Cooperative Societies Act (No. 15 of 1991)

3. Co-operative Societies to be registered in accordance with the Act. PART" Tnr OBJECrrn: OF COOPERATIVE SOCIETIES A~D PROl FCTIO~ Oil HE COOPERATIVE Movrxu.x: ~. Objects of Cooperative Societies.

5. Protection of Cooperative Societies. h. Application of Penal Code to employees and property of socic y. PART III RLSPOfl;SIBILlTIES OF THE MI:-;ISTER

7. Encouragement of Cooperative Development. H. Responsibilities of Minister.

9. Information on cooperation.

10. Persons required to furnish information to Minister. PARTlY RE<jISTRAR II. Appointment of Registrar. Deputy Registrar and Assistant Registrar.

12. Functions of a Registrar. PARTY FOR\1r\TION A:-'-D OReiAfI;I/ATlOJ\i or SOCIETIES

13. Structure of societies. l~. Formation of societies.

15. Societies may affiliate.

16. Registrar may advise primary societies to form or join cooperative unions. 157 1991 No. 15 Co-operative Societies

17. Objects and functions of secondary societies.

18. Objects of Apex Societies.

19. Societies may form joint enterprises.

20. Objects of the Federation.

21. Kinds of societies not restricted. PART VI REGISTRATION OF SOCIETIES

22. Societies which may be registered.

23. Restrictions on member of society holding share capital.

24. Conditions for registration.

25. Rights of minors.

26. Contracts with minors.

27. Power of General Meeting to decide certain questions.

28. Membership subject to Registrar's permission in certain cases.

29. Application for registration.

30. Registration.

31. Certificate of registration.

32. Probationary societies.

33. Registrar to decide on registration within ninety days.

34. Evidence of registration.

35. Societies to be body corporate. PART VII RIGHTS AND LIABILITIES OF MEMBERS

36. Member not to exercise right till due payment is made.

37. Restriction on membership in societies with limited liability.

38. Votes of members.

39. Restrictions on transfer of shares or interest.

40. Liability of a member.

41. Liability of past members.

42. Liability of the estates of deceased member. 158 No. IS Co-operative Societies 1991 PART VIII DUTIES OF REGISTERED SOCIETIES

43. Address of societies.

44. Copy of Act. rules and by-laws to be open for inspection.

45. Power to make by-laws.

46. Amendment of the by-laws of the registered society.

47. By-laws of the society to hind members.

48. Accounts and Audit.

49. Registrar may require Bank to produce information etc.

50. Communications of defects in the working of registered society.

51. Returns to be made by societies. PART IX PRIVILEGES OF REGISTERED SOCIETIES

52. Defects in the constitution not to render act of registered society invalid.

53. Disposal of produce to or through a registered society.

54. Creation of charges in favour of registered societies.

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

56. Shares or interest not liable to attachment.

57. Transfer of interest on death of a member.

58. Register of members.

59. Proof of entries in societies hooks.

60. Exemption from compulsory registration of instruments relating to shares and debentures of registered society.

61. Power to exempt from duty or tax. PART X MANA<iEME:'IiT 01 RE(iISTERED SOCIETIES

62. General meeting.

63. Constitution of committees.

64. Power of the committee.

65. Restriction relating to members of committee.

66. Dissolution of the committee of society.

67. Powers of persons appointed under section 64.

68. Committee to comply with any directions contained in reports. 159 No. 15 Co-operative Societies 1991 PART XI PROPERTY AND Fl:NDS OF RHilSTERFD SOClFTll"

69. Revenue of registered societies.

70. Rules to govern the maintenance of the revenues and funds of a registered society.

71. Restriction on loans.

72. Restriction on borrowing from non-members.

73. Restriction with non-members.

74. Investment of funds.

75. Creation of a Central Cooperative Fund.

76. Purpose of the Fund.

77. Secondary Societies to contribute to the fund.

78. Financial Provisions.

79. Dividends and bonus.

80. Reserve Fund. Sl. Distribution of net balances.

82. Contribution for charitable educational and medical purposes. PART XII REGISTRATION OF CHARGES

83. Registration of charges.

84. Duty of society to register charges created by society.

85. Duty of society to register charges existing on property acquired.

86. Register of charges.

87. Endorsement of certificate of registration on debentures.

88. Entry of satisfaction and rectification of register. 8!). Enforcement of security.

90. Copies of instrument creating charges to be kept by the society.

91. Society's register of charges. <)2. Right to inspect copies of instruments creating mortgages and charges and society register of charges. 160 No. 15 Co-operative Societies 1991 PART XIII INSPFCIIO,\, 01· AI·FA!RS Section nu.

9J. Inquiry by Registrar.

94. Inspection.

95. Cost of Inquiry.

96. Surcharge. PART XIV AMALGAt\IATIOI" A"'D DIVISION

97. Voluntary amalgamation.

9H. Voluntary Division. 9l). Defect or irregularity in notice etc. PART XV DISSOl.UTION OF SOCIETY lOll. Dissolution.

101. Cancellation of registration of society.

102. Appeal against cancellation of registration. lOJ. Effect of cancellation of registration. lO·t Winding up.

105. Powers of liquidator.

106. Powers of Registrar to control liquidation.

107. Power to stay or restrain proceedings against society. lOS. Avoidance of dispositions of property. etc. after cancellation.

109. Avoidance of attachment etc.

110. Powers of Registrar to assess damages against delinquent pro- moters etc. Ill. Power to arrest absconding promoter. officer etc.

