originally registered under any law;
(b) the provisions of this Act relating to the winding-up of co-operatives shall not apply to a co-operative society or co-operative company referred to in the said subsection which is being wound up at the commencement of this Act, and the winding-up of any such society or company shall be proceeded with as if this Act had not been passed: Provided that if at such commencement a liquidator referred to in section 67 (1) of the repealed Act has not yet been appointed in respect of any such society or company the Minister may by notice in the Gazette declare the said provisions applicable in respect of such society or company, and the winding-up of such society or company shall thereupon be proceeded with in accordance with the said provisions;
(c) a co-operative society or co-operative company referred to in the said subsection shall, subject to any amendment of its statute effected after the commencement of this Act, not be prohibited from doing anything which immediately prior to the said commencement it was by its regulations empowered to do;
(d) a right, privilege or liability acquired or incurred by a co-operative society or co-operative company referred to in the said subsection prior to the commencement of this Act shall not be affected by the provisions of this Act.
[a91y1981s3]3 Remedies of Land Bank not affected by this Act
The provisions of this Act shall not affect the rights, remedies and powers of the Land and Agricultural Bank of South Africa referred to in the Land Bank Act, 1944 (Act 13 of 1944), or the obligations to that bank imposed on any co-operative or on the members thereof by or under any law.
Directorate Co-operatives and registrar (ss 4-9)
[Heading substituted by s. 2 of Act 37 of 1993.]
[a91y1981s4]4 Directorate Co-operatives
The office in Pretoria established under section 3 of the repealed Act for the registration of co-operative societies and co-operative companies and for the other purposes of that Act shall, notwithstanding the repeal of that Act, continue to exist and shall for the purposes of this Act be called the Directorate Co-operatives of the Department of Agriculture.
[S. 4 amended by s. 2 of Act 42 of 1985 and substituted by s. 3 of Act 37 of 1993.]
[a91y1981s5]5 Seal of Directorate Co-operatives
There shall be a seal of the Directorate Co-operatives, and the impression of such seal shall be judicially noticed in evidence.
[S. 5 substituted by s. 4 of Act 37 of 1993.]
[a91y1981s6]6 Registrar and Deputy Registrar of Co-operatives
(1) The Minister shall designate an officer in the public service as Registrar of Co-operatives and as many such officers as he may deem necessary as Deputy Registrars of Co-operatives.
[Sub-s. (1) substituted by s. 5 (a) of Act 37 of 1993.]
(2) The registrar shall, subject to the control and directions of the director-general, perform the functions assigned to him by this Act or delegated to him by the director-general, and shall be responsible for the administration of the Division of Co-operatives.
(3) The deputy registrar may, subject to the control and directions of the registrar, perform any functions which may be performed by the registrar.
(4) ......
[Sub-s. (4) deleted by s. 5 (b) of Act 37 of 1993.]
[a91y1981s7]7 Registrar may assign certain functions to officers in public service
(1) The registrar may delegate any power conferred upon him by or under this Act to any officer in the public service or authorize any such officer to perform any duty assigned to the registrar by or under this Act.
(2) A delegation under subsection (1) shall not prevent the exercise of the relevant power by the registrar himself.
[a91y1981s8]8 Inspection and copies of documents in Division of Co-operatives
(1) Any person may on payment of the prescribed fees-
(a) inspect any document received or kept by the registrar in terms of this Act and made available by him for public inspection;
(b) obtain a certificate from the registrar as to the contents or part of the contents of any such document;
(c) obtain a copy of or extract from any such document.
(2) If-
(a) inspection or the certificate, copy or extract is required on behalf of a government of a self-governing territory or a foreign government accredited to the government of the Republic; and
(b) no fees are payable in the territory or country concerned in respect of such inspection, certificate, copy or extract required on behalf of the relevant government,
no fees referred to in subsection (1) shall be payable.
(3) If any inspection is requested for the purposes of research by or under the control of an educational institution the registrar may permit such inspection without payment of the said fees.
[a91y1981s9]9 Payment of fees to registrar
The payment of any fees to the registrar in terms of this Act shall be effected by way of revenue stamps, which shall be cancelled by the registrar.
Minister and director-general: Delegation of powers and control over registrar (ss 10-12)
[a91y1981s10]10 Minister may assign certain functions to director-general
(1) The Minister may delegate any power conferred upon him by this Act, excluding a power referred to in section 1 (2), 2 (2) (b), 18 (1), 103 (1), 104 (1), 142, 182, 240 or 241 (3) (b), to the director-general or any other officer in the public service or authorize the director-general or any such officer to perform any duty assigned to the Minister by this Act.
(2) A delegation under subsection (1) shall not prevent the exercise of the relevant power by the Minister himself.
[a91y1981s11]11 Director-general may assign certain functions to registrar
(1) The director-general may delegate any power delegated to him under section 10 to the registrar or authorize the registrar to perform any duty assigned to the director-general under that section.
(2) The provisions of section 10 (2) shall mutatis mutandis apply in respect of any delegation under subsection (1).
[a91y1981s12]12 Director-general may perform registrar's functions and review his decisions
The director-general may-
(a) exercise any power or perform any duty conferred upon or delegated or assigned to the registrar by this Act;
(b) rescind, amend or confirm any decision of the registrar.
Inspectors (ss 13-14)
[a91y1981s13]13 Designation of inspectors
(1) The Minister may designate persons as inspectors to perform, subject to the control and directions of the registrar, the functions referred to in subsection (3).
(2) Every inspector shall be furnished with a certificate signed by or on behalf of the registrar and stating that he has been designated as an inspector.
(3) An inspector may-
(a) without previous notice, at all reasonable times enter any premises of a co-operative or company subsidiary or any place where any book, writing or other document of or in connection with a co-operative or company subsidiary is kept;
(b) require from a director or an officer of a co-operative or company subsidiary or any person who has control over a book, writing or other document of or in connection with a co-operative or company subsidiary to produce to him any such book, writing or other document;
(c) examine any such book, writing or other document or make copies thereof or extracts therefrom;
(d) require from any such director, officer or person an explanation of any entry in any such book, writing or other document;
(e) question any person whom he reasonably believes to be in possession of information relating to the affairs of a co-operative or company subsidiary or any contravention or alleged contravention of any provision of this Act;
(f) perform any other act which the registrar may order him to perform in connection with the administration or application of this Act.
(4) Any person who-
(a) hinders or obstructs an inspector in the performance of his functions;
(b) refuses or fails to comply to the best of his ability with any requirement made by an inspector in the performance of his functions;
(c) refuses or fails to answer to the best of his ability any question which an inspector in the performance of his functions has put to him; or
(d) wilfully furnishes to an inspector any information which is false or misleading, shall be guilty of an offence.
(5) Any person who immediately prior to the commencement of this Act is an inspector in terms of section 47 of the repealed Act shall at such commencement be deemed to be designated as an inspector under subsection (1) of this section.
[a91y1981s14]14 Inspection reports
(1) If an inspector in the performance of his functions under section 13 has examined the affairs of a co-operative or company subsidiary generally or with reference to any particular matter he shall draw up a report on his findings and submit it to the registrar.
(2) The registrar may refer a report submitted to him under subsection (1) to the directors of the co-operative, or, in the case of a report relating to a company subsidiary, to the directors of such subsidiary and the directors of the co-operative controlling such subsidiary, and order such directors to give him an explanation to his satisfaction of a matter dealt with in the report.
(3) The Minister may on the recommendation of the registrar order the directors of a co-operative to whom a report was referred under subsection (2), in a manner determined by him to bring the report to the attention of the members or auditor of the co-operative or such other person or persons as may be determined by him.
(4) If an examination referred to in subsection (1) is conducted at the request of a co-operative or any member thereof, the Minister may direct the co-operative which or the member who requested the examination to pay the costs of the examination or any portion thereof.
(5) If the directors of a co-operative or company subsidiary fail to comply with an order under subsection (2) or (3) every director shall be guilty of an offence.
Jurisdiction of court (ss 15-16)
[a91y1981s15]15 Jurisdiction of court in respect of applications and appeals under this Act
The court which has jurisdiction with respect to any application or appeal under this Act shall be any provincial or local division of the Supreme Court of South Africa within whose area or jurisdiction the registered office or the main place of business of the co-operative concerned is situated.
[a91y1981s16]16 Copies of certain court orders to be transmitted to registrar
Whenever a court makes an order with respect to any application or appeal under this Act the registrar of the court shall without delay transmit a copy of the order to the registrar.
CHAPTER II
FORMATION, INCORPORATION AND DISSOLUTION OF CO-OPERATIVES (ss 17-48)
General (ss 17-18)
[a91y1981s17]17 Kinds and forms of co-operatives
(1) Three kinds of co-operatives may be formed and incorporated under this Act, namely-
(a) an agricultural co-operative;
(b) a special farmers' co-operative;
(c) a trading co-operative.
(2) An agricultural co-operative, a special farmers' co-operative and a trading co-operative shall be either a primary co-operative or a central co-operative or a federal co-operative.
[a91y1981s18]18 Declaration of co-operative practices as practices to be pursued by co-operatives exclusively
(1) The Minister may by notice in the Gazette-
(a) declare any co-operative practice defined in the notice as a co-operative practice which may be pursued exclusively by co-operatives;
(b) prohibit any person who is not a co-operative from pursuing a co-operative practice so declared;
(c) in special circumstances exempt any class of persons specified in the notice from a prohibition under paragraph (b).
(2) Any person who contravenes a provision of a notice under subsection (1) shall be guilty of an offence.
Promoters of co-operatives (s 19)
[a91y1981s19]19 Persons by whom co-operatives may be formed
Subject to the provisions of this Act-
(a) two or more persons qualified in terms of section 57 (1) (a) (i) or (ii) to become members of a primary agricultural co-operative may form a primary agricultural co-operative;
[Para. (a) substituted by s. 6 of Act 37 of 1993.]
(b) two or more persons qualified in terms of section 58 (a) (i), (ii) or (vi) to become members of a primary special farmers' co-operative may form a primary special farmers' co-operative;
[Para. (b) substituted by s. 6 of Act 37 of 1993.]
(c) eleven or more persons may form a primary trading co-operative: Provided that if a primary trading co-operative is formed for the purpose of manufacturing and disposing of any article, it may be formed by fewer than eleven but not fewer than two persons;
[Para. (c) substituted by s. 6 of Act 37 of 1993.]
(d) two or more primary agricultural co-operatives or primary special farmers' co-operatives may form a central agricultural co-operative or a central special farmers' co-operative;
(e) two or more primary trading co-operatives may form a central trading co-operative;
(f) two or more central agricultural co-operatives or central special farmers' co-operatives may form a federal agricultural co-operative or a federal special farmers' co-operative;
(g) two or more central trading co-operatives may form a federal trading co-operative.
Objects of co-operatives (ss 20-23)
[a91y1981s20]20 Objects of co-operatives to be carried out according to co-operative practice
A co-operative shall subject to the provisions of this Act and its statute carry out its objects according to co-operative practice.
[a91y1981s21]21 Objects of agricultural co-operatives
(1) A primary agricultural co-operative may be formed to carry out one or more of the following objects, namely-
(a) to undertake the marketing of any agricultural product or any thing which is derived from an agricultural product, and for such purposes to acquire, or to acquire control over, any agricultural product or any such thing and to dispose thereof, or to process it or manufacture any article therefrom and dispose of the product or thing into which it was so converted or the article which was so manufactured;
(b) to hire, buy or otherwise acquire, produce or manufacture and to let, sell or otherwise supply requisites necessary or used for or in connection with farming operations;
(bA) to hire, buy or otherwise acquire, or produce or manufacture and to let, sell or otherwise supply any article of consumption;
[Para. (bA) inserted by s. 7 (a) of Act 37 of 1993.]
(c) to hire, establish or erect and to use or make available for use facilities necessary for or useful in connection with farming operations;
(d) to render services necessary for or useful in connection with farming operations;
(dA) to render any other services, including services relating to the buying, selling and leasing of immovable agricultural property;
[Para. (dA) inserted by s. 7 (b) of Act 37 of 1993.]
(e) to carry on farming operations and to dispose of the products thereof, or to process such products or to manufacture articles therefrom and to dispose of the products into which they were converted or the articles which were so manufactured;
(f) to undertake insurance business contemplated in section 51 in respect of farming risks;
(g) to act as-
(i) an agent of a control board in terms of section 53 of the Marketing Act, 1968 (Act 59 of 1968);
(ii) a person contemplated in section 64 (1) or 84F (1) of the said Act to or through whom an agricultural product as defined in that Act shall be sold;
(iii) an agent or intermediary in connection with insurance business referred to in section 49 (1) (s).
[Sub-para. (iii) added by s. 2 (1) of Act 80 of 1987.]
(2) A central or federal agricultural co-operative may be formed to carry out one or more of the objects for which a primary agricultural co-operative may be formed, and also-
(a) to undertake insurance business within the meaning of the Insurance Act, 1943 (Act 27 of 1943), in respect of all risks;
[Para. (a) substituted by s. 7 (c) of Act 37 of 1993.]
(b) to establish and administer a pension fund, pension scheme, provident fund or medical scheme.
[a91y1981s22]22 Objects of special farmers' co-operatives
(1) A primary special farmers' co-operative may be formed to carry out one or more of the objects for which a primary agricultural co-operative may be formed, and also to carry on business as a dealer in agricultural products or any thing which is derived from an agricultural product.
(2) A central or federal special farmers' co-operative may be formed to carry out one or more of the objects for which a central or federal agricultural co-operative may be formed, and also to carry on business as a dealer in agricultural products or any thing which is derived from an agricultural product.
[a91y1981s23]23 Objects of trading co-operatives
A trading co-operative may be formed to carry out any object.
Incorporation of co-operatives and registration of statutes (ss 24-29)
[a91y1981s24]24 Register of co-operatives
(1) The registrar shall keep a register, to be known as the register of co-operatives, containing the name of and the prescribed particulars relating to every co-operative the incorporation of which has been approved under this Act.
[Sub-s. (1) substituted by s. 8 of Act 37 of 1993.]
(2) The register of co-operatives shall be prima facie evidence of all particulars contained therein.
[Sub-s. (2) substituted by s. 8 of Act 37 of 1993.]
(3) The register of co-operative companies and societies kept by the Registrar of Co-operative Societies in terms of the repealed Act shall be deemed to be part of the register referred to in subsection (1).
[a91y1981s25]25 Meeting of interested persons to precede application for registration of statute and incorporation of co-operative.
(1) An application under section 26 for the registration of a statute and the incorporation of a co-operative shall be preceded by a meeting of interested persons to consider the forming of the proposed co-operative, which meeting shall be held within sixty days before application is so made.
(2) There shall be submitted to such a meeting-
(a) a written exposition of the objects of the proposed co-operative, its business prospects and the facts and statistics calculated to show that the co-operative will be able to carry out its objects; and
(b) a proposed statute for the co-operative.
(3) (a) If a number of persons competent to form a co-operative of the proposed kind and form is present or represented at such a meeting and in favour of the formation of the co-operative, they or their representatives, as the case may be, shall elect the number of persons mentioned in the proposed statute to be the first directors of the co-operative.
(b) No person shall participate in any election in terms of paragraph (a) or shall be elected as a director unless he has signed an application form for membership of the proposed co-operative, either on his own behalf or on behalf of the person represented by him.
[a91y1981s26]26 Application for registration of statute and incorporation of co-operative
(1) Application for the registration of the statute and the incorporation of a co-operative shall be made to the registrar on the prescribed form.
(2) An application referred to in subsection (1) shall be accompanied by-
(a) a sworn or solemn statement by the person who acted as chairman of the meeting referred to in section 25 -
(i) that the meeting at which the co-operative was formed was held on a date specified in the statement; and
(ii) that the provisions of section 25 (2) and (3) were complied with with respect to the meeting;
(b) a copy of the exposition referred to in section 25 (2) (a);
(c) two copies of the proposed statute;
(d) a schedule containing the full names and addresses of the persons who applied for membership of the co-operative, the date on which each of them applied, the number of shares subscribed for by each of them and the amount paid by each of them on such shares;
[Para. (d) substituted by s. 3 of Act 42 of 1985.]
(e) a schedule containing the full names and addresses of the persons elected in terms of section 25 (3) (a) to be the first directors of the co-operative;
(f) a detailed statement of the expenses and liabilities incurred on behalf of the proposed co-operative up to the date of transmission to the registrar of the application for incorporation;
(g) a copy of a contract (if any) referred to in section 29;
(h) the prescribed application fees;
(i) a prescribed form containing the address of the registered office and the postal address of the co-operative.
[Para. (i) added by s. 9 of Act 37 of 1993.]
[a91y1981s27]27 Registration of statute and incorporation of co-operative
(1) After an application referred to in section 26 has been submitted to the registrar, the registrar may request the applicant concerned to furnish him with such further documents as he may require.
(2) If, after considering an application in terms of section 26, the registrar is satisfied that the application concerned complies with the provisions of this Act and that the proposed statute and the forming and incorporation of the co-operative concerned are not inconsistent with the provisions of this Act, he shall approve the application, or if he is not so satisfied, he may conditionally approve or reject the application.
(3) If the registrar approves or conditionally approves an application he shall cause-
(a) the name and other particulars of the co-operative to be entered in the register of co-operatives; and
(b) the seal referred to in section (5) [sic] to be impressed on both copies of the statute; and
(c) the statute to be registered conditionally or unconditionally and a certificate to be issued in duplicate that the co-operative has been incorporated and that its statute has been registered under this Act.
(4) One copy of the statute and of the certificate shall be sent to the applicants and the other copy shall be retained in the Directorate Co-operatives.
[S. 27 substituted by s. 10 of Act 37 of 1993.]
[a91y1981s28]28 Effects of incorporation of co-operative
As from the date on which the entry in terms of section 27 (3) (a) is made in the register of co-operatives-
(a) the co-operative shall become a juristic person;
(b) the co-operative shall be entitled to commence with its activities;
(c) every person who is competent to become a member of the co-operative and who prior to the incorporation of the co-operative completed an application form for membership of the co-operative shall become a member of the co-operative on complying with the requirements relating to the taking-up of shares in the co-operative;
(d) the statute shall bind the co-operative and each member (including an executor, a trustee or other administrator of a member's estate) to the same extent as if it had been signed by each member, to observe, subject to the provisions of this Act, all the provisions of the statute;
(e) the persons elected in terms of section 25 (3) (a) to be the first directors of the co-operative shall become the first directors of the co-operative.
[a91y1981s29]29 Written contract concluded before incorporation of co-operative
A written contract concluded by a person professing therein that he is acting as a representative, trustee or promoter of a co-operative not yet incorporated and a copy of which was lodged with the registrar as required by section 26 (2) (g) may, after the incorporation of the co-operative and provided the conclusion of such contract is within the objects and powers of the co-operative, be ratified or adopted by the co-operative, and thereupon such contract shall be enforceable by or against the co-operative as if it were concluded by the co-operative itself.
Statute (ss 30-35)
[a91y1981s30]30 Contents and validity of statute
(1) The statute of a co-operative shall contain a statement that the undertaking formed thereunder is a co-operative under this Act, and shall-
(a) specify the name of the co-operative;
(b) specify the kind and form of the co-operative;
(c) set out the main and other objects of the co-operative;
(d) indicate whether any of the powers referred to in section 49 are excluded or qualified in respect of the co-operative and, if so, particulars of any such exclusion or qualification;
(e) ......
[Para. (e) deleted by s. 11 of Act 37 of 1993.]
(f) specify the place where the co-operative's main business is situated and the place where the co-operative may establish a branch or depot;
(g) indicate the period for which the co-operative is formed, if it is formed for a limited period;
(h) contain a set of rules regulating the internal affairs of the co-operative.
(2) A statute of a co-operative-
(a) containing a provision which is inconsistent with the provisions of this Act shall notwithstanding such provision be valid in so far as the other provisions thereof are consistent with this Act;
(b) shall not be invalid by reason of the fact only that it does not provide for a matter for which it must provide in terms of this Act.
[a91y1981s31]31 Formal requirements concerning statutes
(1) Both copies of a statute submitted to the registrar in terms of section 26 shall be signed-
(a) in the case of a primary agricultural co-operative or a primary special farmers' co-operative or a primary trading co-operative referred to in the proviso to section 19 (c), by at least two promoters of the co-operative;
[Para. (a) substituted by s. 12 of Act 37 of 1993.]
(b) in the case of a primary trading co-operative, excluding a co-operative referred to in the said proviso, by at least 11 promoters of the co-operative;
[Para. (b) substituted by s. 12 of Act 37 of 1993.]
(c) in the case of a central or federal co-operative, by the representatives of at least two promoters of the co-operative.
(2) Each person signing a statute shall do so in the presence of at least one witness who shall attest the signature.
[a91y1981s32]32 Amendment of statute
(1) The statute of a co-operative may be amended by the co-operative by special resolution.
(2) An amendment of a statute shall be of no force and effect unless registered with the registrar, and shall come into operation on the date of registration or on such other date (which may be a date prior to the date of registration) as may be specified in the special resolution.
[a91y1981s33]33 Registration of amendments
(1) Application for the registration of an amendment of a statute shall be made to the registrar within 60 days of the date on which the special resolution referred to in section 32 has been passed.
(2) An application referred to in subsection (1) shall be accompanied by-
(a) a sworn or solemn statement by the person who acted as chairman of the general meeting at which the said special resolution was passed, or, if the special resolution was passed through a series of meetings referred to in section 132, by the person who acted as chairman of the last meeting in the series-
(i) that the said meeting or meetings, as the case may be, were held on a date or dates mentioned in the statement;
(ii) that he has satisfied himself that proper notice of such meeting or meetings and the proposed amendment was given to the members of the co-operative; and
(iii) that such special resolution was passed by the requisite majority;
(b) an explanation of the reasons for the amendment;
(c) two copies of the special resolution in which the amendment is set out;
(d) the prescribed application fees.
(3) If, after considering an application referred to in subsection (1) the registrar is satisfied that the provisions of this Act have been complied with in respect of such application and that the amendment is not repugnant to the provisions of this Act, he shall approve the application, or if he is not so satisfied, he may conditionally approve or reject such application.
[Sub-s. (3) substituted by s. 13 (a) of Act 37 of 1993.]
(4) If the registrar approves or conditionally approves the application in terms of subsection (3), as the case may be, he shall cause the amendment of the statute concerned to be conditionally or unconditionally registered.
[Sub-s. (4) substituted by s. 13 (b) of Act 37 of 1993.]
(5) ......
[Sub-s. (5) deleted by s. 13 (c) of Act 37 of 1993.]
(6) One copy of the said special resolution shall be returned to the co-operative and the other copy shall be retained in the Directorate Co-operatives.
[Sub-s. (6) substituted by s. 13 (d) of Act 37 of 1993.]
(7) If a co-operative contravenes or fails to comply with any condition subject to which an amendment of its statute has been approved by the registrar, the registrar may cancel the registration of the relevant amendment, whereupon such amendment shall be deemed never to have been registered under this Act.
[Sub-s. (7) substituted by s. 13 (e) of Act 37 of 1993.]
(8) Whenever the statute of a co-operative is amended to alter the name of the co-operative or a translation or abbreviated form thereof the registrar shall-
(a) enter the new name or the translation or abbreviated form thereof in the register of co-operatives in the place of the previous one; and
(b) issue a certificate to the co-operative specifying the fact that the co-operative's name or the translation or abbreviated form thereof has been changed in accordance with this Act, and also the new name or the translation or abbreviated form thereof.
[Sub-s. (8) substituted by s. 4 of Act 42 of 1985.]
[a91y1981s34]34 Replacement of statute
(1) A co-operative may at any time replace its statute by a new statute.
(2) The provisions of sections 32 and 33 shall mutatis mutandis apply in respect of the replacement of a statute, and in such application any reference to an amendment of a statute shall be construed as a reference to a new statute.
[a91y1981s35]35 Amendment of statute by registrar
(1) The registrar may after notice to a co-operative amend the statute of the co-operative-
(a) so as to bring it into conformity with the provisions of this Act or any condition subject to which any approval has been granted to or in respect of such co-operative under section 27 (2), 33 (4), 158 (2), 163 (2) or 166 (2);
(b) by deleting any provision therein relating to the establishment of a branch or depot if such branch or depot is not established within one year, or within such further period as the registrar may allow, after provision therefor has been made in the statute, or if the Minister is of the opinion that the objects or activities carried out or performed or which may be carried out or performed by the co-operative at such a branch or depot can with greater benefit to the persons concerned be carried out or performed by another co-operative existing or to be established;
(c) by inserting a provision therein restricting the co-operative from carrying out a particular object or performing a particular activity generally or at any particular place (which may also be a branch or depot) or in any particular area or on behalf of any particular class of persons (which may include or consist of persons who are members of the co-operative) if the Minister is of the opinion that the object or activity in question carried out or performed by the co-operative or carried out or performed by the co-operative at such a place or in such an area or on behalf of such a class of persons, as the case may be, can with greater benefit to the persons concerned be carried out or performed by another co-operative existing or to be established.
[Sub-s. (1) amended by s. 14 of Act 37 of 1993.]
(2) An amendment of a statute under subsection (1) shall come into operation seven days after the date on which the registrar forwarded a copy of the amendment, endorsed with the certificate referred to in section 33 (5), to the co-operative concerned.
(3) A co-operative which contravenes any restriction imposed on it by virtue of the provisions of subsection (1) (c) shall be guilty of an offence.
Names of co-operatives (ss 36-42)
[a91y1981s36]36 Names of co-operatives not to be undesirable
The statute of a co-operative shall not contain a name for that co-operative which is in the opinion of the registrar undesirable.
[a91y1981s37]37 Statute may contain translation or abbreviated form of name
The statute of a co-operative may contain a literal translation into the other official language of the Republic and one abbreviated form of the name of the co-operative which is in the opinion of the registrar not undesirable.
[a91y1981s38]38 Order to change name
(1) If within a period of one year after the incorporation of a co-operative or after the registration of an amendment of a statute with respect to the name of a co-operative or a translation or abbreviated form of a name, the registrar is of the opinion that the name of the co-operative or the translation or abbreviated form thereof is undesirable, he shall order the co-operative concerned to alter the relevant name or the translation or abbreviated form thereof within a fixed period.
(2) A co-operative which fails to comply with an order under subsection (1) shall be guilty of an offence.
[a91y1981s38A]38A Amendment of registers and documents as a result of change of name
(1) Whenever the name of a co-operative has been altered in terms of this Act, any registrar or other officer, charged with the maintenance of a register in terms of any law shall, upon the mere production to such registrar or officer of the certificate contemplated in section 33 (8) (b), or a certified copy thereof, make the amendments in his register and any other document in his office or submitted to him which may be necessary on account of the alteration of the name of the co-operative.
(2) Subsection (1) shall not be construed so as to exempt the co-operative from the payment of any money which would otherwise have been payable to such registrar or officer had the co-operative applied in terms of the said law for the making of the amendment in question.
[S. 38A inserted by s. 5 of Act 42 of 1985.]
[a91y1981s39]39 Appeal to court regarding registrar's decisions
(1) Any person aggrieved by a decision of the registrar under section 36 or 37 or an order by the registrar under section 38 may within 60 days after the date of the decision or order, as the case may be, appeal against that decision or order by way of application on notice of motion to any competent court.
(2) The court to which appeal is made under subsection (1) shall enquire into and consider the matter and shall confirm, vary or set aside the decision or order of the registrar, or give such other decision or order as in its opinion the registrar ought to have given, and may make such order as to costs as it may deem fit.
[a91y1981s40]40 Formal requirements concerning names
(1) The name of a co-operative shall-
(a) include, as its last word, the word 'limited';
(b) include the word 'co-operative';
(c) not include the word 'company' or an abbreviated form thereof.
(2) Unless the Minister otherwise directs the provisions of subsection 1 (c) shall not apply to a co-operative company referred to in section 2 (1) of which the name includes the said word.
[a91y1981s41]41 Use and publication of name by co-operative
(1) Every co-operative shall-
(a) in a conspicuous position and in characters easily legible display its name or a translation thereof as set out in its statute, on the outside of its registered office and every branch, depot and other place where business is carried on;
[Para. (a) substituted by s. 6 (a) of Act 42 of 1985.]
(b) have its name or a translation thereof as set out in its statute mentioned in legible characters in all notices and other official publications of the co-operative and in all bills of exchange, promissory notes, endorsements, cheques or orders for money or goods purporting to be signed by or on behalf of the co-operative, and in all letters, delivery notes, invoices, receipts or letters of credit of the co-operative:
[Para. (b) amended by s. 6 (b) of Act 42 of 1985.]
Provided that for the purposes of this subsection the abbreviations 'bpk' or 'Ltd', 'koöp' or 'co-op', 'mpy' or 'co' and '&' may be used for the words 'beperk', 'limited', 'koöperasie' (or 'koöperatief' or 'koöperatiewe'), 'co-operative', 'maatskappy', 'company' and 'en' or 'and', respectively, in the name of a co-operative or the translation thereof.
[Sub-s. (1) amended by s. 6 (b) of Act 42 of 1985.]
(2) Any co-operative which fails to comply with a provision of subsection (1) shall be guilty of an offence.
[a91y1981s42]42 Improper use of word 'co-operative', etc, an offence
Any person carrying on business under a name in which the word 'co-operative' or the abbreviation 'co-op' is included without being incorporated as a co-operative under this Act shall be guilty of an offence.
Dissolution of co-operatives (ss 43-48)
[a91y1981s43]43 Co-operative to dissolve if struck off register
A co-operative shall dissolve if the name and other particulars of such co-operative are struck off the register of co-operatives in terms of section 44.
[a91y1981s44]44 Circumstances under which co-operative shall be struck off register
A co-operative shall be struck off the register of co-operatives by the registrar-
(a) when the co-operative has been wound up to the satisfaction of the registrar;
(b) if the Minister, after a recommendation referred to in section 45 (3) has been submitted to him, orders that the co-operative be struck off the said register;
(c) when the co-operative has been incorporated as a public or private company in terms of section 161A;
[Para. (c) added by s. 15 of Act 37 of 1993.]
(d) when the co-operative has been incorporated as a close corporation in terms of section 161C.
[Para. (d) added by s. 15 of Act 37 of 1993.]
[a91y1981s45]45 Striking off register of dormant co-operative to be preceded by special steps
(1) If the registrar has reasonable cause to believe that a co-operative is not carrying on business or is not in operation he shall send to the co-operative by registered post a letter enquiring whether it is carrying on business or is in operation.
(2) If the registrar does not within 30 days after sending the letter receive any reply thereto or receives a reply to the effect that the co-operative is not carrying on business or is not in operation, he may publish in the Gazette and send to the co-operative by registered post a notice that after the expiration of 60 days from the date of the notice the co-operative mentioned therein will, unless good cause to the contrary is shown, be struck off the register of co-operatives.
(3) After the expiration of the period referred to in subsection (2) or upon receipt from the co-operative of a written statement signed by at least two directors thereof to the effect that the co-operative has ceased to carry on business or is not in operation and has no assets or liabilities, the registrar may, unless good cause to the contrary is shown, recommend to the Minister that the co-operative be struck off the said register.
(4) A letter or notice to be sent to a co-operative in terms of this section shall be sent to the co-operative at its registered office, its postal address and, provided the registrar has a record of their addresses, to the care of every director and auditor of the co-operative and to any other person as the registrar may deem necessary.
[a91y1981s46]46 Notice in Gazette of co-operative struck off register
The registrar shall give notice in the Gazette of every co-operative struck off the register of co-operatives under section 44 (b).
[a91y1981s47]47 Effects of dissolution on directors, officers and members of co-operative
The dissolution of a co-operative shall not affect the liability of a director, officer or member of the co-operative, and such liability (if any) shall subject to the law relating to prescription continue to exist and may be enforced as if the co-operative had not been dissolved.
[a91y1981s48]48 Court may restore incorporation of co-operative
(1) Any person aggrieved by a co-operative having been struck off the register of co-operatives may within one year after it has been so struck off, by way of application on notice of motion apply to any competent court for an order to have the entry in respect of the said co-operative restored in such register.
(2) The court to which application is made under subsection (1) shall inquire into and consider the matter and shall reject the application or order the registrar to restore the entry in such register in respect of that co-operative, and may make such order as to costs as it may deem fit.
