The Makueni County Co-operative Societies Act, no. 4 of 2017

N ATO M A,i.. COl fNCJL FOR LAWKF.PORTiNG iJ BBA RY Kenya Gazette Supplement No.18 (Makueni County Acts No. 4) SP E C I A L I SSU E REPU BL IC OF KEN Y A KEN YA GAZE TTE SUPPLEMEN T MAKUENI COUNTY ACTS, 2017 NAIROBI , 14th November , 2017 C O N T E N T A c t — P a g e The Makueni County Co-operative Societies Act, 2017 1 PRINTED AND PUBLISHED BY THE GOVERNMENT PRINTER, NAIROBI MAKUENI COUNTY CO-OPERATIVE SOCIETIES ACT, 2017 ARRANGEM ENT OF SECTI ONS N o . 4 of 2017 Date of Assent: 19th June, 2017 Date of Commencement: 13th July, 2017 Section PA R T I - PRE L IM I N A R Y 1— Shor t T i t l e . 2—Interpretation. 3—Object and Purpose. 4—Appli cation. PA RT I I - ADM INI STRTION AND OFFI CES 5—Role of the County Executive Committee Member. 6—Director and other officers. PART m - REGISTRATION OF CO-OPERATIVE SOCIETIES 7—Registration of co-operative societies. 8—Eligibility for registration of a co-operative society. 9—Procedure for registration. 10—Provisional registration. 11 — Appeal against refusal to register. 12—Protection of the name “co-operative” . 13—Evidence of registration. 14—Co-operative society to be body corporate. 15—By-laws to bind members of co-operative societies. 16—Amendments of by-laws. PA RT r V- RI GHTS A ND L I ABIL I T IES OF M EM BERS 17—Qualification for membership. 18—Limitation of holding share capital . 19—Membership subject to authorization by annual general meeting. 20—Membership of co-operative society. 2 2 0 17Makueni County Co-operative SocietiesN o . 4 21 — Limitation of membership to one society. 22—Voting ri ghts of members. 23 —Transfer of shares. 24—Rights of members. 25—Member’s ri ghts vis-a-vis the co-operative society. PART V - DUTIES OF A CO-OPERATIVE SOCIETIES 26—Registered address of co-operative society. 27—Society to keep a copy of the Act and by-laws at registered office. 28—Estimates of income and expenditure. 29 —A ccount and audi t . 30—Production of books and other documents. PART VI - MANAGEMENT OF CO-OPERATIVE SOCIETIES 31 —General meetings. 32—Membership and powers of the Committee. 33 —D uties of the Committee. PART VII - AMAL GAMATION AND DIVI SION OF CO O PERA T I V E SO CI E T I E S 34—Amalgamation of co-operative societies. 35—Division of co-operative societies. PART Vra - RI GHTS AND OBLIGATIONS OF CO-OPERATIVE SO C I E T I E S 36—Society to have charge over member’s produce. 37—Fines for violation of by-laws. 38—Society to have first charge over debts, assets, etc . i n cer t ain cases. 39—Society to have first charge over members’ share. 40 —Failure to remi t the sum deducted . 41 —Member’s share not subject to attachment. 42—Liability of past members. 43—Liabil ity of deceased members. 44—Transfer of share or interest of deceased members. 3 20 17 Makueni County Co-operative Societies 45—Evidence of member’s interest in society. 46—Restriction on production of society’s books. PART IX - PROPERTY AND FUNDS OF CO-OPFRATIVF SO C BET I F S 47—Application of society’s property and funds. 48—Restriction on giving loans. 49—Restriction on borrowing. 50—Investment of society’s funds. 51 — Declaration and payment of bonus. 52 —M aintenance of reserve fund . 53—D istribution of net bal ance. PART X - CHARGFS BY CO-OPFRA TI VF SOCIF TI FS 54—Creating charge over society’s property. 55—Charge to comply with applicable law. 56—Charges to be registered with the Director. 57—Register of charges. 58—Certificate of satisfaction of charges. 59—Receiver to give notice of his appointment. 60—Society to keep copy of instruments of charge at registered of fi ce. 61 — Society to keep register of particulars of charges. 62—Right of members and creditors to inspect register of charges. PA RT XI - INQUIRY AND I NSPECTI ON N o . 4 63—Inquiry by Director. 64—Inspection of books of indebted society. 65—Expenses of inquiry. 66—Routine inspection. PA R T X n - D I SSO L U T I ON 67 —Procedure for di ssolut ion . 68—Cancellation of registration. 4 2 0 17Makueni County Co-operative SocietiesN o . 4 69—Ef fects of cancel l ati on . 70—Application of Companies Act. 71 — Appointment of l iquidator. 72—Powers of l iquidator . 73—Liquidation account of societies. 74—Powers of liquidation committee during liquidation. 75—Appeal against order of liquidator or liquidation com m i ttee . 76—Enforcement of orders. 77—Institution of winding up proceedings. 78—Power to restrain convicted persons from being officers of society . PART Xm - SETTLEMENT OF DI SPUTES 79—Disputes. 80—Establishment, Functions, proceedings and Operation of T r ibunal . PART XTV- GENERA L PROVI SI ONS 81 — Remuneration of of ficers and members of society. 82—Restriction on use of word “co-operative” . 83—County Co-operative Development Fund. 84—Regulations. 85—Exemption. 86 — O f f ences. 87—Savings. 5 20 17 Makueni County Co-operative Societies N o . 4 MAKUENI COUNTY CO-OPERATIVE SOCIETIES ACT, 2017 AN ACT of the County Assembly of Makueni to give eff ect t o section 7 (e) of Part H of the Fourth Schedule of the Constitution; to make provisions relating to the formation, registration and regulation of co-operative societies an d f or connected pur poses ENACTED by the Makueni County Assembly as follows— PA R T I - PR E L I M I N A R Y Sh or t T i t l e 1. This Act may be cited as the Makueni County Co-operative Societies Act , 2017. Interpretation 2. In this Act , except where the context otherwise requires— “agricultural produce” means any produce or article produced or obtained by the work or industry of members of a co-operative society or marketed by a co-operative society, whether the produce be of agriculture, animal husbandry, forestry, fisheries, hand i cr aft s otherwise; o r “apex society” means a national umbrella co-operative society whose membership is open to all co-operative societies and entire co-operative movement, to promote co-operative development and represent the interests of co-operative societies locally and internationally; “bonus” , in relation to a member of a co-operative society, means the surplus of a member’s share in the society which is divided amongst its members, calculated by reference to the proportion w hi ch that m em ber ’ s volume of business with the society bears, to the total v ol um e of busin ess done by the society; “by-laws” means the by-laws made by a society and registered under this Act and includes any registered amendment of such by-laws; “capital” means the permanent members equity in the f or m of common stock and includes all disclosed reserves, retained earnings, grants or donations; “chief of fi cer” means the Chief Offi cer for the time being responsible for co-operative societies; C om m i ttee’ means the governing body of a co-operative society to whom the management of its af fairs is entrusted, and i nc l udes a board of directors; 6 2 0 17Makueni County Co-operative Societies ĉontributor” means a person liable to contribute to the assets of a co-operative society in the event of its being wound up and for the purposes of any proceedings for determining and before the f i nal determination of the persons who are to be deemed contributors, in c l udes any person alleged to be a contributor; “co-operative Society” means a society registered under sect i on 7 and includes a co-operative society registered in another county and licensed to operate within the county; m e a n s a N o . 4 co-operative society whose“co-operative Union' membership is restricted to primary societies; “date of dissolution” means the date on which the Director’s order cancelling the registration of a co-operative society takes ef fect ; “debentures” means the floating interest of a company’s asset s i n a bank ; “deposit” means a sum of money paid on terms under w hi ch i t shal l be repaid, with or without interest or premium, and ei ther on dem and or at a time or in circumstances agreed by or on behalf of the person making the deposit and at the risk of the society receiving i t ; “dividend” , in relation to a member of a co-operative society, means that member’s share of the surplus in the society which i s d i v ided amongst its members, calculated by reference to the proportion which that member’s share capital bears to the total share capital of the society; “deposit-taking business” means— (a) a Sacco business in which the person conducting the busi ness holds himself out as accepting deposits on a day-to-day basis; and (b) any other activity of the Sacco business which i s f i nanced , wholly or to a material extent, by lending or extending credi t f or the account and at the risk of the person accepting the deposit , including the provision of short-term loans to members; “Director” means the County Director for Co-operative Development appointed under section 6 and includes any person on whom any of the powers of the Director have been conferred in accordance w ith this A ct ; “liquidation committee” means the committee to be appointed by the Executive Committee Member to be in charge of a co-operative society during liquidation; 7 20 17 Makueni County Co-operative Societies limited liability” means limited by shares or limited by guarantee, according to the nature of the liability prescribed by the by-laws of the co-operative society; “member” includes a person or a co-operative society j oining in the application for the registration of a society, and a person or co-operative society admitted to membership after registration in accordance w i th the by-laws; N o . 4 'Executi ve Committee M ember ’ means the County Executive Committee Member for the time being responsible for co-operative societies; ‘o f fi cer ’ includes a chairperson, vice-chairperson, secretary, treasurer, committee member, employee or any other person empowered under any rules made under this Act, or by-laws of a co-operative society, to give directions in regard to the business of the society; “personal representative” means any person who, under l aw custom, is responsible for the administration of the estate of a deceased p er so n ; o r “primary society” means a co-operative society whose membership is restricted to individual persons; “reserve fund” means any money, out of the surplus, put aside by a co-operative society to cushion liquidity; “share” means the amount represented by a member’s portion in the equity of a society as a co-owner; “Special General Meeting” means a general meeting, other than an ordinary general meeting, of which at least fift een clear days written notice of the resolution and of the date, time and place of the meeting has been given to each member; “ special resolution” means a resolution passed by two th ir d s of the members present and voting at a general meeting of a society; “supervisory Committee” means an oversight committee elected at a general meeting; “ tribunal” means the Co-operative Tribunal established under sect i on 77 of the Co-operative Societies Act (Cap 490) Laws of Kenya; “winding up” means all proceedings subsequent to the d i sso l ut i on of a co-operative society. 8 2 0 17Makueni County Co-operative SocietiesN o . 4 Obj ect and pur pose 3. The object and purpose of this Act is to provide t h e legislative and institutional framework to facilitate t h e — (a) Promotion of trade and development of co-operative soc iet ies pursuant to section 7 (e) of Part 11 of the Fourth Schedule to the Constitution ; (b) Formation, registration and licensing of co-operative societies; (c) Promotion of co-operation between the national and county governments in matters relating to co-operative societies; and (d) Promotion of corporate governance of co-operative societ ies . Application 4. (1) Subject to sub-section (2), this Act shall apply t o — (a) All co-operative societies operating within the county . (2) This Act shall not apply to— (a) deposit-taking Saccos to the extent the Sacco Act applies. (3) Any co-operative society registered from outside the county and it intends to operate within the county it will be required to seek for approval to operate from the Director in wri ting. (4) All country-wide Saccos operating within the county w i l l b e required to notify the Director of their presence. PART I I —ADM INI STRATI ON AND OFFI CES Role of the County Executive Committee Member 5. The Executive Committee Member shall be responsible f or the growth and development of co-operative societies in the County, and shall in particular— (a) Develop and oversee the implementation of county c o operative societies policies and strategies; (b) Promote good governance in co-operative societies; (c) Provide liaison with the National Government on m a t t e r s relating to co-operative societies; (d) Advise the County on matters relating to the co-operatives; (e) issue guidelines and regulations to facilitate growth and regulation of co-operative societies; and (f) perform such other functions as may be assigned to the of f i ce under th i s A ct . 