112. Debts of all description may be proved. l l J. Where society is insolvent.

114. Preferential payments.

115. Fraudulent preference. 161 No. 15 Co-operative Societies 1991

116. Liabilities and rights of certain fraudulently preferred persons.

117. Effect of floating charge.

118. Disclaimer of onerous property in case of society wound up.

119. Restriction of rights of creditor as to execution or attachment in case of society being wound up.

120. Duties of court as to goods taken in execution.

121. Courts not to have jurisdiction in dissolution of societies.

122. Preservation of books and records. PART XVI RULES A:'oID REGULATIO:--;S

123. Rules.

124. Power of Registrar to make regulations.

125. Fees.

126. Recovery of sums due to Government. PART XVII

127. Offences. 12~. Penalty for soliciting violation of contracts. 12l). Prohibition of use word "Co-operative". IJO. Offences by officer of society being wound up. PART XVIII IJ I. Power to exempt societies from conditions as to registration. I ~2. Power to exempt registered societies from provisions of the Act U~. Appointment of special members to committees. IJ4. Terms of appointment and pO\\'ers of special rncmbcr-, \)\ the committee.

135. Savings. 162 No. IS Co-operative Societies 1991 PART XIX REPEAL A:-<D TRANSITIONAL

136. Construction.

137. Act No. 14 of 1')82 repealed. 1.18. Act No.7 of 1')')0 repealed.

139. Transitional provisions.

140. Further transitional provisions. 163 No. 15 Co-operative Societies 1991 THE UNITED REPUBLIC OF TANZANIA No. 15 OF 1991 I ASSENT, A. H. MWINYI, President 5TH AUGUST, 1991 An Act to make better provisions for the formation, constitution, re- gistration and operation of Cooperative Societies; and for other matters incidental to or otherwise connected with those purposes [ ] ENACfED by the Parliament ofthe United Republic of Tanzania. PART I PRELIMINARY

1. This Act may be cited as the Cooperative Societies Act, 1991, and Short title shall come into operation on such date as the Minister may, by notice and com- mence- published in the Gazette, appoint. ment

2. In this Act, unless the context requires otherwise- Interpre- tation "apex society" means a society the membership of which is restricted to secondary societies and which is established to facilitate the oper- ations of all primary and secondary societies; "agricultural inputs" means supplies needed for agricultural production and includes building materials, fertiliser, dip, veterinary preparations, seed, animal feeding stuffs, breeding stock, draft animals, planting material, farm implements, land tools, fencing material, petroleum products, and other supplies and equipment normally used in agricul- tural production; "agricultural produce" means the produce of farms, gardens orchards and forests, poultry, beekeeping and other animal products, and in- cludes dairy produce and all the products of fish and fishing; "annual net surplus" means such portion of the total income received or accrued during any year, as remains after deductions have been made from it in respect of all recurret expenditure incurred during that year and after adequate provisions has been made for bad debts, depreciation, taxation and losses; 165 No. 15 Co-operative Societies 1991 "annual net balance" means such portion of the net surplus for any year as remains after deductions have been made from i-t in respect of the reserve fund. the share transfer fund and such other appropriations as it may be necessary or desirable to make for the proper conduct of the society's business, and after a dividend (if any) has been paid on the share capital; "bonus" means such portion of the annual net balance as may be distri- buted to members in consideration and on the basis of their patronage of the society's business or their participation in such business; "by-law" means the by-laws made by a society in the exercise of the power conferred by this Act. and duly registered amendment of such by-laws; • "committee" means the governing body of a registered society to whom the management of its affairs is entrusted: "common need" means the need which is common to the majority of the members of a registered society: Cap. 212 "company" means a company registered under the Companies Ordi- nance: "cooperative society" means an association of persons who have volun- tarily joined together for the purpose of achieving a common need through the formation of a democratically controlled organization and who make equitable contributions to the capital required for the for- mation of such an organization. and who accept the risks and the benefits of the undertaking in which they actively participate; Acts 19S2 ..the Corporation" means the Cooperative Audit and Supervision Cor- :-<0. 15 poration established under the Cooperative Audit and Supervision Act. 19S2; "delegate" mcans- (a) in the case of a primary society in which the general meeting of members is substituted by a meeting of delegates. the represen- tative of a specified number of individual members who is elected or appointed to attend and vote at a meeting of delegates; and (h) in the case of a societv which is itself a member of another society the representative of the former elected or appointed to attelld and vote at a meeting of the latter society; "dividend" means the sum paid on the share capital invested in a society: "Economic Viability" means the abilitv of society to conduct its affairs as provided in the rules. . . "federation" means an association formed by apex societies. "industrial society" means a registered society whose principal objectives is manufacturing or making or servicing or assembling of industrial goods and whose members arc respectively manufacturers. craftsmen. artisans. industrial workers and apprentices: "joint enterprise" means an association of two or more societies which join together for a purpose of operating an economic enterprise: ..the Fund" means the Central Cooperative Fund established under sec- tion 73 of this Act: 166 No. 15 Co-operative Societies 1991 "member" includes a person or a registered society joining in the appli- cation for the registration of a society, and a person or a registered society admitted to membership after registration in accordance with the by-laws and rules: "the Minister" means the Minister for the time being responsible for matters relating to cooperative societies: "officer" means any officer of a society and includes chairman. vice-chair- man. secretary. treasurer. member of a committee or any other person empowered under the rules or the by-laws to act on behalf of a regis- tered society: "primary society" means a registered society all of whose members are individual persons or an association of such individual persons and any cooperative body other than a body registered under the com- panies Ordinance and includes a joint enterprise where all its members are primary societies: "registered society" means a cooperative society registered or deemed to have been registered under this Act: "the Registrar" means the Registrar of cooperative societies appointed under Section 11 of this Act. and includes, where appropriate. the Deputy Registrar or an Assistant Registrar; "the rules" means rules made under this Act; "rural areas" means any area which is not part of an urban area: "savings and credit society" means a registered society whose principal objects is to encourage thrift among its members and to create a source of credit to its members at a fair and reasonable rate of interest: "school society" means a society the membership of which is restricted to the pupils of a school: "secondary society" means a registered society whose membership is open only to primary societies which are its members: "society" means a cooperative society registered under this Act and includes a primary society. a secondary society an apex society and a federation: "specialized skills" means an expertise possessed by any person in such particular field as may be described in the rules: "urban area" means any area within the jurisdiction of city council. a municipal council, a town councilor within a township established or deemed to have been established under the Local Government (Urban .\ch IlJi'2 ,",,, ,~ Authorities) Act, 1982 or the Local Government (District Authorities) .-\ct, Il)1'>2 Act, 1982 as the case may be; '"'o ~ "village" means a village registered or deemed to have been registered under the Local Government (District Authorities) Act. 1982 and includes an Ujamaa village designated as such under that Act: 167 No. IS Co-operative Societies 1991 Coopera- 3.-( 1) Cooperative societies shall be registered in accordance with tive this Act and the rules; societies to he re- gistered in accor- dance with this Act (2) Any reference in this Act to compliance with or contravention of this Act or any of its provisions or to any matter being subject to or being in accordance with this Act or any of its provisions, and any equivalent reference, shall include a reference to compliance with or contravention of any regulations or rules made under this Act and to the matter being subject to or in accordance with any such regulations or rules. PART II THE OBJECTIVE OF COOPERATIVE SOCIETIES AND PROTECTION OF THE COOPERATIVE SOCIETIES Objects of 4. A Cooperative Society is an association of persons who have Coopera- voluntarily joined together with an object of promoting the economic tive and social welfare of its members. The society shall be operated Societies democratically on the basis of the principles, methods and procedures of cooperation. It shall thus strive, in accordance with the cooperative principles- (a) to improve the material living conditions of its members; (b) to satisfy the cultural needs of its members as well as to increase their social and political awareness; (c) to promote cooperative education among its members. Protec- S. The state shall protect the cooperative societies by offering support, tion of guidance and advice. Coopera- tive Societies Applica- 6. When applying the Penal Code and the punishments provided for tion of in this Act, the property of the society shall be deemed to be public Penal Code to property, its employees shall be deemed public servants and the papers employee of the society, its records and seal shall not be removed from the premises and prop- of the society except in accordance with the provisions of this Act. erty of so- ciety Cap. 16 168 No. 15 Co-operative Societies 1991 PART III RESPONSIBILITIES OF THE MINIS] ER