(3) If the court gives an order that the entry in such register be restored in respect of such co-operative, the co-operative shall be deemed to have continued to exist as if it had not been struck off such register, and the order of the court may contain such directions so as to place the co-operative and other persons as far as may be possible in the same position as if the co-operative had not been struck off such register.
CHAPTER III
POWERS AND RESTRICTIONS ON CO-OPERATIVES (ss 49-56)
Powers of co-operatives (ss 49-51)
[a91y1981s49]49 Powers of co-operatives
Cases
(1) A co-operative may, subject to the provisions of this Act and the exclusions and qualifications contained in its statute, do all such things as may reasonably be necessary to carry out its objects, and may in particular-
(a) cause its work to be performed by persons employed by it on conditions determined by it or with whom it has entered into contracts for the performance of any particular work;
(b) in the interest of its employees establish training, recreation, sports or other facilities or administer a housing scheme;
(c) (i) acquire or hire movable or immovable property, including rights thereon;
(ii) hypothecate, let, sell or otherwise dispose of movable or immovable property, including rights thereon;
(d) acquire, hypothecate or dispose of bonds, debentures, stocks and other securities;
(e) acquire or alienate patents, licences, concessions, trade marks or the like, and exercise and protect the rights, privileges and powers attached thereto;
(f) in the Republic or elsewhere establish or take over, or acquire interests or shares in, companies or other juristic persons or partnerships and finance them subject to the provisions of section 52: Provided that the objectives of the institution so established or taken over, or in which interests or shares have been acquired, shall relate to the objectives of the co-operative concerned;
[Para. (f) substituted by s. 7 (a) of Act 42 of 1985 and by s. 16 (a) of Act 37 of 1993.]
(g) subject to the provisions of section 52 indemnify any person against damage or loss or guarantee the obligations of any person or become surety or give security for the due fulfilment thereof;
(h) undertake studies and do research in connection with any matter which may be beneficial to the carrying out of its objects or finance or otherwise assist any person in undertaking such studies or in doing such research;
(i) award bursaries;
(j) open accounts with banking or other financial institutions;
(k) make, draw, accept, endorse or negotiate negotiable instruments;
(l) subject to the provisions of section 1 of the Banks Act, 1965 (Act 23 of 1965), and of section 53 of this Act, in the Republic or elsewhere borrow or raise money or overdraw a banking account;
(m) invest money;
(n) make or accept donations;
(o) with the approval of the Minister procure the registration of the co-operative in any other country or territory;
(p) collaborate with any person in the performance of any act which the co-operative is by law permitted to perform;
(q) become a member of a co-operative of which it is competent to become a member, or of any association or organization which seeks to promote any matter in which the co-operative has an interest;
(r) act as agent of its members or in the interest of its members as intermediary in connection with any pension fund, pension scheme, provident fund or medical scheme;
(s) act as agent of its members or in the interest of its members as intermediary in connection with-
(i) insurance business referred to in section 51;
(ii) insurance business within the meaning of the Insurance Act, 1943 (Act 27 of 1943);
[Sub-para. (ii) substituted by s. 16 (b) of Act 37 of 1993.]
(iii) any other insurance business in terms of which an amount which becomes payable at the death of a member or the happening of any other event is paid over to the co-operative on behalf of such member or his estate and in terms of which the co-operative is entitled to set off any amount owing by such a member or his estate to the co-operative against the amount so paid over to it;
(sA) participate in companies, other juristic persons or partnerships established by it in terms of paragraph (f) or in which it acquired interests or shares in terms of that paragraph, or in other co-operatives (including the performance of services on behalf of such companies, juristic persons, partnerships and co-operatives), as agreed with them in writing;
[Para. (sA) inserted by s. 7 (b) of Act 42 of 1985.]
(t) give information and guidance to its members;
(u) advance money to its members;
(v) carry out any function assigned to it by or under any law.
(2) Apart from the powers mentioned in subsection (1) but subject to the other provisions of this Act and the provisions of its statute a co-operative shall have unlimited powers to do anything which is not repugnant to the carrying out of its objects and to which the Minister has given his prior approval in writing.
(3) If a co-operative performs any act for which it does not have the power under subsection (1) or (2), the co-operative and each director of the co-operative who authorized the performance of such act, or participated in the granting of such authorization or in the performance of such act, knowing that the co-operative is not empowered to perform such act, shall be guilty of an offence.
[Sub-s. (3) added by s. 7 (c) of Act 42 of 1985.]
[a91y1981s50]50 Special provision concerning agricultural products of the State
Whenever any agricultural co-operative or special farmers' co-operative in carrying out an object contemplated in section 21 (1) (a) deals with agricultural products of the State or produced at an institution or on land under the control of the State, the State shall as far as those products are concerned be subject to the same conditions and obligations to which it would have been subject had it been a member of that co-operative: Provided that if the statute of the co-operative concerned provides that its members shall receive consideration other than money for agricultural products delivered by them to the co-operative, the products delivered by the State shall nevertheless be paid for in money.
[a91y1981s51]51 Application of Act 27 of 1943 to certain co-operatives in connection with pool insurance
(1) The provisions of the Insurance Act, 1943 (Act 27 of 1943), shall not apply to any agricultural co-operative or any special farmers' co-operative in respect of its activities in so far as they relate to a scheme or arrangement in terms of the statute of the co-operative under which the amount of the benefits afforded by such scheme or arrangement is not guaranteed and the liability of the co-operative in respect of claims is limited to the amount standing to the credit of a fund specially maintained in respect of such claims.
(2) (a) Notwithstanding the provisions of subsection (1) of this section, any trading co-operative referred to in section 17 (1) (c) which on the date immediately before the date of commencement of section 31 of the Financial Institutions Amendment Act, 1992, carried on any activities contemplated in the said subsection (1), shall be entitled to continue to carry on such activities until a date* fixed by the State President by proclamation in the Gazette.
(b) Any such co-operative shall be deemed to have been ordered under section 182 by the Minister, on the date after the date so fixed, to be wound up in respect of such activities.
[S. 51 substituted by s. 31 of Act 83 of 1992.]
Restrictions on co-operatives (ss 52-56)
[a91y1981s52]52 Restriction relating to granting of financial assistance
(1) A co-operative shall not advance money to an undertaking referred to in section 49 (1) (f) or to a co-operative of which it is a member, indemnify its members or any such undertaking or co-operative against damage or loss or become surety for or give security on behalf of its members or any such undertaking or co-operative, except under authority of a special resolution.
(2) Any director or officer of a co-operative who participates in an act in contravention of subsection (1) shall be guilty of an offence.
[a91y1981s53]53 Restriction relating to borrowing of money
(1) A co-operative shall not borrow or raise money or overdraw a banking account except under the authority of a special resolution: Provided that a co-operative may borrow or raise money or overdraw a banking account without the said authority up to an amount not exceeding one half of the aggregate of its share capital and general reserve.
(2) Money standing to the credit of members in a members' fund administered by a co-operative shall for the purposes of subsection (1) not be deemed to be money borrowed or raised by the co-operative.
[a91y1981s54]54 Restriction relating to non-member business
(1) Subject to the provisions of subsections (2) and (3) an agricultural co-operative or a special farmers' co-operative shall not conclude with a person who is not a member of that co-operative a transaction in terms of which that co-operative in carrying out an object contemplated in-
(a) subsection (1) (a) of section 21, acquires from such a person any agricultural product or thing contemplated in the last-mentioned subsection, or the right to dispose of any agricultural product or such thing;
(b) subsection (1) (b), (bA), (c), (d) or (dA) of that section, supplies farming requisites or articles of consumption, makes available farming facilities or renders any services to such a person;
[Para. (b) substituted by s. 17 (a) of Act 37 of 1993.]
(c) subsection (1) (f) or (g)(iii) or (2) (a) of that section, does insurance business with such a person;
[Para. (c) substituted by s. 3 (a) of Act 80 of 1987.]
(d) subsection (2) (b) of that section, allows such a person to participate in any pension fund, pension scheme, provident fund or medical scheme administered by it;
(e) section 22 to carry on business as a dealer, acquires any agricultural product or thing contemplated in that section from such a person.
(2) The provisions of subsection (1) shall not apply in respect of the following transactions, namely-
(a) a transaction concluded by a co-operative in carrying out an object contemplated in section 21 (1) (a) with a control board for the acquisition by that co-operative of a quantity of an agricultural product, or of a thing derived from an agricultural product, not exceeding the quantity of such agricultural product or thing delivered by members and affiliated members of the co-operative to that control board in accordance with a requirement issued under the Marketing Act, 1968 (Act 59 of 1968);
(b) a transaction concluded by a co-operative with the consent of or through a member of such co-operative with any person who is an affiliated member of such co-operative by virtue of his membership of any agricultural co-operative or special farmers' co-operative;
[Para. (b) substituted by s. 8 of Act 42 of 1985.]
(c) a transaction concluded by a co-operative in exercising a power contemplated in section 49 (1) (v);
(d) a transaction concluded by a co-operative with another agricultural co-operative or special farmers' co-operative;
(e) a transaction concluded by a co-operative in carrying out an object contemplated in section 21 (1) (a) with the State to deal with agricultural products of the State or produced at an institution or on land under the control of the State;
(f) a transaction concluded by a co-operative in carrying out an object contemplated in section 21 (2) (a) or (b) with another insurer.
(3) An agricultural co-operative or a special farmers' co-operative shall be entitled to conclude transactions prohibited by subsection (1), in so far as the extent of such transactions concluded by it during a financial year in the course of carrying out any particular object does not exceed the fixed percentage of the business turnover attained by it during the preceding financial year in carrying out that object.
(4) In this section-
'business turnover', in relation to an object contemplated in-
(a) subsection (1) (a) of section 21, means the value (calculated on a basis set out in the statute or determined by the Minister) of the agricultural products or things dealt with by a co-operative during a financial year in carrying out that object;
(b) subsection (1) (b), (bA), (c), (d) or (dA) of that section, means the gross income received by a co-operative during a financial year from the supply of farming requisites or articles of consumption, the making available of farming facilities or the rendering of services relating to the buying, selling or leasing of immovable agricultural property or any other services, as the case may be;
[Para. (b) substituted by s. 17 (b) of Act 37 of 1993.]
(c) subsection (1) (f) or (g) (iii) or (2) (a) of that section, means the amount of insurance premiums received by a co-operative during a financial year;
[Para. (c) substituted by s. 3 (b) of Act 80 of 1987.]
(d) subsection (2) (b) of that section, means the amount of the contributions paid to a co-operative during a financial year in respect of a pension fund, pension scheme, provident fund or medical scheme;
(e) section 22 to do business as a dealer, means the value (calculated on a basis set out in the statute or determined by the Minister) of the agricultural products or things dealt with by a co-operative during a financial year in carrying out that object;
'fixed percentage' means in the case of an agricultural co-operative or a special farmers' co-operative, 49 per cent.
[Definition of 'fixed percentage' substituted by s. 17 (c) of Act 37 of 1993.]
(4A) A co-operative may not record a transaction concluded with a non-member, in the name of a member.
[Sub-s. (4A) inserted by s. 17 (d) of Act 37 of 1993.]
(5) Any co-operative which contravenes a provision of subsection (1) or (4A) shall be guilty of an offence.
[Sub-s. (5) substituted by s. 17 (e) of Act 37 of 1993.]
[a91y1981s55]55 Closed co-operatives
(1) The registrar may declare any co-operative to be a closed co-operative if he is satisfied that it is not concluding transactions with persons who are not members thereof to a greater extent than in his opinion is in the particular circumstances of the case essential to the proper carrying out of the co-operative's objects.
(2) The registrar shall issue to every co-operative declared under subsection (1) to be a closed co-operative a certificate to that effect.
(3) If the registrar is with respect to a co-operative declared under subsection (1) to be a closed co-operative no longer satisfied in respect of the matter mentioned in that subsection he shall revoke the certificate issued under subsection (2) to that co-operative, and thereupon that co-operative shall cease to be a closed co-operative.
(4) For the purposes of subsection (1) the transactions referred to in section 54 (2) and those concluded by a co-operative in carrying out an object contemplated in section 21 (1) (g) shall be deemed to be transactions concluded by the co-operative with its members.
[a91y1981s56]56 Carrying out of unauthorized object prohibited
(1) A co-operative shall not carry out an object not authorized by its statute.
(2) Any co-operative which contravenes the provisions of subsection (1) shall be guilty of an offence.
CHAPTER IV
MEMBERSHIP OF CO-OPERATIVES (ss 57-68)
Restrictions on membership and minimum number of members (ss 57-60)
[a91y1981s57]57 Membership of agricultural co-operatives
(1) Membership of an agricultural co-operative shall subject to the provisions of subsection (2) be restricted-
(a) in the case of a primary agricultural co-operative to-
(i) natural persons or juristic persons carrying on farming operations on their own account in an area where this Act is applicable, whether alone or together with any other person or in addition to any other business, occupation or trade;
(ii) persons approved by the registrar who carry on farming operations outside the Republic or in an area within the Republic where this Act is not applicable;
(iii) primary agricultural co-operatives or primary special farmers' co-operatives;
(iv) primary trading co-operatives;
(v) undertakings approved by the registrar which have been incorporated outside the Republic or in an area within the Republic where this Act is not applicable and which carry out an object for which an agricultural co-operative may be formed under this Act;
(vi) a trustee of a trust carrying on farming operations on behalf of the trust in an area where this Act is applicable;
(vii) companies converted into companies from agricultural co-operatives or special farmers' co-operatives;
[Para. (a) amended by s. 4 of Act 80 of 1987 and substituted by s. 18 (a) of Act 37 of 1993.]
(b) in the case of a central agricultural co-operative to-
(i) primary or central agricultural co-operatives or primary or central special farmers' co-operatives;
(ii) primary or central trading co-operatives;
[Sub-para. (ii) substituted by s. 18 (b) of Act 37 of 1993.]
(iii) undertakings referred to in paragraph (a) (v) or (a) (vii);
[Sub-para. (iii) substituted by s. 18 (b) of Act 37 of 1993.]
(c) in the case of a federal agricultural co-operative to-
(i) central or federal co-operatives;
(ii) primary agricultural co-operatives or primary special farmers' co-operatives which carry out an object for which no central agricultural co-operative or central special farmers' co-operative has been formed;
(iii) undertakings referred to in paragraph (a) (v) or (a) (vii).
[Sub-para. (iii) substituted by s. 18 (c) of Act 37 of 1993.]
(2) Any person residing in the Republic may become a member of a primary agricultural co-operative with the main object of carrying on farming operations.
[a91y1981s58]58 Membership of special farmers' co-operatives
Membership of a special farmers' co-operative shall be restricted-
(a) in the case of a primary special farmers' co-operative to-
(i) persons or associations of persons (corporate or unincorporate) carrying on farming operations on their own account in an area in which this Act is applicable, whether alone or together with any other person or in addition to any other business, occupation or trade;
(ii) persons approved by the registrar who carry on farming operations outside the Republic or in an area within the Republic where this Act is not applicable;
(iii) primary agricultural co-operatives or primary special farmers' co-operatives;
(iv) primary trading co-operatives;
(v) undertakings approved by the registrar which have been incorporated outside the Republic or in an area within the Republic where this Act is not applicable and which carry out an object for which a special farmers' co-operative may be formed under this Act;
(vi) persons who in the course of their activities handle, treat or dispose of agricultural products;
(vii) companies converted into companies from agricultural co-operatives or special farmers' co-operatives;
(viii) a trustee of a trust carrying on farming operations on behalf of the trust in an area where this Act is applicable;
[Para. (a) amended by s. 5 of Act 80 of 1987 and substituted by s. 19 (a) of Act 37 of 1993.]
(b) in the case of a central special farmers' co-operative to-
(i) primary or central agricultural co-operatives or primary or central special farmers' co-operatives;
(ii) primary or central trading co-operatives;
(iii) undertakings referred to in paragraph (a) (v) or (a) (vii);
(iv) associations (whether invested with legal personality or not) or companies which in the course of their activities handle, treat or dispose of agricultural products;
(v) agricultural unions or associations of farmers;
[Para. (b) substituted by s. 19 (a) of Act 37 of 1993.]
(c) in the case of a federal special farmers' co-operative to-
(i) central or federal co-operatives;
(ii) primary agricultural co-operatives or primary special farmers' co-operatives which carry out an object for which no central agricultural co-operative or central special farmers' co-operative has been formed;
(iii) undertakings referred to in paragraph (a) (v) or (a) (vii);
[Sub-para. (iii) substituted by s. 19 (b) of Act 37 of 1993.]
(iv) associations or companies referred to in paragraph (b) (iv) or unions or associations referred to in paragraph (b) (v).
[a91y1981s59]59 Membership of trading co-operatives
(1) Membership of a primary trading co-operative shall not be restricted: Provided that a person who resides or has been incorporated outside the Republic or in an area within the Republic where this Act is not applicable, shall not become a member of a primary trading co-operative without the approval of the registrar.
[Sub-s. (1) substituted by s. 20 (a) of Act 37 of 1993.]
(2) Membership of a central or federal trading co-operative shall be restricted-
(a) in the case of a central trading co-operative to-
(i) primary or central trading co-operatives;
(ii) primary or central agricultural co-operatives or primary or central special farmers' co-operatives;
(iii) undertakings approved by the registrar which have been incorporated outside the Republic or in an area within the Republic where this Act is not applicable;
[Para. (a) substituted by s. 20 (b) of Act 37 of 1993.]
(b) in the case of a federal trading co-operative to-
(i) central or federal trading co-operatives;
(ii) central or federal agricultural co-operatives or central or federal special farmers' co-operatives approved by the Minister;
(iii) undertakings referred to in paragraph (a) (iii).
[a91y1981s60]60 Minimum number of members
(1) A co-operative shall not carry on business for more than 30 days while it-
(a) in the case of a primary agricultural co-operative, a primary special farmers' co-operative or a primary trading co-operative referred to in the proviso to section 19 (c), has fewer than two members;
[Para. (a) substituted by s. 21 (a) of Act 37 of 1993.]
(b) in the case of a primary trading co-operative other than a co-operative referred to in the said proviso, has fewer than 11 members;
[Para. (b) substituted by s. 21 (a) of Act 37 of 1993.]
(c) in the case of a central or federal co-operative, has fewer than two members.
(2) If the number of members of a co-operative-
(a) in the case of a primary agricultural co-operative, a primary special farmers' co-operative or a primary trading co-operative referred to in the proviso to section 19 (c), decreases to fewer than two;
[Para. (a) substituted by s. 21 (b) of Act 37 of 1993.]
(b) in the case of a primary trading co-operative other than a co-operative referred to in the said proviso, decreases to fewer than 11;
[Para. (b) substituted by s. 21 (b) of Act 37 of 1993.]
(c) in the case of a central or federal co-operative, decreases to fewer than two,
the co-operative shall forthwith notify the registrar of such fact in writing.
(3) Any person who is a director of a co-operative at any time during the time which the co-operative carries on business in contravention of subsection (1) and who is cognizant of the fact that the co-operative is so carrying on business shall be liable for the payment of all the debts of the co-operative incurred during that time, and he may be sued for the same without the co-operative or any other director being joined in the action.
(4) Any co-operative which contravenes a provision of subsection (1) or fails to comply with a provision of subsection (2) shall be guilty of an offence.
Acquisition and conditions of membership (ss 61-65)
[a91y1981s61]61 Acquisition of membership in co-operatives
(1) Subject to the provisions of this Act and the statute of a co-operative a person shall become a member of a co-operative-
(a) when a share in the co-operative is issued or transferred to him; or
(b) in the manner, or on compliance with the requirements, determined in the statute of the co-operative:
Provided that the manner in which membership of the co-operative concerned is acquired, shall be the same for all members of that co-operative.
[Sub-s. (1) substituted by s. 22 of Act 37 of 1993.]
(2) A co-operative shall enter the name of any person who submits proof of his appointment as the-
(a) executor, administrator, liquidator or trustee of the estate of a deceased member of the co-operative or of a member whose estate has been sequestrated or of a member in respect of whom a notice under section 22 (1) of the Agricultural Credit Act, 1966 (Act 28 of 1966), was published or of a member who is legally incompetent; or
(b) liquidator or a juristic person being wound up which is a member of the co-operative,
in the register referred to in section 66 as a member nomine officii of the co-operative, and any person whose name has been so entered shall be deemed to be a member of the co-operative.
[a91y1981s62]62 Liability of members
The liability of a member of a co-operative by virtue of his membership shall, subject to the provisions of section 40 of the Land Bank Act, 1944 (Act 13 of 1944), be limited to-
(a) an amount equal to the nominal value of the shares in the co-operative held by him in so far as that amount has not been paid up;
(b) the amount of any contingent liability that may be attached to his shares by virtue of section 72; and
(c) a liability circumscribed in the statute of the co-operative.
[Para. (c) added by s. 23 of Act 37 of 1993.]
[a91y1981s63]63 Fines for certain contraventions and omissions
(1) A member of a co-operative may be fined by the co-operative for any contravention of or failure to comply with a provision of the statute of the co-operative or for any failure to perform any obligation imposed upon him by the co-operative under this Act or the statute or which he undertook to perform.
(2) A fine under subsection (1) shall be imposed subject to the provisions of the statute and shall not exceed the maximum amount fixed by the statute.
(3) A fine shall not be imposed under subsection (1) unless the member concerned has been given prior written notice of the charge and particulars of the alleged contravention or failure and afforded a reasonable opportunity in a manner set out in the statute to produce evidence in refutation of the charge or to show cause why the fine ought not be imposed.
(4) A fine imposed under subsection (1) shall constitute a debt in favour of the co-operative.
(5) No fine shall be imposed under subsection (1) in respect of a failure to comply with a provision of the statute of a co-operative whereby members thereof are obliged to deliver agricultural products produced by them to the co-operative, if the member who committed the failure delivered his agricultural products to another co-operative of which he became a member prior to his becoming a member of the first-mentioned co-operative in compliance with a similar obligation which is imposed by the statute of the last-mentioned co-operative on the members thereof.
[a91y1981s64]64 Suspension or expulsion of members
Cases
(1) A member of a co-operative who persistently contravenes a provision of the co-operative's statute or who refuses to comply with any such provision or to perform any obligation imposed upon him by the co-operative under this Act or the statute or which he undertook to perform or who commits misconduct towards the co-operative may-
(a) be suspended as a member by the board of directors of the co-operative for any period not extending beyond the date of the first annual general meeting held subsequent to such suspension;
(b) by special resolution be suspended as a member for a period not exceeding the maximum period stated in the statute or be expelled from the co-operative.
(2) The suspension of a member under subsection (1) (a) or (b) may at any time be lifted by the board of directors of the co-operative.
(3) The statute of a co-operative shall contain provisions relating to-
(a) the acts (including any acts of omission) which constitute misconduct towards the co-operative;
(b) the maximum period for which a member may be suspended under subsection (1) (b);
(c) the disciplinary steps which may or shall be taken against a suspended member.
(4) A member of a co-operative shall not be suspended or expelled under subsection (1) unless he has been given prior written notice of the grounds on which his suspension or expulsion is being considered and afforded a reasonable opportunity in a manner set out in the statute to produce evidence in refutation of any allegation against him or to show cause why he ought not be suspended or expelled.
(5) A member expelled from the co-operative under subsection (1) shall as from the date of his expulsion cease to be a member of the co-operative, but his expulsion shall, subject to the proviso to subsection (4) of section 81, not affect any liability he may have had under section 62 as a member.
[a91y1981s65]65 Right of members to inspect, or make copies of, certain documents
(1) Subject to any reasonable limitation that may be imposed by a co-operative at a general meeting a member of a co-operative shall be entitled free of charge to inspect at the place where the document concerned is kept-
(a) the registered statute of the co-operative with amendments (if any) or a certified copy thereof;
(b) the register of members referred to in section 66;
(c) any trust deed referred to in section 90 (2);
(d) the register of pledges, bonds and cessions referred to in section 100;
(e) the register of debenture holders referred to in section 101;
(f) the attendance register referred to in section 114;
(g) the register of directors' interests in contracts referred to in section 118;
(h) the register of directors referred to in section 120;
(i) the minutes of general meetings referred to in section 131.
(2) A member of a co-operative may, subject to any reasonable limitation that may be imposed by the co-operative at a general meeting, apply to the co-operative or such other person who has control over the document for a copy of or an extract from a document referred to in subsection (1), and the co-operative or the said other person, as the case may be, shall either furnish such copy or extract on payment of the prescribed fees or free of charge afford such a member an opportunity of making the copy or extract himself at the place where the document concerned is kept.
(3) If access to a document referred to in subsection (1) for the purpose of inspection or the making of a copy or an extract is refused or an opportunity for such inspection or such making of a copy or extract is not afforded within 14 days after a written request to that effect has been delivered to the co-operative or such other person who has control over such a document, as the case may be, the co-operative or the said other person, as the case may be, and every director or officer of the co-operative who knowingly is a party to the refusal or default shall be guilty of an offence.
Register of members and returns relating to members (ss 66-68)
[a91y1981s66]66 Register of members
(1) Every co-operative shall keep in one of the official languages of the Republic a register of its members at a place referred to in subsection (2) and shall forthwith enter therein-
(a) the names and addresses of the members;
[Para. (a) substituted by s. 9 of Act 42 of 1985.]
(b) the number of shares held by each member who became a member of the co-operative on account of shareholding;
[Para. (b) substituted by s. 24 of Act 37 of 1993.]
(c) the amount paid up on the shares of each member referred to in paragraph (b);
[Para. (c) substituted by s. 24 of Act 37 of 1993.]
(d) the date on which each member became a member;
(e) the date on which a member ceased to be a member;
(f) any other particulars that may be prescribed, or required by the co-operative's statute.
(2) The register of members shall be kept at the registered office of the co-operative or such other place as may be mentioned in the statute of the co-operative.
(3) The register of members shall be prima facie proof of all matters entered therein in accordance with the requirements of this Act or the statute of the co-operative.
(4) A co-operative which fails to comply with a provision of subsection (1) or (2) shall be guilty of an offence.
[a91y1981s66A]66A Member certificates
(1) Each member of a co-operative who acquired membership other than by way of shareholding and therefore does not qualify for a share certificate, shall be entitled to a member certificate containing particulars of membership as circumscribed in the statute, and which shall be signed by a director, or an officer duly authorized thereto by the co-operative.
(2) A member certificate which is lost or destroyed shall be replaced by the co-operative on payment of the prescribed fee.
(3) A signature referred to in subsection (1) may be affixed to the certificate by autographic or mechanical means.
[S. 66A inserted by s. 25 of Act 37 of 1993.]
[a91y1981s67]67 Annual return relating to members
(1) A co-operative shall annually whenever it forwards copies of its annual financial statements to the registrar in accordance with the provisions of section 139, furnish the registrar with a return of-
(a) the number of persons who at the first day of the period covered by the relevant annual financial statements were members of the co-operative;
(b) the number of persons who ceased to be members of the co-operative during the relevant period;
(c) the number of persons who became members of the co-operative during the relevant period;
(d) the number of persons who at the last day of the relevant period were members of the co-operative.
(2) The registrar may at any time order a co-operative to compile a list of the names and addresses of its members and to submit to him such list and any other particulars relating to its members as the registrar may specify and which may be available to the co-operative.
(3) A co-operative which fails to comply with a provision of subsection (1) or an order under subsection (2) shall be guilty of an offence.
[a91y1981s68]68 Furnishing of particulars relating to members to Land Bank
(1) The registrar shall at the request of the Land and Agricultural Bank of South Africa referred to in the Land Bank Act, 1944 (Act 13 of 1944), furnish that bank with such particulars relating to the members of any agricultural co-operative or special farmers' co-operative as the bank may require and as may be available to the registrar.
(2) If that bank requires particulars relating to the persons who at any particular date were members of any agricultural co-operative or special farmers' co-operative, the co-operative concerned shall at the request of that bank furnish it with a return of the names and addresses of the persons who at the relevant date were members of such co-operative and shall under the name of each member give such further particulars relating to such member as the bank may require and as may be available to the co-operative.
(3) A co-operative which fails to comply with a request under subsection (2) shall be guilty of an offence.
CHAPTER V
CAPITAL AND APPLICATION OF SURPLUS (ss 69-104)
Share capital and shares (ss 69-81)
The share capital of a co-operative shall be the total nominal value of the shares of the co-operative which have not been cancelled under section 81.
[a91y1981s70]70 Issuing of shares
(1) A share in a co-operative shall come into being when issued and shall lapse when cancelled under section 81.
(2) Shares issued by a co-operative shall, subject to any contingent liability which may in terms of section 72 be attached thereto, all be of the same class, order of preference and nominal value.
(3) A co-operative may, subject to such limitations as may be set out in its statute, issue as many shares as it may deem fit.
[a91y1981s71]71 Share certificates
(1) Each member who became a member of a co-operative on account of shareholding shall be entitled to a share certificate indicating the number of shares in the co-operative of which he is the holder, and which shall be signed by a director, and an officer duly authorized thereto by the co-operative.
[Sub-s. (1) substituted by s. 26 of Act 37 of 1993.]
(2) A share certificate which has been lost or destroyed shall be replaced by the co-operative against payment of the prescribed amount.
(3) A signature referred to in subsection (1) may be affixed to a share certificate by autographic or mechanical means.
[a91y1981s72]72 Shares to which contingent liability is attached
(1) Shares to which contingent liability is attached may be issued by a co-operative only to members voluntarily subscribing therefor.
(2) The maximum amount of the contingent liability attached to such shares and the conditions on which such shares may be issued shall be as provided by the statute of the co-operative.
(3) (a) A co-operative may with the approval of the registrar cancel any contingent liability attached to any shares.
(b) The registrar shall not give his approval under paragraph (a) unless he is satisfied-
(i) that the contingent liability concerned no longer serves any useful purpose or that the continuation thereof is undesirable; and
(ii) that the co-operative has given notice of the proposed cancellation of the relevant contingent liability in the Gazette and in a newspaper circulating in the area in which the co-operative carries on business and that no creditor of the co-operative has objected within a period mentioned in the notice against the proposed cancellation.
[a91y1981s73]73 Payment for shares
(1) A share in a co-operative shall not be issued-
(a) at an amount other than the nominal value thereof;
(b) for any consideration other than money.
(2) If authorized thereto by its statute a co-operative may issue shares not fully paid up, and such shares shall be paid for in such manner, at such times and on such conditions as may be set out in the statute or determined by the co-operative: Provided that-
(a) no share shall be issued unless at least one-tenth of the nominal value of the share has been paid to the co-operative;
(b) an amount payable by a co-operative to a member in respect of bonuses or interest on shares may be set off by the co-operative against any arrears on shares held by such a member;
(c) a co-operative may if it deems fit accept from a member thereof an amount due but not yet payable on such members' shares.
[a91y1981s74]74 Transfer of shares
(1) A share in a co-operative shall not be transferred except with the approval of the co-operative and in such manner and subject to such limitations as may be determined in the statute of the co-operative.
(2) Any transfer of shares shall take effect when such transfer is registered in the register of members referred to in section 66.
[a91y1981s75]75 Minimum number of shares to be held by members
(1) The statute of a co-operative of which membership is acquired by way of shareholding, may provide that-
(a) a member of the co-operative shall be obliged to hold at least such number of shares in the co-operative as may be specified in the statute or fixed according to a basis set out in the statute;
(b) the co-operative may issue to a member who does not hold the required number of shares such number of shares without his having applied therefor, so as to oblige him to comply with the said requirement.
[Sub-s. (1) amended by s. 27 of Act 37 of 1993.]
(2) Paragraph (a) of the proviso to section 73 (2) shall not apply in respect of shares issued by virtue of subsection (1) (b), and such shares shall be paid for in such manner, at such times and on such conditions as may be set out in the statute or determined by the co-operative.
[a91y1981s76]76 Consolidation or subdivision of shares
(1) A co-operative may, subject to the provisions of this Act relating to the amendment of statutes, consolidate its shares into shares with a higher nominal value or subdivide its shares into shares with a lower nominal value.
(2) The consolidation or subdivision of shares under subsection (1) shall not have the effect that the share capital of a co-operative is increased or decreased.
[a91y1981s77]77 Payment of interest out of share capital prohibited
No interest shall be paid on the share capital of a co-operative out of its share capital.