9 20 17 D ir ector and other of fi cer s 6. (1) There shall be a County Director for co-operative development whose off ice shall be an off ice within the county public ser v i c e . Makueni County Co-operative Societies N o . 4 (2) There shall be such number of officers, as may be necessary to assi st the D irector in the admini stration of thi s A c t . (3) The Director shall be responsible to the County E x ecut i ve f or the growth, development and regulation of co-operative societ ies and shal l in particular — (a) Process application for registration of co-operatives; (b) Supervise and inspect co-operative societies to e n s u r e compliance with the law; (c) Maintain the register of co-operative societies within the county; (d) Supervise dissolution, division or amalgamation of co operative societies; (e) authorize the cancellation of licenses or de-registration of co operative societies, subject to the provisions of this A ct; (f) Perform such other functions as may be assigned t o t h e office under this Act or by the County Executive Committee M em ber . PA RT m - REGI STRATION OF CO-OPERA TIVE SOCIETI ES Registration of co-operative societies 7. (1) Subject to the provisions of this Act, a society w hi ch has as i ts obj ects— (a) The promotion of the welfare and economic interests of i t s members; and (b) Has incorporated in its by-laws the following co-operative principles — (i) voluntary and open membership; (i i) democratic member control ; (ii i) economic participation by members; (iv) autonomy and independence; (v) education, training and information; (vi) co-operation among co-operatives; and 10 2 0 17Makueni County Co-operative Societies (vii) concern for community in general , may be registered by the Director as a co-operative society under this Act w i th or without l imited l iabi l ity . (2) A co-operative society may be registered under th i s A ct ei ther N o . 4 a s — (a) limited liability co-operative society which shall b e a operative society limited by shares; or (b) unlimited liability co-operative society which shall be a society where members’ liability is limited to the extent set out by the by-laws. (3) A co-operative union or an apex society may only be registered with l imited l iabil ity. Eligibility for registration of a co-operative society 8. For a society to be registered under this Act, it shal l — (a) consist of at least fi fteen persons all of whom shall be qualifi ed for membership of the co-operative society under section 14 , in the case of a primary society; or (b) have at least two registered societies as its members, i n the case of a co-operative union. Pr ocedur e for r egistr ation 9. (1) An application to register a society shall be m ade to the Director in the prescribed form, and be signed— (a) in the case of a primary society, by at least ten persons qualifi ed for membership of the society under section 17; (b) in the case of an apex society, by a person duly author i zed i n that behalf by each co-operative society or co-operative union , as the case may be, who are members thereof . (2) The application shall be accompanied by four copies of the proposed by-laws of the society in English and the persons on whose behalf the application is made shall furnish such information with regard to the society as the Director may require. (3) The Director shall , within two months from the date of receipt of an appl ication— (a) register the society; or (b) reject the application and give written reasons for rej ection. C O 1 1 20 17 Provisional registration 10. (1) If the Director is not satisfied that a society has complied with this Act, or is of the opinion that further steps need to be taken by the persons on whose behalf the application for registration i s m ade i n order to comply with this Act, the Director may in hi s d i scret ion provisionally register the society for such period, not exceeding one year , and subject to its compliance with such terms and conditions an d provisions, as the Director may specify in writing. (2) A provisional registration shall entitle the society to operate co-operative society and to operate as a body corporate. (3) A society which is provisionally registered shall cause the f act that it is provisionally registered to be stated in legible Roman letters in all billheads, letters, papers, notices, advertisements and other o f f i ci al publications of the society, and on a sign board in a conspicuous position outside any premises in which it operates. Appeal against refusal to register 11. (1) A co-operative society may appeal to the Executive Committee Member against the decision of the Director refusing to register the society. (2) Any party aggrieved by the decision of the Executive Committee Member under subsection (1) may appeal against the dec i sion to the High Court within thirty days. Protection of the name “ co-operative” 12. (1) No society shall be registered under a name i dent i cal w i th that under which any other existing society is registered, or under any name likely, in the opinion of the Director , to mislead the m em ber s of the public as to its identity. (2) The word “co-operative” shall form part of the name of every co-operative society, and the word “ l imited” shall be the l ast w ord i n the name of every co-operative society having limited Uability. Evidence of registr ation 13. (1) A certificate of registration or of a provisional registration signed by the Director shall be conclusive evidence that the society therein mentioned is duly registered or provisionally registered, unless it is proved that such registration of the society has been cancel l ed or has been term i nated . Makueni County Co-operative Societies N o . 4 a s a 12 2 0 17Makueni County Co-operative Societies (2) The certificate of registration bearing the number and d ate of registration shall be displayed at the head office of every co-operative society . N o . 4 (3) A copy of the by-laws of a co-operative society or o f an amendment of such by-laws certif ied by the Director shall be pr ima f acie evidence for all purposes of the registration of such by-laws or such am end m ent . (4) A document purporting to be signed by the Director sh al l be presumed to have been signed by him until the contrary is proved. Co-operative society to be body corporate 14. (1) Upon registration, every society shall be a body corporate and shall be capable in its corporate name of— (a) suing and being sued; (b) purchasing, acquiring, or otherwise holding, and or disposing of movable and immovable property; (c) entering into contract; (d) borrowing money; and (2) There shall be a county register of Co-operative Soci et ies i nto which shall be entered particulars of all registered co-operative societies including— (a) the name of co-operative society; (b) physical address of its offices; (c) nature of business; (d) number of members; and (e) such other particulars as the director may determine. (3) A co-operative society registered under this Act may establish a branch or other of fices other than its registered headquarters and fi l e a not ifi cation of such establ ishment w ith the D irector subject to payment of requisite fees. By-lavrs to bind society and members 15. The by-laws of a co-operative society bind the co-operative society and the members. 13 20 17 Amendment of by-laws Makueni County Co-operative Societies N o . 4 16. (1) A co-operative society may, subject to this A ct , amend i ts by-laws. (2) No amendment of the by-laws of a co-operative society sh al l be valid until the amendment has been registered under this Act by forwarding to the Director a copy thereof in the prescribed (3) The Director may cancel the amendment if he discovers t h at amendment was effected and registered through misrepresentation concealment of a materi al f act . (4) An amendment which changes the name of a co-operative society shall not affect any right or obligation of that society or its members and any legal proceedings pending may be continued by against the society under its new name. (5) When the Director registers an amendment of the by-laws of operative society, he shall issue to the society a copy of the amendment certified by him, which shall be conclusive ev i dence of the fact that the amendment has been duly registered. (6) In this section, “amendment” includes the making of a new by-law and the variation or revocation of a by-law, but ex c l udes the variation of the registered address of a co-operative society where thi s forms a part of the by-laws of such a society. PART I V - RI GH TS A ND L I ABIL I TIES OF M EM BERS Qualification of membership 17. A person other than a co-operative society shall not be qualified for membership of a co-operative society u n l ess — (a) the person has attained the age of eighteen years; (b) the person’s employment, occupation or profession f al l s w i th i n the category or description of those for which the co-operative society is formed; and (c) the person is resident within, or occupies land w ithin , the society’s area of operation as described in the relevant by-law. Limitation of holding share capital 18. No member, other than a co-operative society, shall hold m ore than one- fifth of the issued and paid-up share capital of any co-operative society . m a n n e r . a n o r o r a C O 14 2 0 17Makueni County Co-operative Societies Membership subject to authorization by annual general meeting 19. No company incorporated or registered under the Companies Act (Cap .486), and no unincorporated body of persons shal l be ent i t l ed to become member of a co-operative society, except with a w r i t ten authorization through a resolution by a general meeting of that co operative society. Membership of co-operative society 20. No member of a co-operative society shall exercise any of the rights a member unless he has made such payment to the society in respect of membership, or has acquired such interest in the society as may be prescribed under this Act or under the by-laws of the society . Limitation of membership to one society 21. No person shall be a member of more than one co-operative society with unlimited liability and, no person shall be a member of more than one co- operative society having the same or similar obj ect; Provided that a person who— (a) is a member of a co-operative society; and (b) carries on business on land or at premises outside the area of operation of that co-operative society, may be a member of a co-operative society in whose area of operation that l and or those premises are situate, notwithstanding that its obj ects are the same as or similar to those of the first-mentioned society . V oting r ights of member s 22. Each member of a co-operative society shall have o n e v o t e only in the affairs of the society, irrespective of the number of shares the m em ber hol d s: Provided that a co-operative society which is a member of a co operative union or an apex society shall have as many votes as may be prescribed by the by-laws of the co-operative union or apex society of which it is a member, and may, subject to such by-laws, appoint any number of its committee members, not exceeding the num ber of such votes, to exercise its voting power . T r an sf er o f sh ar es 23. (1) The transfer or charge of the share or interest o f a member in the capital of a co-operative society shall be subj ect to such conditions as to maximum holding as are laid down in sect i on 15 . N o . 4 15 20 17 Makueni County Co-operative Societies N o . 