7. The Minister shall take such measures as he deems necessary for Encour- the encouragement generally of cooperative development for economic. agement of social and cultural purposes and, human advancement on the basis of .oopcra- self-help and in particular, hut without limiting the generality of the tive de- foregoing for the encouragement of the organisation of cooperative velop- societies as a means 01'- merit (a) improving the economic situation of their members: (h) contributing to the economy an increased measure of self-reliance and democratic control of economic activity: (c) increasing personal and national capital resources by the encouragement of thrift, the prevention of usury and the wise use of credit: (d) increasing incomes and employment by fuller utilisation of resources, including the bringing of new land into productive use, the marketing and processing of agricultural and natural products, the development of local industries, and processing raw materials: (e) improving social and cultural conditions and, where appropriate, providing supplementary services in housing, health, education and communications: (f) raising the level of general and technical knowledge of members of societies.

8.-(1) In encouraging cooperative development and in carrying out Respon- the provisions of this Act, the Minister may from time to time take, sibilities of Minis- such measures which are not detrimental to the interests of the members ter as he deems necessary to- (a) assist the organization of cooperative societies among persons or groups of persons who desire to provide themselves with, or to market, commodities or services or both, on a cooperative self help basis: (b) facilitate the financing of societies, where necessary for their establishment and operation, by the provision of, or arrangement for loans, guarantees of loans, or otherwise; (c) provide for such advice as may be necessary to assist officers and members of societies to achieve their objects; (d) institute inquiry into and collect, classify analyse information and statistics relating to societies and cooperative development; 169 No. 15 Co-operative Societies 1991 (e) establish or facilitate the establishment if a research service or services for enquiry generally into the operation of societies and for investigation and analysis of economic. social and other problems as may be deemed advisable to load to the encouragement of new or improved methods of cooperative development including- (i) production of agricultural or natural products and the processing and marketing of such products; (ii) industrial development, manufacturing and marketing and sale by retail or wholesale; (iii) credit, investment and business finance; (iv) wholesaling and retailing of goods and services; (v) community and welfare services on a cooperative basis: (f) issue from time to time such reports. circulars and other publications relating to societies and cooperative development as may be deemed advisable; (g) provide or authorise such other services as may be necessary in carrying out the provisions of this Act: and (h) give directions to the Registrar on matters relating to co-operative development. Informa- 9. The Minister shall disseminate, or arrange for the dissemination tion on of. information relating to cooperative and cooperative development in Coopera- tion such manner and form as may be found best suited to promote interest in and understanding of cooperative principles and practices with a view to the encouragement of the organisation of cooperative societies based on self help. (2) The Minister may delegate some of his powers to a Regional Commissioner. ~ Persons 10.-(1) All officers of societies to which this Act applies shall upon required a request by him furnish the Minister with such information as he mav 10 furnish informa- from time to time require for the purposes of this Act. . tion to (2) An officer who fails to comply with a request of the Minister Minister under subsection (1), or who knowingly makes a statement, false in any material particular, in any information furnished to the Minister, shall be guilty of an offence. PART IV REGISTRAR Appoint- 11.-(1) The President shall appoint public officers to be Registrar ment of of Cooperative Societies and Deputy Registrar, and the Minister shall Registrar. appoint such number of Assistant Registrars as may be required to assist Deputy Regivtrar the Registrar in carrying out his duties and functions under this Act. and Avis- tant Rc- 170 No. 15 Co-operative Societies 1991 (2) The Deputy Registrar and the Assistant Registrars shall act under the direction and control of the Registrar and may subject to this Act or upon due authorisation exercise any of the functions of the Registrar. (3) The Registrar shall have a seal of such device as maybe atlproved by the Minister. 12.--( 1) The functions of a Registrar shall be- Functions ofa Regis- (a) to register, promote, inspect and advise cooperative societies in trar accordance with the provisions of this Act; (b) to advice the Minister on any matter relating to cooperative societies, and in particular in respect of any assistance, financial or otherwise, which may be required by cooperative societies; c) to encourage the establishment of cooperative societies in all sectors of the economy and to assist cooperative societies to increase their efficiency; d) to provide services designed to assist in the formation, organisation and operation of societies and to give advice on cooperative management to all kinds of societies registered under this Act; e) to perform such other functions in relation to the development and well being of cooperative societies such as he may, from time to time be directed by the Minister; (f) to promote, or facilitate education and training of members and staff of cooperative societies. (2) Th~ Registrar shall gradually delegate his duties of promoting, advising, educating and training of cooperative societies to the cooperatives on mutual agreement as provided in the rules. PARTY FORMATION AND ORGANISATION OF SOCIETIES

