Agricultural Cooperative Societies Proclamation No. 85/1994

PROCLAMATION NO. 85/1994 AGRICULTURAL COOPERATIVE SOCIETIE.S · PROCLA!MA TION Whereas, it baa become nece8SIIIIY to make · conditions convinient so that an Ethiopian 1Peasant livm,g in srun1 areas in scattered manner by being org&nir.ed on free will may be ahle to solve jointly the econoim.ie and aocial problem. facing him; Whereas, it h¥ &eoome eseential to mab 1D& · aoejeties . . play their roles properl¥ in a , free mub; aysWP Ly getting rid off the gover11mental intervf>.ntion in tihe .iaitiemal affairs of the Agi-icultmal ~tive eocieties; Whereas, it has beoolllJ.e imperative to iasue a ~tion by whiclt agricultui.-al CO()per&tive aocieties be o~ and administered in order to achieve the foregoing ~ntfuoed obj~ctives; Now, T.bE.refore, i.n accordance with A.rticle 9 (d) of. the T.r8Jllinliionaf 'Pr.riod Chmer, it ~ benby ~ .n follows: p AB.1 :($.E Gensral, l. "Society" means a pTima.ry or a hig:her level agricul tural coopeJative society ,registered under llhis proc• lamation; 2. "Member'' means any phy5foal person or a rocietv having juridica.l perSiOilality wlhich is registered a.fter fulfilling its membemhip obligation; 3. ··General Meeting" me81Jls a meeting of members of the j>ri•uary coope:rallive 1SOCiety; 4. "General Assemhly'' means a meeting of a highe ~ociety in which individual ,persons representing me 1Tu:c1 ,;ocieties attended; 5. "Special He.:;olution" muns a resolution passed by a majority of (2/3) or such :higher quorum or majority as may he specified in the by-laws 6. '"Management Commiittee'' means a body elected and empowered by !Jhe general meeting or assenilhfy with the responsibility lo manage the aclltvities of the so ciety; 7. "Ministry" means ,Ministry of Agriculture; 8. "AgriculturaJ Bureau" means a naitianru/N!§ic,nal self-government agrieulturaJ buirelllU; 9. "'Appropriate Authority" means an agricultu1·aL bureau, in case tthe matter to be entertained by it relates to members of a society foU!Dd i,n a certain nationnl/.regional eelf~emmen.t or tr Mmii!try in tihe case the matter to he entertlllined by it relates to members of society found in more than one na tional/rc,gionai self-governments; Objec:titie.~ of the Socie'!y The society to be established under this proclamation shall have the following objectives: }. to 1D1prove the 11:vmg condition ol. members by in creasing ptoduetion and produetivf.ty; 2. to promotE' self-reliance among ~; 3. to solve prohlmns collectively rwthidh a peasant oo.nno'. personally acliieve; 4. to make memhers obtam modern . t:ech.noll'Jgies pro duct., which Pre caiplllble to ioncrease agricu:lhn·al produetion and materials necessary for 1lhek lively hood ea~ily a:nd at fair ~; 5. to eatisfy the needs of a community amJ increase the income of a peasant by processing ~eultural product to indtl!trial products; and 6. to promote tlJi& cultures of the members by teaching and training. Guiding Principles of Soeietia The l!Ociety shall he guided by principles: }. IndividuaJa who are auppoeed to be voluntarily memhen mUl!lt ha. llilmJar type of. work and intere.rt. 3. Surplus of the society shall he distrihurted to mem hers according tQ tht'lir participation in the economk uctiv11ie., of the society; 4. The society shaJl stand non-allined and free from any political influence. PART TWO Formation and Regi&tration of Societies 5. Formation of a Primary Society 1. A primary society to he estahnshed shill be on the free will of the peasants living wi!ihin a given area: 2. The numlier of memhers in a primary society to be established shall not he I~ llha.11 ten. 6. Forrnation of Higher Level Society Two or more primary societies may he establis.hed a higher level society. 7. Types of Societies 1. A society may engage in eillher one tyipe of activity or in activities with multipurposes llllld may have a character of either service rendering or producing: 2. The field of area to he engaged tiin by any society shall he <lctermirned by the by-l8!Ws of the ;neiiety. 