[a91y1981s78]78 Reduction of share capital
(1) The share capital of a co-operative may-
(a) subject to the provisions of subsection (2) of this section and the provisions of this Act relating to the amendment of statutes, be reduced by fixing the nominal value of the shares of the co-operative at a lower amount;
(b) subject to confirmation by the court be reduced in any other manner.
(2) If the reduction of share capital in terms of subsection (1) (a) involves the repayment or future repayment of paid-up share capital to a member no repayment shall be made by the co-operative until the court has confirmed such reduction of share capital.
(2A) No co-operative shall, subject to subsection (3) of this section and subsection (2) of section 81, make a repayment of paid-up share capital to a member thereof unless that repayment is caused by a reduction of share capital in accordance with this section.
[Sub-s. (2A) inserted by s. 10 of Act 42 of 1985.]
(2B) A co-operative which contravenes a provision of this section shall be guilty of an offence.
[Sub-s. (2B) inserted by s. 10 of Act 42 of 1985.]
(3) The provisions of subsection (1) shall not affect any reduction of share capital whenever shares are cancelled under section 81.
[a91y1981s79]79 Powers of court in connection with application for confirmation of reduction of share capital
(1) The court may in connection with an application for confirmation of any reduction of share capital make such order as it may think fit, including a rule nisi calling on all interested persons to show cause why the proposed reduction of share capital shall not be confirmed.
(2) If the proposed reduction of share capital involves the repayment or future repayment of paid-up share capital by the co-operative to a member thereof, the court shall not issue an order confirming the proposed reduction or the rule nisi referred to in subsection (1) unless the court is satisfied that the co-operative has no creditors or that the creditors have consented to the proposed repayment of paid-up share capital or that the interests of the creditors are adequately protected or not materially affected by the proposed repayment of paid-up share capital.
(3) In this section 'creditor', in relation to a co-operative, means a creditor of the co-operative who at the date on which an application referred to in subsection (1) is made is entitled to a claim which, if that date were the commencement of the winding-up of the co-operative, would be admissible in proof against the co-operative.
(1) The statute of a co-operative may subject to the provisions of section 70 provide for the allocation of bonus shares to the members of the co-operative.
(2) Bonus shares referred to in subsection (1) shall be paid up out of the surplus which may result from the co-operative's operations during a financial year and shall be allocated to the respective members-
(a) in the case of a co-operative the main object of which involves that the members conduct transactions with or through the co-operative, in accordance with the patronage proportion;
(b) in the case of a co-operative the main object of which does not involve that the members conduct transactions with or through the co-operative, in accordance with a basis set out in the statute.
(3) For the purposes of subsection (2)-
(a) an object contemplated in section 21 (1) (g) (i) shall be deemed to be an object involving that the members conduct transactions with or through the co-operative;
(b) the patronage proportion shall be determined with reference to the financial year to which the surplus out of which the relevant bonus shares are paid up relates.
[a91y1981s81]81 Cancellation of shares
Cases
(1) Membership of a co-operative may be terminated, and shares in a co-operative issued to a member may, subject to the provisions of the statute of a co-operative, be cancelled-
(a) if the member dies;
(b) if the estate of the member is sequestrated or if a notice is published in respect of him under section 22 (1) of the Agricultural Credit Act, 1966 (Act 28 of 1966);
(c) if the member resigns as a member of the co-operative;
(d) if the member is expelled from the co-operative in terms of the provisions of section 64;
(e) if the member no longer qualifies to remain a member of the co-operative;
(f) on any other ground set out in the statute.
[Sub-s. (1) amended by s. 28 of Act 37 of 1993.]
(2) (a) The amount paid up on shares cancelled under subsection (1) shall subject to the provisions of paragraph (b) be refunded by the co-operative to the person who was the holder of the cancelled shares, in such manner and at such time or over such period as set out in the statute of the co-operative: Provided that if the value of the shares, as determined by the co-operative, is less than the nominal value thereof, the co-operative shall not be bound to refund a larger amount-
(i) if the shares were fully paid up, than the value of the shares as so determined; or
(ii) if the shares were not fully paid up, than an amount which bears the same ratio to the amount paid up on the shares as the value of the shares as so determined bears to the nominal value of the shares.
(b) A co-operative shall not be bound to refund any amount paid up on shares cancelled under subsection (1) (d), and such amount shall be forfeited to the co-operative: Provided that shares cancelled on the ground that the holder of such shares has resigned as a member of the co-operative shall for the purposes of this paragraph be deemed to have been cancelled under subsection (1) (d) if such member resigned after he has been notified in terms of section 64 (4) that his expulsion or suspension was being considered by the co-operative.
(3) A claim in respect of an amount owing by a co-operative by virtue of the provisions of subsection (2) (a), shall, in the event of the co-operative being wound up, have no preference over the claims of members as shareholders in the co-operative.
(4) A person who was the holder of shares immediately before the cancellation thereof under subsection (1) shall not by reason only of such cancellation be released from any liability in respect of such shares: Provided that any liability contemplated in paragraph (a) of section 62 shall terminate upon expiry of a period of three years as from the date of cancellation of such shares.
Surpluses (ss 82-84)
[a91y1981s82]82 Statute to provide for application of surplus
The statute of a co-operative shall provide for the application of any surplus which may result from the operations of the co-operative during a financial year: Provided that-
(a) the amount set aside out of the surplus as a reserve shall not be less than an amount determined by the board of directors of the co-operative;
(aA) where a co-operative has obligations in terms of a State-guaranteed credit scheme referred to in section 172, the Minister may direct that the amount set aside under paragraph (a) shall in the case of such co-operative not be less than the amount calculated in accordance with a basis determined by the Minister;
[Para. (aA) inserted by s. 1 of Act 38 of 1988.]
(b) the amount available out of the surplus for distribution to the members shall be applied in one or more of the following ways only, namely-
(i) to pay interest to the members on amounts paid up on shares, in accordance with the provisions of section 83;
(ii) to pay bonuses to the members in accordance with the provisions of section 84;
(iii) to set such interest or bonuses aside in a members' fund for future payment to the members;
(iv) to pay up bonus shares for allocation to the members in accordance with the provisions of section 80;
(c) subject to the provisions of section 14 of the Wine and Spirit Control Amendment Act, 1972 (Act 70 of 1972), no portion of the surplus shall be distributed to any person who is not a member of the co-operative;
(d) a capital gain, including a gain resulting from the revaluation of a capital asset, shall not be applied other than for the setting aside thereof as a general reserve.
[Para. (d) substituted by s. 11 of Act 42 of 1985.]
[a91y1981s83]83 Interest on shares
(1) A co-operative may subject to the provisions of section 77 and its statute pay interest on amounts paid up on its shares.
(2) ......
[Sub-s. (2) deleted by s. 29 of Act 37 of 1993.]
(3) ......
[Sub-s. (3) added by s. 12 of Act 42 of 1985 and deleted by s. 29 of Act 37 of 1993.]
(1) A co-operative may subject to the provisions of its statute pay to its members bonuses out of the surplus which may result from its operations during a financial year.
(2) The amount which is applied for the payment of bonuses to the members shall be allocated to them-
(a) in the case of a co-operative the main object of which involves that the members conduct transactions with or through the co-operative, in accordance with the patronage proportion;
(b) in the case of a co-operative the main object of which does not involve that the members conduct transactions with or through the co-operative, in accordance with a basis set out in the statute.
(3) For the purposes of subsection (2)-
(a) an object contemplated in section 21 (1) (g) (i) shall be deemed to be an object involving that the members conduct transactions with or through the co-operative;
(b) the patronage proportion shall be determined with reference to the financial year to which the surplus out of which the relevant bonuses are paid relates.
(4) A co-operative carrying out two or more objects may, the provisions of subsection (2) notwithstanding, provide in its statute for the payment of bonuses to its members according to a scheme of distribution whereby the amount available out of the surplus for the payment of bonuses is first allocated in respect of the different objects set out in the statute of a co-operative and carried out by the co-operative during the financial year to which such surplus relates in the same proportion as the proportion in which the co-operative's operations with respect to the different objects each contributed to such surplus, and the amount of each allocation is then separately distributed among the members-
(a) in the case of an amount so allocated in respect of an object involving that the co-operative's members conduct transactions with or through it, in the same proportion as the proportion which the value of the transactions conducted by a member with or through the co-operative with respect to such object during the financial year concerned, bears to the value of the transactions conducted by all the members with or through the co-operative with respect to that object during that financial year;
(b) in the case of an amount allocated in respect of an object which does not involve that the co-operative's members conduct transactions with or through it, on a basis set out in the statute.
[Sub-s. (4) amended by s. 30 of Act 37 of 1993.]
(5) For the purposes of subsection (4)-
(a) an object contemplated in section 21 (1) (g) (i) which involves that the members of a co-operative conduct transactions with or through the co-operative in the co-operative's capacity as an agent of a control board, shall be deemed to be an object involving that the members conduct transactions with or through the co-operative itself;
(b) the provisions of paragraphs (a) and (b) (i) and (ii) of the proviso to the definition of 'patronage proportion' in section 1 shall mutatis mutandis apply with respect to the proportion referred to in subsection (4) (a) of this section.
(6) If a co-operative pays a bonus in contravention of the provisions of this section, the co-operative and every director of the co-operative shall be guilty of an offence.
[Sub-s. (6) added by s. 13 of Act 42 of 1985.]
Members' funds and reserves (ss 85-87)
[a91y1981s85]85 Members' funds
(1) The statute of a co-operative may provide for the establishment of one or more members' funds in which a member of the co-operative may be credited with-
(a) any contribution made by him to such a fund in terms of the statute;
(b) any interest on an amount paid up on his shares and set aside for future payment;
(c) any bonus allocated to him and set aside for future payment;
(d) any amount allocated to him out of a reduction of share capital and set aside for future payment;
(e) any amount allocated to him out of a distribution of a reserve and set aside for future payment;
(f) any other money due to him payment of which was deferred.
(2) The money standing to the credit of members in a members' fund-
(a) may subject to the provisions of its statute be applied for any purpose other than for writing off any loss;
(b) shall be paid to the members at such times and in such manner and in such circumstances as may be provided in the statute;
(c) may bear interest at a rate which may be fixed in the statute;
(d) may when payment is due be set off by the co-operative against any amount which is then payable by the member concerned to the co-operative.
(3) For the purposes of the Banks Act, 1965 (Act 23 of 1965), a co-operative shall not be deemed to be carrying on the business of accepting deposits by reason only of the fact that it administers a members' fund.
[a91y1981s86]86 Setting aside of funds as reserves
(1) A co-operative may, subject to the provisions of paragraph (a) of the proviso to section 82, set aside as a reserve any amount out of any surplus which may result from its operations during a financial year.
(2) A reserve shall be either a general reserve or a contingency reserve.
(3) Unless authorized thereto by its statute a co-operative shall not write off a loss which is not a capital loss against its general reserve.
[Sub-s. (3) substituted by s. 14 of Act 42 of 1985.]
[a91y1981s87]87 Distribution of reserves to members
(1) The statute of a co-operative may provide for the distribution of a reserve or any portion thereof to the members of the co-operative.
(2) A reserve or portion thereof which is distributed to the members of a co-operative shall be allocated to them-
(a) in the case of a co-operative the main object of which involves that its members conduct transactions with or through it, in accordance with the patronage proportion;
(b) in the case of a co-operative the main object of which does not involve that its members conduct transactions with or through it, in accordance with a basis set out in the statute.
(3) The patronage proportion mentioned in subsection (2) (a) shall be determined with reference to either such period as may be specified in the statute of a co-operative which preceded the commencement of the financial year in which the relevant distribution of a reserve or portion thereof takes place or the period for which the co-operative has existed, whichever period is the shorter: Provided that the period mentioned in the statute of a co-operative shall not be less than five years.
[Sub-s. (3) substituted by s. 31 of Act 37 of 1993.]
(4) For the purposes of subsections (2) and (3)-
(a) an object contemplated in section 21 (1) (g) (i) shall be deemed to be an object involving that the members of the co-operative conduct transactions with or through it;
(b) the value of the transactions conducted by a former member with or through such co-operative during the period referred to in subsection (3) may be added to the value of the transactions of a member who is entitled to a distribution in respect of the relevant reserve or portion thereof, provided-
(i) the former member, or, if he is deceased, his executor, has submitted his written consent to that effect to the co-operative within 90 days after such former member has ceased to be a member of the co-operative; and
(ii) the statute of the co-operative so provides;
(c) a co-operative incorporated in consequence of a conversion under section 163 shall be deemed to exist as from the date of incorporation of the previous co-operative so converted, and the value of the transactions conducted by a member of the first-mentioned co-operative during the appropriate period with or through the previous co-operative as a member may be added to the value of the transactions conducted by him with or through the first-mentioned co-operative;
(d) a co-operative incorporated in consequence of an amalgamation of two or more co-operatives under section 166 shall be deemed to exist as from the date of incorporation of the most recent of those co-operatives, and the value of the transactions conducted by a member of the amalgamated co-operative during the appropriate period with or through any of the previous co-operatives of which he was then a member may be added to the value of the transactions conducted by him with or through the amalgamated co-operative.
Unclaimed moneys (s 88)
[a91y1981s88]88 Forfeiture of certain moneys
Any interest on an amount paid up on shares, any bonus or any amount standing to the credit of any person in a members' fund which is not claimed by the person entitled thereto within a period of three years after he became entitled to payment thereof may be declared forfeited by the co-operative, and thereupon such amount shall be transferred to the co-operative's general reserve.
Debentures (ss 89-104)
[a91y1981s89]89 Creation and issue of debentures
A co-operative may if authorized thereto by its statute create and issue secured or unsecured debentures.
[a91y1981s90]90 Security for debentures
(1) Debentures issued by a co-operative may be secured by-
(a) a deed of pledge and the delivery of movable property to one or more debenture holders or trustees for debenture holders;
(b) a notarial bond executed in favour of one or more debenture holders or trustees for debenture holders;
(c) the cession of rights to one or more debenture holders or trustees for debenture holders;
(d) a mortgage bond over immovable property executed in favour of one or more debenture holders or trustees for debenture holders.
(2) No person shall be appointed as a trustee contemplated in subsection (1) except in accordance with a deed of trust in which the powers and duties and the rights and obligations of the trustee are set out.
[a91y1981s91]91 Registration of mortgage bonds and notarial bonds
(1) A mortgage bond or a notarial bond referred to in section 90 and subsequent transactions relating thereto shall, with due observance of the applicable provisions of any law, be registered in a deeds registry.
(2) No such mortgage bond or notarial bond shall be registered unless a certified copy of the debenture concerned and of the trust deed concerned (if any) is annexed to the bond.
[a91y1981s92]92 Registration of debenture as if notarial bond
A debenture executed before a notary public may be registered in a deeds registry as if it were a notarial bond.
[a91y1981s93]93 Order of preference in respect of security held by trustee
Debentures secured by a pledge, bond or cession to or in favour of a trustee for debenture holders and issued on different dates shall in respect of the security concerned rank in preference concurrently with one another.
[a91y1981s94]94 Rights of debenture holders
(1) Unless the trust deed and debenture concerned otherwise provide, the holder of a debenture secured by a pledge, bond or cession to or in favour of a trustee for debenture holders shall be entitled to enforce his rights under such debenture as if he himself were the pledgee, bondholder or cessionary, as the case may be.
(2) No notice of the transfer of a debenture shall be necessary to confer upon the transferee the rights of the transferor.
[a91y1981s95]95 Incompetence of director or officer to be trustee
A director or an officer of a co-operative shall not be competent to be a trustee for the holders of debentures of that co-operative.
[a91y1981s96]96 Liability of trustee
(1) Subject to the provisions of subsection (2) a provision contained in a trust deed contemplated in section 90 (2) or in an agreement between a trustee and the debenture holders of a co-operative shall be void in so far as the trustee is thereby exempted from or indemnified against liability for breach of trust or contract in connection with the performance of his functions as a trustee.
(2) The provisions of subsection (1) shall not affect a provision in any such deed of trust or agreement in which provision is made for the release of the trustee from the said liability with the consent of a majority of at least three-fourths in value of the debenture holders present and voting in person or by proxy at a meeting summoned for such purpose.
[a91y1981s97]97 Debenture to be described as secured or unsecured
No debenture, debenture certificate or prospectus relating to debentures shall be issued by a co-operative unless the word 'debenture' or such other expression used therein denoting a debenture is qualified by the word 'secured' or 'unsecured', as the case may be.
[a91y1981s98]98 Re-issue of redeemed debentures
(1) Unless its statute otherwise provides a co-operative may after the redemption of any debentures issued by it keep such debentures alive for the purpose of re-issue.
(2) Whenever a co-operative re-issues any debentures it may issue the original debentures or issue new debentures in the place of the original debentures.
[a91y1981s99]99 Form of debentures and debenture certificates
(1) No debenture shall be issued by a co-operative unless the conditions on which the debenture is issued are stated on the debenture or debenture certificate.
(2) A debenture or debenture certificate shall be signed by a director and an officer of the co-operative duly authorized thereto by the co-operative.
(3) A signature referred to in subsection (2) may be affixed to a debenture or debenture certificate by autographic or mechanical means.
(4) A debenture or debenture certificate issued under this Act shall be prima facie evidence of the title of the person named therein to such debenture or debenture certificate.
[a91y1981s100]100 Register of pledges, bonds and cessions
(1) A co-operative shall keep at a place referred to in subsection (2) a register of all the property of the co-operative which serves as security for an obligation of the co-operative, and shall enter forthwith therein-
(a) particulars of the relevant pledge, bond or cession;
(b) a description of the affected property;
(c) the amount of the debt;
(d) the name and address of each pledgee, bondholder or cessionary.
(2) The register referred to in subsection (1) shall be kept at the registered office of the co-operative or such other place as may be determined by the co-operative with the registrar's approval.
(3) A co-operative which fails to comply with a provision of subsection (1) or (2) shall be guilty of an offence.
[a91y1981s101]101 Register of debenture holders
(1) A co-operative which issued debentures shall keep at the place referred to in subsection (2) a register of debenture holders and shall forthwith enter therein the names and addresses of the holders of debentures of the co-operative and the number of debentures held by each of them.
(2) The register referred to in subsection (1) shall be kept at the registered office of the co-operative or such other place as may be determined by the co-operative with the registrar's approval.
(3) A co-operative which fails to comply with a provision of subsection (1) or (2) shall be guilty of an offence.
[a91y1981s102]102 Right of debenture holders to inspect or make copies of certain documents
(1) Subject to any reasonable limitation imposed by a co-operative at a general meeting a debenture holder or his proxy shall be entitled free of charge to inspect a register referred to in section 100 or 101 at the place where the register concerned is kept.
(2) A debenture holder may, subject to any reasonable limitation imposed by the co-operative at a general meeting, apply to the co-operative or such other person who has control over a register referred to in subsection (1) for a copy of or an extract from such a register and the co-operative or the said other person, as the case may by, shall either furnish such copy or extract on payment of the prescribed fees, or free of charge afford such a debenture holder or his proxy an opportunity of making the copy or extract himself at the place where the register concerned is kept.
(3) A debenture holder having an interest in a deed of trust referred to in section 90 (2) may apply to the co-operative concerned for a copy of or an extract from such deed of trust, and the co-operative shall either furnish such copy or extract on payment of the prescribed fees, or free of charge afford such a debenture holder or his proxy an opportunity of making the copy or extract himself at the place where the deed of trust is kept.
(4) If-
(a) access to a register referred to in subsection (1) for the purpose of inspection or the making of a copy or an extract is refused or an opportunity for such inspection or such making of a copy or extract is not afforded within 14 days after a written request to that effect has been delivered to the co-operative or such other person who has control over such a register, as the case may be; or
(b) an opportunity for access to a deed of trust referred to in subsection (3) is not afforded within 14 days after a written request to that effect has been delivered to the co-operative,
the co-operative or the said other person, as the case may be, and every director or officer of the co-operative who knowingly is a party to such refusal or default shall be guilty of an offence.
[a91y1981s103]103 Offering of debentures to public and prospectus
(1) The provisions of Chapter VI and Part I and Part II of Schedule 3 of the Companies Act, 1973 (Act 61 of 1973), shall, subject to such modifications as may be effected thereto by the Minister by notice in the Gazette, mutatis mutandis apply in respect of an offer of debentures by a co-operative, and in such application any reference therein to-
(a) shares shall be construed as a reference to debentures;
(b) the Companies Registration Office shall be construed as a reference to the Directorate Co-operatives;
[Para. (b) substituted by s. 32 of Act 37 of 1993.]
(c) a company shall be construed as a reference to a co-operative;
(d) a director or an officer of a company shall be construed as a reference to a director or an officer of a co-operative.
(2) Any person who commits an act or omission which constitutes an offence in terms of the provisions of Chapter VI of the Companies Act, 1973, as applied by subsection (1), shall be liable on conviction to the same penalties as those which may be imposed under section 441 of the said Act for such offence.
[a91y1981s104]104 Transfer of debentures
(1) The provisions of sections 134, 135, 136, 137, 138, 139 and 140 (read with section 96 (2) and (3)) of the Companies Act, 1973 (Act 61 of 1973), shall, subject to such modifications as may be effected thereto by the Minister by notice in the Gazette, mutatis mutandis apply in respect of the transfer of debentures issued by a co-operative, and in such application any reference to-
(a) a company shall be construed as a reference to a co-operative;
(b) a memorandum of association or articles of association of a company shall be construed as a reference to a statute of a co-operative;
(c) a director or an officer of a company shall be construed as a reference to a director or an officer of a co-operative.
(2) Any person who commits an omission which constitutes an offence under section 139 or 140 (read with section 96 (2) and (3)) of the Companies Act, 1973, as applied by subsection (1), shall on conviction be liable to the same penalties as those which may be imposed under section 441 of the said Act for such offence.
CHAPTER VI
MANAGEMENT OF CO-OPERATIVES (ss 105-132)
Postal address, registered office, branches and depots (ss 105-106)
[a91y1981s105]105 Postal address and registered office of co-operative
(1) A co-operative shall have in the Republic-
(a) a postal address to which communications and notices may be addressed; and
(b) a registered office to which communications and notices may be addressed and where process may be served.
(2) Any change in the situation of the registered office or of the postal address of a co-operative shall for the purposes of this Act take effect on the date on which a form referred to in section 26 (2) (i), together with the prescribed fees, is handed over to the registrar.
[Sub-s. (2) substituted by s. 33 (a) of Act 37 of 1993.]
(3) ......
[Sub-s. (3) deleted by s. 33 (b) of Act 37 of 1993.]
[a91y1981s106]106 Branches and depots of co-operatives
(1) A co-operative shall not establish a branch or depot or maintain or administer a branch or depot established prior to the commencement of this Act, unless the establishment of such a branch or depot is authorized by its statute.
(2) A co-operative which contravenes a provision of subsection (1) shall be guilty of an offence.
Directors (ss 107-121)
[a91y1981s107]107 Board of directors
Cases
(1) The affairs of a co-operative shall be managed and controlled by a board of directors, which shall subject to the provisions of this Act and the statute of the co-operative exercise and perform the powers and duties of the co-operative.
(2) The statute of the co-operative shall determine the maximum and minimum number of directors of which the board of directors shall consist.
[Sub-s. (2) substituted by s. 34 of Act 37 of 1993.]
(3) Unless the statute of a co-operative otherwise provides the directors of a co-operative shall subject to the provisions of section 28 (e), 159 (e), 164 (f) or 168 (a) be elected at a general meeting in such manner and for such period as may be set out in the statute.
[a91y1981s108]108 Certain persons not competent to be directors
(1) A person shall not hold office as a director of a co-operative-
(a) unless he is-
(i) a member or an affiliated member of the co-operative; or
(ii) a member of a company, a close corporation or an association of persons (with or without legal personality) which is either itself a member of the co-operative or a member of any other company, co-operative or juristic person which is a member of the co-operative;
[Sub-para. (ii) substituted by s. 35 (a) of Act 37 of 1993.]
[Para. (a) substituted by s. 15 (a) of Act 42 of 1985.]
(aA) if such person is a member of a company referred to in paragraph (a) (ii) of which another member is a director of the co-operative and such person is not also a member or affiliated member referred to in paragraph (a) (i) of the co-operative;
[Para. (aA) inserted by s. 15 (b) of Act 42 of 1985.]
(b) if such person is a juristic person;
(c) ......
[Para. (c) deleted by s. 27 of Act 132 of 1993.]
(d) if he is a minor;
(e) if he becomes a patient as defined in section 1 of the Mental Health Act, 1973 (Act 18 of 1973);
(f) save under the authority of a competent court-
(i) if he is an unrehabilitated insolvent;
(ii) if he has at any time been removed from an office of trust on account of misconduct;
(iii) if he or she has at any time been convicted (whether in the Republic or elsewhere) of theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention of Corruption Act, 1958 (Act 6 of 1958), the Corruption Act, 1992 (Act 94 of 1992), Part 1 to 4, or section 17, 20 or 21 (in so far as it relates to the aforementioned offences) of Chapter 2 of the Prevention and Combating of Corrupt Activities Act, 2004, any offence involving dishonesty or in connection with the formation or management of a co-operative or company and sentenced therefor to imprisonment without the option of a fine or to a fine exceeding two hundred rand;
[Sub-para. (iii) substituted by s. 36 (1) of Act 12 of 2004.]
(g) if he is incompetent by virtue of a provision of the statute of the co-operative to hold such office.
(1A) Notwithstanding the provisions of subsection (1) a person who by virtue of his membership of a trading co-operative is an affiliated member of an agricultural co-operative or a special farmers' co-operative shall not hold the office of director of that agricultural co-operative or special farmers' co-operative unless he is a person who carries on farming operations as contemplated in section 57 (1) (a) (i).
[Sub-s. (1A) inserted by s. 15 (c) of Act 42 of 1985.]
(1B) If the State has a material interest in the activities of the co-operative, the registrar, or, if provision is made therefor in the statute of a co-operative, the board of directors, may, notwithstanding the provisions of paragraphs (a) and (aA) of subsection (1), appoint non-members to the board in order to obtain expertise on the board: Provided that the total number of directors appointed by the board of directors from non-members shall not exceed the number of directors appointed from members: Provided further that the registrar may not appoint more than two directors.
[Sub-s. (1B) inserted by s. 35 (b) of Act 37 of 1993.]
(1C) Non-members appointed by the registrar to the board of directors in terms of subsection (1B), shall be so appointed in addition to the number of persons holding the office of director in terms of section 107(2).
[Sub-s. (1C) inserted by s. 35 (b) of Act 37 of 1993.]
(1D) Non-members referred to in subsection (1B) who are appointed by the board of directors shall be appointed for the period determined in the statute of a co-operative.
[Sub-s. (1D) inserted by s. 35 (b) of Act 37 of 1993.]
(1E) Non-members referred to in subsection (1B) who are appointed by the registrar shall be appointed for the period during which the State has a material interest in the activities of the co-operative.
[Sub-s. (1E) inserted by s. 35 (b) of Act 37 of 1993.]
(2) Any person who in terms of subsection (1) is not competent to hold office as a director of a co-operative and who acts or purports to act as a director or directly or indirectly takes part in or is concerned in the management of a co-operative, shall be guilty of an offence.
[a91y1981s109]109 Vacation of office by directors and filling of vacancies
(1) A director of a co-operative shall cease to hold office as a director of the co-operative-
(a) if he becomes incompetent in terms of section 108 to hold such office in the co-operative;
(b) if he has been absent from more than four consecutive meetings of the board of directors of the co-operative without the board's leave (and such leave shall not be granted for a period covering more than six consecutive meetings unless the absence be on the affairs of the co-operative);
(c) upon the expiry of 30 days, or such shorter period as may be approved by the co-operative, after he resigned as a director of the co-operative;
(d) if he is removed from office under subsection (2).
(2) A director of a co-operative may at any time by resolution passed at a general meeting of the co-operative be removed from office.
(3) Any vacancy on the board of directors of a co-operative arising from a circumstance referred to in subsection (1) and every vacancy caused by the death of a member shall be filled in such manner as may be provided in the statute, and every director so appointed shall hold office for the unexpired portion of the period of office of the vacating director.
[a91y1981s110]110 Chairman, vice-chairman and acting chairman of board of directors
(1) Unless the statute of a co-operative otherwise provides the board of directors of a co-operative shall at its first meeting after the incorporation of the co-operative and thereafter as often as it may become necessary elect a director as the chairman and another director as the vice-chairman of the board.
(2) Whenever the chairman of a board of directors is absent or is unable to perform his functions as chairman the vice-chairman shall act as chairman during the absence or incapacity of the chairman, and if both the chairman and the vice-chairman are absent or unable to perform the functions of the chairman the board may elect any other director to act as chairman during such absence or incapacity.
(3) (a) The chairman of the board of directors of a co-operative shall, subject to his remaining a director of the co-operative, retire as chairman at the first meeting of the board held subsequent to an annual general meeting, and shall be eligible for re-election.
(b) The provisions of paragraph (a) shall mutatis mutandis apply to the vice-chairman of a board of directors.
[a91y1981s111]111 Vacation of office by chairman and vice-chairman
(1) The chairman of the board of directors of a co-operative shall vacate his office-
(a) if he ceases to be a director of the co-operative;
(b) if he resigns as chairman;
(c) if he is removed from office under subsection (2).
(2) The chairman of a board of directors may at any time be removed from office by the board.
(3) The provisions of subsections (1) and (2) shall mutatis mutandis apply in respect of the vice-chairman of a board of directors.
[a91y1981s112]112 Meetings and resolutions of board of directors
(1) A meeting of the board of directors of a co-operative shall be held at a time and place determined by the board or the chairman of the board or any two directors of the co-operative.
(2) Unless the statute of a co-operative otherwise provides-
(a) a majority of all the directors shall constitute a quorum for any meeting of a board of directors;
(b) the decision of the majority of the directors present at a meeting of a board shall constitute a resolution of such board, and in the event of an equality of votes relating to any matter the chairman of a board or the person acting as chairman, as the case may be, shall have a casting vote in addition to his deliberative vote.
(3) No resolution passed by a board of directors or act performed under the authority of a board shall be invalid by reason only of a vacancy on the board or of the fact that a person who is not entitled to sit as a director sat as a director at the time when the resolution was passed or the act was authorized, if the resolution was passed or the act was authorized by the requisite majority of the directors who were present at the time and entitled to sit as directors.
(4) (a) A co-operative shall at the written request of the registrar notify him and forward to him the agenda and relevant documents of any meeting of its board of directors or of a committee of that board on the same day as the directors or members of such committee are notified of any such meeting.
(b) The registrar may attend any meeting of which he was notified in terms of paragraph (a) and shall have the right to take part in the proceedings thereof but shall not have the right to vote, and his participation shall be noted in the minutes referred to in section 113(1).
(c) If default is made in complying with any requirement of paragraph (a) the co-operative and every director and officer of the co-operative who knowingly are parties to such default shall be guilty of an offence.
[Sub-s. (4) added by s. 6 of Act 80 of 1987.]
[a91y1981s113]113 Minutes of directors' meetings
(1) The board of directors of a co-operative shall cause minutes in one of the official languages of the Republic to be kept of all proceedings at meetings of the board and to be entered within two months of a board meeting in one or more books to be kept for that purpose at the registered office of the co-operative or at such other place as may be determined by the co-operative.
(2) Minutes to be prepared in terms of subsection (1) in respect of any meeting of a board of directors shall as soon as may be possible, but not later than the first meeting of the board held subsequent to the expiration of two months after the meeting to which the minutes relate, be submitted to a meeting of the board.
(3) A resolution of a board of directors in the form of a written resolution signed by the chairman of the board shall be deemed to be minutes of a meeting and shall be entered in the book or books referred to in subsection (1).
(4) For the purposes of subsection (1) loose leaves of paper shall not be deemed to constitute a minute book unless they are bound together permanently, without means provided for the withdrawal or insertion of leaves, and the pages or leaves are consecutively numbered.
(5) The minutes of any meeting of a board of directors purporting to be signed by the chairman of the board or a person who acted as chairman, as the case may be, shall in any court be prima facie proof of the taking place of anything which according to such minutes took place at such meeting.