3. The structure of cooperatives shall be determined by the members Structure I subject to the wishes of the members, may comprise of:- of the Coopera- a) the primary society. tive. . h) the secondary society. Societies c) the Apex society. :d) the Federation. 1".-( 1) A primary society may be formed by ten or more persons Forma- ccpt for co-operatives of specialized skills which can be formed by tion. . of .ir or more persons. Societies (2) A person may not be a member of a primary society unless he s the following qualifications, namely- (a) that he has attained the minimum age of eighteen years and is of sound mind; (h) that he is following a trade or occupation relevant to the society's object as defined in the by-laws; 171 No. 15 Co-operative Societies 1991 (c) that he has a common need which the society seeks to satisfy; (d) that he is capable of paying fees and acquiring shares. (3) Notwithstanding the provisions of sub-section (2) a person who has not attained the age of 18 years but has the minimum age of fifteen and is following a trade, or occupation relevant to the society's object who is in this section referred to as a minor may become a member of a cooperative society; but such person shall not be eligible to act as a member of a committee until he has attained the age of eighteen; and a person who has not attained the age of fifteen years but is attending school may be a member of a school society at his school. Societies 15. Primary societies may form secondary societies and secondary may societies may form Apex Societies. Apex societies may join and form a affiliate Federation. but where a cooperative is unable due to its nature to combine with other of similar nature to form a secondary or apex society is may be allowed to become a member of the Federation. Registrar 16. Where the Registrar considers that a cooperative union in relation may ad- to any area is economically viable, he may advise any primary soc!e!y vice prim- ary or category of cooperative societies operating within that area to ~om societies the cooperative union, by notice in writing served on the society to join a orcategory of cooperative societies, as the case may be. coopera- tive union Objects 17. The objects of secondary societies shall be: and func- tions of (1) to facilitate the operation of primary societies which are its secondary members; societies (2) to provide services to primary societies as will be provided for in the by-laws of the secondary societies; , (3) to procure, process and sell all their products. Objects of 18. The objects of Apex Societies shall include: Apex Societies (i) to facilitate the operations of secondary societies; (ii) to provide services to secondary societies. (iii) to organize and coordinate activities of secondary societies. «iv) to render services designed to ensure efficiency and uniformity in the conduct of the business of its member societies, standardising their book-keeping, accounting and their procedures and providing audit services to those socities; 172 No. 15 Co-operative Societies 1991 (v) to print, publish and circulate any newspaper or ouier publication designed to foster or increase interest in cooperative enterprises, principles and practices; (vi) to represent member societies in collective bargaining; (vii) to provide consultative services to member societies. (viii) to do any other thing which in its opinion is connected with or is ancillary to the above enumerated objects.

19.-(1) Where it is necessary or desirable for the efficient operation Societies of a business or economic enterprise that it be operated by two or more .m.ay form societies, such societies may join in an association and form a joint {~:~seen. enterprise, subject to the approval and such limitations as the Registrar may generally or in relation to any association of societies or category of them impose, for the purpose of operating and carrying on such a business and the Registrar may register such a body under this Act. (2) The societies which form an association for the purpose of operating and carrying on a joint enterprise as provided under subsection (1), may form a joint committee for the purpose of managing that joint enterprise but such an association shall have no right of separate representation either in the secondary society or the Apex Societies or Federation.

20.-(1) The federation, when formed and registered, shall provide, Object of organize and supervise effective centralized services for the member th~ feder- societies and for cooperative education and training and such other anon services as may be necessary or expedient for its members. (2) Without prejudice to the generality of subsection (1), the Federation" may perform any of the following functions- (a) to coordinate the economic plans of the member societies and to forward them to the Minister for the incorporation in the national plan; (b) to formulate, maintain and regulate the terms and conditions of service of persons employed in the apex societies, secondary societies and such other registered societies as the Federation may deem necessary; (c) to carry on, to encourage and assist educational and advisory work relating to cooperative enterprise, and without limiting the generality of the foregoing, to advise the government on cooperative education and operating methods and for that purpose may prepare and provide correspondance courses regarding cooperative principles and operating methods and may disseminate information on cooperative principles and practices; (d) to represent its member societies in international conferences; 173 No. 15 Co-operative Societies 1991 (e) to do any other thing which in its opinion is connected with or is ancillary to the above enumerated objects. Kinds of 21.-(1) The kinds of societies which may be formed and registered Societies under the provisions of this Act shall not be restricted in any manner. not re- stricted (2) Without prejudice to the generality of sub-section (1) the Registrar may register the following types of societies- (a) agricultural co-operatives which are designed to deal with crop production, purchasing, processing, marketing, distribution, and any such activity as may be provided in the rules and by-laws. (b) savings and credit societies which are designed to deal with the mobilization of local savings and giving credit to members; (c) consumer co-operatives designed to deal with wholesale and retail business amongst members; (d) industrial co-operatives for production, manufacturing and sale of goods; (e) housing co-operatives designed to deal with building, construction and housing programmes for members; (f) livestock co-operatives societies designed to deal with the needs of members in animal husbandry, livestock keeping and diary farming; (g) fisheries co-operatives societies designed to deal with fishing, processing and marketing of fish and other sea products; (h) producer's co-operatives for agricultural, forestry or other natural products; (i) such other society as may be deemed appropriate to establish. 174 No. 15 Co-operative Societies 1991 PART VI REGISTRATION OF SOCIETIES