8. Name of a Society 1. Any society shall have a name; 2. The word "Cooperative Society'' sb,11 appeair in the name of every primary society; 3. The word "Union" or "Federation'' shall appear in the name of 1mgher level sooie1 y. 9. Registration of Society I. Any society shall he registcted by the appropriate authoTity; 2. Any society when established shall submit an appli· cation for registration together with the following particulars to the appropriate authority: a) the by-laws of t!he society; b) names, acl.mess and signatll!re of the members; C) names, addrt:ss and sign.atuires o£ the IIIlt'llllher., or the manll.gi"IMD.t oommittee of the !IOCiety; d) names and address and the i,jgnatures of the leaders 0£ the member pr.irmary societial. 3. Thi'.' appropriate authority shaill regtster a society and iosuc a oortific.ute of registrati(J[I; Wlithirn 15 da.ys when he satisfies that applicallion for :r,egistration submitted to him hM fuliilled the TeqUirement for regimai.ion. 11. By-laws ,JI Society 1. Every ,;ociety shall have, !its own by-law; 2. The cont<cnts of the by-law shall include the followin~ particulars:• a) name of the society; h) address of the society; c) objectives of the society; d) requirements necessary for membership of so ciety and eonditions for dismissal from mernbel"• ship; e) the :rights and duties of the members of the society; f) the ..-espcmsihi.1ities and working mechanism of managemoot borues; g) alloca1ion a!lld distriibution of su:rpil:us; and h) otheI' cases not contrary to this proclamation. 3. The by-laws of ~may he amended by the gene ral meeti~ or assembly; 4. The Ji:tnendment of the by.Jaws of society shall he effective only where it is submitted and 1:gisterrd. 12. Amalgamation and Division of Societies 1. The gC'Ilcrel meeting of a society 1ihroug¾t a spocial resolution may: a) by dividing miellf <in to two or more societies, or b) by amalgamating itself with one or more societies form a new society. 2. AmalgamatiOOl a.nd division of tbe society shall be effecth-e through a special iraJOlution; a) if the members and creditors of the society fully agree of its amalgamation or division; or b) if the special resolution is registered by the approprialle a.ut:hority i.n that the members and crf'ditcrs have been paid off or tlhe payment is guaranted to the satisfaction of the appro priate authority. 3. The prtvious records of societies shall be cancelled from the ~-egister as soon as the newly f~ sooie ty by amalgamation is registered or the newly fonnetl s0cieties hy divisicm are registered: 4. The rights and duties of societies wihidh have lost their identities by aim.algmwl'tion shali be f.l'llllsf,.red to the newly formed soc!iety; 5. The righui and duties of a sooiety hu I«it its iden• tity by division shall he transfered to the newly fOT· med ~etie..~ as specimed in sub a-rticle two of this article. PART THREE Tlie Rir,hta and Dutiu of· • S«ilt,ty 13. Requirements Neces¥&ry for Membership of Primary Society l. Any individual m&y heoo:me a member of. primary eociety if: e) he is found willing to implement it.,; ubligati,:, 11 , 2) Any v, ":n:rn shall have the rii-ihl to l;,, ;, m'.!nibcr of societv if she fulfills the reqoo~m<"n';.; set forth i ,, sub article 1 of this article. 14. Rights w1d Duties of 11-Iembers l. Any memher of a society shall haw the fol!owinc: rights: a) to obtain services and benefits according to his partidpation i:n the society; b) to participate in the meeting of the ;;,;ciety 1:nrl to vote; c) to elect or be elected; however a member who has not attained the age of 18 sh<1H not have the r'·ght t-0 be elected; d) lo withdraw from the society according to his request after due r€19peCt of his benefits. 2. Any member of a society shall ihave the following duties: a) lo pay respect to the by-laws, directives and decisiuns of the society; b) lo work those aetivtlties whieh ought to he wor ked collectively in acco:rdarnce with the by-laws and directives of the society; c) to pay share capital and xegistration fee; d) lo protect the common property of the society. 