4 (2) In the case of a co-operative society registered w i th un l i m i ted liability, a member shall not transfer or charge any share held by him his interest in the capital of the society or any part thereof , unless— (a) he has held such share or interest for at least one year; and (b) the transfer or charge is in favour of the society o r a m em b er o f the society. Rights of member s 24. A member of a co-operative society shall have the right to— (a) attend and participate in decisions taken at all general meetings of the society and vote; (b) be elected to organs of the society, subject to it ’s by-laws; (c) enj oy the use of al l the facil ities and services of the society subject to the society’s by-laws; (d) all legitimate information relating to the society, including: internal regulations, registers. Minutes of general meetings, supervisory committees, reports, annual accounts and inventories, investigation reports, at the society’s head of f i ce . Member ’s r ights vis-a-vis the co-operative society 25. A member of a co-operative society shall have the obligation o r t o — (a) observe and comply with all the society by-laws and dec i si ons taken by the relevant organs of the co-operative society i n accordance with the by-laws of that society; (b) buy and pay up for shares or make any other payments provided for in the by-laws of the, society; and (c) meet the debts of the society in case of bankruptcy i n accordance with this Act and the by-laws of the society. PA R T V - D U T I E S O F C O -O PE RA T I V E SO CI E T I E S Registered address of co- operative society 26. Every co-operative society shall have a registered addr ess to which notices and communications may be sent and shall send to the Director notice of every change of address within one m onth of the change. 16 2 0 17Makiieni County Co-operative SocietiesN o . 4 Society to keep a copy of the Act and by-laws at registered of fi ce 27. Every co-operative society shall keep a copy of th i s A ct and of the rules made thereunder and of its own by-laws and a l i st of i t s m em b er s (excluding details of nominees and shareholdings) at its registered off ice and shall keep them open for inspection by any person, f ree of charge, at all reasonable times during business hours. Est imates of income and expenditur e 28. For each financial year, the Committee of a co-operative society shall cause to be prepared estimates of the society’s income and expenditure including recurrent and capital estimates for approval by the general meeting at least three months before the end of the preceding fi nancial year . A ccoun t and aud i t 29. (1) Every co-operative society shall keep proper accounts w h ich shal l — (a) be prepared in accordance with International Accounting Standards; (b) reflect the true and fair state of the co-operative society’s affairs; and (c) explain the co-operative society’s transactions including— (i) all sums of money received and paid by the co-operative society and the reasons thereto; (ii) all sales and purchases of goods and services by the co operative society; and (iii) all assets and liabilities of the co-operative society. (2) The books of accounts shall be kept at the registered o f fi c e of the co-operative society or at such other place as may be determined by the co-operative society and shall at al l t i m es be available for inspection by members of its supervisory com m i t tee and the audi tor . (3) It shall be the duty of every co-operative society to cause i t s accounts to be audited at least once in every fi nancial year by an auditor appointed under subsection (4). (4) The auditor shall be appointed at the annual general meeting from a l ist of auditors approved by the Director, in consul tat i on w i th the Institute of Certif ied Public Accountants of Kenya. 17 20 17 Makueni County Co-operative Societies (5) Where at an annual general meeting no auditor is appointed, the Director may appoint a person to fill the vacancy and the remuneration of the person so appointed shall be borne by the co operative society . (6) The accounts referred to in subsection (3) shall — (a) conform with International Financial Reporting Standards; (b) include the following records— (i ) a balance sheet; (ii) an income and expenditure account; and (i i i) a cash f low statement , (c) be approved by the Committee; and (d) be authenticated by at least three Committee members including the chairperson of the co-operative society. (7) No auditor shall present the audited accounts of a co-operative society to the members at a general meeting unless the account s hav e previously been submitted to the Director in such form as may be prescribed. (8) The auditor shal l submi t the audited accounts to a general meeting within four months after the end of the accounting period and shall include his opinion as to whether or not the co-operative society’s busi ness has been conducted — (a) in accordance with the provisions of this Act and, w hether the books of accounts kept by the co-operative society are i n agreement therewith and give a true and fair view of the state of the af fairs of the society; and (b) in accordance with the co-operative society’s obj ectives, by laws and any other resolutions made by the society at a general meeting. (9) The auditor shall have the right to— (a) attend any general meeting of the co-operative society and be heard on any matter which concerns him as an auditor ; N o . 4 18 2 0 17Makiieni County Co-operative Societies (b) receive all notices and other communications relating to an y general meeting which a member of the co-operative society is enti t led to receive; (c) access, at all times, any accounting records, books o r documents of the co-operative society as may be necessary f or the purpose of carrying out his duties as an auditor and may at the t ime of hi s audit — (i) sununon any officer, agent or member of the co-operative society for the purpose of obtaining information on th e transactions of the co-operative society or management of i ts af fair s; (ii) require the production of any book, document, cash or securities relating or belonging to the co-operative society by any officer, agent, trustee or member having custody of such book , document , cash or securities; (iii) demand such other information or explanation f rom any officer of the co-operative society as may be necessary f or the performance of his duties as an auditor. (10) Every co-operative society shall , at such time and i n such f or m may be prescribed, file with the Director an annual return together with certifi ed true copy of the audited accounts and balance sheet o f the society for each period of twelve months. (11) Where a co-operative society fails to cause its accounts to be audited within the prescribed period in respect of i t s bu si ness f or the previous fi nancial year, members of the Committee shall automatical ly lose their positions at the next general meeting and shall not be el igible for re-election for three years unless the Director i s sat i sf i ed that the failure was due to circumstances beyond their control . (12) For the purposes of this section, “International Accounting Standards” and “ International Financial Reporting Standards” m eans the standards established by the Institute of Certif ied Pub l ic A ccount ant s of Kenya. Pr oduct ion of b ook s and other docum ents 30. Any officer, agent, servant or member of a co-of^rative society who is required by the Director, or by a person author i zed i n writing by him to do so shall , at such place and time as the Director may direct, produce all moneys, securities, books, accounts and docum ent s belonging to or relating to the affairs of such society w hi ch ar e i n the custody of such officer , agent, servant or member. N o . 4 a s a 19 20 17 Makueni County Co-operative Societies PART V I - M A NA GEM ENT OF CO-OPERA TI VE SOCIETI ES General meetings 31. (1) The supreme authority of a co-operative society sh al l vest in the members who shall have the right to attend and vote i n al l general meetings. (2) Subject to subsection (3) a co-operative society sh al l ho ld an annual general meeting within four months af ter the end o f each f inanc i al y ear . N o . 4 (3) In the fi rst year after registration of a co-operative society , the general meeting shall be held not later than one month aft er receipt of the certifi cate of registration of the co-operative society and during such meeting, the members shall — (a) elect the co-operative society’s offi ce bearers for the ensuing y ear ; (b) determine the maximum borrowing powers of the co-operative society; (c) consider and approve estimates of income and expenditure f o r the ensuing fi nancial year or part thereof ; (d) appoint the co-operative society’s bankers and audi tors; and (e) receive reports and decide upon such other matters as may be necessary for the conduct of the co-operative society’s bu si ness. (4) A general meeting of a co-operative society shall be convened by giving at least fi fteen days written notice to the m em ber s. (5) At the annual general meeting of a co-operative society, the m em ber s shal l — (a) consider and confi rm the minutes of the last general meeting; (b) consider any reports of the Committee or the Director; (c) consider and adopt audited accounts; (d) determine the manner in which any available surplus i s to be distributed or invested; (e) elect the co-operative society’s offi ce bearers f or the ensuing year; (f) determine, where necessary, the maximum borrowing power of the society; (g) appoint an auditor for the ensuing year ; and 20 2 0 17Makueni County Co-operative Societies (h) transact any other general business of the co-operative society of which notice has been given to members in the manner prescribed in the by-laws of the co-operative society. (6) A special general meeting of a co-operative society may be conv ened — N o . 4 (a) by the Committee for the purpose of approving annual estimates or discussing any urgent matter which in t h e Committee’s opinion is in the interest of the co-operative society; or (b) on receipt of a written notice for such meeting signed by such number of the members of the co-operative society as may be prescribed in the rules and stating the objects and reasons f or call ing the meeting. (7) If the Committee fails to convene a meeting within f ifteen days of receiving the notice under subsection (6)(b), the members demanding the meeting may themselves convene the meeting by giving not i ce to the other members of the co-operative society, stating the obj ects and reasons for the meeting and the fact that the Committee has f ai l ed to convene the meeting. (8) The Director may convene a special general meeting of a c o operati ve society at which he may direct the matters to b e d i scussed at the meeting. (9) The chairperson or in his absence the vice-chairperson or such other person as may be prescribed in the by-laws of the co-operative society shall preside at a general meeting of a co-operative society . (10) The Directors may preside at any meeting convened u n d er subsection (8) . Membership and powers of the Committee 32. (1) A co-operative society may establish Committees consisting of not less than five and not more than ni ne m em b er s . (2) The members of the Committee shall elect a chairperson and a vice-chairperson from among their number. (3) The Committee shall be the governing body of the society and shall , subject to any direction from a general meeting or the by-laws of the co-operative society, direct the affairs of the co-operative society with pow ers to — (a) enter into contracts; (b) institute and defend suits and other legal proceedings brought in the name of or against the co-operative society; and 2 1 20 17 Makueni County Co-operative Societies (c) do all Other things necessary to achieve the objects of the operative society in accordance with its by-laws. (4) No person shall be a member of a Committee if the per son — (a) is not a member of the co-operative society; (b) is under eighteen years of age; (c) is unable to read and write; (d) receives any remuneration, salary or other payment f rom the operative society save in accordance with this Act; (e) is a committee member in two other co-operative societies; (f) has been adversely named by the Director in an inquiry report adopted by a general meeting for mismanagement or corrupt practices while a member of the Committee; (g) has been convicted of any offence involving dishonesty or i s sentenced to imprisonment for a term exceeding three months; (h) has been unable to pay a debt owing to a co-operative society as required other than in respect of a loan under the provision of any rules made under this Act; (i) is a person against whom any amount of money is due under a decree, decision or order or is pending recovery under thi s A ct ; (j) is of unsound mind; and (k) is an undischarged bankrupt. (5) The Committee may delegate any of its duties under thi s A ct to an officer or offi cers of the co-operative society but, nothing in this subsection shall absolve the Committee f rom its responsibility t o r u n t h e affairs of the co-operative society in a proper and busi ness l ik e m anner (6) In the conduct of the affairs of a co-operative society the Committee shall exercise the prudence and dil igence of ordinary men of business and the members shall be held, j ointly and severally l iable for any losses sustained through any of their acts which are contrary to the Act, rules, by-laws or the directions of any general meeting of the co operative society. (7) The Director may suspend from duty any Committee m em ber charged in a court of law with an offence involving f raud or dishonesty pending the determination of the matter . N o . 