22.-(1) Subject to the following provisions, a society which has its Societies objects the promotion of the economic and social interests.of its members which by means of common undertaking based upon mutual aid and which ~a! bedre- conforms to the cooperative principles or a society.which is established gIS ere for the purpose of facilitating operations of societies may be registered as a cooperative.societyunder this Act with or without limited liability. (2) Except as otherwise provided in this Act, cooperative principles means the following principles and methods used in the operation and administration of a society- (i) Membership of a cooperative society is open and voluntary to all those who can make use of its services. (ii) The control of society is democratic, and that each member or delegate has one vote in their various meetings properly formed. (iii) Share capital should only receive a strictly limited rate of interest, if any. (iv) There is a fair and equitable distribution of the economic results arising out of the operations of the cooperative society. (v) There is a provision for the education of members, officers and employees of societies in the principles and practice and techniques of cooperation. (vi) Cooperative organizations should actively cooperate at local, national and international levels. (3) The liability of a primary society, joint venture, secondary society, Apex society, federation, shall be limited. (4) The word limited shall be the last word in the name of every cooperative society with limited liability registered under this Act.

23. No member other than a registered society, shall hold more than Restric- one fifth of the share capital of any cooperative society. tions on members of Society holding share cap- ital

24.-(1) No society other than a society of which a member is a Condi- registered society shall be registered under this Act unless it consists of tions fc, at least the minimum number of persons each of whom is qualified for r~gistra- membership as provided under section 14 of this Act. bon (2) N? Secondary.or Ap.ex Society or Federation shall be registered un~er. this Act unless It consists of at least two of its members as registered societies. 175 No. 15 Co-operative Societies 1991 (3) The word "cooperative" or its equivalent in Kiswahili shall form part of the name of every society registered under this Act. (4) The word "Limited" or its equivalent in Kiswahili shall be the last word in the name of every society with limited liability registered under this Act. Rights of 25.-(1) A society may receive moneys on share account, or on de- minor posit account, from or for the benefit of a minor, and it shall be lawful for the society to pay such minor dividend or interest which may become due on such shares or deposits. (2) Any payment or deposit made on behalf of a minor pursuant to subsection (1) may, together with any dividend or interest, be paid to the guardian of that minor for the use of the minor. (3) The receipt of any minor or guardian for money paid to him under this section shall be sufficient discharge of the-liability of the society in respect of that money. (4) The Minister may make rules prescribing the rights of minor may have in a society. Contracts 26. The fact that any person who has been admitted as a member of with a society has not reached the age of eighteen years shall not prevent minors that person form executing any instrument or giving any acquittance necessary to be axecuted or given under this Act or the rules, and shall not be a ground for the invalidation of any contract entered into by such person with the society, whether as principal or as surety, shall be en- forceable at law as against such person, notwithstanding his mono- rity. Powers of 27.-(1) Where for the purpose of this Act any question arises as to General whether- meeting to decide (a) a person is following a relevant trade to the society; certain (b) a person is a resident in the area of operation; questions (c) two or more societies shall be considered to form a joint venture; (d) a person has attained the apparent age of eighteen years; the question shall be decided by the members at a general meeting. (2) Any person aggrieved by a decision of the members at a general meeting as given under subsection (1) may in writing appeal to the Registrar. If the party is not satisfied with decision of the Registrar, he may in writing appeal to the Minister whose decision shall be final and shall not be subject to review bv Slny court. 176 No. 15 Co-operative Societies 1991 %8.-(1) No company incorporated or registered under the Com- Member- panies Ordinance and no unincorporated or registered body of persons ~hip sub- shall be entitled to become a member of a registered society except with J~Ctt to ,Re- t hee wri . . 0 f t he R wntten permission ' egistrar an d sub'ject to such ru Ies as may gis rar S permis- be made under this section. sion in (2) A company registered under the Companies Ordinace may, by a ~:~n special resolution as defined in that Ordinance, and with the prior ap- proval of the Registrar, determine to convert itself into a cooperative society.

29.-(1) For the purpose of registration an application shall be made Applica- to the Registrar. tio~ for registra- (2) The application shall be signed- tion (a) in the case of a society which after registration will be a primary society, by at least a minimum number of persons or such number of persons as the Registrar may approve, who are qualified in accordance with the requirement of section 14; (b) in the case of a society which after registration will be a secondary society, by the duly authorized persons of at least two registered primary societies which are members of such secondary society; and (c) in the case of an Apex society, by the duly authorized person of at least two registered secondary societies which are members of such Apex society. (d) In the case of a Federation by the duly authorized persons of at least two registered apex societies which are members of the federation, (3) The application shall be accompanied by- (a) four copies of the proposed by-laws of the society, signed by the applicant; . (b) a report, of a feasibility study or project write up indicating the viability of the society; and (c) such other information in regard to the society as the Registrar may require. (4) The Registrar may prescribe the forms to be used and the condi- tions to be complied with in applying for the registration of a society and the procedure in the matter of such application.