15. Dismis•ol from Membership l. Any member of a society may lt>ave from the societv on his own intiative: 2. Any member of a society ma:; leave from the sociPtv when it is decided by the ge;-.eral meeting or assembh to dismiss him -from the soc.ety bt>-0ause of OOJJ1<J.I1iting repeated faults; :1. The henefits of any du;missed member shall be re,,. pecte<l in accordance with the h-y-laws of l!he .soci~ty: 4. Without p1-ejudice to the provisions of artide F hE"reof, an} dismissed member may reapply for memLer~hip, however a member dismissed in accor d;mce with the sub article 2 of this 1rticle may he beoome a memher of the aociety only if bl oht::ur.s the approv:il l)f the gerneral meeting or as.o:.tm::hly, l 6. Payment nf :,;.hares . . 1. The capital whicli enables the society t-0 expand it~ work aetivit:im shall be obtained frmn prnid n:p .:Jhsr..-,s of each mmnhei: in acoordanre of the de;:i.sion oi the /:(Cncr>1l mrni!ling or aS,9C'.!Dh1y; 4. The society may pay interest on the share issued in accordance with the by-laws of the society; how ever the rate of mterest ahalll mt exoeed the hank interest rate. 17 Regl,$ter of 11.tlembers Every society shall keep a ~ster wlherein shall be e<nte ed. 1. the name, address, age a,nd sex of eacli member; ~. the date on which 1he become a IIJ.embetr or ceased lt> be a member; 3. the amount of shares ihe1d by eacli member; 4. the name of the heir of the member; a!Ild 5. any other details llhat may be specified iiin the by laws. 18. Voting 1. Any meml*r J.ii.al.!, regaroless of the number of shares ownoo uy him have only one vote sit meetinJ of the !',OCiety; 2. Any memher shall not cast a vote througih a repre sentative 19 . . Restriction on Transfer of Share ,or Benefit I. No transfer by a member of ms share or benefit in a society shall be valid unless: a) the member has ihe1d such shaire or be,ne!it for at least one year before he tINl.tl.S:fers; h) a 'T8'11Sfer as made to another member; and c) the transfer is approved by the mmuigement com mittee. 2. On the death of the member, ihis eh.are or benefit shall he transfered to one of his heirs who has been speci£foally mentioned in the register of society to inherit ~ooh aha.re or be~fit ,in the will of llh.e de ceased, or faaliw,g sucli mention to the iheir 811: law, where such heir is a member · or tis admitted as a member; 3. Where such heiir is not ia •member aind does not wish to become or is not admitted as a member, ihe shall he paid the value of the share or benefit of llh.e de cemred member; 4. If the -:,ha~-es or benefit to be transfered to a member under this article are i6oomd to be beyond the limi tation as prescribed in sub arl!icle 3 article :16 ihereo£, the member shall be pmd ~ difference i<n cash; 5. The transe.r or payment concluded in pumuance of sub article 2 or 3 of 1mS article sh.all not he reversed due to the claims paU9ed by llhiro , parties on the !!OCiety. PART\FXlUR 2. The general meelling or the mp.~tatives uf gene r:i I rn;sernhly shall meet twice in a year. But if 1:ihe ma nagement committee or one tmrd of the llkm'.ber, of general meeting or general a..,;semhly require a ::UbC'.ing to be called, on emergency meeting may bP. he!J by giving 30 days pT'ior notice. :JI. Pov-'cro and Du.f.ies of thl' General i'.!eeting or C 0 n~r:ii r1ssembly I.;" ,;eneral mreting or assembly or of a soeiety shali: t'''"s decisions after evaluating bhe genernl work a,, vitic:s of the societies; 2. issue and amend the by-laws and intemial regulati,)ns uf the society; 3. elect and dismiss the members of the management i,ommittec. controlling OOIIllillittee and when nece~ sary the members of otlmr com1Il1l:ttees; i. determine the :.mount of ;;haires of the sooiety; 5. decide how the ari.nua:l net surplus of lihe society is distributl'd; 6. give decision on the audit report; 7. hear work :n>ports and give proper decision; 8. ,decide ~at a society be either be amalgameted with :mothn ~ciety or he diVlided in prursuamce of this proclamation: 9. approvt> the annual work plan and budget; 10. decide any issue suhmitt!'(i by the manaigmnent committee and other ·cammittees. 22. Special General Meeting or General Asse,nbly 1. The management committee shall 1-tll a sperial gene ral meeting or general SBBeIDhly wii1lhin one month from having required in writing :o do so by t1he limi ted number oi£ memoors as Ina)' be speciified in t} • .: by-laws; 2. Where the mana.gettnent oom·;1ittee rfoiils to call a sr~ cial general meeting or gen,•,-a.l 3.'8emhly in MCOrd:m ce with sub article I of this airticle suoh meeting ➔hall be called by the BB})l"OIPJ.ffl8te authority and shall ;n such cn.se he deemed to have been t-clkd h:1 the ma nagement committee. 