4 c o c o 2 2 2 0 17Makueni County Co-operative SocietiesN o . 4 D ut ies of the Com m it tee 33. (1) The Committee of a co-operative society shall be the governing authority of the society and have the powers to do al l other things necessary to achieve the society's objects in accordance with its by l aw s . (2) The Committee of a co-operative society shall be responsible for the custody of all the assets belonging to the society. (3) In the first year after registration of a co-operative society , the general meeting shall be held not later than one month after receipt of the certificate of registration of the co-operative society and during such meeting, the members shall— (a) elect the co-operative society’s office bearers f or the ensuing year; (b) determine the maximum borrowing powers of the co operative society; (c) consider and approve estimates of income and expenditure for the ensuing financial year or part thereof ; (d) appoint the co-operative society’s bankers and audi tors; and (e) receive reports and decide upon such other matters as m ay be necessary for the conduct of the co-operative society’s business. (4) A general meeting of a co-operative society shall be conv ened by giving at least fifteen days written notice to the m em ber s. (5) At the annual general meeting of a co-operative society, the m em ber s sh al l — (a) consider and confirm the minutes of the last general meeting; (b) consider any reports of the Committee or the Director (c) consider and adopt audited accounts; (d) determine the manner in which any available surplus i s to be di str ibuted or invested; (e) elect the co-operative society’s office bearers f or the ensuing year ; (f) determine, where necessary, the maximum borrowing power of the society; (g) appoint an auditor for the ensuing year; and 2 3 20 17 Makueni County Co-operative Societies (h) transact any other general business of the co-operative society of which notice has been given to members in the prescribed in the by-laws of the co-operative society. (6) A special general meeting of a co-operative society may be c o n v en ed — (a) by the Committee for the purpose of approving annual estimates or discussing any urgent matter which in the Committee’s opinion is in the interest of the co-operative society; or (b) on receipt of a written notice for such meeting signed by such number of the members of the co-operative society as m ay be prescribed in the rules and stating the objects and r easons for calling the meeting. (7) If the Committee fails to convene a meeting within f if teen days of receiving the notice under subsection (6) (b), the members demanding the meeting may themselves convene the meeting by giving noti ce to the other members of the co-operative society, stating the obj ects and reasons for the meeting and the fact that the Committee has f ai l ed to conv ene the meeting. N o . 4 m a n n e r (8) The Director may convene a special general meeting of a society at which he may direct the matters to be discussed at the meeting. (9) The chairperson or in his absence the vice-chairperson o r such other person as may be prescribed in the by-laws of the co operative society shall preside at a general meeting of a co-operative society. (10) The Directors may preside at any meeting convened u n d er subsection (8) . PA R T V n - A M A L GA M A T I ON A ND D I V I SI O N O F CO O PERA T I V E SO CI E T I E S Amalgamation of co-operative societies 34. (1) Any two or more co-operative societies may, by special resolution (in this section referred to as the preliminary resolution) , resolve to amalgamate as a single society (hereinaf ter ref er red to as the amalgamated society) . (2) A copy of the preliminary resolution shal l be sent to al l the members and creditors of each of the amalgamating societies, and to al l other persons whose interests in any of the amalgamating soc i et ies w i l l b e affected by the amalgamation. 2 4 2 0 17Makueni County Co-operative Societies (3) Any member of any of the amalgamating societies m ay , notwithstanding any by-law to the contrary, by notice in writing gi ven to his society at least one month before the date specified as the date of amalgamation, intimate his intention not to become a member of the amalgamated society. (4) Any creditor of any of the amalgamating societies m ay , notwithstanding any agreement to the contrary, by notice in writing given to such society at least one month before the date specified as the date of amalgamation, intimate his intention to demand the payment of any money due to him. (5) Any other person whose interest will be affected by the amalgamation may, by notice in writing given to the concer ned amalgamating society, not less than one month before the date specif ied the date of amalgamation, object to the amalgamation unl ess h i s c l ai m i s sat i sf ied . (6) Not less than three months after the date of the meeting at which the preliminary resolution is passed, a further special general meeting of each of the amalgamating societies shall be hel d to consi der the preliminary resolution and any notices received under th i s sect i on . (7) At the special general meeting held under subsection (6) provision shall be made by a further resolution of the society (in this section referred to as the secondary resolution) for— (a) the repayment of the share capital of any member w ho has given notice under subsection (3); (b) the satisfaction of any claims by creditors who have given notice under subsection (4); and (c) the satisfaction of the claims, of such other persons w ho hav e given notice under subsection (5) securing of their c l ai m s in such manner as determined or directed by the Director. Provided that no member or creditor or other person shal l be ent i t led to such repayment or satisfaction until the preliminary reso lut ion i s confirmed as provided in subsection (8). (8) Each amalgamating society may, by further resolution passed by a two-thirds majority of the members present and voting, confirm the preliminary resolution. (9) If , within such time as the Director considers reasonable, the Director is satisf ied that the secondary resolutions of each of the soc iet ies N o . 4 a s 2 5 20 17 Makiieni County Co-operative Societies amalgamating comply with the provision of this section, he may register the amalgamated society and its by-laws and thereupon— (a) each of the amalgamating societies shal l stand d i sso l ved and i t s registration cancelled; (b) the registration of the amalgamated society shall be a suf f i ci ent conveyance to vest the assets and liabil ities of the amalgamating societies in the amalgamated society; (c) the remaining members of the amalgamating societies sh al l become members of the amalgamated society and will be subjected to its bylaws; (d) any share holders of the amalgamating societies or any other persons who have claims against the amalgamating societies and whose claims were not satisf ied in accordance w ith t h e secondary resolution, may pursue such claims against the amalgamated society. (10) Where the Director refuses the amalgamation of th e amalgamating societies under subsection (9) such societies may appeal against such refusal to the Executive Committee M ember within thirty days of receipt of the refusal . Division of co-operative societies 35. (1) A co-operative society (hereinafter referred to as the existing society) may, by special resolution (in this sect ion ref er red to as the preliminary resolution) , resolve to divide itself i n to tw o or m or e co operative societies (hereinafter referred to as the new societies) . (2) The preliminary resolution shall contain proposals f or the division of assets and liabilities of the existing society among the societies in which it is proposed to be divided and may prescribe the area of operation of , and specify the members who will constitute eac h o f t h e new societ ies. (3) A copy of the preliminary resolution shall be sent to al l the members and creditors of the existing society, and to all other persons whose interests will be af fected by the division of the existing society. (4) Any member of the existing society may, notwithstanding an y by-law to the contrary, by notice in writing given to the society within two months of the receipt of the copy of the preliminary resolution , intimate his intention not to become a member of any of the new soci et ies. (5) Any creditor of the existing society may, notwithstanding an y agreement to the contrary, by notice in writing given to the existing N o . 4 n e w 2 6 2 0 17Makueni County Co-operative SocietiesN o . 4 society within two months af ter his receipt of the copy of the preliminary resolution, intimate his intention to demand the payment of any money due to h im . (6) Any other person whose interest will be affected by the division may, by notice in writing given to the existing society within two months of the receipt of the preliminary resolution, object to the d i v i si on . (7) After the expiry of three months after the date of the preliminary resolution, a further special general meeting of the existing society shall be held to consider the preliminary resolution and any notices received under thi s section . (8) At the special general meeting held under subsection (7) , provision shall be made by a further resolution of the society for — (a) the repayment of the share capital of any member w ho h as given notice under subsection (2); (b) the satisfaction of any claims by creditors who have given notice under subsection (5); (c) the satisfaction of the claims of such other persons w ho hav e given notice under subsection (6) or the securing of their c l ai m s as the Director may determine, or direct: Provided that no member or creditor or other person sh al l be ent i t l ed to such repayment or satisfaction until the preliminary resol ut ion i s con& med as provided in subsection (9). (9) The society may, by further resolution passed by a t w o - t to d s majority of the members present and voting, confirm the preliminary resolution, with or without changes as in the opinion of the D ir ector ar e not substantial , and the decision of the Director as to w hether any changes are or are not substantial shall be final . (10) If , the Director is satisfied within such time as he consi der s reasonable that the provisions of the secondary resolution ̂ d the provisions of this section have been complied with, he may, register the societies into which the existing society has been divided and the by-laws of such societies and thereupon— (a) the registration of the existing society shall stand dissolved; (b) the registration of the new societies shall be suf f i c ient to vest the assets and liabilities of the existing society in the new soc iet ies in the manner specified in the preliminary resolution, a s conf irmed; 27 20 17 Makueni County Co-operative Societies (c) the remaining members of the existing society shall becom e members of one or other of the new societies, as is provided by the preliminary resolution, as confirmed; and (d) any shareholders or creditors of the existing society and any other persons who have claims against the existing society and whose claims were not sati sf ied in accordance w ith t h e secondary resolution, may pursue such claims against o n e o r other of the new societies, as is provided by the preliminary resolution , as conf irmed . (11) Where the Director refuses to approve the division of an existing society under subsection (10), the society may appeal to the Executive Committee Member within thirty days of the com m uni cat i on to i t o f the r ef u sal . PA R T V m - R I GH T S A ND O B L I GA T I O N S O F C O -O PE RA T I V E SO C I E T I E S Society to have charge over member ’s produce 36. (1) A co-operative society which has as, one of i ts obj ects the disposal of any agricultural produce, may enter into a contr act w i th i t s members, either in its by-laws or by a separate document binding the members to dispose of all their agricultural produce, or such am ount s or descriptions of the same as may be stated therein, to or through the society, and the contract may bind the members to produce the quantities of â cultural produce therein specified, and the contract may al so provide for payment of a specific sum per unit of weight o r o t h er measure as l iquidated damages for any breach of the contract , and any such sum on becoming payable shall be a debt due to the society and shall be a charge upon the immovable property of the member (subj ect to registration of the charge under the law under which the property is registered) and all stock then being thereon. (2) Any such contract as is mentioned in subsection ( 1) shal l have the effect of creating in favour of the co-operative society a charge upon the proceeds of sale of all produce mentioned therein, whether existing or f u ture . N o . 