(6) If default is made in complying with any requirement of subsection (1) or (2) the co-operative and every director or officer of the co-operative who knowingly is a party to such default, shall be guilty of an offence.
[a91y1981s114]114 Attendance register
(1) Every director of a co-operative present at any meeting of the board of directors of the co-operative shall at the meeting sign his name under the date of the meeting in a register with permanently bound leaves to be kept for such purpose by the co-operative.
(2) Such register shall be kept at the registered office of the co-operative or such other place as may be determined by the co-operative with the approval of the registrar.
(3) A co-operative which or director who fails to comply with a provision of subsection (1) or (2) shall be guilty of an offence.
[a91y1981s115]115 Board of directors may assign functions to a director or committee
Cases
(1) The board of directors of a co-operative may subject to such limitations and qualifications as may be set out in the statute of the co-operative delegate any of its powers, including such powers as it may exercise under section 107 (1), to a director or a committee of directors, or authorize a director or any such committee to perform any of the board's duties or to act as the co-operative's representative or agent.
(2) A delegation under subsection (1) shall not prevent the exercise of the relevant power by the board itself.
(3) The provisions of section 112 (3) shall mutatis mutandis apply in respect of a committee referred to in subsection (1).
[a91y1981s116]116 Liability of directors and officers
(1) A director or officer of a co-operative shall not be liable to any person in his personal capacity for any loss or damage which may occur in or in connection with the performance of his duties, unless-
(a) the loss or damage is due to his wilful misconduct, dishonesty or gross negligence or to the fact that he wilfully contravened or that he refused to comply with a provision of this Act or the statute of the co-operative and such loss or damage is not covered by a fidelity guarantee policy or any other similar policy taken out by the co-operative; or
(b) the loss or damage is due to his reckless conduct, or conduct which is or was intended to defraud any person or for any other fraudulent purpose, in which case he shall be liable in his personal capacity without any limitations of liability.
(2) Without prejudice to any other criminal liability incurred, where any business of a co-operative is carried on in any manner contemplated in subsection (1), every director or officer who is knowingly a party to the carrying on of the business in any such manner shall be guilty of an offence.
[S. 116 substituted by s. 7 of Act 80 of 1987.]
[a91y1981s117]117 Directors to disclose interest in certain contracts
(1) A director of a co-operative who in a capacity other than that of director, member, affiliated member or duly authorized agent of the co-operative is interested in a proposed contract which the co-operative considers entering into or becomes interested in a contract after it has been entered into by the co-operative, shall disclose to the co-operative full particulars relating to the nature and extent of his interest in accordance with the provisions of subsection (2) or (3), as the case may be.
(2) A director referred to in subsection (1) who is interested in such a proposed contract shall-
(a) if the proposed contract is or is to be considered at a meeting of the board of directors or a general meeting of the co-operative, disclose his interest prior to such meeting by way of a written notice to the board or otherwise at such meeting, or, if for any reason it is not possible for him to disclose his interest at or prior to such meeting, he shall do so at the first meeting of the board held thereafter at which it is possible for him to do so, irrespective of whether the contract has been entered into or not; or
(b) if the proposed contract is not to be considered at any meeting referred to in paragraph (a), disclose his interest by way of a written notice to the board of directors within seven days as from the day on which he first became aware of the proposed contract or, if it has already been entered into, of the contract:
Provided that a written notice given by a director of a co-operative to the board of directors thereof to the effect that he has an interest in a particular undertaking and is to be regarded as interested in every contract which may be entered into with such undertaking during a period specified in the notice, shall for the purposes of this subsection be deemed to be sufficient disclosure of interest with respect to all contracts entered into by the co-operative with such undertaking during the specified period, provided-
(i) full particulars relating to the nature and extent of such a director's interest in such undertaking are set out in the notice; and
(ii) the extent of such a director's interest in such undertaking is at the time when a contract is entered into by the co-operative with the undertaking not greater than is set out in the notice.
(3) A director of a co-operative who becomes interested in a contract after it has been entered into by a co-operative shall disclose his interest by way of a written notice to the board of directors of the co-operative within seven days as from the day on which he so became interested.
(4) Any director of a co-operative who fails to comply with a provision of subsection (1) shall be guilty of an offence.
[a91y1981s118]118 Register of directors' interests in contracts
(1) A co-operative shall keep at its registered office or such other place as may be mentioned in its statute a register of directors' interests in contracts in one of the official languages of the Republic and enter therein particulars of every disclosure of interests under section 117.
(2) A co-operative which fails to comply with a provision of subsection (1) shall be guilty of an offence.
[a91y1981s119]119 Acceptance of commission, remuneration or reward prohibited in certain circumstances
(1) A director or an employee of a co-operative shall not accept any commission, remuneration or reward from any person for or in connection with any transaction to which the co-operative is a party unless such commission, remuneration or reward is paid or given in the course of his usual business or profession and he, if he is a director, has disclosed his interest in terms of the provisions of section 117.
(2) A director or employee who contravenes a provision of subsection (1) shall be guilty of an offence.
[a91y1981s120]120 Register of directors
(1) A co-operative shall keep at its registered office or such other place as may be mentioned in its statute a register of directors in one of the official languages of the Republic and enter therein in respect of each director-
(a) his full name and address;
(b) the name and address of each co-operative or company of which he is a director.
(2) A co-operative which fails to comply with a provision of subsection (1) shall be guilty of an offence.
[a91y1981s121]121 Returns relating to directors
(1) A co-operative shall within 30 days after-
(a) an annual general meeting notify the registrar in writing of the full name and address of each person who holds office as a director of the co-operative immediately after that meeting;
(b) it was informed by a director in terms of subsection (2) of any change of address notify the registrar in writing of such change;
(c) a director vacated his office notify the registrar in writing of such vacation of office;
(d) a person was appointed as a director notify the registrar in writing of the full name and address of the person so appointed.
(2) A director of a co-operative who changes his address shall within 30 days after such change inform the co-operative in writing of his new address.
(3) A co-operative which fails to comply with a provision of subsection (1) and a director of a co-operative who fails to comply with a provision of subsection (2) shall be guilty of an offence.
Meetings of members of co-operatives (ss 122-132)
[a91y1981s122]122 Annual general meetings
(1) A co-operative shall within 180 days, or such shorter period as may be required by its statute, after the end of each financial year of the co-operative hold a meeting of the members of the co-operative so as to-
(a) consider the financial state of affairs of the co-operative and deal with the annual financial statements relating to the preceding financial year;
(b) dispose of any other matters which shall or may in terms of this Act or the statute of the co-operative be disposed of at an annual general meeting.
(2) The registrar may in respect of any particular general meeting exempt a co-operative from compliance with a provision in such co-operative's statute requiring the co-operative to hold its annual general meeting within a period of less than 180 days after the end of its financial year.
(3) An annual general meeting shall subject to the provisions of subsections (1) and (2) be held at a time and place determined by the board of directors and shall be convened on the authority of the board by giving each member of the co-operative at least 14 days' written notice of the meeting.
(4) A co-operative which fails to comply with a provision of subsection (1), and every director of a co-operative who knowingly is a party to such default, shall be guilty of an offence.
(5) The provisions of section 112(4) shall mutatis mutandis apply to any annual general meeting of a co-operative.
[Sub-s. (5) added by s. 8 of Act 80 of 1987.]
[a91y1981s123]123 Extraordinary general meetings
(1) A co-operative may in addition to its annual general meetings from time to time hold extraordinary meetings of its members in order to dispose of any matter relating to the affairs of the co-operative which is not a matter to be disposed of at an annual general meeting: Provided that any matter dealt with but not disposed of at an annual general meeting may be disposed of at any extraordinary general meeting.
(2) An extraordinary general meeting may be convened-
(a) by the board of directors of the co-operative;
(b) by at least two directors of the co-operative;
(c) by five or more members of the co-operative constituting in number at least one-tenth of all the members of the co-operative, if such co-operative is a primary co-operative; or
(d) by two or more members of the co-operative constituting in number at least one-tenth of all the members of the co-operative, if such co-operative is a central or federal co-operative,
and shall be so convened by giving each member of the co-operative at least 14 days' written notice of the meeting: Provided that the members referred to in paragraph (c) or (d) shall not be entitled to convene an extraordinary general meeting unless they have petitioned the directors in writing to convene such a meeting and the meeting is not convened within 21 days after the transmission of the petition, or there are for any reason no directors to whom such a petition may be addressed.
(3) The notice through which an extraordinary general meeting is convened shall in addition to the time and place of the meeting state the purpose for which the meeting is convened.
(4) The provisions of section 112(4) shall mutatis mutandis apply to any extraordinary general meeting of a co-operative.
[Sub-s. (4) added by s. 9 of Act 80 of 1987.]
[a91y1981s124]124 Representation of juristic persons and associations of persons at general meetings
(1) A juristic person or association of persons may appoint a person as its representative to act on its behalf at a general meeting of a co-operative of which such juristic person or association is a member.
(2) The representative of a juristic person or association of persons referred to in subsection (1) shall be a person who is not in terms of section 108, excluding section 108 (1) (g), incompetent to be a director of the co-operative of which such juristic person or association is a member.
(3) Subject to the conditions of his appointment, a representative referred to in subsection (1) may at a meeting concerned do anything on behalf of such juristic person or association of persons which such juristic person or association would have been able to do as a member of the co-operative had it been a natural person.
[S. 124 amended by s. 16 of Act 42 of 1985 and substituted by s. 36 of Act 37 of 1993.]
[a91y1981s125]125 Appointment of proxies
A member of a co-operative or a representative referred to in section 124 may, if authorized thereto by the co-operative's statute, appoint any person who is not in terms of section 108, excluding section 108 (1) (g), incompetent to be a director of the co-operative, as his proxy to attend, to speak and to vote in his stead at a general meeting of the co-operative: Provided that-
(a) a proxy shall not be entitled to cast a vote except in a vote by ballot;
(b) a member or such a representative shall not be entitled to appoint more than one proxy;
(c) the same person shall not act as proxy to more members or such representatives than the number determined by the statute of a co-operative;
[Para. (c) substituted by s. 37 of Act 37 of 1993.]
(d) a proxy at a general meeting shall not represent more than 20 per cent of the votes of all the members of the co-operative or such representatives.
[Para. (d) substituted by s. 37 of Act 37 of 1993.]
[S. 125 amended by s. 17 of Act 42 of 1985.]
[a91y1981s126]126 Quorum for general meetings
(1) Unless the statute of a co-operative requires a larger quorum, a quorum for a general meeting of a co-operative shall be constituted-
(a) in the case of a primary co-operative with not more than fifty members, by at least five members;
(b) in the case of a primary co-operative with more than fifty members but not more than two hundred members, by at least one-tenth of the members of the co-operative;
(c) in the case of a primary co-operative with more than two hundred members, by twenty members plus at least one per cent of the number of members of the co-operative in excess of two hundred;
[Para. (c) substituted by s. 38 (a) of Act 37 of 1993.]
(d) in the case of a central or federal co-operative with not more than five members, by at least two members;
(e) in the case of a central or federal co-operative with more than five members, by at least one-fifth of the members of the co-operative.
[Para. (e) substituted by s. 38 (b) of Act 37 of 1993.]
(2) A member of a co-operative represented at a general meeting by a representative referred to in section 124 or a proxy referred to in section 125 shall for the purposes of subsection (1) or (4) be deemed to be present at such meeting.
(3) If a number of persons constituting a quorum in terms of the provisions of subsections (1) and (2) are present at a general meeting of a primary co-operative such persons shall, the said provisions notwithstanding, be deemed not to constitute a quorum if fewer than five members and representatives referred to in section 124 are personally present.
(4) (a) If within one hour from the time appointed for any general meeting of a co-operative a quorum for such meeting is not present, the meeting-
(i) if convened by members or upon a petition from members of the co-operative, shall be deemed to be cancelled;
(ii) if otherwise convened, shall be deemed to be adjourned to the same day in the next week at the same time and place, or if that day is a public holiday, to the next day which is not a public holiday or a Sunday.
(b) If within one hour from the time appointed for an adjourned meeting referred to in paragraph (a) (ii) a quorum for such meeting is not present, the members present, not being fewer than five, in the case of a primary co-operative, or two, in the case of a central or federal co-operative, shall be deemed to constitute a quorum for such meeting: Provided that a special resolution shall not be passed at such a meeting.
[a91y1981s127]127 Chairman of general meetings
(1) The chairman of the board of directors of a co-operative or, in his absence, the vice-chairman or, in the absence of both, any other director elected by the meeting, shall act as the chairman of any annual general meeting or of an extraordinary general meeting convened in terms of section 123 (2) (a) or (b).
(2) A person elected by the meeting shall act as the chairman of an extraordinary general meeting convened in terms of section 123 (2) (c) or (d).
[a91y1981s128]128 Voting rights of members
(1) Every member of a co-operative who is not temporarily suspended as a member in terms of the provisions of section 64 shall have the right to vote at a general meeting of the co-operative.
(2) A person present at a general meeting of a co-operative and entitled to vote thereat shall-
(a) in the case of a vote on the show of hands, have one vote subject to the provisions of paragraph (a) of the proviso to section 125;
(b) in the case of a vote by ballot, have one vote and such number of additional votes (if any) as may be allotted to him by virtue of the provisions of subsection (3).
(3) The statute of a co-operative may for the purposes of a vote by ballot provide for the allotment to the members of the co-operative of one or more additional votes on a basis set out in the statute: Provided that in the case of a co-operative with more than four members, no member shall have more than 20 per cent of the votes of all the members of the co-operative.
[Sub-s. (3) substituted by s. 39 of Act 37 of 1993.]
(4) Unless the statute of a co-operative determines otherwise, two or more members of a co-operative which are companies in respect of which any person directly or indirectly has the power to exercise control in any respect which the Minister may determine by notice in the Gazette, shall for the purposes of subsections (1), (2) and (3) of this section and sections 124, 125, 126, 130 and 180 (2) be deemed to be a single member.
(1) Any matter for decision by a general meeting shall be decided by means of a vote on the show of hands or by ballot.
(2) A vote by ballot shall not be held unless it is demanded, in the case of a general meeting of a primary co-operative, by at least five persons present at the meeting and entitled to vote in a vote by ballot or, in the case of a general meeting of a central or federal co-operative, by the number of persons prescribed in the statute of the co-operative.
[Sub-s. (2) substituted by s. 10 of Act 80 of 1987.]
(3) Unless the statute of a co-operative otherwise provides the chairman of a general meeting shall in the event of an equality of votes relating to any matter have a casting vote in addition to his deliberative vote.
[a91y1981s130]130 Special resolutions
(1) A resolution by a general meeting of a co-operative shall constitute a special resolution of the co-operative if-
(a) the notice through which the general meeting was convened specified particulars of the proposed resolution and stated the intention to propose the resolution as a special resolution; and
(b) the resolution was passed, in the case of a vote on the show of hands, by not less than two-thirds of the persons present at the meeting and entitled to vote in a vote on the show of hands, or, in the case of a vote by ballot, by not less than two-thirds of the votes of the persons present at the meeting and entitled to vote in a vote by ballot; and
(c) the resolution relates to-
(i) the conversion of a co-operative into a company or a close corporation; or
(ii) the winding-up of the co-operative,
and was passed by at least 75 per cent of the votes of all the members of the co-operative, both in a vote on the show of hands and a vote by ballot.
[Para. (c) added by s. 40 (a) of Act 37 of 1993.]
(2) Notwithstanding the provisions of subsection (1), the statute of a co-operative may, for the purposes of a special vote, require a larger majority of votes than that mentioned in the said subsection.
[Sub-s. (2) substituted by s. 40 (b) of Act 37 of 1993.]
[a91y1981s131]131 Minutes of general meetings
(1) A co-operative shall cause minutes in one of the official languages of the Republic to be kept of all proceedings at its general meetings and to be entered within two months of a meeting in one or more books to be kept for that purpose at the registered office of the co-operative or at such other place as may be determined by the co-operative.
(2) Minutes to be prepared in terms of subsection (1) in respect of any general meeting shall-
(a) in the case of minutes relating to an annual general meeting, be submitted to the next annual general meeting;
(b) in the case of minutes relating to an extraordinary general meeting, as soon as may be possible, but not later than the first general meeting held subsequent to the expiration of two months after the meeting to which the minutes relate, be submitted to a general meeting.
(3) For the purposes of subsection (1) loose leaves of paper shall not be deemed to constitute a minute book unless they are bound together permanently, without means provided for the withdrawal or insertion of leaves, and the pages or leaves are consecutively numbered.
(4) The minutes of a general meeting of a co-operative purporting to be signed by the chairman of the meeting shall in any court be prima facie proof of the taking place of anything which according to such minutes took place at such meeting: Provided that a record in the minutes of a meeting of a statement by the chairman of the meeting that a resolution was passed or passed unanimously or passed by a particular majority of votes by the meeting shall in any court be conclusive evidence of the fact that the resolution was passed or passed unanimously or passed by a particular majority of votes, as the case may be.
(5) A co-operative which fails to comply with a provision of subsection (1) or (2) and every director or officer thereof who knowingly is a party to such default, shall be guilty of an offence.
[a91y1981s132]132 Series of meetings
(1) If more than one-tenth of the members of a primary co-operative are resident further than 50 kilometres from the registered office of the co-operative a series of meetings of members may instead of a general meeting be convened and held on the basis of the different areas in which the members are resident, to dispose of any matter which shall or may be disposed of by a general meeting.
[Sub-s. (1) substituted by s. 18 of Act 42 of 1985.]
(2) The provisions of this Act pertaining to general meetings of a primary co-operative shall mutatis mutandis apply in respect of a meeting referred to in subsection (1): Provided that-
(a) the meetings in any particular series shall be convened for the same purpose and that the agenda for the different meetings shall be the same;
(b) the requirements relating to a quorum shall be deemed to have been complied with if the persons present at the respective meetings and entitled to vote thereat are in the aggregate at least equal to the number constituting a quorum for a general meeting of the co-operative concerned;
(c) a member of a co-operative shall not have the right to vote at more than one of the meetings in the same series;
(d) a vote by ballot may be demanded at the first meeting in any series only and that if any matter has been decided by the first meeting by a vote by ballot such matter shall likewise be decided by the other meetings in the series by a vote by ballot;
(e) only the chairman of the last meeting in a series shall have a casting vote.
(3) (a) Unless the statute of a co-operative otherwise provides the chairman of each meeting in a series, except the chairman of the last meeting, shall record the number of votes cast at the meeting of which he is the chairman for and against each item on the agenda, certify such record and deliver it to the co-operative for transmission to the chairman of the last meeting in the series.
(b) The chairman of the last meeting in a series shall determine the number of votes cast by all the meetings jointly for and against each item on the said agenda and announce the result.
(4) Any resolution passed in terms of this section by a series of meetings shall be deemed to be a resolution passed by a general meeting.
CHAPTER VII
ACCOUNTING RECORDS, ACCOUNTING AND AUDITING (ss 133-156)
Financial year and accounting records (ss 133-134)
[a91y1981s133]133 Financial year
Unless the statute of a co-operative otherwise provides the financial year of a co-operative shall be a year terminating on the last day of February.
[a91y1981s134]134 Co-operative to keep accounting records
(1) Every co-operative shall keep in one of the official languages of the Republic such accounting records as are necessary fairly to reflect the state of affairs and business of the co-operative and to explain the transactions and financial position of the business of the co-operative, including-
(a) records showing the assets and liabilities of the co-operative;
(b) a register of fixed assets showing in respect of each asset the date of acquisition, the cost price or, if it stands in the co-operative's books at a valuation, the amount of the valuation, depreciation (if any), the date of disposal and the consideration received in respect thereof: Provided that if the cost price or valuation, as the case may be, of any fixed asset acquired before the commencement of this Act is not available or cannot be obtained without unreasonable expense or delay, the net amount at which the asset is shown in the co-operative's books at such commencement, shall be deemed to be the cost price or valuation;
(c) records containing daily entries in sufficient detail of all cash received and paid out and of the matters in respect of which cash is received and paid out;
(d) where the business of the co-operative involved dealings in goods, records of all goods sold and purchased;
(dA) notes indicating the percentage business-turnover referred to in section 54 (3) in respect of transactions concluded with non-members; and
[Para. (dA) inserted by s. 41 of Act 37 of 1993.]
(e) statements of an annual stocktaking.
(2) The accounting records referred to in subsection (1) may be kept either by making entries in bound books or by recording the matters in question in any other manner, and where such records are not kept by making entries in bound books, adequate precautions shall be taken for guarding against falsification and for facilitating its discovery.
(3) The accounting records shall be kept at the registered office of the co-operative or at such other place as may be determined by the co-operative and shall at all times be available for inspection by a director.
(4) (a) Any co-operative which fails to comply with a provision of subsection (1), (2) or (3) and every director or officer thereof who knowingly is a party to such default or who fails to take all reasonable steps to secure compliance by the co-operative with such a provision, shall be guilty of an offence.
(b) In any proceedings against any director or officer of a co-operative in respect of an offence consisting of a default to take reasonable steps to secure compliance by a co-operative with a provision of subsection (1), (2) or (3), it shall be a defence to prove that the accused had reasonable grounds for believing and did believe that a competent and reliable person was charged with the duty of seeing to it that such provision was complied with and was in a position to discharge that duty and that the accused had no reason to believe that the said person had failed in any way to discharge that duty.
Accounting (ss 135-142)
[a91y1981s135]135 Annual financial statements
(1) A co-operative shall in respect of each financial year of the co-operative cause financial statements to be made out in one of the official languages of the Republic.
(2) The financial statements required to be made out in terms of subsection (1) shall consist of-
(a) a balance sheet dealing with the assets and liabilities of the co-operative;
(b) an income statement or any similar financial statement dealing with the surplus or deficit of the co-operative;
(c) a directors' report in accordance with section 138; and
(d) an auditor's report in accordance with section 154:
Provided that a co-operative distributing bonuses to its members in accordance with the provisions of section 84 (4) shall in addition to the income statement referred to in paragraph (b) make out separate income statements dealing with the surplus or deficit of the co-operative in respect of each object carried out by the co-operative during the relevant financial year.
(3) The annual financial statements shall, in conformity with generally accepted accounting practice, fairly reflect the state of affairs of the co-operative and its business as at the end of the relevant financial year and the surplus or deficit of the co-operative for that financial year and shall for that purpose be in accordance with and include at least the matters contained in Schedule 2, as far as these are applicable, and comply with any other requirement of this Act: Provided that a co-operative registered as an insurer in terms of the Insurance Act, 1943 (Act 27 of 1943), shall comply with the requirements of the said Schedule only in so far as those requirements are not inconsistent with the provisions of that Act.
(4) (a) Any co-operative which fails to comply with a provision of subsection (1) and every director or officer thereof who knowingly is a party to such default or who fails to take all reasonable steps to secure compliance by the co-operative with such a provision, shall be guilty of an offence.
(b) In any proceedings against any director or officer of a co-operative in terms of paragraph (a) the defence referred to in section 134 (4) (b) shall be available to him.
(5) ......
[Sub-s. (5) deleted by s. 42 of Act 37 of 1993.]
[a91y1981s135A]135A When annual financial statements are to be consolidated
Consolidated annual financial statements shall be compiled when-
(a) a co-operative has made an investment in a company or has given financial support to a company, and the directors of the co-operative are of the opinion that it is the most effective manner of reflecting the required information about the state of affairs, the business and the surplus or deficit of the co-operative or company; or
(b) it is required by virtue of the requirements of Schedule 2.
[S. 135A inserted by s. 43 of Act 37 of 1993.]
[a91y1981s135B]135B Consolidated annual financial statements
(1) The consolidated annual financial statements referred to in section 135A shall consist of-
(a) a consolidated balance sheet dealing with the state of affairs of the co-operative and a company referred to in section 135A, and the subsidiaries of the company, if any; and
(b) a consolidated income statement dealing with the surplus or deficit of the co-operative and such company, and the subsidiaries of the company, if any.
(2) The consolidated annual financial statements may be wholly or partly incorporated in the company's own annual financial statements.
[S. 135B inserted by s. 44 of Act 37 of 1993.]
[a91y1981s136]136 Right of members to inspect annual financial statements
(1) Unless copies of the annual financial statements, including consolidated annual financial statements if section 135A is applicable, were sent to every member of the co-operative at least 14 days before the annual general meeting at which such statements are to be dealt with, the co-operative shall for a period of at least 14 days before the said meeting make copies of the said statements available at the registered office and every branch of the co-operative for inspection by the members of the co-operative or their proxies.
[Sub-s. (1) substituted by s. 45 of Act 37 of 1993.]
(2) A co-operative which fails to comply with a provision of subsection (1) shall be guilty of an offence.
[a91y1981s137]137 Formal requirements relating to annual financial statements
(1) The annual financial statements referred to in section 135 (2) (with the exception of the auditor's report), as well as the consolidated annual financial statements referred to in section 135B, if any, shall not be issued, sent out or made available for inspection unless the original or a copy thereof signed by-
(a) at least two directors of the co-operative duly authorized thereto by the board of directors, or, where such authority has not been given, by a majority of the directors; and
(b) the auditor of the co-operative,
has been filed at the registered office of the co-operative.
[Sub-s. (1) amended by s. 46 (a) of Act 37 of 1993.]
(2) ......
[Sub-s. (2) deleted by s. 46 (b) of Act 37 of 1993.]
(3) Any person who contravenes a provision of subsection (1) shall be guilty of an offence.
[a91y1981s138]138 Directors' report
(1) The directors of a co-operative shall in respect of every financial year of the co-operative draw up a report in accordance with subsection (2).
(2) The directors' report shall deal with every matter which is material for the appreciation by members of the co-operative of the state of affairs, the business and the surplus or deficit of the co-operative and shall for that purpose be in accordance with and include at least the matters contained in Schedule 2, in so far as these are applicable, and comply with any other requirement of this Act.
[a91y1981s139]139 Copy of annual financial statements to be sent to registrar
(1) A copy of the annual financial statements and the consolidated annual financial statements, if any, signed in the manner required in section 137 shall be sent by the co-operative to the registrar at least 14 days before the annual general meeting at which those statements are to be dealt with.
[Sub-s. (1) substituted by s. 47 (a) of Act 37 of 1993.]
(1A) If a co-operative fails to comply with a provision of subsection (1), the registrar may either of his own accord or at the request of a member or a creditor of the co-operative in question send a letter of demand by certified or registered post to the postal address or registered office of the co-operative in which it is ordered to rectify such omission.
[Sub-s. (1A) inserted by s. 47 (b) of Act 37 of 1993.]
(1B) If the co-operative fails to rectify the omission within seven days after receipt of the letter of demand referred to in subsection (1A), the registrar may send a written notice by certified or registered post to the postal address or registered office of the co-operative in which it is ordered to rectify the omission within 14 days after the date of sending of the notice.
[Sub-s. (1B) inserted by s. 47 (b) of Act 37 of 1993.]
(2) A co-operative shall within 14 days after it is ordered by the registrar to do so furnish the registrar with a copy of any pool or trading account, duly signed by the co-operative's auditor, or with any information in connection with the state of affairs or business of the co-operative or any transaction to which the co-operative is a party or in which it has an interest.
(3) If the co-operative on which a notice referred to in subsection (1B) has been served, without good cause, fails to rectify the omission concerned within the said period of 14 days, the registrar may, by delivering a further written notice at the registered office of the co-operative concerned, or by sending such notice by certified or registered post to the postal address or the registered office of the co-operative, order the co-operative to pay a fine specified in the further notice, but not exceeding R200, within 14 days after delivery or sending of the notice.
[Sub-s. (3) substituted by s. 47 (c) of Act 37 of 1993.]
(4) A co-operative which fails to comply with an order under subsection (1B) or fails to pay a fine imposed under subsection (3), shall be guilty of an offence.
[Sub-s. (4) added by s. 47 (d) of Act 37 of 1993.]
[a91y1981s140]140 Special provision relating to company subsidiaries
A company subsidiary shall, notwithstanding anything to the contrary contained in any law or its articles of association, cause annual financial statements as required by the Companies Act, 1973 (Act 61 of 1973), to be made out so as to cover an accounting period ending on the same date as the period covered by the annual financial statements of the co-operative of which it is a subsidiary.
[a91y1981s141]141 Special provision relating to co-operatives with interests in other undertakings
(1) Copies of the latest available audited annual financial statements of a company which is a subsidiary of a co-operative shall-
(a) for at least 14 days before an annual general meeting of the co-operative be made available by the co-operative at its registered office for inspection by members of the co-operative or their proxies;
(b) be sent by the co-operative to the registrar within 14 days after it was ordered by the registrar to do so.
(2) A co-operative shall within 14 days after it was ordered by the registrar to do so furnish the registrar with information available to it in connection with the state of affairs or business of an undertaking in which it has an interest or any transaction to which any such undertaking is a party or in which any such undertaking has an interest.
(3) A directors' report contemplated in section 138 shall in the case of a co-operative having an interest in any other undertaking also deal with every matter relating to the relevant undertaking which is material for the appreciation by the members of the co-operative of the state of affairs, the business and the surplus or deficit of the co-operative.
(4) A co-operative which fails to comply with a provision of paragraph (a) of subsection (1) or an order under paragraph (b) of that subsection or subsection (2) shall be guilty of an offence.
[a91y1981s142]142 Amendment of Schedule 2
The Minister may from time to time amend Schedule 2 by notice in the Gazette.
Auditing (ss 143-156)
[a91y1981s143]143 Annual auditing
(1) A co-operative shall cause its accounting records and annual financial statements to be audited annually.
(2) A co-operative which fails to comply with a provision of subsection (1) shall be guilty of an offence.
[a91y1981s144]144 First appointment of auditor of co-operative
(1) The board of directors of a co-operative shall before the end of the co-operative's first financial year appoint a person or persons as the co-operative's auditor or auditors.
(2) An auditor appointed under subsection (1) shall hold office until the conclusion of the first annual general meeting of the co-operative.
[a91y1981s145]145 Annual appointment of auditor
(1) A co-operative shall at its first and at every subsequent annual general meeting appoint a person or persons as the co-operatives' auditor or auditors.
(2) An auditor appointed under subsection (1) shall hold office until the conclusion of the first annual general meeting held subsequent to his appointment.
(3) A person holding office as auditor of a co-operative at the commencement of any annual general meeting of the co-operative shall be deemed to be reappointed as auditor at such meeting without any resolution being passed, unless-
(a) he has given the co-operative notice in writing that he is not prepared to be reappointed as the co-operative's auditor; or
(b) a resolution is passed at the meeting that he be not reappointed as auditor of the co-operative.
(4) No resolution appointing another person as auditor shall be passed at an annual general meeting unless notice in writing of the intention to move such a resolution was given to the board of directors of the co-operative not later than the last day of the financial year which precedes the annual general meeting at which the resolution is to be moved: Provided that this subsection shall not apply-
(a) if the office of auditor is vacant at the commencement of such annual general meeting or becomes vacant in the course thereof;
(b) if the person holding office as auditor at the commencement of the meeting concerned has notified the co-operative that he is not prepared to be reappointed as auditor of the co-operative; or
(c) where proper notice has been given of a proposed resolution to appoint a competent person as auditor and such resolution for any reason is not moved at the meeting.
(5) On receipt of a notice of intention referred to in subsection (4) to propose another person as auditor of a co-operative the board of directors of the co-operative shall-
(a) forthwith send a copy of the notice to the person who is then holding office as auditor of the co-operative (if any), except in the case where that person has notified the co-operative that he is not prepared to be reappointed as auditor; and
(b) simultaneously when notice of the annual general meeting is given to the members and in the same manner give notice to the members of the proposed resolution.
[a91y1981s146]146 Firm may be appointed as auditor
(1) A firm of auditors may be appointed to hold office as auditor of a co-operative.
(2) A change in the composition of the members of a firm of auditors while holding office as auditor of a co-operative shall not constitute a casual vacancy in the office of auditor, but if less than one-half of the members of such a firm remain after any one such change it shall be taken as a resignation of the auditor and a casual vacancy shall have been constituted.
[a91y1981s147]147 Filling of casual vacancies
(1) A casual vacancy in the office of auditor of a co-operative-
(a) shall, if there is one incumbent, be filled by the board of directors of the co-operative within 60 days;
(b) may, if there are two or more incumbents, be filled by the board if it deems fit.