30.-(1) If the Registrar is satisfied that a society has complied with' Registra- the provisions of this Act and of the Rules, and that its proposed by-laws tion are not contrary to this Act, the rules and the cooperative principles and that the proposed undertaking is likely to be viable, he may register the society and its by-laws. (2) Before registering any society or its by-laws the Registrar may require that the by-laws shall be amended so as to conform with such directions as he may give in that behalf. 177 No. 15 . Co-operative Societies 1991 (3) On registration the society shall pay such fees as may be required by the Registrar. (4) The Registrar may refuse to register a society only if he is not satisfied in terms of subsection (1). (5) An appeal shall lie to the Minister from a decision of the Registrar refusing to register a society under sub-section (1) of this section and the Minister's decision thereon shall be final and shall not be subject to review by any court. (6) Every appeal under subsection (5) shall be made within sixty days from the date of the decision of the Registrar. Certifi- 31. If the Registrar approves registration he shall issue a certificate cate of re- gistration of registration to the society, together, with the copy of the by-laws certified by him as having been approved and registered. Probatio- 32.-(1) Where by reason of non-compliance with any provision of nary this Act or of the rules or any direction given hy him, the Registrar, societies acting under the powers conferred upon him by section 27, is unable to register a society but is satisfied that steps can be taken with diligence by the applicants to comply with such provision or direction, as the case may be, he may, by notice in writing (hereinafter referred to as a notice of deferment), defer registration of that society pending compliance with such provision or direction. (2) The Registrar shall transmit the notice of deferment to the persons by whom or on whose behalf application for registration is made. (3) A notice of deferment shall, subject to the provisions of this sectior and any condition specified in that notice, entitle the society in respect of which it is issued to operate as a registered society. (4) A society entitled to operate as a registered society under the provisions as subsection (3) of this section shall be termed a probationary society and shall, while so entitled to operate, be deemed to be a body corporate with perpetual succession and common seal, and with power to hold movable and immovable property of every description, to enter into contacts, to institute and defend suits and other legal proceedings and to do all things necessary for the purpose for which it is constituted: Provided that no probationary society shall be entitled to operate as such society for a period exceeding two years and if after that period the Registrar is satisfied that a society registered under this section has failed to comply with any provision of this Act or any direction given under subsection (1), he shall cancel the registration of that probationary society. (5) When a probationary society is duly registered under section 31, its certificate of registration shall supersede its notice of deferment which shall thereafter cease to have effect and the society shall be deemed for all purposes to have been registered from the date on which the notice of deferment in respect thereof was issued by the Registrar. 178 No. 15 Co-operative Societies 1991 t6) The Registrar may cancel a notice of deferment by notice in writing to be addressed to the probationary society concerned and such cancel- lation shall from the date thereof. operate as a refusal to register the society for the purpose of section 31: Provided that such cancellation shall not affect the validity of any transaction entered into by or with the society while notice of deferment was in force. (7) Where the notice of deferment of a probationary society is cancel- led under subsection (6) of this section, the Registrar may appoint a competent person to be a liquidator of the society. (8) The provisions of subsection (3) of section 22, subsection (2) of section 24, section 33, subsection (2) and (3) of section 45, section 34. 51,59,79,95,98,99 and 101 shall not apply to a probationary society. (9) Subject to the provisions of subsection 8 of this section, any refer- ence in any law, including this Act, to a registered society within the meaning of this Act shall, unless the context otherwise requires. include a reference to a probationary society. (10) A probationary society shall cause the fact that it is probationary society to be stated in legible Roman letters in all bill-heads, letter papers, notices, advertisements and other official publications of the society and on a signboard in a conspicuous position outside any premises in which it operates. (11) A probationary society which contravenes any of the provisions of subsection (10) and every office of a probationary society which con- travenes any such provision shall be guilty of an offence and shall on conviction be liable to a fine of one hundred shillings and in the case of a continuing offence, to a fine one hundred shillings for each day during which the default continues.

33.-( 1) The Registrar shall consider and decide on an application Registrar for registration within ninety days from the date of the application and, to decide if f he i bl . on regist- I or any reason e IS not a e to consider and decide on the application ration within that time, he shall make a report to the Minister and the society within which is applying giving reasons as to why he is unable to dispose of ninety the application within that time. days (2) Where the Registrar makes a report in terms of su bsection (1), the Minister may direct him to finalize the application within sixty days from the date of the report or within such shorter time as it may be practically possible.

34. A certificate or registration-signed by the Registrar shall be con- Evidence elusive evidence that the society mentioned in that certificate is duly of. regist- registered unless it is proved that the registration of the society is cancel- ration led. 179 No. 15 Co-operative Societies 1991 Societies 35. The registration of a society shall render it a body corporate by io be the name under which it is registered, with perpetual succession and a bodies common seal, and with power to hold property, to enter into contracts, corporate to institute and defend suits and other legal proceedings, to do all things necessary for the purposes laid down in its constitution. PART VII RIGHTS AND LIAPTLITIES OF MEMBERS Member 36. No member of a registered society shall exercise the rights of a not to member unless or until he has made such payment to the society in exercise respect of shares, entry fees and any other dues as may be prescribed right till due pay- by the rules or by-laws of the society. ment is made Restric- 37. No person other than a registered society shall be a member of tion on more than one registered society with unlimited liability except with the member- sanction of the Registrar. ship in society with unli- mited lia- bility Vote of 38. Every member of a registered society shall have one vote only as Members a member in the affairs of the society and shall be entitled to attend the general meeting of the society and to record his vote in regard to any matter for decision of such meeting: Provided that the by-laws of a secondary society, apex society and federation may provide for the attendence at general meetings of dele- gates from the member societies or other bodies who are members of such societies and Federation the member societies and other bodies shall each be entitled to such number of votes and to vote in such manner, as may be prescribed by the rules and the by-laws of such societies or federation as the case may be. Restric- 39.-(1) A member of a registered society shall not transfer any share tion on transfer of held by him or his interest in the capital of the society or any part thereof share or unless- interest (a) such a member has held such share or interest for not less than five years; (b) the transfer is made to the society or to a member of the society or to a person whose application for membership has been ac- cepted by the committee; (c) such a person has ceased to have any of the qualification laid down in section 14. 180 No. IS Co-operative Societies 1991 (2) No transfer of a share or other interest shall be valid and effective unless and until such transfer and the name of the transferee has been registered on the directions of the committee of the society.