4 (3) A co-operative society may, on the authority of a r eso l ut i on passed in general meeting, pledge the produce deliverable by members under any such contract as is mentioned in subsection (1) as security for loans made to the society, in all respects as if it w ere the ow ner of the produce. 28 2 0 17Makueni County Co-operative Societies (4) No contract entered into under this section shall b e contested in any court on the ground that it constitutes a contract i n r estr ai n t o f t r ad e . Fines for violation of by-laws 37. (1) The by-laws of a co-operative society may, subj ect to thi s Act, provide for the imposition of fines, not exceeding twenty thousand shillings, on its members for any infri ngement of its by-laws, but no such fine shall be imposed upon any member until wri tten not i ce of intention to impose the fi ne and the reason therefore has been ser v ed him and he has had an opportunity of showing cause why the fi ne should not be imposed and, if he so desires, of being heard w i th or w i thout w i tnesses. (2) Any such fi ne shall be a civil debt due to the co-operative society, and shall , without prej udice to any other means of recovery, be recoverable summari ly . (3) The whole or any part of such fi ne may be set off against any moneys due to such member in respect of produce delivered by him to the co-operative society. (4) A member shall not be taken to have infri nged the by-laws of a co-operative society by reason of his having failed to deliver produce to such society, if the failure was due to the fact that, before becoming a member of the society, he had contracted to deliver such produce to some other person, and the contract had been disclosed i n accordance with subsection (5) . (5) It shall be the duty of every person applying for membership of a registered society to disclose to the society particulars of al l such contracts as are mentioned in subsection (4) . Society to have fi rst charge over debts, assets, etc. i n cer ta i n cases 38. (1) Subject to any other wri tten law as to pri ori ty of debt s where a co-operative society has— (a) supplied to any member or past member any seeds o r m a n u r e , or any animals, feeding stuff , agricultural or industri al ; (b) implements or machinery or materi als for manufacture o r (c) bui lding; or (d) rendered any services to any member or past member; o r (e) lent money to any member or past member to enable hi m to buy any such things as aforesaid or to obtain any such services. N o . 4 o n 29 20 17 Makueni County Co-operative Societies N o . 4 the society shall have a first charge upon such things o r , as the case may be, upon any agricultural produce, animals o r articles produced therewith or theref rom or with the aid of such m o n ey . (2) The charge shall subsist for such period as the l oan or v al ue of the services rendered by a co-operative society to a m em ber shal l remain unpaid. Society to have first charge over members’ share 39. A co-operative society shall have a first charge upon the share or interest in the capital and on the deposits of a member or past member , and upon any dividend, bonus or accumulated funds payable t o a m em b er or past member, in respect of any debt due from such member or past member to the society, and may set off any sum credited or payable to such member, or past member in or towards the payment of any such deb t . F ai l u r e t o r em i t t h e su m d ed u ct ed 40. (1) Where an employer of a person who is a member of a co-operative society has, under the instructions of the employee, made a deduction from the employee’s emoluments for remittance to the co operative society concerned but fails to remit the deduct i ons w i thi n sev en days aft er the date upon which the deduction was made, the employer shall be l iable to pay the sum deducted together with compound interest thereon at a rate of not less than five per cent per m onth . (2) The Director may, on behalf of the society, institute legal proceedings in court for recovery of the sum owing under subsection (1) without prej udice to any other mode of recovery and su c h su m sh al l b e a civi l debt recoverable summarily . (3) The Director may, by written notice, appoint any person, bank or institution to be an agent of the society for the purposes of co l l ec t i on and recovery of a debt owed to the society. (4) The agent shall pay the amount specified in the not i ce i ssued under subsection (3) out of any moneys which may, at any time during the twelve months following the date of the notice, be held by him for the employer or are due from him to the employer . (5) Where an agent claims to be or to have become unable to comply with subsection (3) by reason of lack of moneys held by or due from him. 30 2 0 17Makueni County Co-operative Societies he shall give a written notification to the Director stating the reasons for his inability and the Director may— (a) accept the notification and cancel or amend the not i ce accordingly; or (b) if he is not satisfied with the reasons, reject the not i f i cat ion i n writing. (6) Where an agent fails to notify the Director or the not i f i cat i on is rejected, it shall be presumed that the agent has suff icient moneys for the payment of the amount specified in the notice. (7) Where an agent fails to pay the amount specified i n the notice within thirty days f rom the date of service or the date on which any moneys come into his hands for or become due to h im f r om the employer, the agent shall be liable for the amount specified in the notif ication as if he were the employer . (8) In any proceedings for the collection or recovery of the amount specified in the notice, it shall not be a defence for the agent to claim lack of the moneys. (9) This section shall apply notwithstanding that the f ai l ur e under subsection (1), to remit the sum deducted may constitute an of f ence under some other law for which the employer has been prosecuted, or is being, or is likely to be prosecuted. (10) In this section “employer” includes any person, f i r m or organization holding remuneration or payment for produce of a m em ber of a co-operative society and the term “employee” includes any per son who receives remuneration or payment for produce from such persons or fi r m or organization. M ember ’s shar e not subj ect to attachment 41. Subject to section 39, the share or interest of a m em ber i n the capital of a co-operative society shall not be liable to at tachm ent or sal e under any decree or order of a court in respect of any debt or liability incurred by such member, and a trustee in bankruptcy under the l aw relating to bankruptcy shall not have any claim on such share or i n t er e st ; N o . 4 Provided that, where a co-operative society is dissolved, the share or interest of any member who is adj udged a bankrupt under such l aw shall vest in the trustee in bankruptcy in accordance w ith such l aw . 3 1 20 17 Liability of past members 42. The liability of a past member of a co-operative society shall be in respect of the debts of the society as they existed at the date w hen he ceased to be a member and proceedings in respect thereof may be commenced within a period of two years from such date: Provided that, in the case of a co-operative society w i th l i m i ted l iabil ity , if the fi rst audit of the accounts of such society after his ceasing to be a member discloses that the society is sol vent , the fi nancial liabil ity of such past member shall cease f or thw i th . L iabil i ty of deceased member s 43. The estate of a deceased member shal l be l iable f or the debts of the co-operative society as they existed at the time of his death, and proceedings in respect thereof may be commenced within one year of the death : Makueni County Co-operative Societies N o . 4 Pr ov ided that — (a) in the case of a co-operative society with limited l iabili ty, if the fi rst audit of the accounts of the society after the death discloses a credit balance in favour of the society, the fi nanc i al l iabil ity of the estate shall cease forthwith; and (b) a personal representative shall not be liable except in respect of assets in his possession or under his control . T r ansfer of shar e or i n ter est of deceased m em ber s 44. (1) On the death of a member, a co-operative society m ay transfer the share or interest of the deceased member t o — (a) the person nominated in accordance with this Act and any rules made thereunder ; or (b) if there is no person so nominated, such person as m ay appear to the Committee of the society to be the personal representative of the deceased member; or (c) if either of such persons is not qualifi ed under th i s A ct and any rules made thereunder or the by-laws of such society f or membership, such person, specifi ed by the nominee or personal representative, as the case may be, who is so qual ifi ed, or m ay pay to such nominee or personal representative, as the case may be, a sum representing the value of such member’s share o r interest ascertained in accordance with any rules made under this Act or by-laws of the society: 32 2 0 17Makueni County Co-operative SocietiesN o . 4 Pr ov ided that — (i) in the case of a co-operative society with unlimited liability, such nominee or personal representative, as the case may be, may require the society to pay him the value of the share or interest of the deceased member ascertained in the manner mentioned in thi s subsection; o r (ii) in the case of a co-operative society with limited l iabil ity, the society shall transfer the share or interest of the deceased member to such nominee or personal representative, as the case may be, being qualified i n accordance with this Act or any rules made thereunder o r the by-laws of such society for membership of the society, or on his application within one month of the death, to any person specified in the application, who is so qualified. (2) A co-operative society shall pay aU other moneys due to the deceased member from the society to such nominee or personal representative, as the case may be. (3) All transfers and payments made by a co-operative society in accordance with this section shall be valid and ef fectual against any demand made upon the society by any other person. Evidence of member ’s inter est in society 45. (1) Any register or list of members or of shares w hi ch i s kept by a co- operative society shall be prima facie evidence of any of the following particulars entered therein— (a) the date on which the name of any person was entered i n such register or list, as a member; (b) the date on which any such person ceased to be a member ; and (c) the number of shares held by any member. (2) A copy of any entry in a book of a co-operative society regularly kept in the course of its business, shall , i f cer t i f i ed i n accordance with the rules made under this Act , be prima f acie evidence in any proceedings of the existence of such entry, and of the matters, transactions, and accounts, therein recorded. Restr iction on production of society’s books 46. No of ficer of a co-operative society shall in any legal proceedings to the society or liquidator is not a party may be compelled to produce any of the society’s books where the contents be proved under section 42 or to appear as a witness to prove the matters, transactions, and accounts therein recorded, unless the cour t , f or special cause, otherwise orders. c a n 3 3 20 17 Makueni County