(2) Any person appointed in a vacancy under subsection (1) shall hold office until the conclusion of the first annual general meeting held subsequent to his appointment.
[S. 148 repealed by s. 11 of Act 80 of 1987.]
[a91y1981s149]149 Appointment of auditor by registrar
If a co-operative for any reason omits to appoint an auditor for the co-operative the registrar shall make the necessary appointment.
[a91y1981s150]150 Qualifications for appointment as auditor
A person shall not hold office as auditor of a co-operative-
(a) unless he is registered in terms of the Public Accountants' and Auditors' Act, 1951 (Act 51 of 1951), as an accountant and auditor and is engaged in public practice;
(b) if he is or at any time during the relevant financial year was a director, officer or member of such co-operative;
(c) if he is a partner, employer or employee of a director of such co-operative.
[a91y1981s151]151 Vacation of office by auditor
An auditor of a co-operative shall vacate his office as auditor of such co-operative if he becomes incompetent in terms of section 150 to hold such office in respect of such co-operative.
[a91y1981s152]152 Rights of auditor
An auditor of a co-operative, or a person appointed under section 156 (1), shall have the right-
(a) of access to the accounting records, all previous and current annual financial statements and all other books and documents of the co-operative or a company subsidiary of the co-operative, and may demand such information and explanations from the directors and officers of the co-operative or any such company subsidiary as he may think necessary in performing his duties as auditor;
(b) to attend any general meeting of the co-operative and to receive all notices of and other communications relating to any general meeting which a member of the co-operative is entitled to receive and, subject to such reasonable limitations as may be imposed by a general meeting, to be heard at any such meeting attended by him on any part of the business of the meeting which concerns him as auditor.
[S. 152 amended by s. 48 of Act 37 of 1993.]
[a91y1981s153]153 Duties of auditor
It shall be the duty of the auditor of a co-operative, or a person appointed under section 156 (1), to-
(a) examine the co-operative's annual financial statements referred to in section 135 (2) (a), (b) and (c), as well as the consolidated annual financial statements referred to in section 135A, if any;
[Para. (a) substituted by s. 49 of Act 37 of 1993.]
(b) satisfy himself that proper accounting records in accordance with the requirements of this Act have been kept by the co-operative and that proper returns, adequate for the purposes of his audit, have been received from branches and depots not visited by him;
(c) satisfy himself that the minute books contemplated in sections 113 and 131 and the attendance register contemplated in section 114 have been kept by the co-operative;
(d) satisfy himself that the register of directors' interests in contracts contemplated in section 118 has been kept by the co-operative and that the entries therein are in agreement with the minutes of directors' meetings;
(e) examine, or satisfy himself as to the existence of, any securities of the co-operative;
(f) obtain all the information and explanations which to the best of his knowledge and belief are necessary for the purpose of carrying out his duties;
(g) satisfy himself that the co-operative's annual financial statements are in agreement with its accounting records;
(h) examine the accounting records of the co-operative and carry out such tests in respect of such records and such other auditing procedures as he may consider necessary in order to satisfy himself that the annual financial statements fairly reflect the financial state of affairs of the co-operative and the results of its operations in conformity with generally accepted accounting practice applied on a basis consistent with that of the preceding year;
(i) satisfy himself that statements made by the directors in their report do not conflict with a fair interpretation or distort the meaning of the annual financial statements and accompanying notes;
(j) perform any other duty that may be prescribed, or imposed on him by this Act;
(k) comply with any applicable requirements of the Public Accountants' and Auditors' Act, 1951 (Act 51 of 1951); and
(l) satisfy himself that the co-operative has complied with the provisions of this Act, in so far as they relate to the carrying out of its objects, and the provisions of Chapter III and of its statute.
[Para. (l) substituted by s. 19 of Act 42 of 1985.]
[S. 153 amended by s. 49 of Act 37 of 1993.]
[a91y1981s154]154 Auditors' report
(1) When the auditor of a co-operative has complied with the provisions of section 153 he shall make a report regarding his audit to the members of the co-operative.
(2) If the auditor is of the opinion that the annual financial statements referred to in section 135 (2) (a), (b) and (c), or consolidated financial statements referred to in section 135A, if any, fairly reflect the financial state of affairs of the co-operative and the results of its activities in the manner required by this Act, he shall issue a report to that effect.
[Sub-s. (2) substituted by s. 50 of Act 37 of 1993.]
(3) If the auditor is unable to issue the said report without qualification, he shall set forth the facts or circumstances which prevent him from issuing the said report without qualification.
[Sub-s. (3) substituted by s. 50 of Act 37 of 1993.]
(4) An auditor's report shall in addition to matters referred to in subsection (2) or (3) deal with any other matter which may be prescribed as a matter to be dealt with in an auditor's report.
[Sub-s. (4) substituted by s. 50 of Act 37 of 1993.]
(5) An auditor's report shall, unless all the members present agree to the contrary, be read at an annual general meeting.
(6) The auditor of a co-operative shall without delay transmit to the registrar a copy of his report, including any other report made by him in pursuance of his functions as auditor of the co-operative.
[a91y1981s155]155 Remuneration of auditor
(1) The remuneration of an auditor of a co-operative shall be fixed by agreement between the auditor and the co-operative.
[Sub-s. (1) substituted by s. 51 of Act 37 of 1993.]
(2) The remuneration of an auditor fixed under subsection (1) shall be paid by the co-operative.
[a91y1981s156]156 Appointment of person not being a registered auditor to carry out functions of auditor
(1) If the registrar after written representations by a co-operative is of the opinion that the extent or nature of co-operative's affairs during a financial year does not justify the appointment as auditor of a person referred to in section 150 (a), he may authorize the co-operative to dispense with the appointment of an auditor and to appoint any person approved by him who is not a person registered in terms of the Public Accountants' and Auditors' Act, 1991 (Act 80 of 1991), as an accountant and auditor and engaged in public practice, to perform the duties mentioned in section 153 in respect of the co-operative during such financial year.
[Sub-s. (1) substituted by s. 52 (a) of Act 37 of 1993.]
(2) When a person referred to in subsection (1) is appointed the co-operative and its board of directors shall be deemed to have complied with all the requirements of this Act relating to the appointment of an auditor, and the person concerned shall have the rights and powers of an auditor of the co-operative and shall perform the duties of such an auditor.
(2A) Any person appointed in terms of subsection (1) who in the performance of his functions in terms of this Act in any manner pretends to be an accountant or auditor who is registered in terms of the Public Accountants' and Auditors' Act, 1991, shall be guilty of an offence.
[Sub-s. (2A) inserted by s. 52 (b) of Act 37 of 1993.]
(3) The remuneration payable to a person appointed under subsection (1) shall be fixed by the Minister and paid by the co-operative.
CHAPTER VIII
CONVERSIONS, AMALGAMATIONS, COMPROMISES AND ARRANGEMENTS (ss 157-171)
[Heading substituted by s. 12 of Act 80 of 1987.]
Conversion of company into co-operative (ss 157-161)
[a91y1981s157]157 Application to convert company into co-operative
(1) A company intending to conduct its affairs according to co-operative practice and which passed a resolution at a general meeting authorizing the conversion of the company into a co-operative of a particular kind and form may apply to the registrar on the prescribed form to be so converted.
(2) An application referred to in subsection (1) shall be accompanied by-
(a) a sworn or solemn statement by a person who acted as the chairman of the general meeting referred to in subsection (1)-
(i) that the meeting has passed a resolution authorizing the conversion of the company into a co-operative of the required kind and form;
(ii) that the meeting was specially convened to consider the said resolution;
(iii) that he has satisfied himself that proper notice of the meeting was given to the members of the company;
(b) a copy of the said resolution and an explanation of the reasons for the proposed conversion;
(c) proof of the company's registration under any law as a company;
(d) two certified copies of the company's memorandum of association and articles of association;
(e) two copies of either a proposed new statute in terms of this Act or a proposed amendment of the memorandum and articles of association of the company bringing the memorandum and articles into line with the provisions of this Act;
(f) a certified copy of the company's latest audited annual financial statements;
(g) a schedule containing the full names and addresses of the members of the company, the number of shares of each class held by each one of them in the company, and, if application is made to convert the company into a primary agricultural co-operative or special farmers' co-operative, also the occupations of the members;
(h) a schedule containing the full names and addresses of the directors of the company;
(i) a schedule stating the particulars and extent of the company's interest in any other company;
(j) the prescribed application fees.
(3) A company may instead of a document referred to in subsection (2) (e) give the registrar an undertaking in writing that if it is converted into a co-operative it will within one year of its conversion replace its memorandum and articles of association by a statute in terms of this Act or will otherwise amend its memorandum and articles of association so as to bring them into line with the provisions of this Act.
[a91y1981s158]158 Consideration of application
(1) An application referred to in section 157 shall be submitted to the registrar together with any such other documents as he may require.
(2) The registrar shall consider the application submitted to him in terms of subsection (1), and if he is satisfied that the provisions of this Act have been complied with in respect of the said application and that-
(a) the conversion of the company into a co-operative;
(b) the incorporation of the proposed co-operative; and
(c) the company's memorandum and articles of association, with due regard to the proposed amendment, or the proposed new statute (if such proposed amendment or new statute accompanied the application),
are not inconsistent with the provisions of this Act, he shall approve the application, or if he is not so satisfied, he may conditionally approve or reject the application.
(3) If the registrar approves or conditionally approves an application, the registrar shall cause-
(a) the name and other particulars of the company to be entered in the register of co-operatives;
(b) the seal referred to in section 5 to be impressed on both copies of the memorandum and articles of association or new statute, as the case may be; and
(c) the memorandum and articles of association or new statute, as the case may be, to be registered conditionally or unconditionally, and a certificate to be issued in duplicate that the company has been incorporated as a co-operative in terms of this Act and that the memorandum and articles of association or new statute, as the case may be, has been registered as a statute in terms of this Act.
(4) One copy of the certificate and of the memorandum and articles of association or new statute, as the case may be, shall be sent to the applicant and the other copy shall be retained in the Directorate Co-operatives.
[S. 158 substituted by s. 53 of Act 37 of 1993.]
[a91y1981s159]159 Effects of incorporation of company as co-operative
As from the date on which the entry is made in terms of section 158 (3) (a) in the register of co-operatives-
(a) the company shall be converted into a co-operative and such co-operative shall become a juristic person;
(b) the company shall cease to exist;
(c) the memorandum and articles of association of the company, if a new statute was not substituted for them, shall be deemed to be the statute of the co-operative;
(d) the persons who at the said date were members of the company shall ipso facto become members of the co-operative;
(e) the persons who at the said date were directors of the company shall become the first directors of the co-operative;
(f) all assets, rights, liabilities and obligations of the company shall vest in the co-operative;
(g) the statute shall bind the co-operative and each member (including an executor, a trustee or other administrator of a member's estate) to the same extent as if it had been signed by each member, to observe, subject to the provisions of this Act, all the provisions of the statute.
[a91y1981s160]160 Special provision relating to company which has given an undertaking under section 157 (3)
(1) A co-operative which as a company has given an undertaking under section 157 (3) to the registrar shall within one year of the date of its incorporation amend its statute or replace its statute by a new statute so as to bring it into conformity with the provisions of this Act.
(2) A co-operative referred to in subsection (1) which has failed to comply with the provisions of that subsection shall be deemed at all times to have remained a company.
(3) The name and particulars of a co-operative which has failed to comply with the provisions of subsection (1) shall without delay be struck off the register of co-operatives by the registrar.
[a91y1981s161]161 Registrar to give notice of conversions to Registrar of Companies
The registrar shall give notice of any conversion of a company into a co-operative in terms of this Act and of any default referred to in section 160 (2) to the Registrar of Companies mentioned in section 7 of the Companies Act, 1973 (Act 61 of 1973).
Incorporation of co-operative as company or as close corporation (ss161A-161C)
[Heading inserted by s. 54 of Act 37 of 1993.]
[a91y1981s161A]161A Incorporation of co-operative as public or private company having a share capital
(1) The board of directors of a co-operative may, if authorized thereto by special resolution, request the Registrar of Companies to register the co-operative as a public or private company having a share capital in accordance with the provisions of the Companies Act.
(2) The request shall be accompanied by the memorandum of association and the articles of association of the proposed company, approved by the registrar and complying with the requirements of the Companies Act.
(3) (a) On receipt of the said request and the memorandum of association and articles complying with the said requirements, the Registrar of Companies shall register the said memorandum of association and articles in accordance with section 63 of the Companies Act, and he shall in accordance with section 64 (1) of that Act endorse thereon a certificate that the company has been incorporated.
(b) When the Registrar of Companies registers the memorandum of association and articles in terms of paragraph (a), he shall notify the registrar of the date of such registration.
(c) No fees shall be payable in terms of the Companies Act in respect of the registration of the said memorandum and articles.
(d) The Registrar of Companies may, in order to comply with the provisions of this subsection, issue such directions and authorize such deviations from the regulations made in terms of the Companies Act and the forms prescribed by that Act, as he may deem necessary.
[S. 161A inserted by s. 54 of Act 37 of 1993.]
[a91y1981s161B]161B Effect of incorporation of co-operative as company
(1) From the date of incorporation of the company-
(a) the co-operative shall cease to exist;
(b) all the assets, liabilities, rights and obligations of the co-operative shall pass to the company without any transfer duty, stamp duty, office fee or other money being payable in respect thereof;
(c) any legal proceedings instituted by or against the co-operative, or anything done by or on behalf of or in respect of the co-operative, shall be deemed to have been instituted by or against the company or deemed to have been done by or on behalf of or in respect of the company;
(d) the name of the co-operative in any document shall be deemed to have been replaced by the name of the company;
(e) all shares or debentures issued by the co-operative shall be deemed to be shares or debentures as defined in section 1 of the Companies Act.
(2) If a co-operative possessed any immovable property that passed to the company under this section, the Registrar of Deeds concerned shall at the request of the company effect the appropriate endorsements in his registers and on the title deeds in question.
[S. 161B inserted by s. 54 of Act 37 of 1993.]
[a91y1981s161C]161C Incorporation of co-operative as close corporation
(1) (a) If a co-operative does not have more than 10 members, such members may take steps to have a founding statement registered in terms of the provisions of the Close Corporations Act, 1984 (Act 69 of 1984).
(b) A founding statement referred to in paragraph (a) shall be approved by the registrar.
(2) If a certificate of incorporation has been issued in terms of section 14 (1) of the Close Corporations Act, 1984, by the Registrar of Close Corporations, the co-operative in question shall cease to exist.
(3) When the Registrar of Close Corporations issues a certificate of incorporation in terms of subsection (2), he shall notify the registrar of the date of such issue.
(4) The provisions of section 161B (1) (a), (b), (c) and (d) and (2) shall mutatis mutandis apply in respect of the incorporation of a close corporation under this section.
[S. 161C inserted by s. 54 of Act 37 of 1993.]
Conversion of co-operative into other kind or form of co-operative (ss 162-164)
[a91y1981s162]162 Application to convert co-operative into other kind or form of co-operative
(1) A co-operative which has passed a special resolution authorizing the conversion of the co-operative into another kind or form of co-operative shall within 60 days after such resolution was passed, apply to the registrar on the prescribed form to be so converted.
[Sub-s. (1) substituted by s. 55 (a) of Act 37 of 1993.]
(1A) A special resolution contemplated in subsection (1) shall be valid only for the period of 60 days mentioned in the said subsection.
[Sub-s. (1A) inserted by s. 55 (b) of Act 37 of 1993.]
(2) An application referred to in subsection (1) shall be accompanied by-
(a) a sworn or solemn statement by a person who acted as the chairman of the general meeting at which the special resolution referred to in subsection (1) was passed-
(i) that the meeting was held on a date mentioned in the statement;
(ii) that he has satisfied himself that proper notice of the meeting and the proposed special resolution was given to the members of the co-operative;
(iii) that the special resolution was passed by the requisite majority;
(b) a copy of the special resolution and an explanation of the reasons for the proposed conversion;
(c) two copies of either a proposed new statute or a proposed amendment of the existing statute whereby provision is made for such adaptations as may be necessary to so convert the co-operative;
(d) the prescribed application fees.
[a91y1981s163]163 Consideration of application
(1) An application referred to in section 162 shall be submitted to the registrar together with such other documents as he may require.
(2) If, after considering the application submitted to him in terms of subsection (1), the registrar is satisfied that the provisions of this Act have been complied with and that the proposed conversion of the co-operative into the required kind or form of co-operative, the incorporation of the proposed co-operative and the proposed new statute or amendment of the existing statute, as the case may be, are not inconsistent with the provisions of this Act, he shall approve the application, or if he is not so satisfied, he may conditionally approve or reject the said application.
(3) If the registrar approves or conditionally approves an application he shall cause-
(a) the name and other particulars of the existing co-operative to be struck off the register of co-operatives and the name and other particulars of the new co-operative to be entered in such register; and
(b) the statute to be registered conditionally or unconditionally and a certificate to be issued in duplicate that the co-operative has been incorporated in terms of this Act as a co-operative of the required kind or form and that the amendment of the statute or new statute, as the case may be, has been registered in terms of this Act.
(4) One copy of the certificate and of the amendment of the statute or new statute, as the case may be, shall be sent to the co-operative and the other copy retained in the Directorate Co-operatives.
[S. 163 substituted by s. 56 of Act 37 of 1993.]
[a91y1981s164]164 Effects of incorporation of co-operative as co-operative of another kind or form
As from the date on which the entry in terms of section 163 (3) (a) is made in the register of co-operatives-
(a) the co-operative shall be converted into a co-operative of the approved kind or form;
(b) the last-mentioned co-operative shall become a juristic person and the first-mentioned co-operative shall cease to exist;
(c) the amended statute of the first-mentioned co-operative, if its statute has not been replaced by a new statute, shall be deemed to be the statute of the last-mentioned co-operative;
(d) the persons who at the said date were members of the first-mentioned co-operative shall ipso facto become members of the last-mentioned co-operative;
(e) the shares issued by the first-mentioned co-operative shall be deemed to be shares in and to have been issued by the last-mentioned co-operative;
(f) the persons who at the said date were directors of the first-mentioned co-operative shall become the first directors of the last-mentioned co-operative;
(g) all assets, rights, liabilities and obligations of the first-mentioned co-operative shall vest in the last-mentioned co-operative;
(h) the statute shall bind the co-operative and each member (including an executor, a trustee or other administrator of a member's estate) to the same extent as if it had been signed by each member, to observe, subject to the provisions of this Act, all the provisions of the statute.
Amalgamations (ss 165-169)
[a91y1981s165]165 Application for amalgamation of two or more co-operatives
(1) Two or more co-operatives intending to amalgamate and each of which has passed a special resolution authorizing such amalgamation shall within 60 days after the last of such resolutions was passed, apply to the registrar on the prescribed form to be amalgamated.
[Sub-s. (1) substituted by s. 57 (a) of Act 37 of 1993.]
(1A) A special resolution contemplated in subsection (1) shall be valid only for the period of 60 days mentioned in the said subsection.
[Sub-s. (1A) inserted by s. 57 (b) of Act 37 of 1993.]
(2) An application referred to in subsection (1) shall be accompanied by-
(a) a sworn or solemn statement by each of the persons who acted as the chairman of the respective general meetings at which the special resolution referred to in subsection (1) was passed-
(i) that the meeting of which he was the chairman was held on a date mentioned in the statement;
(ii) that he has satisfied himself that proper notice of the meeting and the proposed special resolution was given to the members of the co-operative;
(iii) that the special resolution was passed by the requisite majority;
(b) a copy of each of the relevant special resolutions and an explanation of the reasons for the proposed amalgamation;
(c) two copies of a proposed statute for the amalgamated co-operative approved by the respective co-operatives at a general meeting;
(d) the prescribed application fees.
[a91y1981s166]166 Consideration of application
(1) An application referred to in section 165 shall be submitted to the registrar together with such other documents as he may require.
(2) If, after considering the application submitted to him in terms of subsection (1), the registrar is satisfied that the provisions of this Act have been complied with and that the proposed statute and the incorporation of the proposed amalgamated co-operative are not inconsistent with the provisions of this Act, he shall approve, or if he is not so satisfied, he may conditionally approve or reject the said application.
(3) If the registrar approves or conditionally approves an application he shall cause-
(a) the names and other particulars of the co-operatives referred to in section 165 (1) to be struck off the register of co-operatives and the name and other particulars of the amalgamated co-operative to be entered in such register; and
(b) the statute to be registered conditionally or unconditionally and a certificate to be issued in duplicate that the amalgamated co-operative has been incorporated in terms of this Act and that the co-operative's statute has been registered in terms of this Act.
(4) One copy of the certificate and of the statute shall be sent to the applicants and the other copy shall be retained in the Directorate Co-operatives.
[S. 166 substituted by s. 58 of Act 37 of 1993.]
[a91y1981s167]167 Effects of incorporation of amalgamated co-operative
As from the date on which the entry in terms of section 166 (3) (a) is made in the register of co-operatives-
(a) the co-operatives referred to in section 165 (1) shall cease to exist;
(b) the amalgamated co-operative shall become a juristic person;
(c) the persons who at the said date were members of the said co-operatives shall ipso facto become members of the amalgamated co-operative;
(d) all assets, rights, liabilities and obligations of the said co-operatives shall vest in the amalgamated co-operative;
(e) the statute shall bind the co-operative and each member (including an executor, a trustee or other administrator of a member's estate) to the same extent as if it had been signed by each member, to observe, subject to the provisions of this Act, all the provisions of the statute.
[a91y1981s168]168 Statute of amalgamated co-operative shall provide for certain matters
The statute of an amalgamated co-operative shall contain provisions so as to effectively accomplish the amalgamation of the co-operatives concerned, and shall in particular provide for-
(a) the appointment of the first directors of the amalgamated co-operative;
(b) the issue of shares in the amalgamated co-operative to the members thereof in the place of the shares which the said members held in the previous co-operatives;
(c) the continuation of the members' respective interests in a members' fund administered by any of the previous co-operatives in a members' fund to be administered by the amalgamated co-operative;
(d) the application of any surplus which may have resulted from the operations of the previous co-operatives in respect of a period immediately preceding the amalgamation: Provided that any surplus (or portion thereof) which has resulted from the operations of any of the previous co-operatives in respect of the said period may be separately determined and be distributed among the persons who immediately before the amalgamation were members of such a co-operative in the same proportion as the proportion in which such surplus (or portion) would have been distributed among the said persons had the co-operative still existed.
[a91y1981s169]169 Amalgamated co-operative exempted from stamp duty on certain shares
An amalgamated co-operative shall be exempted from the payment of stamp duty in respect of shares issued in pursuance of section 168 (b).
Compromises and arrangements (ss 169A-169C)
[Heading inserted by s. 13 of Act 80 of 1987.]
[a91y1981s169A]169A Compromise and arrangement between co-operative, its members and creditors
(1) If any compromise or arrangement is proposed between a co-operative and its creditors or any class of them or between a co-operative and its members, the court may, on the application of the co-operative or any creditor or member of the co-operative or, in the case of a co-operative being wound up, of the liquidator, or if the co-operative is subject to a judicial management order, of the judicial manager, order a meeting of the creditors or class of creditors or of the members of the co-operative, as the case may be, to be summoned in such manner as the court may direct.
(2) If a compromise or arrangement is agreed to by-
(i) a majority in number representing three-fourths in value of the creditors or class of creditors present and voting either in person or by proxy at the meeting; or
(ii) a special resolution,
as the case may be, such compromise or arrangement shall, if sanctioned by the court, be binding on all the creditors or the class of creditors or on the members, as the case may be, and also on the co-operative or on the liquidator if the co-operative is being wound up, or on the judicial manager if the co-operative is subject to a judicial management order.
(3) No such compromise or arrangement shall affect the liability of any person who is a surety for the co-operative.
(4) (a) An order by the court sanctioning a compromise or arrangement shall have no effect until a certified copy thereof has been lodged with the registrar and registered by him.
(b) A copy of such order of court shall be annexed to every copy of the statute of the co-operative.
(5) If a co-operative fails to comply with the provisions of subsection (4) (b) the co-operative and every director and officer of the co-operative who are parties to the failure shall be guilty of an offence.
[S. 169A inserted by s. 13 of Act 80 of 1987.]
[a91y1981s169B]169B Information as to compromises and arrangements
(1) If a meeting of creditors or any class of creditors or of members is summoned under section 169A (1) for the purpose of agreeing to a compromise or arrangement, there shall, with every notice summoning the meeting which is sent to a creditor or member, be sent also a statement-
(i) explaining the effect of the compromise or arrangement;
(ii) stating all relevant information material to the value of the shares and debentures concerned in any arrangement.
(2) If a co-operative fails to comply with any requirement of this section the co-operative and every director or officer of the co-operative who are parties to the failure shall be guilty of an offence, and for the purpose of this subsection any judicial manager of the co-operative shall be deemed to be an officer of the co-operative.
[S. 169B inserted by s. 13 of Act 80 of 1987.]
[a91y1981s169C]169C Provisions facilitating reconstruction or amalgamation
(1) If an application is made to the court under section 169A for the sanctioning of a compromise or an arrangement proposed between a co-operative and any such persons as are referred to in that section, and it is shown to the court that the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for the reconstruction of any co-operative or co-operatives or the amalgamation of any two or more co-operatives, and that under the scheme the whole or any part of the undertaking or the property of any co-operative concerned in the scheme (in this section referred to as the 'transferor co-operative') is to be transferred to another co-operative (in this section referred to as the 'transferee co-operative'), the court may, either by the order sanctioning the compromise or arrangement or by any subsequent order, make provision for all or any of the following matters:
(a) The transfer to the transferee co-operative of the whole or any part of the undertaking and of the property or liabilities of any transferor co-operative;
(b) the allotment by the transferee co-operative of any shares or other like interests in that co-operative which under the compromise or arrangement are to be allotted by that co-operative to the members of the transferor co-operative;
(c) the continuation by or against the transferee co-operative of any legal proceedings pending by or against any transferor co-operative;
(d) the dissolution without winding-up of any transferor co-operative;
(e) the provision to be made for any persons who within such time and in such manner as the court may direct dissent from the compromise or arrangement;
(f) such incidental, consequential and supplementary matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out:
Provided that no order for the dissolution without winding-up of any transferor co-operative shall be made under this subsection prior to the transfer in due form of all the property and liabilities of the said co-operative.
(2) If an order under this section provides for the transfer of property or liabilities, that property shall by virtue of the order vest in, subject to transfer in due form, and those liabilities shall become the liabilities of, the transferee co-operative.
(3) If an order is made under this section every co-operative in relation to which the order is made shall within 30 days after the making of the order cause a copy thereof to be lodged with the registrar for registration, and if default is made in complying with this subsection the co-operative shall be guilty of an offence.
(4) In this section the expression 'property' includes property, rights and powers of every description, and the expression 'liabilities' includes 'duties'.
[S. 169C inserted by s. 13 of Act 80 of 1987.]
General (ss 170-171)
[S. 170 repealed by s. 32 (1) of Act 96 of 1981.]
[a91y1981s171]171 Duty of registrar of deeds relating to transfer of fixed property in terms of this Chapter
(1) (a) The registrar of deeds concerned shall on submission to him of-
(i) a certificate referred to in section 158 (3) (b), 163 (3) (b) or 166 (3) (b); or
(ii) an order of court, or a certified copy thereof, referred to in section 169A (4) (a) or 169C (3),
make such entries or endorsements in or on any relevant register, title deed or other document in his office or laid before him as he may deem necessary in order to register any fixed property or real right vested in a co-operative in terms of a provision of this Chapter in the name of such co-operative.
(b) If any property or right other than that contemplated in paragraph (a) is vested in a co-operative as a result of a conversion, amalgamation, compromise or arrangement in terms of this Act, and such property or right is required by any law to be registered, the person by whom such registration is to be done shall, on submission to him of a certificate referred to in paragraph (a), make such entries or endorsements in or on any relevant register or document in his office or laid before him as he may deem necessary to effect the registration of such property or right in the name of the co-operative.
[Sub-s. (1) substituted by s. 14 of Act 80 of 1987.]
(2) No transfer duty, stamp duty, office or other fees shall be payable in respect of a registration contemplated in subsection (1).
CHAPTER IX
SPECIAL STATUTORY PLEDGE (ss 172-177)
(1) In this Chapter, unless the context otherwise indicates-
'agricultural remedy' means a remedy used for or in connection with the treatment of an agricultural product or any thing from which an agricultural product is derived, or for or in connection with the prevention, repelling, control or destruction of any thing which adversely affects the production of an agricultural product;
'fuel' means fuel for the propelling of vehicles, machinery or implements used for or in connection with farming operations, and includes oil or any lubricant used in any such vehicles, machinery or implements;
'packing material' means containers into which and material with which agricultural products are packed;
'plant material' means the seed, plant or tree from which an agricultural product is derived, or any portion of such seed, plant or tree;
'repair service' means the repair or maintenance of vehicles, machinery or implements used for or in connection with farming operations;
'spare parts' means spare parts of vehicles, machinery or implements used for or in connection with farming operations;
'State-guaranteed credit scheme' means a scheme in terms of which a co-operative out of funds made available by the State to the Land and Agricultural Bank of South Africa referred to in the Land Bank Act, 1944 (Act 13 of 1944), or on the strength of a guarantee given by the State to that bank, gives credit or advances money to its members.
(2) For the purposes of this Chapter money advanced by a co-operative to a member shall be deemed to have been advanced for production purposes only in so far as such money was advanced for the payment of-
(a) wages in connection with that member's farming operations;
(b) costs in connection with the conveyance of that member's agricultural products;
(c) costs in connection with electricity consumed by that member;
(d) insurance premiums in connection with that member's farming risks;
(e) the purchase price of livestock purchased by that member; or
(f) expenditure incurred by that member in respect of wages, costs or insurance premiums referred to in paragraph (a), (b), (c) or (d) during a period of six months prior to his application for an advance.
[a91y1981s173]173 Security for production credit and loans given by co-operatives to members
Cases
(1) As long as an amount is owing by a member to a primary agricultural co-operative or a primary special farmers' co-operative in respect of fuel, spare parts, fertilizers, plant material, agricultural remedies, packing material, livestock or feeding stuffs supplied to him by the co-operative, or in respect of fumigating, spraying or cleansing operations or repair services performed on his behalf by the co-operative, or in respect of electricity supplied to him by the co-operative, or in respect of money advanced to him for production purposes by the co-operative-
(a) the ownership in the fuel, spare parts, fertilizers, plant material, agricultural remedies, packing material, livestock or feeding stuffs supplied shall vest in the co-operative notwithstanding its or their delivery to such member;
(b) the fuel, spare parts, fertilizers, plant material, agricultural remedies, packing material, livestock or feeding stuffs supplied shall not be seized or sold in execution of a judgment of a court of law at the instance of a creditor, except with the consent of the co-operative;
(c) (i) all agricultural products of a class with which the co-operative deals in the normal course of business; and
(ii) all agricultural products from which the agricultural products referred to in subparagraph (i) were or are derived; and
(iii) if a State-guaranteed credit scheme is applicable in respect of that debt, also all other agricultural products,
of which that member is the owner at the date on which the debt arose or which are produced or acquired by him after that date, shall be deemed to be pledged to the co-operative as fully and effectually as if such products were delivered to the co-operative;
[Para. (c) substituted by s. 20 (a) of Act 42 of 1985.]
(d) the co-operative shall have the powers described in subsection (2) in respect of the agricultural products referred to in paragraph (c);
(e) such member shall subject to the provisions of section 64 (2A) or (2B) of the Marketing Act, 1968 (Act 59 of 1968), not dispose of any of the said products and no person shall subject to the said provisions acquire such products otherwise than from the co-operative except through the co-operative or under a permit issued by the co-operative on such conditions as it may determine.
(2) A co-operative may-
(a) require of a member referred to in subsection (1)-
(i) to indicate the agricultural products deemed in terms of paragraph (c) of that subsection to be pledged to the co-operative, or the land on which such products are being or are to be produced, or, in the case of livestock, where such livestock are being or are to be kept; and
(ii) to furnish the name of every other agricultural or special farmers' co-operative of which he is a member and the amount and nature of his debt to such co-operative, if any, and to indicate whether that debt or any part thereof is secured by the pledging of agricultural products in terms of this section;
[Para. (a) substituted by s. 20 (b) of Act 42 of 1985.]