40.-(1) Except as provided in subsection (2) of this section, the Liability liability of a member, present or past, or a society, shall be limited to of a the amount, if any, unpaid on the shares held by him, and his liability member shall be known as liability limited by shares. (2) Where in the by-laws of the society the amount of liability of a member is expressed to be greater than the nominal value of the share held by him and such amount is expressly stated than the liability of such a member shall extend to such greater amount, and his liability shall be known as liability by guarantee.

41. The liabilities of a past member for the debt of a registered society Liability as they existed at the time when he ceased to be a member shall, not- of past withstanding the provisions of any written law to the contrary, continue members for a period of two years from the date of his ceasing to be a member.

42. The estate of a deceased member, shall, notwithstanding the pro- Liability visions of any written law to the contrary be liable for a period of one of the es- year from the time oj his death for the debt of the registered society as tates of deceased they existed at the time of his death: member Provided that in the event a society is wound up immediately after a period of two years, the liability of such estates of the deceased or past member shall continue until the liquidation proceedings of the society are completed but such liability shall extend only to the debt of the society as at the time of his death or of his ceasing to be a member. PART VIII DUTIES OF REGISTERED SOCIETIES

43. Every registered society shall have an address registered accor- Address dance with the rules, to which all notices and communications may be of. . sent, and shall send to the Registrar a notice of every change thereof. societies

44. Every registered society shall keep a copy of this Act, Rules and Copy of of its by-laws open to inspection free of charge, at all reasonable times Act, the at the registered address of the society. ruflebs and o y-laws to be open to inspec- tion

45.-(1) Every registered society shall have power to make by-laws Power to for any such things as are necessary or desirable for the purpose for make by- which such a society is established. laws (2) Without prejudice to the generality of subsection (1) every regi- stered society may make by-laws in respect of the following matters:- 181 No. 15 Co-operative Societies 1991 ---~---_._-""""""= (a) the name and registered address of the society; (b) the area of the operation of the society; (c) the object for which the society is established; (d) the purpose to which the funds of the society may be applied and the mode of custody and investment of such funds; (e) the qualifications for membership of the society, the terms of admission of members, the entrance fees, and the mode of elec- tion; (f) the nature and extent of the liability of members; (g) the withdrawal and expulsion, suspension of members and the payment, if any to be made to such members; (h) the transfer of shares or interest of members; (i) the manner of conducting meetings of the society and the powers of such meetings; U) the appointment, suspension and removal of members of the corn- mittee and officers and the powers and duties of the committee and officers; (k) the authorization of an officer to sign documents and to use the seal on behalf of the society. (3) Where the objects of the registered society include the creation of funds to be lent to the members, additional by-laws shall be made in respect of the following matters:- (a) the conditions on which loans may be made to members which shall include:- (i) the rate of interest; (ii) the maximum period which can be gran.ed for the repayment of a loan; (iii) the maximum amount of money which may be lent to a member; (iv) the purpose of loans; (v) security for payment; (vi) the consequences of default in payment of any sum due on account of shares or loans and the consequences of failure to use a loan for the purpose for which it was granted; and (b) the disposal of the annual net surplus. (4) A by-law made under this section may empower a registered society to impose a fine upon a member of the society for the breach of the by-law which fine shall be recoverable by the society as a civil debt: Provided that no fine may be imposed under the by-laws, on any member unless- (a) the member on whom the fine is intended to be imposed has been sei ."u WIth a notice, in writing, of the intention to impose the fine; and (b) the member within fourteen days, has failed to show cause why the fine may not be imposed on him. 182 No. 15 Co-operative Societies 1991

46.-(1) Any registered society may, subject to the provisions of this Amend- section amend its by-laws including the by-laws which declares the name ment of of the society. the by- laws of the (2) No amendment of the by-laws of a registered society shall be valid registered until that amendment has been registered under this Act. society (3) If the Registrar is satisfied that the amendment of the By-laws is not contrary to this Act, he shall register the amendment. (4) A society may, within two calender months from the date of notification to it by the Registrar of his refusal to register an amendment of any By-taws appeal to the Minister against that refusal. (5) An amendment which changes the name of the society shall not affect any right or obligation of the society or any of its members or past members, and any legal proceedings pending may be continued by or against the society under its new name. (6) When the Registrar registers an amendment of the By-laws of a registered society, he shall issue to the society a copy of the amendment certified and sealed by him, and such copy so certified and sealed shall be conclusive evidence of the fact that the amendment has been duly registered. (7) In this section "amendment" includes the making of new by-laws and the variation of by-laws.

47.-(1) Every by-law of a registered society shall upon registration By-lawsof be binding upon the society and the members thereof to the same extent the ~oc~ as if the by-law was signed by each member of the society and contained ~~~bel~ a covenant by each such member to observe the provisions of the by-laws. (2) Any dispute arising out of the interpretation of a by-law of regis- tered society shall be referred to the Registrar.