Co-operative Societies PART I X - PROPERTY AND FUNDS OF CO-OPERA TI VE SO C I E T I E S Application of society’s proper ty and funds 47. The property and funds of a co-operative society shall only be applied for the benefit of the society and, its members, i n accordance w i th 'the provisions of this Act , the rules made hereunder and the by-laws of the society. Restriction on giving loans 48. A co-operative society shall not give a loan nor allow any credit, to person other than a member, unless the by-laws of the society provide for giving a loan subject to a resolution passed at the general meeting of the society to that ef fect . Restr iction on bor rowing 49. A co-operative society may receive loans from persons w ho are not members only to such extent and under such conditions as may be prescribed by its by-laws or by rules under this Act , and f or the purposes of this section a deposit of money under a hire-purchase agreement shall be deemed to be a loan. Investment of society ’s funds 50. A co-operative society may invest or deposit its f unds only— (a) in the Post Offi ce Savings Bank; (b) in and upon such investments and securities as are f or the t im e being authorized for the investment of trust f unds; (c) in the shares of any other co-operative society; (d) with any bank licensed under the Banking Act (Cap. 488) ; (e) in the stock of any statutory body estabUshed in Kenya or in any limited Uability company incorporated in Kenya or i n any other manner approved by a resolution at a general meeting of the said society. Declaration and payment of bonus 51. (1) Subj ect to this section, every co-operative society shall declare each year all bonuses due to members; but, w her e the bonuses are required for re- investment by the society for capital development , or for the redemption of bonus certif icates, the society shall i ssue bonus certifi cates to its members in lieu of cash payments, redeem abl e f r om a revolving fund established by the society for that p ur p o se . N o . 4 34 2 0 17Makueni County Co-operative Societies (2) No co-operative society shall pay a dividend, bonus; o r distribute any part of its accumulated funds without a b al ance sheet and audited account and report disclosing the surplus f und s out of w hi ch the dividend, bonus or distribution is to be made. (3) A co-operative society shall pay a dividend at such rate as may be recommended by the management committee and approved by the annual general meeting of the society. M aintenance of r eser ve f nnd 52. (1) Every co-operative society which does or can der i v e surplus from its transactions shall maintain a reserve f und . (2) A co-operative society may carry to the reserve f und such portion of the net surplus in each year as may be prescribed by rules made under this Act or by the by-laws of the society. (3) The reserve fund shall be invested in the manner provided for under section 47 of thi s A ct . (4) The reserve fund set up under this section shall be ind i v i sib le and no member shall be entitled to claim a specific shar e o f i t . (5) Upon the dissolution of a co-operative society, the assets under the reserve fund shall be applied in the discharge of the liabil ities of the society. D istr ibu ti on of net balance 53. Subject to sections 48 and 49, the net balance of each year with, any sum available for distribution from previous years, may be distributed in the manner prescribed by rules made under this A ct or by the by-laws of the society. PART X - CHARGES BY CO-OPERA TI VE SOCIETIES Creating charge over society’s proper ty 54. A co-operative society may from time to time, charge the whole or any part of its property, if its by-laws expressly empower it to do so, subject to a special resolution by the general meeting. Charge to comply with applicable law 55. A charge created by a co-operative society in accordance w i th section 51 of this Act shall comply with the provisions of the l aw applicable to the particular type of charge. N o . 4 3 5 20 17 Makueni County Co-operative Societies Charges to be registered with the Director 56. (1) It shall be the duty of every co-operative society to register with the Director, every charge created by it and the particulars thereof : Provided that registration of a charge may be ef f ected on the application of any person interested therein: Provided further that where registration is effected on the application of a person other than the co-operative society, such person shall be entitled to recover from the co-operative society the amount of any fees properly paid by him to the Director for such registration. (2) If any co-operative society fails to send to the D ir ector f or registration the particulars of any charge created by it within a period of thirty days, then unless the registration has been effected by some other person within that period, every officer of the society shall be guilty of an offence and shall be liable to a fine not exceeding t w o thousand shillings for every day during which the default continues. Register of char ges 57. (1) The Director shall , with respect to each co-operative society , register in such form as may be prescribed by or under this A ct , al l charges requiring registration and shall enter in the register , with respect to every charge, the following particulars— (a) if the charge is a charge created by the society, the date of i t s creation, and if the charge was a charge existing on property acquired by the society, the date of the acquisition of the property; (b) the amount secured by the charge; (c) short particulars of the property charged; and (d) the persons entitled to the charge. (2) The D irector shal l i ssue a certi f i cate under hi s hand of the registration of any charge registered under this Act stating the amount secured and the cer t if i cates shal l be conc l usi ve ev idence t h at t h e requirements of this Act as to registration of charges have been complied w i th . N o . 4 (3) The register kept in pursuance of this section shall be open for inspection by any interested person on payment of the prescribed fee. (4) The Director shall keep a chronological index in the prescribed form and containing the prescribed particulars, of the charges entered in the register . 36 20 17Makueni County Co-operative SocietiesN o . 4 Cer tifi cate of satisfact ion of char ges 58. The Director may, on evidence being given to his sat i sf act i on that the debt for which any registered charge was given has been paid or satisfied, order that a memorandum of satisfaction be entered on the register, and shall if required, furn ish the co-operative society concerned with a copy thereof . Receiver to give notice of his appointment 59. (1) If any person obtains an order for the appointment of receiver or manager of the property of a co-operative society, or if the Director appoints such a receiver or manager under any powers contained in any instruments, he shall , within seven days from the date of the or der of the appointment under the said powers, give written noti ce of the f act to the Director and the Director shall enter the notice in the register of charges. (2) Where any person appointed receiver or manager of the property of a co-operative society under the powers contained in any instrument ceases to act as such receiver or manager , he shal l , on so ceasing, give written notice of the fact to the Director and the D i rector shall enter the notice in the register of charges. (3) If any person makes default in complying with the requirements of this section, he shall be guilty of an of fence and shal l b e l i ab le to a f i ne not exceeding two thousand shillings for every day during which the def aul t cont inues. Society to keep copy of instruments of charge at registered of fi ce 60. Every co-operative society shall cause a copy of ev er y instrument of a charge which is required by this Act to be registered, to be kept at the registered address of the society. Society to keep register of par ticulars of charges 61. (1) Every co-operative society shall keep, at the registered address of the society, a register of charges in which shal l be entered al l charges specifically affecting the property of the society and all floating charges on the property or assets of the society, giving in each case a short description of the property charged, the amount of the charge, and the name of the person entitled thereto. (2) If any offi cer of a co-operative society knowingly omi ts, or permits the omission of , any entry required to be made in any register in pursuance of this section, he shall be guilty of an of fence and shal l be liable to a fi ne not exceeding ten thousand sliQlings. 37 2 0 17 Makueni County Co-operative Societies Right of members and creditors to inspect register of char ges 62. (1) The copies of the instruments creating charges w h i c h ar e required by this Act to be registered and the register of charges kept by the co-operative society under section 54 shall be open, during business hours, to inspection by any creditor or member of the society, without fee, subject to such reasonable restrictions as the society, in general meeting, may impose. Provided however, that n o t m o r e t h an two hours in each day shall be allowed for inspection, and the register of charges shall also be open to inspection by any other person on p ay m ent of the prescribed fee. (2) Any of ficer of a co-operative society who refuses t o a l l o w inspection of the register of charges or copies of the instruments creating charges in accordance with subsection (1) of this section, or who permits such refusal , shall be guilty of an offence and shall be l i ab le to a f i ne not exceeding two thousand shillings for every day during w h i ch the ref usal of permission continues, and the court may order an immediate inspection of such register or copies. PA RT XI - INQUI RY AND I NSPECTI ON N o . 4 I nquir y by Dir ector 63. (1) The Director may hold an inquiry or, in writing, direct any person to hold an inqui ry — (a) on the direction of the Executive Committee M ember; (b) on the appl ication of not less than one-thirds of the m em ber s present and voting at a meeting of the society; or (c) on the application of the liquidator or of any cred i tor . (2) The inquiry under subsection (1) may inquire into — (a) the by-laws, working and financial conditions of an y c o operative society; or (b) the conduct of any person who has taken part in the organization or management of a co-operative society, or any past or present officer or member of the society. (3) All of ficers and members of the co-operative society sh a l l produce such cash, accounts, books, documents and securities of the society, and furnish such information in regard to the af f air s o f the society, as the person holding the inquiry may require. 3 8 2 0 17Makueni County Co-operative Societies (4) The Director shall report the findings of the inquiry at a general meeting of the society and shall give directions for the implementation of the recommendations of the inquiry report . (5) Where the Director is satisfied, after due inquiry, that the Committee of a co-operative society is not performing its duties properly, he may dissolve and cause to be appointed an interim C om m i ttee consisting of not more than five members from among the m em ber s of the society for a period not exceeding ninety days. (6) Any person found to have misapplied or retained or becom e l iable or accountable for any money or property of the society or has been guilty of misfeasance or breach of trust in relation to the society, he may, if the Director so directs, be required to repay or restore the money or property or any part thereof to the co-operative society together with interest at such rate as the Director th i nk s f i t . (7) This section shall apply notwithstanding that the a c t o r default by reason of which the order is made may constitute an of fence under another law for which the person has been prosecuted, or is being or is likely to be prosecuted. (8) Any person aggrieved by an order of the Director under sub section (6) may, within thirty days appeal to the Tribunal . (9) Any party aggrieved by the decision of the Tribunal m ay within thirty days appeal to the High court on matters of l aw . (10) Subject to sub-section (8) an order made pursuant to Sub section (6) for any monies to be repaid or contributed to a co-operative society shall be fi led with the Tribunal and shall , without prej udice to any other mode of recovery, be a civil debt recoverable summarily . Inspection of books of indebted society 64. (1) The Director may, if he thinks fit , on the application of a creditor of a co-operative society, inspect, or direct som e per sons authorized by him in writing to inspect, the books of the society, i f — (a) the creditor satisfies the Director that the debt i s a sum then due, and that he has demanded payment thereof and has n o t received sati sfaction w ithin a reasonable t ime; and (b) the applicant deposits with the Director such sum as security for the expenses of the inspection as the Director may require. (2) The Director shall inform the creditor of the results of the inspection. N o . 