(b) authorize any person to enter, at any reasonable time, any land on which such member carries on or presumably carries on farming operations and to view or inspect any agricultural products or any thing from which an agricultural product is derived;
[Para. (b) substituted by s. 20 (c) of Act 42 of 1985.]
(c) if agricultural products deemed to be pledged to the co-operative cannot be found by a representative of the co-operative, require an explanation from the member concerned as to what became of such products.
(3) A co-operative which acquired a right or power contemplated in subsection (1) with respect to any fuel, spare parts, fertilizer, plant material, agricultural remedies, packing material, livestock or feeding stuffs supplied by it to a member or with respect to any agricultural products of a member, shall not forfeit such right or power by reason only of the fact that such member ceased to be a member of the co-operative.
(4) If any particular agricultural products of any person (hereinafter referred to as the pledger) are deemed in terms of subsection (1) (c) to be pledged to more than one co-operative-
(a) those products shall, subject to paragraph (b), be deemed as aforesaid to be pledged to those co-operatives jointly;
(b) the powers referred to in subsection (1) (d) may be exercised by each of the said co-operatives separately from the other as if the products were pledged to such co-operative alone;
(c) the pledger, if he disposes of those products through any one of the said co-operatives, and any other person, if he acquires those products from such co-operative, shall be deemed to have complied with the provisions of subsection (1) (e);
(d) none of the said co-operatives shall, on account of the fact that those products are deemed to be pledged to it and the other co-operatives jointly, be entitled to a greater part of the proceeds of those products than an amount which bears the same ratio to the amount of the net proceeds of the products as the amount owing to it by the pledger as at the date on which the products are received for marketing by a co-operative in accordance with its statute or a provision of the Marketing Act, 1968, or are otherwise disposed of by the pledger, bears to the sum of the respective amounts owing by the pledger to the said co-operatives as at that date;
(e) any one of the said co-operatives having possession of the proceeds of those products, may, at the written request of any one of the other of the said co-operatives and without the consent of the pledger, on behalf of any such last-mentioned co-operative set off against those proceeds, and pay to the said co-operative, the amount, or any part thereof, owing by the pledger to such co-operative in settlement or part settlement of the said debt.
[Sub-s. (4) substituted by s. 20 (d) of Act 42 of 1985.]
(4A) For the purposes of-
(a) subsection (4) (d)-
(i) any amount owing to a co-operative by the pledger which is not secured by the pledging of the agricultural products in question, shall be disregarded;
(ii) agricultural products of which quantities are received by a co-operative mentioned therein, or disposed of by the pledger, over a period of two or more days, shall be deemed to be so received or disposed of, as the case may be, on the first day of that period; and
(b) subsection (4) (e)-
(i) no amount owing by the pledger to a co-operative which is not secured by the pledging of the agricultural products in question, shall be set off in accordance with the authority contained therein and paid over to such co-operative;
(ii) the co-operative having possession of the proceeds of the products shall accept the amount specified in the written request mentioned therein as the amount which is owed by the pledger to the co-operative making the request and which is secured by the pledging of the products in question if that request is accompanied by either a written acknowledgement by the pledger or an affidavit by an officer of the co-operative concerned to the effect that the amount so specified in the written request represents an amount which is owed by the pledger to the co-operative and secured by the pledging of the products in question;
(iii) the co-operative having possession of the proceeds of the products shall give an account to the pledger of every payment made by him under the said subsection.
[Sub-s. (4A) inserted by s. 20 (e) of Act 42 of 1985.]
(5) If a member of a co-operative is desirous of binding a quantity or percentage of an agricultural product of which he is the owner or which is or is to be produced by him, as security for a debt which that member intends contracting for the purposes of his farming operations with any person other than the co-operative, the co-operative may, at the written request of that member and that person, waive in favour of that person any right which it may have or which it may acquire in terms of subsection (1) (c) on that quantity or percentage of the said agricultural product, and thereupon the provisions of subsection (1) (c) and (e) and section 174 shall, as long as that debt or any portion thereof is outstanding, not be applicable to that member and that person with respect to that quantity or percentage of the said agricultural product.
[a91y1981s174]174 Seizure or sale of pledged agricultural products in execution of judgement
(1) Agricultural products deemed in terms of subsection (1) (c) of section 173 to be pledged to a co-operative shall not be seized or sold in execution of a judgment of a court of law at the instance of a creditor of the member concerned except under a permit issued by the co-operative under subsection (1) (e) of that section.
(2) A co-operative shall not refuse a permit for the purpose mentioned in subsection (1) unless the co-operative is of opinion that the agricultural products which will after the seizure or sale in execution remain will not be sufficient security for the amount owing to it by the member.
[a91y1981s175]175 Consumption of pledged agricultural products by members and their employees
The provisions of section 173 shall not prohibit the consumption by a member of a co-operative or his employees of so much of the agricultural products deemed in terms of subsection (1) (c) of that section to be pledged to a co-operative as is reasonably necessary for his or their households.
[a91y1981s176]176 Rights or powers of State not affected by this Chapter
Cases
The provisions of this Chapter shall not affect any right or power of the State or the Minister under the Agricultural Credit Act, 1966 (Act 28 of 1966).
(1) Any person who-
(a) contravenes a provision of subsection (1) (e) of section 173;
(b) fails to comply with a requirement under subsection (2) (a) or (c) of that section;
(c) in response to any such requirement wilfully furnishes information which is false or misleading;
(d) hinders or obstructs a person referred to in subsection (2) (b) of that section in the performance of his functions,
shall be guilty of an offence.
(2) If any person is charged under subsection (1) (a) with having acquired agricultural products deemed to be pledged to a co-operative otherwise than from or through the co-operative or under a permit issued by the co-operative, it shall be a defence if he proves that when he acquired those products he did not know and had no reason to suspect that they were products which were deemed to be pledged to a co-operative.
CHAPTER X
WINDING-UP OF CO-OPERATIVES (ss 178-237)
In this Chapter, unless the context otherwise indicates-
'contribution' means a contribution to be made by a contributory in terms of a contribution account towards the payment of the debt of the co-operative or any portion thereof;
'contribution account' means an account contemplated in section 226;
'contributory' means a member or former member of a co-operative or the estate of any such member or former member who is liable in respect of the debt of the co-operative or any portion thereof by virtue of-
(a) shares in the co-operative of which he is or was the holder and which are not fully paid up;
(b) a condition attached under section 72 to shares in the co-operative of which he is or was the holder;
(c) section 40 of the Land Bank Act, 1944 (Act 13 of 1944);
'disposition', in relation to property, means any transfer or waiver of a right to property and includes a sale, donation, exchange, lease, hypothecation or pledge of property, and 'dispose' shall have a corresponding meaning;
'distribution account' means an account contemplated in section 224;
'liquidation account' means an account contemplated in section 217;
'liquidator', in relation to a co-operative being wound up, means a person appointed under subsection (1) of section 195 to carry out the winding-up of the co-operative, and includes a temporary liquidator contemplated in subsection (2) of that section;
'security', in relation to a creditor's claim, means property over which the creditor has a preferent right for the payment of his claim;
'trading account' means an account contemplated in section 223.
Modes of winding-up (ss 179-183)
[a91y1981s179]179 Modes of winding-up
A co-operative may be wound up-
(a) voluntarily under section 180;
(b) by an order of the court under section 181; or
(c) by an order of the Minister under section 182.
[a91y1981s180]180 Voluntary winding-up
(1) A co-operative may be wound up voluntarily by special resolution.
(2) ......
[Sub-s. (2) deleted by s. 59 of Act 37 of 1993.]
[a91y1981s181]181 Winding-up by order of court
(1) A competent court may on application by any interested person order that a co-operative be wound up if it appears to the court that it is just and equitable that the co-operative should be wound up.
(2) The court considering an application in terms of subsection (1) may adjourn the hearing thereof conditionally or unconditionally, or before granting or refusing such application, make any provisional or other order it may deem fit.
[a91y1981s182]182 Winding-up by order of Minister
The Minister may on the recommendation of the registrar order that a co-operative be wound up if-
(a) the co-operative has contravened a provision of section 60 (1);
(b) the co-operative has twice or more times been convicted of an offence in terms of section 54 (5), 56 (2) or 106 (2);
(c) the co-operative has not transacted business during a continuous period of one year;
(d) the co-operative was formed for a particular period or until the occurrence of a particular event and that period has expired or that event has occurred;
(e) the co-operative has failed to comply with a condition under section 27 (2), 33 (4), 158 (2), 163 (2) or 166 (2);
(f) the Minister is of the opinion that the incorporation of the co-operative was obtained through fraud;
(g) the Minister is of the opinion that the co-operative does not carry out its objects according to co-operative practice.
[a91y1981s183]183 Suspension of certain proceedings pending decision of application for winding-up order
At any time after application is made to a competent court for a co-operative to be wound up, any action for the recovery of an amount from the co-operative or in connection with an asset of the co-operative, or any execution of a judgment in any such action may on the application of the co-operative or any other interested person be suspended by the court in which that action is under consideration or by which that judgment was given pending the decision of such application.
Provisional winding-up (ss 184-194)
[a91y1981s184]184 Provisional winding-up order
(1) If a court in which an application in terms of section 181 is under consideration in respect of a co-operative issues a provisional winding-up order in respect of such a co-operative it shall appoint a provisional liquidator for such co-operative or direct the registrar to appoint a provisional liquidator.
(2) A provisional liquidator appointed under subsection (1) shall hold office for as long as it pleases the court, but not after the date of commencement of the winding-up of the co-operative (if the co-operative is wound up thereafter).
(3) The provisions of sections 196, 198 (1), (3) and (4), 199, 200 (1), 203 (1) and 206 shall mutatis mutandis apply in respect of a provisional liquidator appointed under subsection (1): Provided that costs referred to in section 196 (2) and the remuneration referred to in section 198 (1) shall be paid by the co-operative concerned.
[a91y1981s185]185 Functions of provisional liquidator
(1) A provisional liquidator appointed under section 184 shall-
(a) assume the management of the co-operative concerned and recover and take into his possession all the assets of the co-operative;
(b) continue as far as may be possible to carry out the objects of the co-operative;
(c) investigate any matter which the court which issued the provisional liquidation order required him to investigate, and report to the court on his findings.
(2) A provisional liquidator may subject to the provisions of this Act do anything reasonably necessary for the effective performance of his duties, and may in particular exercise any power mentioned in paragraphs (a), (b), (c), (f) and (g) of section 207 (1).
(3) Unless the registrar deems it necessary in the interests of the creditors or members of the co-operative a provisional liquidator shall not have the power to liquidate any assets of the co-operative.
(4) A provisional liquidator shall, at the request of the registrar and within a period determined by the registrar, compile and submit to the registrar an inventory of all assets and liabilities of the co-operative as at the date of his appointment.
[Sub-s. (4) added by s. 60 of Act 37 of 1993.]
[a91y1981s186]186 Effects of provisional winding-up order
During the period for which a provisional winding-up order is in force in respect of any co-operative-
(a) the functions of the board of directors of the co-operative shall be suspended save in so far as the continuation thereof has been approved by the registrar or the provisional liquidator;
(b) no judgment in any action against the co-operative for the recovery of an amount or the delivery of any thing shall be executed;
(c) the issue, transfer or cancellation of shares in the co-operative shall be void.
Provisions relating to the commencement of winding-up
[a91y1981s187]187 Commencement of winding-up
The winding-up of a co-operative shall be deemed to commence-
(a) in the case of a voluntary winding-up, at the time when the special resolution authorizing the winding-up is passed;
(b) in the case of a winding-up by an order of the court, at the time when a final order that the co-operative be wound up is issued by the court;
(c) in the case of a winding-up by an order of the Minister, on the seventh day after the day on which the Minister's order that the co-operative be wound up was forwarded to the co-operative.
[a91y1981s188]188 Effects of winding-up on status of co-operative and on board of directors
(1) A co-operative being wound up shall continue to be a juristic person, but shall as from the commencement of its winding-up cease to carry out its objects except in so far as it is necessary for the purposes of its winding-up.
(2) The functions of the board of directors of a co-operative being wound up shall terminate at the commencement of its winding-up except in so far as the continuation thereof has been approved by the registrar or liquidator.
[a91y1981s189]189 Persons responsible for the performance of duties of co-operatives being wound-up
The persons who immediately prior to the commencement of the winding-up of a co-operative hold office as a director, manager or secretary of the co-operative shall jointly and severally be responsible for the performance of a duty to be performed by a co-operative in terms of this Chapter.
[a91y1981s190]190 Effects of winding-up on legal proceedings
After the commencement of the winding-up of a co-operative-
(a) no civil proceedings to which the co-operative is a party shall be instituted or proceeded with until a liquidator has been appointed under section 195 (1) (a);
(b) any attachment or execution put into force against an asset of the co-operative under a judgement given by a court before the commencement of the winding-up shall be void.
[a91y1981s191]191 Issue, transfer or cancellation of shares in co-operative being wound up
The issue, transfer or cancellation of shares in a co-operative being wound up shall be void.
[a91y1981s192]192 Effects of winding-up on assets of co-operative
Unless the court giving a final liquidation order or the registrar otherwise directs, the persons referred to in section 189 shall as from the commencement of the winding-up of a co-operative up to the appointment of a liquidator jointly and severally be responsible for the custody of all the assets of the co-operative under the co-operative's control.
[a91y1981s193]193 Notice of voluntary winding-up to be given to registrar
A co-operative shall within 14 days after a special resolution referred to in section 180 was passed by the co-operative send a certified copy of such resolution to the registrar together with a sworn or solemn statement by the person who acted as the chairman of the general meeting at which that special resolution was passed-
(a) that such meeting was held on a date mentioned in the statement;
(b) that he has satisfied himself that proper notice of the meeting and the object thereof was given to the members of the co-operative;
(c) that such special resolution was passed by the requisite majority.
[a91y1981s194]194 Inventory of assets and liabilities to be submitted to registrar by co-operative
(1) A co-operative being wound up shall draw up an inventory of all the assets and liabilities of the co-operative as at the date of commencement of the winding-up and submit such inventory to the registrar within 30 days of such date.
(2) The provisions of subsection (1) shall not apply to a co-operative in respect of which a liquidator is appointed within 30 days of the commencement of the winding-up.
(3) If a co-operative fails to comply with a provision of subsection (1) every person referred to in section 189 shall be guilty of an offence.
Liquidators (ss 195-202)
[a91y1981s195]195 Appointment of liquidators
(1) (a) The registrar shall appoint one or more liquidators in respect of a co-operative being wound up.
(b) If a liquidator ceases to hold office the registrar shall, if such liquidator was the only liquidator, or may, if such liquidator was one of a plurality of liquidators, appoint any person to fill the vacancy.
[Sub-s. (1) substituted by s. 61 of Act 37 of 1993.]
(2) The registrar may appoint any person as the temporary liquidator of a co-operative being wound up until a liquidator is appointed under subsection (1) (a) or a vacancy is filled under subsection (1) (b).
[a91y1981s196]196 Giving of security by liquidator
(1) A liquidator shall not be deemed to be appointed until he has given security to the satisfaction of the registrar for the proper performance of his functions as liquidator.
(2) The cost of giving such security to an amount which the registrar considers reasonable, shall form part of the costs of liquidation of the co-operative concerned.
(3) The registrar may on written request by a liquidator consent to a decrease in the security given by such liquidator.
[a91y1981s197]197 Notice of appointment of liquidator
A liquidator or liquidators appointed under section 195 (1) (a) shall after his or their appointment forthwith publish a notice in the Gazette and in a newspaper circulating in the area in which the registered office of the co-operative concerned is situated in which his name and address or their names and addresses are given and his or their appointment is made known.
[a91y1981s198]198 Remuneration of liquidator
(1) A liquidator shall be entitled to the prescribed remuneration for his services: Provided that if more than one liquidator is appointed the remuneration shall be distributed among them on such basis as may be approved by the registrar.
[Sub-s. (1) substituted by s. 62 of Act 37 of 1993.]
(2) Unless the registrar otherwise directs the remuneration of a liquidator shall not be paid otherwise than in accordance with a liquidation account.
(3) The registrar may decrease the remuneration of a liquidator or disallow such remuneration if in his opinion there is good cause for doing so.
(4) No person who employs or is a fellow employee or in the ordinary employment of a liquidator shall be entitled, except with the approval of the registrar, to receive any remuneration out of the assets of the co-operative for services rendered in connection with the functions of the liquidator, and no liquidator shall be entitled either by himself or his partner to receive out of the assets of the co-operative remuneration for his services except the remuneration to which he is entitled under this Act.
[a91y1981s199]199 Plurality of liquidators, liability and disagreement
(1) If two or more liquidators have been appointed they shall act jointly in performing their functions as liquidators, and shall jointly and severally be liable for every act performed by them jointly.
(2) If such liquidators disagree on any matter relating to the co-operative of which they are the liquidators one or more or all of them may refer the matter to the registrar, who may thereupon settle the issue or give directions as to the procedure to be followed in settling such issue.
[a91y1981s200]200 Control of registrar over liquidators
(1) A liquidator shall perform his functions subject to the control and directions of the registrar.
(2) The registrar may at any time require a liquidator to answer any inquiry in connection with the winding-up in which such liquidator is engaged and may examine such liquidator on oath concerning the wind-up.
(3) The registrar may at any time investigate or seize the books and other documents relating to the winding-up of a co-operative.
(4) Any expenses incurred by the registrar in carrying out any provision of this section shall form part of the costs of liquidation of the co-operative concerned.
[a91y1981s201]201 Removal from office of liquidator
The registrar may at any time remove a liquidator from office if in his opinion there is good cause for doing so.
[S. 201 substituted by s. 63 of Act 37 of 1993.]
[a91y1981s202]202 Circumstances under which winding-up may be carried out without liquidator
If the registrar is of the opinion that the value of the assets of a co-operative being wound up is less than R1 000 or such other amount as the Minister may by notice in the Gazette determine, he may order the winding-up of that co-operative to be carried out, notwithstanding anything to the contrary contained in any law, in such manner and by such person as may be determined by him.
[S. 202 substituted by s. 64 of Act 37 of 1993.]
Functions of liquidators (ss 203-209)
[a91y1981s203]203 Inventory of assets and liabilities to be submitted to registrar by liquidator
(1) A liquidator referred to in section 195 (1) (a) shall draw up an inventory of all assets and liabilities of the co-operative being wound up as at the date of his appointment and submit such inventory to the registrar within 30 days of his appointment.
(2) The provisions of subsection (1) shall not apply to a liquidator of a co-operative in respect of which a provisional or temporary liquidator was appointed, if such provisional or temporary liquidator drew up and submitted such an inventory to the registrar.
[a91y1981s204]204 General duty of liquidator
The liquidator of a co-operative shall subject to the provisions of this Act forthwith recover and take into his possession all the assets of the co-operative, realize those assets and apply the proceeds thereof in accordance with the provisions of this Act.
[a91y1981s205]205 Banking account and investments
(1) The liquidator of a co-operative-
(a) shall open with a banking institution registered under the Banks Act, 1965 (Act 23 of 1965), a current account in the name of the co-operative, and shall deposit therein to the credit of the co-operative all the money received by him on the co-operative's behalf as soon as may be possible but not later than seven days of the receipt thereof;
(b) may, with the written consent of the registrar, open with such a banking institution or a building society registered under the Building Societies Act, 1965 (Act 24 of 1965), a savings account in the name of such co-operative, and may transfer thereto money deposited in the account referred to in paragraph (a) and not immediately required;
(c) may, with the written consent of the registrar, place money deposited in the account referred to in paragraph (a) and not immediately required on interest-bearing deposit with such a banking institution or building society;
(d) shall not withdraw any money in a savings account referred to in paragraph (b) or on interest-bearing deposit referred to in paragraph (c) otherwise than by way of a transfer to the said current account.
(2) The liquidator of a co-operative shall forthwith notify the registrar of-
(a) the banking institution or building society and the branch with which he has opened an account referred to in paragraph (a) or (b) of subsection (1) or with which he has placed a deposit referred to in paragraph (c);
(b) the number of that account or the reference number under which that deposit has been placed;
(c) any transfer of money in such an account or so placed in deposit to any other banking institution or building society or branch of such a banking institution or building society.
(3) A banking institution or building society referred to in subsection (2) shall on the registrar's request forthwith furnish him with a statement showing deposits paid into and withdrawals made from an account referred to in subsection (1) (a) or (b).
(4) The registrar and any surety for a liquidator shall have the same right to information in regard to an account referred to in paragraph (a) or (b) of subsection (1) or a deposit referred to in paragraph (c) of that subsection as the liquidator himself possesses, and may examine all documents in relation thereto, whether in the possession of the liquidator or a banking institution or building society.
(5) The registrar may after notice to the liquidator in writing order a banking institution or building society with which an account referred to in paragraph (a) or (b) of subsection (1) has been opened or where a deposit referred to in paragraph (c) of that subsection has been placed not to allow any withdrawal from any such account or of any such deposit except with the approval of the registrar.
(6) All cheques or orders drawn on an account referred to in subsection (1) (a) shall contain the name of the payee and the cause of payment, and shall be drawn to order and be signed by the liquidator or his duly authorized agent.
[a91y1981s206]206 Register to be kept by liquidator
(1) Immediately after his appointment a liquidator shall open a register in which he shall enter a statement of all money and property and all books, accounts and other documents received by him on behalf of the co-operative.
(2) The registrar may at any time order a liquidator to submit to him any such register, book, account or other document or to make any such register, book, account or other document available for inspection by an interested person.
[a91y1981s207]207 Powers of liquidator
(1) A liquidator may subject to the provisions of this Act do anything reasonably necessary for the effective performance of his duties, and may in particular-
(a) with the approval of the registrar institute, defend or take any action or other legal proceeding of a civil nature in the name and on behalf of the co-operative;
(b) with the approval of the registrar obtain legal advice on any question of law affecting the winding-up of the co-operative;
(c) carry on any part of the business of the co-operative in so far as may be necessary for the beneficial winding-up thereof;
(d) with the approval of the registrar agree to any reasonable offer of composition made to the co-operative by any debtor, and accept payment of any part of a debt due to the co-operative in settlement thereof;
(e) with the approval of the registrar write off any debts;
(f) submit to the determination of arbitrators any dispute concerning the co-operative or a claim by the co-operative;
(g) terminate contracts to which the co-operative is a party.
(2) A liquidator shall not dispose of immovable property of a co-operative except with the approval of the registrar.
[a91y1981s208]208 Realization of movable assets in possession of creditors as security
(1) A creditor of a co-operative being wound up holding a movable asset as security for his claim against the co-operative shall within 30 days of publication of the notice referred to in section 197 notify the liquidator of such co-operative of his possession of such asset, the nature of such asset and the grounds of his preference to such asset.
(2) If such asset consists of securities or a bill of exchange the creditor may after he has given such notice realize such asset in terms of subsection (4).
(3) If such asset does not consist of securities or a bill of exchange the liquidator may take over such asset from the creditor at a value agreed upon between the liquidator and the creditor or at the full amount of the creditor's claim, and if the liquidator does not so take over such asset, the creditor may realize such asset in terms of subsection (4).
(4) A creditor may realize an asset referred to in subsection (2) or (3) in the following manner, namely-
(a) if it consists of a thing ordinarily sold through a stockbroker the creditor may forthwith cause it to be sold by a stockbroker approved by the liquidator;
(b) if it consists of a thing which in the opinion of the liquidator can profitably be sold at a public auction, the creditor may cause it to be sold by public auction through an auctioneer approved by the liquidator;
(c) if it consists of a thing which in the opinion of the liquidator cannot profitably be sold by public auction, the creditor may cause it to be realized in a manner approved by the liquidator.
(5) As soon as a creditor has realized an asset in terms of subsection (4) he shall forthwith pay the net proceeds thereof and submit all supporting documents relating to the realization of such asset to the liquidator.
(6) If the asset concerned has not been realized within 90 days of the publication of the notice referred to in section 197 the creditor shall forthwith deliver such asset to the liquidator.
[a91y1981s209]209 Assets acquired by co-operative under hire-purchase contract
A movable asset delivered to a co-operative under a hire-purchase contract may after the commencement of the winding-up of the co-operative be delivered to the creditor under such contract, and thereupon the creditor shall be deemed to be holding that asset as security for his claim and the provisions of section 208 shall apply.
Voidable dispositions (ss 210-214)
[a91y1981s210]210 Disposition not for value
(1) Any disposition of property made by a co-operative not for value may on application by the liquidator of the co-operative be declared void by a competent court if the property was disposed of-
(a) more than two years before the commencement of the winding-up of the co-operative and it is proved that immediately after the disposition was made the liabilities of the co-operative exceeded the value of its assets;
(b) within two years before the commencement of the winding-up of the co-operative and the person to whom the property was disposed of is unable to prove that immediately after the disposition was made the value of the co-operative's assets exceeded its liabilities:
Provided that if it is proved that the liabilities of the co-operative at any time after the disposition was made exceeded the value of its assets by less than the value of the property disposed of, the disposition may be declared void only to the extent of such excess.
(2) A disposition of property not made for value which was declared void under subsection (1) or which was not completed by the co-operative shall not give rise to any claim in competition with the co-operative's creditors.
(3) If the court declares any disposition of property void under subsection (1) the court may summarily issue an order directing that the property disposed of be delivered to the liquidator or that an amount equal to the value of the relevant property as at the date of the disposition thereof be paid to the liquidator.
[a91y1981s211]211 Voidable preferences
(1) Any disposition of property made by a co-operative within 180 days before the commencement of its winding-up and which has had the effect of preferring any one or more of its creditors above another may on application by the liquidator be declared void by a competent court if immediately after such disposition was made the liabilities of the co-operative exceeded the value of its assets, unless the person to whom the property was disposed of proves that the disposition was made in the ordinary course of business and that it was not intended thereby to prefer a creditor above another.
(2) Any disposition of property by a co-operative made at a time when its liabilities exceeded the value of its assets and with the intention of preferring any one or more of its creditors above another may at any time after the commencement of the winding-up of the co-operative on application by the liquidator be declared void by a competent court.
(3) If the court declares any disposition of property void under subsection (1) or (2) the court may summarily issue an order directing that the property disposed of be delivered to the liquidator or that an amount equal to the value of the relevant property as at the date of the disposition thereof be paid to the liquidator.
[a91y1981s212]212 Collusive dealings to prejudice creditors or to prefer certain creditors above others
(1) Any collusion to dispose of property of a co-operative in a manner prejudicing the co-operative's creditors or preferring a creditor above another may at any time after the commencement of the winding-up of such a co-operative on application by the liquidator be declared void by a competent court.
(2) Any person being a party to any collusion declared void by the court under subsection (1) may summarily be ordered by the court to make good to the co-operative any decrease in the value of the assets of the co-operative caused by such collusion, and if such person is a creditor of the co-operative he shall forfeit his claim against the co-operative.
[a91y1981s213]213 Voidable set-off
Any set-off of debts between a co-operative and another person within 180 days before the commencement of the co-operative's winding-up and which has had the effect of preferring such person as creditor above another creditor of the co-operative may on application by the liquidator be declared void by a competent court if at the time when such set-off was effected the liabilities of the co-operative exceeded the value of its assets, unless such person proves that the debts which were set off arose in the ordinary course of business between him and the co-operative.
[a91y1981s214]214 Interested person may make application to court on behalf of liquidator
If the liquidator is requested by any interested person to make application to the court under section 210, 211, 212 or 213 and the liquidator omits to make such application within 30 days as from the date of the request such person may upon his indemnifying the liquidator against all costs in the action make the relevant application on behalf of the liquidator.
Admission and proving of claims (s 215)
[a91y1981s215]215 Admission and proving of claims against co-operative being wound up
(1) Any person who has a claim against a co-operative being wound up, excluding a claim against a members' fund, shall within 90 days after the date of publication of the notice referred to in section 197 lodge with the liquidator a sworn or solemn statement specifying the amount of the claim and the prescribed particulars relating to the claim together with the supporting documents (if any): Provided that if a member for any reason whatsoever does not want his claim against a members' fund to proceed he shall inform the liquidator in writing thereof.
[Sub-s. (1) substituted by s. 15 of Act 80 of 1987.]
(2) The liquidator may admit or refuse to admit the co-operative's liability for the amount of a claim referred to in subsection (1) or may admit the co-operative's liability for any portion of such an amount.
(3) Any person aggrieved by a decision taken by a liquidator under subsection (2) in connection with his claim may within 30 days after he was notified of such decision appeal to the registrar against such decision, and the registrar may after consideration of the grounds of the appeal and the liquidator's reasons for his decision confirm the decision, or set the decision aside and order the liquidator to admit the claim or to admit it to the extent determined by the registrar.
(4) (a) Any person referred to in subsection (1) who has failed to lodge his claim with the liquidator within the period mentioned in that subsection, may thereafter with the consent of the registrar lodge his claim with the liquidator within a period of 30 days after the termination of the said period.
(b) The provisions of subsections (2) and (3) shall mutatis mutandis apply in respect of a claim referred to in paragraph (a).
(5) The provisions of this section shall not prevent a creditor from proving a claim against a co-operative in any court, but no person shall institute an action to prove a claim against a co-operative being wound up or proceed with any such action which has been suspended in terms of section 190, unless he has lodged his claim with the liquidator within the period mentioned in subsection (1), or, with the consent of the registrar, within the further period mentioned in subsection (4), or has otherwise given notice to the liquidator in writing of the action or intended action within a period of 120 days after the date of publication of the notice referred to in section 197.
Liquidation, trading, distribution and contribution accounts and application of proceeds (ss 216-234)
[a91y1981s216]216 Submission of certain accounts to registrar
(1) The liquidator shall within 180 days after the date of publication of the notice referred to in section 197 draw up the following accounts, certify them and submit them in duplicate to the registrar, namely-
(a) a liquidation account;
(b) a trading account, if the liquidator has carried on a business of the co-operative;
(c) a distribution account, if the proceeds of the co-operative's assets exceed the sum of the amounts to be paid out of such proceeds in terms of sections 218 (1) and (2) and 219 (a), (b), (c), (d) and (e);
(d) a contribution account, if the said proceeds are less than the sum of the said amounts and there are contributories.
(2) The accounts referred to in subsection (1) shall be accompanied by all supporting documents available to the liquidator.
(3) If the said accounts are not the final accounts the liquidator shall within such period as the registrar may determine draw up further accounts and submit them to him in duplicate.
(4) If the liquidator is unable to submit an account or documents mentioned in subsection (1), (2) or (3) to the liquidator within the required period he shall before the termination of the period concerned submit to the registrar a written explanation of the reasons for his inability, and the registrar may thereupon grant an extension of time to the liquidator for the submission of the relevant account or documents.
[a91y1981s217]217 Liquidation account
(1) A liquidation account shall contain an accurate record-
(a) of all money received and of all money disbursed by the liquidator otherwise than in the course of a business which he carries on on behalf of the co-operative;
(b) of the expected or real costs of liquidation;
(c) of every claim against the co-operative proved or admitted in terms of section 215;
(cA) of the amount standing to the credit of each member in the members' fund of the co-operative;
[Para. (cA) inserted by s. 16 of Act 80 of 1987.]
(d) if such a claim is a secured claim, of the property which serves as security for the claim, or if the property has already been realized, the amount of the proceeds thereof;
(e) in the case of a second or later liquidation account, of the amount paid on every claim in terms of a previous liquidation account;
(f) in the case of a liquidation account which is not the final liquidation account-
(i) of all assets yet to be realized;
(ii) of all debts yet to be recovered;
(iii) of the reasons why such assets have not yet been realized or such debts have not yet been recovered.
(2) A liquidation account shall subject to the provisions of sections 218, 219, 220, 221 and 222 provide for the application of the proceeds of the assets of the co-operative.
[a91y1981s218]218 Application of proceeds of assets which served as security
(1) The proceeds of any asset which served as security for a claim admitted or proved in terms of section 215 shall, after deducting therefrom the liquidator's expenses with respect to such asset and such pro rata portion of the costs of liquidation as may be determined by the liquidator, in the first place be applied in paying such claim.
(2) If there is more than one such claim the relevant claims shall be paid in the order of their preference.