23. Maruzgeme11t Cumraita:ee I . There shall be a Dllltlll3igeIDeD.t romm.ittee i:u.viug a limited lll.llllrel" of members as-~ in the Lv laws in every BOciety; 2. The term offioo of ,the management committee shdll lie two vears, however they .nay' l'H cit.her elected or di5.IJlissed at .my time by the gen,e,ral IDNJti~ or nssembly. 24-. Puwers ,11:d Daties of the Jfon.agllme:u Cum.mitt~ The r,o-,\-er3 and <l.utice ,...f the rna~;; ,cri;mmi tli,r 3. prepares report on ,the work activities of the society. lhe next annual work programme and budget and submits to the general mooting or generail assembly 4. calls general meeting or general a;;sernbly in acco·rd ance with the hy-law of the society; 5. executes -all decisions given by the general meeting or general assembly. 25. Controlling Committee 1. Every soc'.ety shall have a controlling committee which ihe number of members shall he specified ;r! the by-laws of vhe society; 2. The term office of the controlling committee shall he twv years, however they may he eithea- reeleo~icd. or <lismissE>d any time by tihe geneml meeting or a, sembly. 26. Powers and nuties of the Cantrolling Committee The controlling committee: ] . follows up that the management committee is car rying out its responsibilities pmpei,ly; 2. follows up that the funds and properties of the societies are property utilized; ;l. controls that the various activities of tlhe society are earried out persuant to tlhe by-laws of illhe society; 4. performs otlher duties given by ,the general :meelmg or assembly. 0th.er Sub-Committees Other .suh-commitrees mey he established as necessary persuant to the by-laws of the i,ooiety. PART FIVE Special Previlages oJ Society 28. Priority of Claims by Society Notwithstanding any proviaion to tlhe contrary in what ever law contained, any deht ow.ed to the society by a member in respect of such membership, shall take prece dence over .all other debts of such peril<>n, except debt owed tv t-he Government. 29. Set-off in Respect of Slwre or Benefit of Members The shares or benefits of any mem:her may be set--oiff for debts due to the society from sucl:t a membetr. 30. Shares or Btmefit not Liable to Attachment or Sale Except as provided in a.rticle 29 hereof, tlhe sh.ares or benefit of a illlember m the capital of a society sihall uot he liable to .ittachment or sale. PART SIX Properties and Funds of Societie.~ 32. Funds of Society not to be Divided No paTt of the funds other than the net suq1lus deter mined to be allocated to mmnhen-s of !the society shall I1e paid as a bonus, dividend or in any other form, h'>wm-er remuneration may be paid to any ;member for 'the servi"?e<i rendered to the 90ciety as prescribed in ti11e by-law. 33. Allocation of Net Surpl'U.3 1. The society may allocate the net surplus obtau~J for the payment of. the following tihings in accordanct• with the terms and conditions set forth m the by-law and plan usued from time to time by the 90Ciety. a) for reserve; b) for the expansion of the w<mk: c ) for social servi()e!!, 2. After deducting the amount prescribed in sub, artide one of this artide the fflmaining net surplllll ~hall be d~vdded to t:he members. Without prejudice to the sub-article 4 o£ airticle 16 hereof', division is applicable on the basis or the shares or tlhe member~ in the capital or the society; and a) the ,1<mOU!llt of goods sold to or purchased from the l'Ociety by the members; or b) lahom participation by the mAm1I001'S in case of prodi.retion ootiTi.ty. 34. Festrictions rr1 Borr.owin.gs A society shall receive deposits or loare lrom its members or other organu.atiom to such extent ~ on sucli condi tions as may be specified in the by.Jaws ol 800:iety, 35. Restrictions on Loans A Society shall not extend loans other than to it.'I members or a society cst,nhlished under this proola.matiffll. 