4 39 20 17 Expenses of inquir y 65. (1) Where an inquiry is held under section 60, o r a n inspection is made under section 61 of thi s Act , the Di rector may, by a certificate under his hand, make an order apportioning the expenses, or such part of the expenses as he considers proper, between the society, the members or creditor demanding the inquiry or inspection, and the of f i cer s or former off icers of the society; and the decision of the D ir ector thereon shal l be f i nal . (2) Any sum awarded by way of expenses under subsection ( 1) shall be a civil debt recoverable summarily on production of the cer t i f i cate ref er red to i n that sub sect i on . Routine inspect ion 66. Notwithstanding the provisions of sections 60 and 6 1, the Director may from time to time carry out impromptu inspection into the affairs of a co-operative society. Makueni County Co-operative Societies N o . 4 PA R T X n - D I SSO L U T I O N P r oced u r e f or d isso l u t i on 67. (1) If the Director, after holding an inquiry under sect i on 63 or making an inspection under section 64 of this Act, or receiving an application made by at least three fourths of the members of a co operative society, is of the opinion that the society ought to be dissolved, he may, in writing, order the dissolution of the society and subsequent cancellation of registration. (2) Any member of a co-operative society who feels aggrieved by an order under subsection (1) may, within two months af ter the making of such order , appeal against the order to the E x ecut i v e Committee Member with a final appeal to the High Court. (3) Where no appeal is filed within the prescribed t ime, the order shall take effect on the expiry of that period, but where an appeal is filed within the prescribed time the order shall not tak e ef f ect un less i t i s confirmed by the Executive Committee Member or by the High Court , as the case may be. (4) Where the Director makes an order under subsection (1) he shall make such further order as he thinks fi t for the custody of the book s and documents and the protection of the assets of the society. (5) No co-operative society shall be dissolved or wound u p sav e by an order of the Di rector . 40 2 0 17Makiieni County Co-operative SocietiesN o . 4 Cancel lat ion of r egistr at ion 68. (1) Where a co-operative society has— (a) less than the prescribed number of members; or (b) failed to file returns with the Director for a period of three years; o r (c) failed to achieve its objects, the Director may, in writing, order the cancellation of its registration and dissolution of the society and the order shall take effect immediately. (2) A person aggrieved by an order of the Director u n d er subsection (1) may appeal against such order to the E x ecut i v e C om m i ttee Member within thirty days of the order . E f fect s o f can cel l a t io n 69. Where the registration of a co-operative society i s cancel led , the society shall cease to exist as a corporate body f rom the date the order tak es ef f ect . E ff ects o f can cel l a t i on 70. (1) The sections of the Companies Act (Cap. 486) specified in the Schedule to that Act, shal l apply with necessary m od if i cat i ons i n relation to the winding-up of a co-operative society as they apply to that of a company registered under that Act . (2) The Executive Committee Member may, by order, amend t h i s A c t . Appointment of l iquidator 71. (1) Where the registration of a co-operative society i s cancel l ed under section 67 and 68, the Director may, in consultation w i t h th e Executive Committee M ember , appoint one or more persons to be liquidators of that society (hereinafter referred to as the liquidator) and all the property of such society shall vest in the liquidator f rom the date upon w hich the order of cancel lat ion takes ef fect . (2) The Executive Committee Member shall appoint a l iquidation committee of f ive members comprising of the Chief Offi cer, the D irector , member of the apex society and two members of the business community who shall be working with the liquidator during the liquidation period. (3) The Chief Officer and the Director shall be the chairperson and secretary to the liquidation committee respectively. o n e 4 1 20 17 Makiieni County Co-operative Societies N o . 4 Power s of l iquidator 72. (1) The liquidator shall , subject to this Act, have the fol lowing po w er s — (a) to appoint a day, in the prescribed manner, before w h i ch the creditors whose claims are not already recorded in the b ook s of the co-operative society shall state their claims for admission , or be excluded from any distribution made before they have proved them; (b) to institute and defend suits and other legal proceedings by, and on behalf of , the society in his own name or office, an d t o appear before the Tribunal as litigant in person on behal f o f the society; (c) to appoint an advocate to assist him in the performance o f his duties; (d) to refer disputes to the Tribunal in the prescribed m a n n e r ; (e) to determine, f rom time to t ime the contributions to be made by the members and past members, and by the estates of deceased members of the society, to the funds of the society; (f) to investigate all claims against the society, and subj ect to this Act, to decide questions of priority arising between cl aimants; (g) to call such meeting of members and creditors as may be necessary for the proper conduct of the liquidation; (h) to sell the movable and immovable property and rights of action of the society, by public auction or private contract with power to transfer the whole thereof to any person or company o r t o transfer the same in parcels; (i) to carry on the business of the society as far as may be necessary for the proper l iquidation of the affairs of the society; (j) to determine, from time to time, by what persons and i n what proportion the expenses of the liquidation are to be borne; (k) to take possession of the books, documents and assets of the society; (1) to arrange for the distribution of the assets of the society in a convenient manner w hen a scheme of distribution has b een approved by the hquidation committee; 4 2 2 0 17Makiteni County Co-operative Societies (m) to give such directions in regard to the disposal of the b ook s and documents of the society as may appear to him to be n ec essar y for winding up the af fairs of the society; (n) to compromise, with the approval of the liquidation commi ttee, any claim by, or against, the society; (o) to apply to the liquidation committee for his discharge f rom the duties of liquidator after completion of the liquidation proceedings. (2) The liquidator shall have power to summon and enforce the attendance of witnesses and to compel the production of documents by the same means and so far as may be necessary, in the s a m e m a n n e r a s is provided in the case of .a court under the Civil Procedure Act (Cap. 21), in so far as such powers are necessary for carrying out the purposes of th i s sect i on . N o . 4 Liquidation account of societies 73. An account, to be called the Co-operative Societies Liquidation Account, shall be kept by the liquidation com m i ttee w i th such bank as may be prescribed. Powers of liquidation committee during liquidation 74. (1) The liquidator shall exercise his powers subject to the guidance and control of the liquidation committee and to any liniitations imposed by the liquidation committee and the liquidation com m i ttee m a y — (a) rescind or vary any order made by the liquidator an d m ak e any new order it thinks proper; (b) remove the liquidator fr om of fice and appoint a new l iquidator in hi s place; (c) call for all books, documents and assets of the society; (d) by order in writing, in any particular case, limit the powers of the liquidator conferred by section 72; (e) at its discretion, require accounts to be rendered to the l iquidation committee by the liquidator; (f) procure the auditing of the liquidator’s accounts and author i ze the distribution of the assets of the society; (g) make an order for the remuneration of the liquidator; (h) grant a discharge to the liquidator on application by him after completion of the liquidation proceedings; 4 3 20 17 Makueni County Co-operati ve Societies N o . 4 require any member or past member of the society and an y trustee, banker, receiver, agent or off icer of the society to pay, deliver , convey, surrender or transfer forthwith, or w i t h i n such time as he shall direct, to the liquidator , any m o n ey , property, books or papers in his hands to which the society appears to be entitled; appoint a special manager for the management of the business of the society and determine his remuneration and what, if any, security it shall give for the proper performance of hi s duties; (k) refer any dispute between a liquidator and any third party to the Tribunal if that party consents in writing to be bound by the decision of the Tribunal ; require the indemnification of the liquidator . (2) The decision of the Tribunal on any matter referred to i t under subsection (1) (k) shall be binding upon the parties and shal l be exercisable in the like manner as an order made by the l iquidation committee under subsection (1) (a). (3) Where any matter is referred to the Tribunal under sub sect ion (1) (k) the cost of the reference and award shal l be i n the d i scret i on of the Tribunal , who may direct to and by whom, and in what manner , those costs or any part thereof shall be paid, and may tax or sett le the am ount of costs to be so paid by any party thereof . Appeal against order of liquidator or liquidation committee 75. (1) A person aggrieved by any order or decision o f t h e liquidation committee or the liquidator under section 72 or secti on 74 , as the case may be, may appeal against the order or decision to the T r i bunal within thirty days of the order or decision. (2) A person aggrieved by a decision of the Tribunal u n d er subsection (1) may appeal to the High Court within thirty days of the dec i sion . E n f or cem en t of or d er s 76. Subject to sections 74 and 75, any order or decision m ade under section 72 or section 74 on being fi led in the court, may be enforced in a court in the same manner as i f the order or deci sion w ere an order or dec isi on of the cour t . Institution of winding up proceedings 77. If the liquidator of a society whose registration has been cancelled alleges that any of the offences mentioned in sections 3 18, 3 19, (i) G) (1) 4 4 2 0 17Makueni County Co-operative Societies 320, 321, 322 or 323 of the Companies Act (Cap. 486) hav e been committed, he shall report the facts to the Director, who shall , if he think s fit , institute such proceedings as may be necessary. Power to restrain convicted persons from being officers of society 78. Any person who is convicted of an offence under sect i ons of the Companies Act (Cap. 486) specified in section 74 shal l cease to be, or remain, an of ficer of a co-operative society, and shall cease to be concerned in or take part in, whether directly or indirectly, t h e management of a co-operative society, for a period of five years f rom the date of his conviction, and any person acting as, or purporting to be acting as such an officer, or being so concern ed in, or taking part in the management of a co-operative society during that period, shall be guilty of an offence and shall be liable to imprisonment f or a term not exceeding two years. N o . 