(3) If the portion of the said proceeds which may be applied in paying any such claim or claims is less than the amount of such claim or claims the creditor or creditors concerned shall be an ordinary creditor or ordinary creditors in respect of the unpaid portion of his claim or their claims.
[a91y1981s219]219 Application of proceeds after payment of secured claims
Subject to the provisions of section 218 the proceeds of the assets of a co-operative being wound up shall be applied as follows, namely-
(a) in the first place in paying expenses incurred by the liquidator in connection with the winding-up and the other costs of liquidation;
(b) thereafter in paying any amounts due by the co-operative with respect to the matters referred to in paragraph (b) of section 98A (1), or in paragraphs (a) to and including (e) of section 99 (1), of the Insolvency Act, 1936 (Act 24 of 1936), which have been admitted or proved in terms of section 215, or, if the balance of the said proceeds is insufficient to pay the said amounts in full, in paying a proportionate share of each;
[Para. (b) substituted by s.10 of Act 122 of 1998.]
(c) thereafter in paying outstanding salaries and wages of full-time employees of the co-operative which have been admitted or proved in terms of section 215 for a period not exceeding two months prior to the commencement of the winding-up of the co-operative, or, if the balance of the said proceeds is insufficient to pay the said salaries and wages in full, in paying a proportionate share of each;
(d) thereafter in paying income tax for which the co-operative is liable;
(e) thereafter in paying all other claims admitted or proved in terms of section 215, including any unpaid portions of secured claims contemplated in section 218 (3) and any credit amounts in the members' fund, or, if the balance of the said proceeds is insufficient to satisfy the said claims, portions of claims and credit amounts in full, paying a proportionate share of each;
[Para. (e) substituted by s. 17 of Act 80 of 1987.]
(f) thereafter any residue shall be applied in accordance with the distribution account.
[a91y1981s220]220 Tacit hypothecs
(1) A tacit hypothec, other than a landlord's legal hypothec, shall not confer any preference when a co-operative is being wound up.
(2) A landlord's legal hypothec shall confer a preference with regard to property which is subject to that hypothec for any rent calculated in respect of any period immediately prior to and up to the commencement of the winding-up but not exceeding-
(a) three months, if the rent is payable monthly or at shorter intervals than one month;
(b) six months, if the rent is payable at intervals exceeding one month but not exceeding three months;
(c) nine months, if the rent is payable at intervals exceeding three months but not exceeding six months;
(d) fifteen months in any other case.
[a91y1981s221]221 Certain mortgage bonds not to confer preference
(1) A mortgage bond, other than a kustingbrief, registered in any office for the registration of deeds against immovable property of a co-operative for the purpose of securing payment of-
(a) a debt not previously secured which arose more than 60 days prior to the lodging of the relevant bond for registration in such office; or
(b) a debt incurred in novation of or substitution for a debt referred to in paragraph (a),
shall not confer any preference with regard to such property or the proceeds thereof if the co-operative is wound up within 180 days after the lodging of such bond.
(2) A general mortgage bond, including a general clause in a mortgage bond hypothecating particular immovable property, shall not confer any preference with regard to the property of a co-operative being wound up or the proceeds thereof.
[a91y1981s222]222 Ranking of mortgage bonds for future debts
Priority under any mortgage bond registered in any office for the registration of deeds against immovable property of a co-operative for the purpose of securing payment of future debts shall depend on the date of registration of that mortgage bond and not on the date upon which any such debt arises.
[a91y1981s223]223 Trading account
A trading account shall contain an accurate record of-
(a) the value of the stock on hand at the commencement of the winding-up;
(b) the value of the stock on hand on the last day of the period in respect of which the account is made up;
(c) the daily totals of receipts and payments in connection with the business.
[a91y1981s224]224 Distribution account
(1) A distribution account shall subject to the provisions of section 225 provide for a residue referred to in section 219 (f) to be applied according to the provisions of this section.
(2) The residue referred to in subsection (1) shall in the first place be applied in paying back the paid-up share capital of the co-operative to shareholders of the co-operative.
(3) If such residue is less than the paid-up share capital the amount to be paid to a shareholder out of such residue shall be an amount which bears the same ratio to the amount of such residue as the paid-up value of his shares bears to the paid-up share capital.
(4) If such residue exceeds the paid-up share capital the balance remaining after the paid-up share capital has been paid back shall subject to the provisions of subsection (8) be allocated to the members of the co-operative-
(a) in the case of a co-operative the main object of which involves that its members conduct transactions with or through it, in accordance with the patronage proportion;
(b) in the case of a co-operative the main object of which does not involve that its members conduct transactions with or through it, in accordance with a basis set out in the statute.
(5) The patronage proportion mentioned in subsection (4) (a) shall-
(a) in the case of an agricultural co-operative or a special farmers' co-operative, be determined with reference to either the period mentioned in the statute of the co-operative which preceded the commencement of the winding-up of the co-operative or the period for which the co-operative has existed, whichever period is the shorter;
(b) in the case of a trading co-operative, be determined with reference to either the period specified in the statute of the co-operative which preceded the commencement of the winding-up of the co-operative or the period for which the co-operative has existed, whichever period is the shorter:
Provided that the period mentioned in the statute of the co-operative shall not be less than five years.
[Sub-s. (5) substituted by s. 65 of Act 37 of 1993.]
(6) For the purposes of subsections (4) and (5)-
(a) an object contemplated in section 21 (1) (g) (i) shall be deemed to be an object involving that the members of the co-operative conduct transactions with or through it;
(b) the value of the transactions conducted by a former member with or through such co-operative during the appropriate period referred to in subsection (5) may be added to the value of the transactions of a member who is entitled to an allocation under subsection (4), provided-
(i) the former member, or, if he is deceased, his executor, has submitted his written consent to that effect to the co-operative within 90 days after such former member ceased to be a member of the co-operative; and
(ii) the statute of the co-operative so provides;
(c) a co-operative incorporated in consequence of a conversion under section 163 shall be deemed to have existed as from the date of incorporation of the previous co-operative so converted, and the value of the transactions conducted by a member of the first-mentioned co-operative during the appropriate period with or through the previous co-operative as a member may be added to the value of the transactions conducted by him with or through the first-mentioned co-operative;
(d) a co-operative incorporated in consequence of an amalgamation of two or more co-operatives under section 166 shall be deemed to have existed as from the date of incorporation of the most recent of those co-operatives, and the value of the transactions conducted by a member of the amalgamated co-operative during the appropriate period with or through any of the previous co-operatives of which he was then a member may be added to the value of the transactions conducted by him with or through the amalgamated co-operative.
(7) The registrar may notwithstanding the provisions of subsections (4), (5) and (6) direct the liquidator of a trading co-operative to allocate the balance remaining after the paid-up share capital has been paid back, to the members of the co-operative on any basis determined by the registrar.
(8) If the statute of a co-operative provides that an amount shall be paid to any particular person or for any particular purpose in the event of the co-operative being wound up, the balance referred to in subsection (4) shall in the first place be applied for the payment of such an amount.
(9) For the purposes of-
(a) subsections (2) and (3) a person to whom an amount is due by the co-operative by virtue of the provisions of section 81 (2) (a) shall be deemed to be a shareholder of the co-operative; and
(b) subsections (2), (3) and (4) an amount referred to in paragraph (a) of this subsection shall be deemed to form part of the paid-up share capital of the co-operative.
[a91y1981s225]225 Disposal of small residues
If a residue referred to in section 219 (f) is so small that the payment thereof to the persons referred to in section 224 is in the opinion of the registrar not justified the registrar may direct the liquidator to dispose of such residue, the provisions of that section notwithstanding, in any manner determined by the registrar.
[a91y1981s226]226 Contribution account
(1) A contribution account shall provide for the recovery of contribution from such persons as are liable for the payment thereof.
(2) A contribution account shall in respect of each contributory indicate the ground on which he is liable for the payment of contribution, the amount for which he is liable and the contribution to be paid by him in terms of that contribution account and, in the case of a second or later contribution account, the contribution recovered from him in terms of a previous contribution account.
[a91y1981s227]227 Inspection of liquidation, distribution or contribution account by interested persons
(1) Every liquidation, distribution or contribution account or a copy thereof shall be made available in the Directorate Co-operatives, and, if the registered office of the co-operative is not situated in the magisterial district of Pretoria, also in the office of the magistrate of the district in which the registered office of the co-operative is situated, for such period as may be determined by the registrar, for inspection by interested persons.
[Sub-s. (1) amended by s. 66 of Act 37 of 1993.]
(2) The liquidator shall give notice to interested persons in the Gazette and in a newspaper circulating in the area in which the registered office of the co-operative is situated of the period for which and the place or places where the liquidation, distribution or contribution account will be available for inspection and that objection against such account may be lodged with the registrar before a date to be stated in the notice, which shall be a date not less than seven days after the end of the said period.
(3) The magistrate of the office where an account is available for inspection shall affix a notice in a public place in or at his office in which is mentioned that the account concerned is available in his office for inspection by interested persons during the relevant period, and shall upon the expiry of such period issue a certificate that the relevant account was available for inspection during the relevant period and transmit the certificate and account to the registrar.
[a91y1981s228]228 Objections against liquidation, distribution or contribution account
(1) Any person who has an interest in the winding-up of a co-operative may before the date stated in the notice referred to in subsection (2) of section 227 lodge an objection with the registrar against any entry in an account made available for inspection in terms of subsection (1) of that section.
(2) An objection referred to in subsection (1) shall be contained in an affidavit or a solemn declaration in which the grounds of appeal are fully set forth.
(3) The registrar may uphold, partially uphold or reject an objection referred to in subsection (1).
[a91y1981s229]229 Amendment of liquidation, distribution or contribution account
(1) If the registrar upholds or partially upholds an objection against a liquidation, distribution or contribution account under section 228 (3), or if he is of the opinion that any such account is incorrect in any respect, he shall order the liquidator to amend the relevant account in such manner as may be determined by him.
(2) If the registrar is of the opinion that the interests of any person are materially prejudiced by an amendment of a liquidation, distribution or contribution account under subsection (1), the provisions of sections 227 and 228 and this section shall be applicable to the amended account unless the said person submits a written statement to the registrar that he has no objection against such amendment.
[a91y1981s230]230 Appeal to court against registrar's decisions
(1) Any person whose objection against a liquidation, distribution or contribution account has been rejected or partially upheld under section 228 (3) may within 30 days after he was notified of the registrar's decision with regard to his objection appeal against that decision by way of application on notice of motion to any competent court.
(2) A liquidator may within 30 days after he was ordered by the registrar under section 229 (1) to amend a liquidation, distribution or contribution account appeal against that decision by way of application on notice of motion to any competent court.
(3) The court to which appeal is made under subsection (1) or (2) shall inquire into and consider the matter and shall confirm, vary or set aside the decision or order of the registrar, or give such other decision or order as in its opinion the registrar ought to have given, and may make such order as to costs as it may deem fit.
[a91y1981s231]231 Confirmation of liquidation, distribution or contribution account
(1) If the registrar is satisfied that a liquidation, distribution or contribution account has been made available for inspection in accordance with the requirements of this Act, that any objections against it have been finalized and that the necessary amendments (if any) have been effected thereto, he shall confirm the account.
(2) ......
[Sub-s. (2) deleted by s. 91 of Act 88 of 1996.]
[a91y1981s232]232 Payments in terms of liquidation or distribution account and recovery of contribution
(1) The liquidator shall as soon as may be practicable after-
(a) a liquidation or distribution account was confirmed in terms of section 231, make all payments to be made in accordance therewith;
(b) a contribution account was so confirmed, recover the contributions to be paid in accordance therewith.
(2) Any payment in terms of a liquidation or distribution account shall be made by way of a cheque payable to the person entitled to such payment or his order and drawn on an account contemplated in section 205 (1) (a).
(3) The liquidator shall forthwith submit to the registrar proof of every payment made by him in terms of a liquidation or distribution account.
[a91y1981s233]233 Disposal of unclaimed payments
If a cheque by which any payment is made in terms of a liquidation or distribution account, is not cashed or deposited within 90 days after it was issued, the liquidator shall, unless the registrar otherwise directs, stop payment of the cheque and forthwith deposit the amount concerned in the guardian's fund referred to in section 86 of the Administration of Estates Act, 1965 (Act 66 of 1965), to be credited to the said person.
[S. 233 substituted by s. 40 of Act 108 of 1991.]
[a91y1981s234]234 Recovery of contribution
(1) If any contributory liable to pay contribution in terms of a contribution account fails to pay the amount of such contribution to the liquidator within 30 days after a letter of demand in which particulars of such contribution are set out was sent to him by registered post to his last-known residential or business address, the magistrate of the district in which the registered office of the co-operative is situated shall upon written request by the liquidator issue a writ of execution against the property of such contributory.
(2) Any such writ shall be executed against the movable property of such contributory, and if sufficient movable property is not found to satisfy the writ, then against his immovable property.
(3) A writ of execution issued under subsection (1) shall be deemed to have been issued pursuant to a judgment of a magistrate's court.
General provisions (ss 235-237)
[a91y1981s235]235 Summoning and examination of persons concerning affairs of co-operative being wound up
(1) The magistrate of the district in which the registered office of a co-operative being wound up is situated may, on application by the registrar, the liquidator of the co-operative or any other person who has an interest in the winding-up of such co-operative, summon before him any person known or suspected to have in his possession any asset of the co-operative or believed to be indebted to the co-operative, or any person whom the magistrate deems capable of giving information concerning the affairs, transactions or assets of the co-operative.
(2) (a) Such magistrate may examine on oath or affirmation any person summoned under subsection (1), or authorize the registrar, the liquidator or any such other interested person to examine such person or to cause such person to be examined, concerning any matter referred to in that subsection, either orally or on written interrogatories, and may reduce his answers to writing and require him to sign them.
(b) Any such person may be required to answer any question put to him at the examination, notwithstanding that the answer might tend to incriminate him, and any answer given to any such question may thereafter be used in evidence against him.
(3) Such magistrate may require any such person to produce any book or other document in his custody or under his control relating to the co-operative, but without prejudice with regard to any right which he or any other person may have to such book or document.
(4) If any person summoned under subsection (1) fails to appear before the magistrate concerned at the appointed time such magistrate may cause him to be apprehended and brought before him for examination.
[a91y1981s236]236 Release of liquidator
The liquidator of a co-operative may at any time after dissolution of the co-operative in terms of section 43 apply to the registrar for his release, who may grant such release if he deems it expedient.
[S. 236 substituted by s. 67 of Act 37 of 1993.]
[a91y1981s237]237 Disposal of books and documents
After six months from the date of release of the liquidator the books and documents of the co-operative and those relating to the winding-up of the co-operative may be destroyed, unless the registrar otherwise directs.
CHAPTER XA
JUDICIAL MANAGEMENT (ss 237A-237N)
[Heading inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237A]237A Circumstances in which co-operatives may be placed under judicial management
(1) When any co-operative by reason of mismanagement or for any other cause-
(a) is unable to pay its debts or is probably unable to meet its obligations; and
(b) has not become or is prevented from becoming a successful concern,
and there is a reasonable probability that, if it is placed under judicial management, it will be enabled to pay its debts or to meet its obligations and become a successful concern, a competent court may, if it appears just and equitable, grant a judicial management order in respect of that co-operative.
(2) An application to a competent court for a judicial management order in respect of a co-operative may be made-
(a) by a co-operative voluntarily after a special resolution to that effect;
(b) by any interested person; or
(c) by the Minister on the recommendation of the registrar.
(3) When an application for the winding-up of a co-operative is made in terms of section 181 to a competent court and it appears to that court that if the co-operative concerned is placed under judicial management the grounds for its winding-up may be removed and that it will become a successful concern, and that the granting of a judicial management order would be just and equitable, such court may grant such an order in respect of that co-operative.
[S. 237A inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237B]237B Provisional judicial management order
(1) A court may, on an application made under section 237A, grant a provisional judicial management order stating the return day or dismiss the application or make any other order that it deems fit.
(2) A provisional judicial management order shall contain-
(a) directives that the co-operative named therein shall be under the management and control, subject to the supervision of the registrar, of a provisional judicial manager appointed as hereinafter provided, and that any person vested with the management and control of the co-operative's affairs shall from the date of the order be divested thereof;
(b) such other directives as the court may deem necessary as to the management and control of the co-operative, or any matter incidental thereto, including directives conferring upon the provisional judicial manager the power, subject to the rights of the creditors, to raise money in any way without the authority of the members of the co-operative as the court may deem necessary,
and may contain instructions that while the co-operative is under judicial management, all actions, legal proceedings and the execution of all writs, summonses and other legal process against the co-operative be stayed and not be proceeded with without the leave of the court.
(3) The court which has granted a provisional judicial management order may at any time and in any manner on the application of the applicant, the co-operative, a creditor or a member of the co-operative, the provisional judicial manager or the Minister on the recommendation of the registrar, vary the terms of such order or discharge it.
[S. 237B inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237C]237C Custody of property and appointment of provisional judicial manager on granting of judicial management order
(1) When a provisional judicial management order is granted-
(a) all persons who immediately prior to the commencement of the provisional judicial management order of the co-operative hold office as director, manager or secretary of the co-operative shall jointly and severally be responsible for the custody of all the assets of the co-operative under the co-operative's control until a provisional judicial manager is appointed and has assumed office;
(b) the registrar shall without delay appoint a provisional judicial manager, who shall give such security for the proper performance of his duties in his capacity as such as the registrar may direct, and who shall, subject to the provisions of subsection (2), hold office until discharged by the court as provided in section 237G (3) (a).
(2) The registrar may at any time and for reasons which he deems fit dismiss a provisional judicial manager from his office and appoint another person in his place.
[S. 237C inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237D]237D Effect of provisional judicial management order
(1) When a provisional judicial management order is granted-
(a) no shares in the co-operative or amount of money from a members' fund shall be refunded to any member or to any member whose membership was terminated within six months prior to the granting of the provisional judicial management order; and
(b) the statute of the co-operative shall remain in force in so far as it is not in conflict with the directives of the provisional judicial management order, unless the registrar is of the opinion that the application of any provision of the statute is not in the interests of the members or creditors during the provisional judicial management, and he notifies the provisional judicial manager in writing that such provision shall be suspended.
(2) The registrar may at any time terminate the suspension referred to in subsection (1) (b) and notify the provisional judicial manager in writing thereof.
[S. 237D inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237E]237E Functions of provisional judicial manager
A provisional judicial manager appointed under section 237C (1) (b) or (2) shall-
(a) assume the management and control of the co-operative and recover and take into his possession all the assets of the co-operative;
(b) convene within 60 days, or such longer period as the registrar may determine at the written request of the provisional judicial manager, joint or separate meetings of the creditors and members of the co-operative for the purposes referred to in section 237F;
(c) prepare and lay before the meetings convened under paragraph (b) a report containing-
(i) an account of the general state of affairs of the co-operative;
(ii) a statement of the reasons why the co-operative is unable to pay its debts or is probably unable to meet its obligations or has not become or is prevented from becoming a successful concern;
(iii) a statement of the assets and liabilities of the co-operative;
(iv) a complete list of creditors of the co-operative, including contingent and prospective creditors, and of the amount and the nature of the claim of each creditor;
(v) particulars as to the source from which money has been or is to be raised for the purposes of carrying on the business of the co-operative and the conditions on which it shall be repaid; and
(vi) the considered opinion of the provisional judicial manager as to the prospects of the co-operative becoming a successful concern and of the removal of the facts or circumstances which prevent the co-operative from becoming a successful concern.
[S. 237 E inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237F]237F Purpose of meetings convened under section 237E (b)
(1) (a) Any meeting convened under section 237E (b) shall be presided over by the registrar or a magistrate having jurisdiction in the area where the meeting is held.
(b) Any meeting referred to in paragraph (a) shall be convened-
(i) in the case of a meeting of the members of the co-operative concerned, in the manner prescribed in the statute of that co-operative for the convening of a general meeting; and
(ii) in the case of a meeting of creditors, by a notice in the Gazette and in one or more newspapers circulating in the area in which the registered office of the co-operative is situated, not less than seven days prior to such meeting.
(2) At the meeting the report of the provisional judicial manager under section 237E (c), and the desirability or not of placing the co-operative finally under judicial management, shall be considered, taking into account the prospects of the co-operative becoming a successful concern.
(3) The chairman of any such meeting shall prepare and lay before the court a report of the proceedings of such meeting, including a summary of the reasons for any conclusion arrived at under subsection (2).
[S. 237F inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237G]237G Return day of provisional judicial management order, and powers of court
(1) Any return day fixed under section 237B (1) shall not be later than 60 days after the date of the provisional judicial management order but may be extended by the court on good cause shown.
(2) On such return day the court may after consideration of-
(a) the opinion and wishes of creditors and members of the co-operative;
(b) the report of the provisional judicial manager under section 237E (c);
(c) the report referred to in section 237F (3); and
(d) a report of the registrar if he does not preside at the meeting referred to in section 237F (1),
grant a final judicial management order if it appears to the court that the co-operative will, if placed under judicial management, be enabled to become a successful concern and that it is just and equitable that it be placed under judicial management, or the court may discharge the provisional order or make any other order it may deem fit.
(3) A final judicial management order shall contain-
(a) directives for the vesting of the management and control of the co-operative, subject to the supervision of the registrar, in the final judicial manager, the handing over of all matters and the accounting by the provisional judicial manager to the final judicial manager, and the discharge of the provisional judicial manager, where necessary;
(b) such other directives as to the management and control of the co-operative, or any matter incidental thereto, including directives conferring upon the final judicial manager the power, subject to the rights of the creditors of the co-operative, to raise money in any way without the authority of the members of the co-operative, as the court may consider necessary.
(4) (a) When a final judicial management order is granted, the registrar shall without delay appoint a final judicial manager, who shall give such security for the proper performance of his duties in his capacity as such as the registrar may direct, and who shall hold office until he is discharged in terms of paragraph (b) or until the judicial management order is withdrawn or is deemed to be withdrawn in terms of section 237M.
(b) The registrar may at any time for reasons which he deems fit dismiss a final judicial manager from his office and appoint another person in his place.
(5) The court which has granted a final judicial management order may at any time and in any manner vary the terms of such order on the application of the registrar, the final judicial manager, or a representative acting on behalf of the creditors or members of the co-operative concerned by virtue of a resolution passed, in the case of creditors, by a majority in value and number of such creditors at a meeting of those creditors or, in the case of members, by a majority of members present at a general meeting.
[S. 237G inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237H]237H Effect of final judicial management order
The provisions of section 237D shall mutatis mutandis apply when a final judicial management order is granted.
[S. 237H inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237I]237I Functions of final judicial manager
A final judicial manager shall, subject to the provisions of the statute of the co-operative concerned in so far as they are not inconsistent with any directive contained in the relevant judicial management order or suspended by the registrar in writing-
(a) take over the management and control of the co-operative from the provisional judicial manager;
(b) conduct such management and control, subject to the orders of the registrar, in such manner as he may deem most economic and most promotive of the interests of the members and creditors of the co-operative in order to restore the co-operative as a successful concern;
(c) comply with any directive of the court made in the final judicial management order or any variation thereof;
(d) keep such accounting records and have such annual financial statements prepared as the co-operative would have been obliged to keep or have prepared if it had not been placed under judicial management;
(e) convene the annual general meeting and other meetings of members of the co-operative provided for by this Act, and in that regard comply with all the requirements with which the directors of the co-operative would in terms of this Act have been obliged to comply if the co-operative had not been placed under judicial management;
(f) convene meetings of the creditors of the co-operative by notices issued separately on the dates on which the notices convening annual general meetings of the co-operative are issued or on which any interim report is sent out to members, and submit to such meetings reports showing the assets and liabilities of the co-operative, its debts and obligations as verified by the auditor of the co-operative, and all such information as may be necessary to enable the creditors to become fully acquainted with the co-operative's position as at the date of the end of the period covered by any such interim report;
(g) lodge with the registrar copies of all the documents submitted to the meetings as provided for in paragraphs (e) and (f);
(h) examine the affairs and transactions of the co-operative before the commencement of the judicial management in order to ascertain whether any director, past director, officer or past officer of the co-operative has contravened or appears to have contravened any provision of this Act or has committed any other offence which gave rise to the circumstances referred to in section 237A (1);
(i) examine the affairs and transactions of the co-operative before the commencement of the judicial management in order to ascertain whether any director, past director, officer or past officer of the co-operative is or appears to be personally liable for damages or compensation to the co-operative or for any debts or liabilities of the co-operative;
(j) if at any time he is of the opinion that the continuation of the judicial management will not enable the co-operative to become a successful concern, apply to the court after not less than 14 days' notice by registered post to all members and creditors of the co-operative for the cancellation of the relevant judicial management order and the issue of an order for the winding-up of the co-operative.
[S. 237I inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237J]237J Application of assets during judicial management
(1) A judicial manager shall not without the leave of the court sell or otherwise dispose of any of the co-operative's assets save in the ordinary course of the co-operative's business.
(2) Any money of the co-operative becoming available to the judicial manager shall be applied by him in paying the costs of the judicial management and in the conduct of the co-operative's business in accordance with the judicial management order and so far as the circumstances permit in the repayment of debts of the co-operative incurred before the date of the provisional judicial order.
[S. 237J inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237K]237K Position of auditor in judicial management
Notwithstanding the granting of a judicial management order in respect of any co-operative and for so long as the order is in force, the provisions of this Act relating to the appointment and re-appointment of an auditor and the rights and duties of an auditor shall continue to apply as if any reference in the said provisions to the directors of the co-operative were a reference to the judicial manager.
[S. 237K inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237L]237L Application to judicial management of certain provisions on winding-up
In every case in which a co-operative is placed under judicial management the provisions of sections 210, 211, 212, 213 and 235 shall apply as if the co-operative under judicial management were a co-operative being wound up and the judicial manager were the liquidator.
[S. 237L inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237M]237M Cancellation of judicial management order
(1) If at any time on application by the judicial manager or any person having an interest in the co-operative it appears to the court which granted a judicial management order that the purpose of such order has been fulfilled or that for any reason it is undesirable that such order should remain in force, that court may cancel such order, and thereupon the judicial manager shall be divested of his functions.
(2) In cancelling any such order the court shall give such directives as may be necessary for the resumption of the management and control of the co-operative by a board of directors referred to in section 107 (1), including directives for the convening of a general meeting of members for the purpose of electing such directors.
(3) When a co-operative under judicial management amalgamates with another co-operative it shall be deemed that the judicial management order is cancelled with effect from the date on which the first-mentioned co-operative ceased to exist in terms of section 167.
[S. 237M inserted by s. 18 of Act 80 of 1987.]
[a91y1981s237N]237N Remuneration of provisional and final judicial manager
The registrar shall determine the basis of the remuneration of a provisional or final judicial manager, and may at any time decrease or disallow such remuneration if in his opinion there is good cause for doing so.
[S. 237N inserted by s. 18 of Act 80 of 1987.]
CHAPTER XI
GENERAL PROVISIONS (ss 238-242)
[a91y1981s238]238 False statements
Any person who in any application, return, report or other document under this Act wilfully furnishes information or makes a statement which is false in any material respect shall be guilty of an offence.
[a91y1981s239]239 Penalties for offences
Any person convicted of an offence in terms of this Act shall be liable to a fine not exceeding R5 000 or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.
[S. 239 substituted by s. 21 of Act 42 of 1985.]
(1) The Minister may make regulations-
(a) as to any matter which is required or permitted to be prescribed by regulation under this Act;
(b) prescribing, generally, any matter which he considers it necessary or expedient to prescribe in order that the objects of this Act may be better achieved.
(2) Regulations made under this section may in respect of any contravention thereof or failure to comply therewith prescribe a penalty not exceeding a fine of R500 or imprisonment for a period of six months.
[a91y1981s241]241 Repeal of laws, and savings
Cases
(1) Subject to the provisions of subsections (2) and (3) the laws specified in Schedule 3 are hereby repealed.
(2) Anything done under a provision of a law repealed by subsection (1) and which may be done under a provision of this Act shall be deemed to have been done under the last-mentioned provision.
(3) (a) Any notice or proclamation issued or deemed to be issued under section 102 of the repealed Act and which is in force immediately before the commencement of this Act shall, the repeal of such section notwithstanding, continue in force until it is withdrawn by the Minister under paragraph (b).
(b) A notice or proclamation referred to in paragraph (a) may at any time be amended, substituted or withdrawn by the Minister by notice in the Gazette.
[Para. (b) substituted by s. 19 (a) of Act 80 of 1987.]
(c) An amendment, substitution or withdrawal of a notice or proclamation referred to in paragraph (a)-
(i) shall take place either at the request of the agricultural co-operative or special farmers' co-operative to which that notice or proclamation relates as a result of a resolution passed at a general meeting of that co-operative or after consultation with such agricultural co-operative or special farmers' co-operative;
[Sub-para. (i) substituted by s. 68 of Act 37 of 1993.]
(ii) shall relate to the agricultural product contemplated in that notice or proclamation, or shall pertain to an agricultural product from which the agricultural products contemplated in that notice or proclamation originate; and
(iii) is limited to the area referred to in that notice or proclamation.
[Para. (c) added by s. 19 (b) of Act 80 of 1987.]
(d) A producer who, when he is by virtue of a notice or proclamation referred to in paragraph (a) compelled to sell or otherwise dispose of the agricultural product to which such notice or proclamation relates through the co-operative stated in such notice or proclamation, sells or disposes of the said agricultural product otherwise than through the said co-operative, and any person who buys or otherwise obtains that agricultural product except through the said co-operative, shall be guilty of an offence and on conviction liable to a fine not exceeding R1 000 or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment.
[Para. (d) added by s. 19 (b) of Act 80 of 1987.]
[a91y1981s242]242 Short title and commencement
This Act shall be called the Co-operatives Act, 1981, and shall come into operation on a date fixed by the State President by proclamation in the Gazette.
Schedule 1
[Schedule 1 repealed by s. 20 of Act 80 of 1987.]
Schedule 2
REQUIREMENTS FOR ANNUAL FINANCIAL STATEMENTS
[Schedule 2 amended by Government Notice R1044 of 20 May 1983 (as corrected by Government Notice R1290 of 17 June 1983), substituted by Government Notice R229 of 7 February 1986 and amended by Government Notice R1165 of 13 June 1986 and by Government Notice R2051 of 26 September 1986.]
[NB: Reference should be made to Government Notice R229 of 7 February 1986 regarding the application of this Schedule.]
GENERAL
1. A co-operative may give any information required by this Schedule to be stated in any annual financial statement, in the form of a note or annexure thereto if such presentation is more effective or convenient.
2. When the directors of a co-operative are of the opinion that the disclosure of information required to be made known, in terms of items 21, 22, 23, 31 (c) and 35 (b) and (c) of this Schedule is not in the interest of, or is prejudicial to the co-operative or any of its subsidiaries, the registrar may, on application by such co-operative, on such terms and conditions as he may determine, exempt the co-operative concerned from disclosing such information: Provided that the co-operative concerned shall give the information in respect of which such exemption is granted, to the registrar.
A. BALANCE SHEET
General
3. The assets and liabilities shall be summarised with such particulars as are necessary to disclose their general nature and shall be classified under headings and sub-headings appropriate to the co-operative's business: Provided that if the amount of a particular class of assets or liabilities is not material, it may be included under the same subheading as some other class.
Share capital and shares
4.(1) The issued and the paid-up share capital shall be specified separately.
(2) Under the issued share capital the number of issued shares and the nominal value per share shall be stated.
(3) Under the paid-up share capital, the following shall be specified:
(a) The amount paid or payable per share at the date of the balance sheet (i.e. application moneys plus calls);
(b) the total amount paid or payable in respect of share capital;
(c) the amount outstanding in respect of calls on shares; and
(d) the amount paid up in advance on shares.
(4) If shares with any contingent liability attached thereto in terms of section 72 have been issued by the co-operative the number of such shares and the total amount of such contingent liability shall be indicated.
Reserves and provisions
5. The respective reserves and provisions (other than a provision for depreciation or diminution in value of an asset which shall be shown in conjunction with the relevant asset) shall, subject to the provisions of item 8, be specified under different headings and subheadings, indicating the nature of the reserve or provision.
6.(1) The reserves shall be classified under the subheading 'General reserve' and 'Contingency reserves'.