36, Audit I. The account of every sooie1:y ,~a.Jl be audited 'at least once ·annuaUy; 2. Th~ <1udit repo11t sha11 be smimitted to tite gene.rat meeting or assembly. PART SEVEN Di.~solution and Tf:'iruling up of Societies .37. Dissolution of :1 Society Any society shall be dissolved on the fol:lawin:g grounds where: 1. It is dis~o lvul by special rresolurtioin of tihe ~.:;; or 2. It is primary society and the number of its m1.1mher fa\.~ below ten; 39. Liquidator I. The geueral meeting or assembly of a society shall assign a liqUJidator w;hen a society is decided upon to he dissolved in pursuance of mb lllrticle I or 2 c,f article 37 hereof; 2. The approp1iate authority shall assign a liquidator upon the 11pplication of the mamagernent oommittee or memh,,rs if a liquidator is not able to he essigt:ted iin accordance with sub arllicle I of this article; 3. The 1i,1ui<lator shaJl receive records, documents and properties of the society as soon as he is assigned. He shali also take the necessa,ry imeasures so that a damage may not inome on tihe rights and properties of the society. 40. Powers and Duties of Liquidac.or 1. The liquidator shall have all the necessary power'! to complete the wrioomg up proceedings. He shall in particular perform the following in ord= to carry out his dutie, properly. a) investigate aJl olaians against the society and de cide on priority of payment among drem; b) collect the assets of the society; c) distributes its assets in aecordance with the plan of -liquidation approved by the ~ meeting or assembly of the society; d) carry on the work activities of the 80Ciety in so far as mary be nooessary for 11he ipmper liquida tion <'J the a.ffa.irs of the society; ~) rep~ts the socilety in legal prooeedmgs; £) calls meetings of rllhe members as may be nece!• sary for the proper eonduet of the liqtmda.tion. 2. Upon completion of the wmdimg up proceedings the liquidator sha1il make a report to the appl'Olpl'i.atc authority. He s,hall. deiposiit the :moords of the IJIOOiety in such flace as die a:m,rop:riate fflJll!h(?:mty may direot. 41. Cancellation of a Society From the Re~ter When the winding up proceedings are oompleted tlhe cer• tH'.ioate of re'ghtratiOlll shall be SU:ffl'e!ndered to the ap· propriate authority wlho shall eanoel the registration of the society, and 11he society shall upon such am-1la.tion he .1:~.,,,.1.,.,.d and cease to e:xiet. u ... ......, . PcAiRT EIGHT .11uceUanecus Provisi.ons 42. Addres3 of Society Any society shall ha= a known ,and -registered addreS$ where service of ,proctlBS ahall be made and to wihich all 44. l~mploymtmt o,f Workers I. Any society may employ a wonk.er for an activity which requires specilal professional: skill as necessarr. 2. Any society may employ a wonk.er on, a tmnporury basis when it encounters work load and ~rcity of man power. 45. lnapplicab[P, Laws l. The provisions set forth in the proclamation to provide the establishment of oooperative societies, ·Proolama• tion No. 138/1978 as regards agricultural. produ.o~s cooperative societies and agricull!ll'ral service coopera tive societies are repealed by 1lhis P.roclamaµon: :l. No law. regulation or directive in so far it is in con sistent with this Proclamation have force or effect in respect of mallters provided for by tihli! Proclama tion. 46. Transitional Pro1.•isions l. Agriculturol producers cooperative sociellieii 11111d agri cultural scrvioe cooperative ~ Wlhich have hem <'.stahlished in accordance will:h oooperatwve societies Proclamation No. 138/1978 and still which are oper• ating shall be reorganized under this Proclamation; 2. The societies shall continue their operations lboldnig their previoll8 juridical ,persanialiilties U111.til they are reor'5anized and registered by the appropriate autho rity; 3. The appropriate aul!hority shall facilitate all llhe con• ditions necessary for the reorganization o£ tihe society. 47. Power to fr,sue Directives The Ministry may issue di.rectvies for 1lhe better aod pro per implementation of this Proclamation. 4o. E/ft•ctive Date This Proclamation shall enter. :intu foroe <m1 the date of it; publication m tht- Negarit Gazet1. Done at Addis Ababa, this 1st day of F~brua.ry 1994. MELES ZENAWI PRESIDENT OF THE TRAIVSITJO'!VAL GOVERNMENT OF ETHIOPIA