4 PART Xi n - SETTL EM ENT OF DI SPUTES Disputes 79. (1) If any dispute concerning the business of a co-operative society arises— (a) among members, past members and persons claiming through members, past members and deceased members; o r (b) between members, past members or deceased members, an d the society, its Committee or any officer of the society; o r (c) between the society and any other co-operative society, it shall be referred to the Tribunal . (2) A dispute for the purpose of this section shall i nc l ude — (a) a claim by a co-operative society for any debt or dem and due to it from a member or past member, or from the nominee o r personal representative of a deceased member, whether such debt or demand is admi tted or not ; or (b) a claim by a member, past member or the nominee o r personal representative of a deceased member for any deb t or demand due from a co-operative society, whether such deb t or demand is admi tted or not ; (c) a claim by a Sacco society against a refusal to grant or a revocation of licence or any other due, from the Director . 4 5 20 17 Makueni County Co-operative Societies Establishment, Functions, Proceedings and Operation of T r i b u n al 80. The establishment, functions, proceedings and operation of t h e Tribunal shall be governed by sections 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87 and 88 of the Co-operative Societies Act (Cap. 490). PA R T X I V - GE NE R A L PR O V I SI ON S Remuner ation of Offi cers and Members of society 81. (1) No officer or member of a co-operative society sh al l receive any remuneration, salary, commission or any other payment from the society for services rendered to the society unless the society has, by a resolution passed at a general meeting, approved the payment of such remuneration, salary, commission or other payment. (2) No officer or member of a co-operative society sh al l recei v e any remuneration, salary, commission or other payment from any person or body or association other than the society in respect of any business or transaction entered into by the society: N o . 4 Provided that in special circumstances the society may, by resolution passed at a general meeting, authorize such remuneration , salary, commission or other payment to be made. (3) Any officer or member of a co-operative society w ho recei v es any remuneration, salary, commi ssion or other payment i n contr av ent i on of this section shall be guilty of an offence and liable to a f i ne not exceeding one hundred thousand shillings or to imprisonment f or a ter m not exceeding two years, or to both such f ine and such imprisonment; and shall , if the offence is the contravention of subsection ( 1) of this section, be ordered to repay the amount of the remuneration, salary, commission or other payment received from the society i n add i t ion to or in lieu of any other punishment, and default in such payment shall be dealt with in the same manner as default in paying a f ine imposed by a c o u r t . Restr iction on use of word “ Co- operative 82. (1) No person, other than a co-operative society, sh al l t r ad e or carry on business under any name or title of which the w or d “ C o operative” or its equivalent in any other language is part , without the written approval of the Director . (2) Any person who contravenes subsection (1) of this sec t i o n sh al l be guilty of an offence and shall be liable to a f ine not exceeding f if ty thousand shill ings, and in the case of a continuing of fence, to a fur ther f ine not exceeding two thousand shillings for each day on which the of fence is continued af ter convict ion theref or . 4 6 2 0 17Makueni County Co-operative Societies County Co- operative Societies Development Fund 83. (1) The Executive Committee Member may establish a f und to be known as the Co-operative Societies Development Fund (hereinafter referred to as “ the Fund” ) . (2) The object and purpose for which the Fund is established i s the promotion of education, training, research, consultancy and other rel ated activities in the co-operative sector. (3) The Fund shall consist of contributions by co-operative societies and any other lawful source. (4) The Fund shall vest in a Board of nine trustees, six of w hom shall be elected by the co-operative movement and three appointed by the E x ecut i v e C om m ittee M em ber . (5) The Executive Committee Member may, in consultation w i th the apex society, prescribe the manner of formation and maintenance of the F und . N o . 4 (6) The fund shall consist of— (a) such moneys as may be appropriated by the County A ssembly and which amount shall be 2% of the County’s total development budget; (b) such gifts as may be donated to the Board; (c) all moneys from any other lawful source provided, donated or l ent to the B oard . Regulations 84. (1) The Executive Committee Member may in consultation with the apex society make regulations for the better carrying out of the provisions and purposes of this Act . (2) In particular, and without prejudice to the generality of the foregoing power, such regulations may— (a) prescribe the forms to be used and conditions to be complied with in making application for the registration of a society and the procedure to be followed; (b) prescribe the matter in respect of which a co-operative society may or shall make by-laws, and the procedure to be f o l l ow ed i n making, varying and revoking by-laws, and the conditions to be satisfied before making, varying or revoking by-laws; (c) prescribe the conditions to be complied with by per son s applying for admission or admitted as members, and the 47 2 0 17 Makueni County Co-operati ve Societies N o . 4 payments to be made and the interest to be acquired bef or e the exercise of the right of membership; (d) regulate the manner in which funds may be raised whether by means of shares or debentures or otherwise; (e) provide for general meetings of the members and f or the procedure at such meetings and the powers to be exercised by such meetings; (f) provide for the appointment, suspension and removal o f t h e members of the Committee and other of ficers, and for t h e procedure at meetings of the Committee, and for the pow er s to be exercised and the duties to be performed by the C om m i ttee and other off icers; (g) prescribe the accounts and books to be kept by a co-operative society; (h) provide for the form of the fi nal accounts and the bal ance sheet to be prepared annually and any other statements an d schedules relating thereto; (i) provide for the resignation and expulsion of members and f or the payments, if any, to be made to members who resign o r a r e expelled, and for the liabil ities of past members; (j) provide for the persons by whom and the form in which copies of entries in books of co-operative societies may be certi f ied ; (k) provide for the inspection of documents and registers at t h e Director’s off ice and prescribe the fees to be paid thereof and for the issue of copies of such documents or registers; (1) provide for the formation and maintenance of a register for members and, where the l iabil ity of members is l imited by shares or l imited by guarantee, of the register of shares; (m) provide for the order in which the value of a deceased m em b er ’ s interest shall be ascertained and subj ect to section 3 9 f o r t h e nomination of a person to whom such interest may be paid or transferred; (n) provide for the mode in which the value of the i n terest of a member who has become of unsound mind or incapable of managing his affairs shal l be ascertained and for the nom i nat i on of any person to whom such interest may be paid or transferred; (o) provide for the manner of formation and maintenance of reser v e funds and the objects to which such funds may be applied an d 4 8 2 0 17Makueni County Co-operative Societies for the investments of any funds under the control of a co operative society; (p) prescribe the procedure to be followed in appeals m ade to the Executive Committee Member under this Act; (q) prescribe the returns to be submitted by a co-operative society to the Director and the person by whom and the f orm i n w hich such returns shal l be submitted; (r) prescribe the fees to be paid on applications, registrations and other acts done by the Director under this Act; (s) prescribe the procedures to be followed in the liquidation of societies; and (t) prescribe anything which under this Act may be prescribed. (3) In any case where the Director is satisfied that a subst an t ial number of members of any co-operative society are unacquainted w i t h the English language, he may cause any rules made under th i s sect i on to be translated into a language with which such members are acquainted, and to be made known in a manner customary for the community to which such members belong, provided that on any matter of interpretation the English version of the rules shall prevail . Exemption 85. (1) Notwithstanding anything contained in this A ct , the Executive Committee Member may, by notice in the Gazett e— (a) exempt any co-operative society from any of the provisions of this Act , subject to such conditions, exceptions or qualifications as he may think fi t to impose; (b) apply to any co-operative society any of the provisions of th i s Act subject to such modifications as he may think fit. (2) The Executive Committee Member shall cause to be published in the Gazett e thirty days’ notice of the intention to grant an exemption under subsection (1) . (3) Any person with an objection regarding an intended exemption under this section may make representations to the E x ecut i v e C om m i ttee Member within the period of the notice. (4) The Executive Committee Member may upon considering representations and objections made under this section, ei ther — (a) abstain from granting the intended exemption; or (b) grant such exemption subject to such terms and cond it ions as he may deem f it . N o . 4 4 9 20 17 O f f en ces Makueni County Co-operative Societies N o . 4 86. (1) It shall be an offence under this Act if — (a) a co-operative society, or an officer or a member thereof , fails to do or to cause to be done any act or thing w hi ch i s required by or under this Act or any rules made thereunder t o be done; or (b) a co-operative society, or an officer or a member thereof , does anything which is prohibited by or under this A c t o r any rules made thereunder; or (c) a co-operative society, or an of fi cer or a member thereof , willfully neglects or refuses to do any act or to furnish an y information required for the purposes of this Act by the D ir ector or the Registrar, or any person duly authorized in that behalf , by the Director or the Registrar; or (d) a co-operative society or an of fi cer or member thereof wil lful ly makes a false return or furnishes false information w i t h respect to any return or information in or which is required by or under this Act or any rules made thereunder; or (e) any person willfully and without reasonable excuse disobeys any summons, requirement or lawful order issued under t h i s Act, or fails to furnish any return or information lawfully required from him by a person authorized to do so, or w h ich he is required to furnish, by or under this Act or any ru l es m ade thereunder ; or (f) any person acts or purports to act as an officer of a co operative society when not entitled to do so. (2) Every co-operative society, of fi cer or member of a co-operative society or other person who commits an offence under th i s sect i on shal l be liable to a fi ne not exceeding f ifty thousand shil lings o r t o imprisonment for a term not exceeding two years, or t o b o t h . (3) The Director of Public Prosecution may appoint public prosecutors for cases arising under of this Act . Savings 87. (1) Every society, and all by-laws of a society, registered under the Co- operative Societies Act (Cap 490) shall be deem ed to hav e been registered under this Act . 50 2 0 17Makueni County Co-operative Societies (2) Any register kept in pursuance of the Co-operative Soci et i es Act (Cap. 490) shall be deemed to be part of the register to be kept in pursuance of this Act. (3) Any document referring to a provision of the Co-operative Societies Act (Cap 490) shall be construed as referring to the corresponding provision of this Act . and (4) Any orders, directions, appointments and other acts lawfull y made or done under any of the provisions of the Co-operative Societ ies Act (Cap 490) and in force immediately before the commencement of this Act shall be deemed to have been made or done under the corresponding provision of this Act and shall continue to hav e ef f ect accordingly . (5) The Co-operative Societies Act (Cap 490) shall cease to apply to co-operative societies within the County to which this Act applies. N o . 4