(2) A general reserve shall include any reserve established with the object of acquiring a fixed asset or of providing working capital or generally of strengthening the financial position of the co-operative.
(3) A contingency reserve shall include any reserve established with the object of meeting any loss of an unusual nature or of being applied in accordance with specific provisions of the co-operative's statute.
7.(1) Unless it is either indicated in the income statement or indicated by way of a note thereto or unless the amount involved is not material, the following shall be specified:
(a) The source and the amount of each transfer to a reserve or provision; and
(b) the amount and application of each transfer from a reserve or provision.
(2) Where the heading under which any of the said reserves or provisions are shown is divided into subheadings, subitem (1) shall apply to each of the amounts shown under subheadings.
8. If the Minister is satisfied that a separate indication for a particular provision is not in the interest of the co-operative or its members or that it may prejudice the co-operative, he may, on the conditions determined by him, grant permission that such provision not be indicated separately.
9. (1) If the amount of a provision is, in the opinion of the board of directors of the co-operative-
(a) in excess of the amount that in its opinion was reasonably necessary for the purpose of the provision and the board decides to reduce that amount, the manner in which the amount of the reduction was applied shall be shown in a note; or
(b) less than the amount that will be reasonably necessary for the purpose of the provision, this fact shall be stated in a note.
(2) If the auditor of a co-operative holds an opinion contrary to that of the board of directors referred to in subitem (1), the auditor shall mention this fact in terms of section 154 in his report.
Members' funds
10.(1) Members' funds shall be specified under separate headings and subheadings, stating the name of each fund, particulars of the source thereof, the rate at which interest on money in the fund is paid and the fact that such money is repayable in circumstances other than in the event of termination of membership.
(2) The following shall be specified under each members' fund:
(a) The amounts with which the fund have been credited or debited during the financial year; and
(b) the balance of the fund as at the date of the balance sheet.
Liabilities
11. Long term liabilities, current liabilities and, if applicable, liabilities that are neither long-term nor current liabilities shall be indicated separately.
Debentures
12. The following shall be specified:
(a) The amount and classes of debentures issued; and
(b) particulars of all redeemed debentures that the co-operative may reissue.
Loans
13.(1) Loans due to the Land and Agricultural Bank of South Africa referred to in the Land Bank Act, 1944 (Act 13 of 1944), and to members, shall be shown separately under appropriate headings.
(2) Loans obtained for the purpose of paying advances to members in respect of agricultural products delivered by them to the co-operative or of financing the supply of farming requisites or of meeting expenses incidental to the handling, storing, treating or processing of such agricultural products, as well as bank overdrafts, shall be shown under appropriate headings.
Secured liabilities
14. When any liability of the co-operative is secured by any asset of the co-operative other than by operation of law, such liability shall be indicated separately, and the asset concerned shall be specified.
Amounts due to certain juristic persons and partnerships
15. The following shall be shown under separate headings:
(a) The amount owing otherwise than in the normal course of business, by the co-operative to juristic persons and partnerships in which the co-operative has an interest, except a company subsidiary of the co-operative; and
(b) the amount owing by the co-operative to its company subsidiaries.
Assets
16. Fixed assets, current assets and assets that are neither fixed nor current shall be reflected separately.
Fixed assets
17. The method applied to arrive at the amount of a fixed asset or an asset that is neither fixed nor current shall be specified under each heading.
18.(1) The method of arriving at the amount of a fixed asset (or an asset that is neither fixed nor current) shall be to take the difference between-
(a) the cost price thereof or, if it appears in the books of the co-operative at a valuation, the amount of the valuation; and
(b) the aggregate amount provided or written off since the acquisition or valuation, as the case may be, for depreciation.
(2) The following amounts in respect of assets which have been determined in accordance with subitem (1) shall be indicated under each heading:
(a) The aggregate of the amounts referred to in paragraph (a) of that subitem; and
(b) the aggregate of the amount referred to in paragraph (b) of that subitem.
19.(1) There shall in respect of land and buildings be stated-
(a) a description of the land and buildings and the situation thereof;
(b) the date of acquisition thereof by the co-operative;
(c) the purchase price thereof; and
(d) the cost of improvements since the date of acquisition or the most recent valuation, as the case may be:
Provided that where there are more than five different items of land and buildings a co-operative may, if it considers that compliance with this subparagraph to be inconvenient or cumbersome, include the information in a register and, in that event shall state in the financial statements that the said register shall be open for inspection by members at the registered office of the co-operative or such other place referred to in section 134 (4).
(2) As regards any fixed asset referred to in subitem (1) the amount of which is arrived at with reference to a valuation, the provisions of paragraphs (b) and (c) of that subitem shall not apply, but the years in which the asset was valued, the valuations and in the case of an asset valued during the financial year in question, the names and qualifications of the persons that carried out the valuation and the basis used by them for the valuation shall be stated.
Goodwill, patents and trade marks
20. The amount of the goodwill, patents or trade marks shall, in so far as it has not been written off, be shown under separate headings.
Investments
21. The following shall be shown under separate subheadings:
(a) The amount of the co-operative's investment in the shares and members' funds of other co-operatives separately; and
(b) the amount of the co-operative's investments in shares and securities other than those referred to in paragraph (a) and, by way of a note in respect of each such investment, the name of the company or other juristic person, the number of shares and securities involved and the cost price thereof: Provided that investments in company subsidiaries of a co-operative shall be shown under a separate heading:
Provided that, if the director's valuation differs from the book value of each such investment, that fact and the amount of the directors' valuation shall also be shown.
Loans due to co-operative
22. There shall be shown under separate subheadings-
(a) any amount due to the co-operative, otherwise than in the normal course of business, by other co-operatives of which it is a member and, in a note in respect of each such debt, the name of such a co-operative, the amount due, the nature of the debt and whether or not it is a secured debt, the rate at which interest was or is to be paid and the terms upon which the debt is being or is to be repaid and if such terms have not been complied with, the extent of such non-compliance;
(b) any amount due to the co-operative, otherwise than in the normal course of business, by companies in which it holds shares and, in a note in respect of each such debt, the name of the company, the amount due, the nature of the debt and whether or not it is a secured debt: Provided that amounts owing by company subsidiaries shall be shown under a separate heading;
(c) any amount due to the co-operative by employees in respect of loans granted to them as employees; and
(d) any amount due to the co-operative, otherwise than in the normal course of business, by any person other than the persons mentioned in paragraphs (a), (b) and (c).
Investments in company subsidiaries
23. The aggregate amount of the investments of the co-operative in company subsidiaries, consisting of shares and amounts receivable (whether on account of loan or otherwise) distinguishing between shares, indebtedness and provisions, shall be set out separately.
Current assets
24.(1) (a) The amount of the current assets shall be shown as a separate item and shall be classified under appropriate subheadings, which shall at least include-
(i) the amount of trading stock and of farming requisites; and
(ii) the amount of agricultural products on hand, excluding pool products or products that the co-operative may have on hand as agent.
(b) As regards the method of determining the value of the trading stock, farming requisites and agricultural products referred to in paragraph (a), there shall be stated-
(i) whether it is consistent with the method according to which it was determined in the previous financial year;
(ii) whether it is the lower of cost or of net realizable or replacement value or other expressly declared value; and
(iii) the accounting basis that has been applied in determining the value of the said stock, farming requisites and agricultural products on hand.
(2) The amount of debtors shall be shown separately and classified under appropriate subheadings, which shall at least include-
(a) the amount due by members of the co-operative; and
(b) the amount due by other co-operatives and companies, otherwise than in the normal course of business, in which the co-operative holds shares: Provided that the amount due to the co-operative by company subsidiaries shall be shown under a separate heading.
(3) The amount provided for doubtful debts shall be shown separately as a reduction against debtors.
(4) The following shall be shown separately:
(a) The balance on a pool account held in respect of agricultural products or any thing which is derived from an agricultural product over which the co-operative has acquired control in the carrying out of an object contemplated in section 21 (1) (a);
(b) the balance on an account held in respect of products over which the co-operative has acquired control as the agent of a control board; and
(c) a debit balance on a pool account referred to in paragraph (a), with a note indicating the net realisable value of any unsold agricultural products or such things.
(5) If in the opinion of the board of directors of the co-operative a current asset will on realisation in the ordinary course of business yield an amount less than the amount at which such asset appears in the books of the co-operative, the extent of the estimated deficit shall be stated if no provision has been made for such deficit.
Debenture issues
25. In so far as they have not been written off the following shall be stated under separate subheadings:
(a) The costs incurred in connection with the issue of debentures;
(b) the amounts paid by way of commission in respect of debentures;
(c) the amounts allowed by way of discount in respect of debentures; and
(d) the manner in which the above items are to be written off.
Contingent liabilities
26. The following matters shall be stated by means of a note, namely:
(a) Particulars of any material guarantee given by the co-operative and of any encumbrance on the assets of the co-operative: Provided that guarantees of the same kind may be shown in one total;
(b) particulars of any encumbrance on the assets of the co-operative to secure the liabilities of any other person, including, where practicable, the amount secured; and
(c) the general nature of any other contingent liability not provided for and, where practicable, the aggregate or estimated amount of those liabilities, if it is material.
Contracts for capital expenditure
27. Where practicable, the aggregate amount or estimated amount, if it is material, of contracts for capital expenditure not otherwise provided for, and the aggregate amount or estimated amount, if it is material, of capital expenditure authorised by the directors and not been contracted for, and the source from which funds to meet such expenditure will be provided, shall be stated.
Foreign currency
28. The basis on which foreign currency has been converted into rand, if the effect thereof on the results for the year is material, shall be stated.
General
29. Except in the case of the first balance sheet, the corresponding amounts as at the end of the preceding financial year shall be shown in the case of all items in the balance sheet and in any note or annexure thereto.
B. INCOME STATEMENT
30.(1) The following shall be shown separately in the income statement:
(a) The amount of income from company subsidiaries in which case dividends, interest, fees and any other income shall be specified;
(b) the amount of income derived from other investments;
(c) the amount of income derived from other loans;
(d) the amount of any material capital gain or loss: Provided that any capital gain or loss resulting from the disposal of vehicles, equipment, furniture and appliances may be shown in one total;
(e) the amount of interest paid on long term loans and debentures;
(f) the amount of interest paid on members' funds;
(g) the amount of interest paid on any other money borrowed;
(h) the amount written off as bad debts;
(i) the amount debited against income for depreciation of fixed assets;
(j) subject to the provisions of subitem (4), the separate amounts debited against income by means of provisions, other than provisions for depreciation of fixed assets, specifying the nature of each provision and the amount withdrawn from such provisions and not applied for the purposes thereof;
(k) the amount of any remuneration paid to the directors of the co-operative;
(l) the amount of the auditor's remuneration, in which case a distinction shall be made between remuneration for the audit, remuneration for other specified services, the auditor's expenses and payments in respect of the audit and any other matter;
(m) the amount paid by way of leasing charges for the use of any asset that, if owned by the co-operative, would have been subject to a charge for depreciation;
(n) the amount provided for income tax in respect of the financial year concerned and the amount, if any, so provided for in respect of any other financial year; and
(o) the amount, if material, of any credit or debit arising in consequence of an event in a preceding financial year.
(2) (a) In the event of an income statement being drawn up in compliance with the proviso to section 135 (2) by a co-operative paying bonuses to its members according to a scheme of distribution, the particulars referred to in subitem (1) shall not, if the board of directors and the auditor of the co-operative are of the opinion that these are not applicable, be included in such income statement.
(b) The income statement referred to in paragraph (a) shall, apart from the particulars referred to in subitem (1) but subject to the provisions of paragraph (a), include such additional particulars as may be necessary to fairly reflect the profit or loss resulting from the particular object which was carried out by the co-operative, in accordance with generally accepted accounting practice applied on a basis consistent with that of the preceding year.
(c) If the auditor of a co-operative holds an opinion contrary to that of the board of directors regarding particulars that are deemed inapplicable in terms of paragraph (a) or that may be necessary to reflect fairly the profit or loss in terms of paragraph (b), the auditor shall mention this fact in terms of section 154 in his report.
(3) The manner in which the surplus of the preceding financial year has been applied shall be stated if this has not already been shown in the statements of the preceding financial year.
(4) If the registrar is satisfied that a separate indication for an amount referred to in subitem (1) ( j ) is not in the interest of the co-operative or its members or that it may prejudice the co-operative, he may, on the conditions determined by him, grant permission that such an amount not be indicated separately.
(5) Except in the case of the first income statement, the corresponding amounts as at the end of the preceding financial year shall be shown for all items in the income statement and in any note or annexure thereto.
Notes to income statement
31. The following matters shall be shown by means of a note to the income statement, namely:
(a) If no provision has been made for income tax, a statement to that effect and the reason therefor;
(b) all material respects in which items included in the income statement (with an indication of the amount involved in each case) are affected by-
(i) transactions of a nature not usually entered into by the co-operative or otherwise by circumstances of an exceptional or non-recurrent nature; or
(ii) any change in the accounting policy; and
(c) the amount of the profit or loss of each company subsidiary of the co-operative for the accounting period that corresponds with the financial year of the co-operative.
C. STATEMENT OF SOURCE AND APPLICATION OF FUNDS
32.(1) A statement showing the sources and the application of any funds received and applied during the financial year shall be annexed to the annual financial statements or separately incorporated therein.
(2) An analysis of changes in working capital shall also be shown.
D. DIRECTOR'S REPORT
General
33.(1) The director's report shall deal in narrative form under appropriate headings with all descriptive matters, and amounts or statistics mentioned therein shall be set out in tabular form as far as may be practicable.
(2) Where any amounts are mentioned, the corresponding amounts, if any, in respect of the preceding financial year shall also be shown.
General review
34.(1) The report shall give a general review of the business and operations of the co-operative during the financial year and the results thereof and shall deal with each fact and circumstance material to the appreciation of the state of the co-operative's affairs by its members.
(2) The report shall deal with any material fact or circumstance that occurred between the end of the financial year and the date of the report.
Specific matters
35. Unless such information is already given in any statement annexed to the annual financial statements, the report shall state-
(a) the nature of the business of the co-operative and of its company subsidiaries, if any, and any major change therein during the financial year;
(b) any major change in the nature of the fixed assets of the co-operative or of its company subsidiaries, if any, during the financial year or any change in policy relating to the use of fixed assets: Provided that the opening or commissioning of a new branch or depot shall be deemed to be included therein;
(c) the board of directors' proposals with regard to the application of any surplus of the co-operative and of any profit of a company subsidiary;
(d) the names of the directors, the chief executive officer and the secretary of the co-operative and any change during the financial year; and
(e) the registered address of the co-operative.
Schedule 3
LAWS REPEALED
|
Number and year of law |
Title |
|
Act 29 of 1939 |
Co-operative Societies Act, 1939 |
|
Act 44 of 1960 |
Co-operative Societies Amendment Act, 1960 |
|
Act 56 of 1963 |
Co-operative Societies Amendment Act, 1963 |
|
Act 65 of 1964 |
Co-operative Societies Amendment Act, 1964 |
|
Act 44 of 1975 |
Co-operative Societies Amendment Act, 1975 |
|
Act 69 of 1979 |
Co-operative Societies Amendment Act, 1979 |
[SAPL5][a42y1985]CO-OPERATIVES AMENDMENT ACT 42 OF 1985[/SAPL5]
[ASSENTED TO 26 MARCH 1985] [DATE OF COMMENCEMENT: 12 APRIL 1985]
(English text signed by the State President)
ACT
To amend the Co-operatives Act, 1981, so as to replace certain obsolete designations, and to further define 'branch'; to delete the requirement that the schedule accompanying an application for the registration of a statute and the incorporation of a co-operative shall specify the occupations of persons who applied for membership of the co-operative; to provide that the Registrar of Co-operatives shall issue a certificate whenever the statute of a co-operative is amended to alter the name of the co-operative; to provide for the amendment of registers and documents as a result of the change of name of a co-operative; to further regulate the use and publication of the name of a co-operative; to extend the powers of co-operatives; to place further restrictions on the conclusion of transactions by an agricultural or special farmers' co-operative with persons who are not members of that co-operative; to delete the requirement that the occupations of members of certain co-operatives shall be entered in the register of members; to provide that a capital gain shall be set aside as a general reserve and that a capital loss may be written off against a general reserve; to create certain offences for contraventions of the said Act; to declare further persons incompetent to hold the office of director of certain co-operatives; to make further provision in connection with representatives of juristic persons at general meetings; to further regulate the appointment of proxies by members and the said representatives; to abolish the restriction on matters which may be disposed of at series of meetings; to further define certain duties of the auditor of a co-operative; to make further provision in connection with the special statutory pledge of co-operatives; and to increase the maximum fine which may be imposed after conviction of offences in terms of the said Act; and to provide for matters connected therewith.
1 Amends section 1 (1) of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes the definition of 'branch', paragraph (b) substitutes the definition of 'director-general'; and paragraph (c) substitutes the definition of 'Minister'.
2 Amends section 4 of the Co-operatives Act 91 of 1981 by substituting the words 'Agricultural Economics and Marketing' for the words 'Agriculture and Fisheries'.
3 Amends section 26 (2) of the Co-operatives Act 91 of 1981 by substituting paragraph (d).
4 Amends section 33 of the Co-operatives Act 91 of 1981 by substituting subsection (8).
5 Inserts section 38A in the Co-operatives Act 91 of 1981.
6 Amends section 41 (1) of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes paragraph (a); and paragraph (b) deletes in paragraph (b) and in the proviso the words 'or abbreviated form' wherever they occur.
7 Amends section 49 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection 1 (f); paragraph (b) inserts subsection (1) (sA); and paragraph (c) adds subsection (3).
8 Amends section 54 (2) of the Co-operatives Act 91 of 1981 by substituting paragraph (b).
9 Amends section 66 (1) of the Co-operatives Act 91 of 1981 by substituting paragraph (a).
10 Amends section 78 of the Co-operatives Act 91 of 1981 by inserting subsections (2A) and (2B).
11 Amends section 82 of the Co-operatives Act 91 of 1981 by substituting paragraph (d).
12 Amends section 83 of the Co-operatives Act 91 of 1981 by adding subsection (3).
13 Amends section 84 of the Co-operatives Act 91 of 1981 by adding subsection (6).
14 Amends section 86 of the Co-operatives Act 91 of 1981 by substituting subsection (3).
15 Amends section 108 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1) (a); paragraph (b) inserts subsection (1) (aA); and paragraph (c) inserts subsection (1A).
16 Amends section 124 of the Co-operatives Act 91 of 1981 by substituting subsection (2).
17 Amends section 125 of the Co-operatives Act 91 of 1981 by substituting the words preceding paragraph (a).
18 Amends section 132 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
19 Amends section 153 of the Co-operatives Act 91 of 1981 by substituting paragraph (l).
20 Amends section 173 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1) (c); paragraph (b) substitutes subsection (2) (a); paragraph (c) substitutes subsection (2) (b); paragraph (d) substitutes subsection (4); and paragraph (e) inserts subsection (4A).
21 Substitutes section 239 of the Co-operatives Act 91 of 1981.
22 Short title
This Act shall be called the Co-operatives Amendment Act, 1985.
[SAPL5][a80y1987]CO-OPERATIVES AMENDMENT ACT 80 OF 1987[/SAPL5]
[ASSENTED TO 30 SEPTEMBER 1987] [DATE OF COMMENCEMENT: 1 FEBRUARY 1988]
(Afrikaans text signed by the State President)
ACT
To amend the Co-operatives Act, 1981, so as to further define 'agricultural product'; to extend the objects of primary agricultural co-operatives so as to include certain insurance business; to provide for the marketing of agricultural products from self-governing territories and independent states in the Republic as well as aid from the Republic's agricultural co-operatives to such territories and states; to further regulate the membership of certain co-operatives; to provide for the attendance of the registrar at meetings of co-operatives; to further regulate the liability of directors and officers; to provide that certain co-operatives may prescribe in their statutes the number of persons that may request a vote by ballot paper at general meetings; to repeal the requirement that the registrar may approve the appointment of a co-operative's auditor; to provide for co-operatives to make compromises and arrangements; to provide for the registration by the registrar of deeds of any conversion, amalgamation, compromise or arrangement, the registration, if necessary, of property other than fixed property, and the exemption of the payment of certain registration fees; to provide that members of co-operatives under liquidation do not have to bring claims against members' funds; to provide for the judicial management of co-operatives; to further regulate the amendment, substitution and repeal of certain notices and proclamations, and to provide for contraventions of those notices and proclamations; and to repeal Schedule 1; and to provide for incidental matters.
1 Amends section 1 of the Co-operatives Act 91 of 1981 as follows: paragraph (a) substitutes the definition of 'agricultural product'; and paragraph (b) deletes subsection (2).
2 (1) Amends section 21 (1) (g) of the Co-operatives Act 91 of 1981 by adding subparagraph (iii).
(2) Anything done by a primary agricultural co-operative or a primary special farmers' co-operative from the date of commencement of the principal Act and which could have been done if subparagraph (iii) of section 21 (1) (g) of the principal Act, as inserted by subsection (1), was in operation shall be deemed to have been done in terms of that subparagraph.
(3) A primary agricultural co-operative or primary special farmers' co-operative which existed immediately prior to the date of commencement of the principal Act, and which had as one of its objects the object referred to in subparagraph (iii) of section 21 (1) (g) of the principal Act, as inserted by subsection (1), shall be deemed to have that object from the said date as one of its objects.
3 Amends section 54 of the Co-operatives Act 91 of 1981 as follows: paragraph (a) substitutes paragraph (c) of subsection (1); and paragraph (b) substitutes in subsection (4) paragraph (c) of the definition of 'business turnover'.
4 Amends section 57 of the Co-operatives Act 91 of 1981 as follows: paragraph (a) substitutes subparagraph (v) of paragraph (a) of subsection (1); and paragraph (b) adds subparagraph (vi) to paragraph (a) of subsection (1).
5 Amends section 58 of the Co-operatives Act 91 of 1981 as follows: paragraph (a) substitutes subparagraph (v) of paragraph (a); and paragraph (b) adds subparagraph (viii) to paragraph (a).
6 Amends section 112 of the Co-operatives Act 91 of 1981 by adding subsection (4).
7 Substitutes section 116 of the Co-operatives Act 91 of 1981.
8 Amends section 122 of the Co-operatives Act 91 of 1981 by adding subsection (5).
9 Amends section 123 of the Co-operatives Act 91 of 1981 by adding subsection (4).
10 Amends section 129 of the Co-operatives Act 91 of 1981 by substituting subsection (2).
11 Repeals section 148 of the Co-operatives Act 91 of 1981.
12 Substitutes the heading of Chapter VIII of the Co-operatives Act 91 of 1981.
13 Inserts a subheading and sections 169A, 169B and 169C after section 169 of the Co-operatives Act 91 of 1981.
14 Amends section 171 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
15 Amends section 215 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
16 Amends section 217 of the Co-operatives Act 91 of 1981 by inserting paragraph (cA) after paragraph (c) of subsection (1).
17 Amends section 219 of the Co-operatives Act 91 of 1981 by substituting paragraph (e).
18 Inserts Chapter XA (headings and sections 237A to 237N inclusive) after Chapter X of the Co-operatives Act 91 of 1981.
19 Amends section 241 of the Co-operatives Act 91 of 1981 as follows: paragraph (a) substitutes paragraph (b) of subsection (3); and paragraph (b) adds paragraphs (c) and (d) to subsection (3).
20 Repeals Schedule 1 to the Co-operatives Act 91 of 1981.
21 Short title and commencement
(1) This Act shall be called the Co-operatives Amendment Act, 1987, and shall come into operation on a date fixed by the State President by proclamation in the Gazette.
(2) Different dates may be so fixed in respect of the different provisions of this Act.
[SAPL5][a38y1988]CO-OPERATIVES AMENDMENT ACT 38 OF 1988[/SAPL5]
[ASSENTED TO 24 MARCH 1988] [DATE OF COMMENCEMENT: 1 JULY 1988]
(English text signed by the State President)
ACT
To amend the Co-operatives Act, 1981, so as to make further provision for the application of surpluses of co-operatives; and to provide for incidental matters.
1 Amends section 82 of the Co-operatives Act 91 of 1981 by inserting paragraph (aA).
2 Short title and commencement
This Act shall be called the Co-operatives Amendment Act, 1988, and shall come into operation on a date fixed by the State President by proclamation in the Gazette.
[SAPL5][a37y1993]CO-OPERATIVES AMENDMENT ACT 37 OF 1993[/SAPL5]
[ASSENTED TO 25 MARCH 1993] [DATE OF COMMENCEMENT: 2 APRIL 1993]
(English text signed by the State President)
ACT
To amend the Co-operatives Act, 1981, so as to amend certain obsolete definitions; to delete obsolete transitional clauses; to further regulate the manner in which membership of co-operatives is obtained, and the requirements for such membership in general; to provide for the amendment of the objects of co-operatives; to make provision for simplified procedures regarding the registration, conversion and amalgamation of co-operatives; to transfer powers of the Minister to the Registrar of Co-operatives; to provide for the expansion of business with non-members; to regulate the representation and voting rights of members at general meetings; to provide for the delegation of powers by the board of directors; to provide for the preparation of consolidated annual statements; and to provide for the incorporation of co-operatives as public or private companies or as close corporations; and to provide for matters connected therewith.
1 Amends section 1 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) inserts the definition of 'Companies Act'; paragraph (b) substitutes the definition of 'director-general'; paragraph (c) substitutes the definition of 'Directorate Co-operatives' for the definition of 'Division of Co-operatives'; paragraph (d) substitutes the definition of 'Minister'; and paragraph (e) inserts the definition of 'non-member'.
2 Amends the Co-operatives Act 91 of 1981 by substituting the heading before section 4.
3 and 4 Substitute respectively sections 4 and 5 of the Co-operatives Act 91 of 1981.
5 Amends section 6 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1); and paragraph (b) deletes subsection (4).
6 Amends section 19 (1) of the Co-operatives Act 91 of 1981 by substituting paragraphs (a), (b) and (c).
7 Amends section 21 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) inserts subsection (1) (bA); paragraph (b) inserts subsection (1) (dA); and paragraph (c) substitutes subsection (2) (a).
8 Amends section 24 of the Co-operatives Act 91 of 1981 by substituting subsections (1) and (2).
9 Amends section 26 (2) of the Co-operatives Act 91 of 1981 by adding paragraph (i).
10 Substitutes section 27 of the Co-operatives Act 91 of 1981.
11 Amends section 30 (1) of the Co-operatives Act 91 of 1981 by deleting paragraph (e).
12 Amends section 31 (1) of the Co-operatives Act 91 of 1981 by substituting paragraphs (a) and (b).
13 Amends section 33 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (3); paragraph (b) substitutes subsection (4); paragraph (c) deletes subsection (5); paragraph (d) substitutes subsection (6); and paragraph (e) substitutes subsection (7).
14 Amends section 35 (1) of the Co-operatives Act 91 of 1981 by substituting the words preceding paragraph (a).
15 Amends section 44 of the Co-operatives Act 91 of 1981 by adding paragraphs (c) and (d).
16 Amends section 49 (1) of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes paragraph (f); and paragraph (b) substitutes paragraph (s) (ii).
17 Amends section 54 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1) (b); paragraph (b) substitutes in subsection (4) paragraph (b) of the definition of 'business turnover'; paragraph (c) substitutes in subsection (4) the definition of 'fixed percentage'; paragraph (d) inserts subsection (4A); and paragraph (e) substitutes subsection (5).
18 Amends section 57 (1) of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes paragraph (a); paragraph (b) substitutes paragraph (b) (ii) and (iii); and paragraph (c) substitutes paragraph (c) (iii).
19 Amends section 58 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes paragraphs (a) and (b); and paragraph (b) substitutes paragraph (c) (iii).
20 Amends section 59 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1); and paragraph (b) substitutes subsection (2) (a).
21 Amends section 60 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1) (a) and (b); and paragraph (b) substitutes subsection (2) (a) and (b).
22 Amends section 61 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
23 Amends section 62 of the Co-operatives Act 91 of 1981 by adding the word 'and' at the end of paragraph (b), and paragraph (c).
24 Amends section 66 (1) of the Co-operatives Act 91 of 1981 by substituting paragraphs (b) and (c).
25 Inserts section 66A in the Co-operatives Act 91 of 1981.
26 Amends section 71 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
27 Amends section 75 (1) of the Co-operatives Act 91 of 1981 by substituting the words preceding paragraph (a).
28 Amends section 81 (1) of the Co-operatives Act 91 of 1981 by substituting the words preceding paragraph (a).
29 Amends section 83 of the Co-operatives Act 91 of 1981 by deleting subsections (2) and (3).
30 Amends section 84 (4) of the Co-operatives Act 91 of 1981 by substituting the words preceding paragraph (a).
31 Amends section 87 of the Co-operatives Act 91 of 1981 by substituting subsection (3).
32 Amends section 103 (1) of the Co-operatives Act 91 of 1981 by substituting paragraph (b).
33 Amends section 105 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (2); and paragraph (b) deletes subsection (3).
34 Amends section 107 of the Co-operatives Act 91 of 1981 by substituting subsection (2).
35 Amends section 108 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1) (a) (ii); and paragraph (b) inserts subsections (1B), (1C), (1D) and (1E).
36 Substitutes section 124 of the Co-operatives Act 91 of 1981.
37 Amends section 125 (1) [sic] of the Co-operatives Act 91 of 1981 by substituting paragraphs (c) and (d).
38 Amends section 126 (1) of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes paragraph (c); and paragraph (b) substitutes paragraph (e).
39 Amends section 128 of the Co-operatives Act 91 of 1981 by substituting subsection (3).
40 Amends section 130 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) adds the word 'and' at the end of subsection (1) (b), and subsection (1) (c); and paragraph (b) substitutes subsection (2).
41 Amends section 134 (1) of the Co-operatives Act 91 of 1981 by deleting the word 'and' at the end of paragraph (d) and inserting paragraph (dA).
42 Amends section 135 of the Co-operatives Act 91 of 1981 by deleting subsection (5).
43 and 44 Insert respectively sections 135A and 135B in the Co-operatives Act 91 of 1981.
45 Amends section 136 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
46 Amends section 137 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes in subsection (1) the words preceding paragraph (a); and paragraph (b) deletes subsection (2).
47 Amends section 139 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1); paragraph (b) inserts subsections (1A) and (1B); paragraph (c) substitutes subsection (3); and paragraph (d) inserts subsection (4).
48 Amends section 152 of the Co-operatives Act 91 of 1981 by substituting the words preceding paragraph (a).
49 Amends section 153 of the Co-operatives Act 91 of 1981 by substituting the words preceding paragraph (a), and paragraph (a).
50 Amends section 154 of the Co-operatives Act 91 of 1981 by substituting subsections (2), (3) and (4).
51 Amends section 155 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
52 Amends section 156 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1); and paragraph (b) inserts subsection (2A).
53 Substitutes section 158 of the Co-operatives Act 91 of 1981.
54 Inserts the heading after section 161, and sections 161A, 161B and 161C, in the Co-operatives Act 91 of 1981.
55 Amends section 162 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1); and paragraph (b) inserts subsection (1A).
56 Substitutes section 163 of the Co-operatives Act 91 of 1981.
57 Amends section 165 of the Co-operatives Act 91 of 1981, as follows: paragraph (a) substitutes subsection (1); and paragraph (b) inserts subsection (1A).
58 Substitutes section 166 of the Co-operatives Act 91 of 1981.
59 Amends section 180 of the Co-operatives Act 91 of 1981 by deleting subsection (2).
60 Amends section 185 of the Co-operatives Act 91 of 1981 by adding subsection (4).
61 Amends section 195 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
62 Amends section 198 of the Co-operatives Act 91 of 1981 by substituting subsection (1).
63 and 64 Substitute respectively sections 201 and 202 of the Co-operatives Act 91 of 1981.
65 Amends section 224 of the Co-operatives Act 91 of 1981 by substituting subsection (5).
66 Amends section 227 (1) of the Co-operatives Act 91 of 1981 by substituting the word 'Directorate' for the words 'Division of'.
67 Substitutes section 236 of the Co-operatives Act 91 of 1981.
68 Amends section 241 (3) (c) of the Co-operatives Act 91 of 1981 by substituting subparagraph (i).
69 Short title
This Act shall be called the Co-operatives Amendment Act, 1993.