48.-(1) Every registered society other than a primary society shall, Accounts with the approval of the general meeting, employ an Internal Auditor and Audit or such number of such internal Auditors as are necessary for the efficient cheking of the accounts of the society. (2) Every registered society shall keep proper accounts and other records in relation thereto and shall prepare in respect of every year a statement of accounts in a form which conforms to the best accounting atanderds. (3) The accounts of every registered society shall be audited at least once in a year by the corporation or any such competant and registered auditor appointed by the general meeting and approved by the Registrar. (4) As soon as the annual accounts of a registered society have been audited the society shall cause to be sent to the Registrar a copy of the audited balance sheet and statement of income and expenditure prepared in respect of that year together with any report made by the auditors thereon. 183 No. 15 Co-operative Societies 1991 (5) The auditor's report referred to under subsection (4) shall include an examination of the balance sheet and related income statement and a valuation of assets and liabilities of the registered society. (6) When the accounts. of a society have been audited and adopted by the general meeting of the society and approved in accordance with subsection (3) of this section, they shall be conclusive, except as regards any error discovered therein within six months following the date of such approval and except as regards any allegation of fraud. and whenever any such error is discovered within that period the accounts shall forthwith be corrected with the approval of the Registrar and thereafter shall be conclusive except as regards any allegation of fraud. Registrar 49. Notwithstanding anything in any other written law, the Registrar may re- may, if he considers it necessary to do so require any bank- quire bank to (a) to furnish any information regarding the transactions of any regis- produce tered societv- with the bank;. informa- . tion etc. (b) to produce a copy showing the accounts of the society with the bank from the ledger kept by the bank; (c) to produce any cheques paid to the credit of the society or en- dorsed by the society. Com- 50.-(1) If any audit, inquiry or inspection made under this Act dis- munica- closes any defect in the working of a registered Society, the Registrar tion of de- fects in shall bring such defect to the notice of the society and if the society is the work- affiliated to another registered society he shall bring such defect to the ing of the notice of that other society as well. registered societies. (2) The Registrar may make an order directing the society or its officers to take such action as shall be specified in the order and within such time as he may direct in that order as will remedy any defect disclosed in the audit, inquiry or inspection. Returns 51. The Registrar may prescribe the returns to be submitted by regi~­ to be tered societies to the Registrar and the persons who have to submit made by societies those returns and the form in which those returns are to be made. PART IX PRIVILEGES OF REGISTERED SOCIETIES Defect in 52. No act of a registered society or of any persons purporting to act the con- on behalf of the society in good faith shall be deemed to be invalid by stitution not to ren- reason only of the existence of any defect in the constitution of the der act of registered society or of a committee of such registered society or in the a regis- appointment or election of an officer of such a society on the ground tered soci- that such officer was disqualified for his appointment. etyinvalid 184 No. 15 Co-operative So'cieties 1991 53.-{1) A registered society which has one of its objects the disposal Disposal of any article which is the produce of agriculture or animal husbandry, of pro- may provide in its by-laws or may contract with its members:- dhuce tohOar t roug (a) that every such member who produces any such articles shall registered dispose of the whole of any specified amount proportion of de- society scription thereof to or through the society; and (b) that any member who is proved or adjudged to be guilty of a breach of by-laws or contract, shall pay to the society as liquidated damages a sum ascertained or assessed in such manner as may be prescribed by its by-laws. (2) A contract made by a registered society under subsection (1) shall create in.favour of the registered society a first charge upon all articles as referred to under sub-section (1) whether these articles have been produced or are about to be produced. (3) In any legal proceedings arising out of a contract made under subsection (1) it shall not be a defence that the contract is in restraint of trade. (4) A member of a registered society shall be deemed not to have contravened the by-laws of the society which requires him to deliver any produce to the society if the failure to deliver such produce to the society was due to the fact that he had, prior to be coming a member of the sqciety, contracted to deliver the produce to some other person. (5) Every person who applied for membership of a registered society shall, if required so to do, disclose in his application particulars of all contracts made by him for the delivery of any produce to any other person. S4.-{1) Subject to any prior claim ofthe Government on the property Creation of the debtor and to the lien or of claim of a landlord in respect of rent of charges or any money recoverable as rent and in the case of immovable property in favo~r to any prior registered charge thereon:- of dregJs• tere (a) any rent or outstanding demand payable to a registered society societies by any member or past member shall be a first charge on all produce of agriculture, animal husbandry, fisheries or any indus- try arid generally all produce of labour and things used in connec- tion with production raised, purchased or produced in whole or in part from any loan whether in money or in goods given to him by the society. Provided that nothing herein contained shall affect the claim of any bona fide purchaser or transferee without notice. (b) any outstanding demands or dues payable to a registered housing society by any member or past member in respect of rent, shares, loans or purchase money or any other rights or amounts payable to such society shall be first charge upon his interest in the immov- able property of the society. 185 No. 15 Co-operative Societies 1991 (2) No person shall transfer any property which is subject to a charge under subsection (1) except with the previous permission in writing of the co-operative society which holds the charge. (3) Notwithstanding anything contained in any law for the time being in force any transfer of property made in contravention of the provisions of subsection (2) shall be void. Charges 55. A registered society shall have a charge upon the shares or interest and set of in the capital and on the deposits of a member or past member and in respect upon any divident, bonus, or accumulated funds payable to or due from of share or interest of such member or past member to the society and may set off any sum members credited or payable to a member or past member or towards payment of any such debt. Shares or 56. Subject to the provisions of section 47 the share or interest of a interest member in the capital of a registered society shall not be liable to attach- not liable to attach- ment or sale under any decres or order of a court in respect of any debt ment or liability incurred by such member, and the official receiver under the law relating to bankruptcy for the time being in force shall not be entitled to or have any claim on such share or interest. Transfer 57.-(1) On the death or declaration of permanent insanity of a of interest member, a registered society may transfer the share or other interest on death of the member to the person nominated in accordance with the by-laws of a member. of the society on if there is no person so nominated, to such person (as may appear to the committee) to be the heir or legal representative of the member or may pay to such nomineo , heir or legal representative as the case may be, a sum representing the value of such member's share or interest. as ascertained in accordance with the by-laws or customary law. Provided that:- (a) in the case of a registered society with unlimited liability such nominee, heir, or legal representative. as the case may be, may require payment by the society of the value of the shares or interest of the deceased member ascertained as aforesaid. (b) in the case of a society with limited liability the society may transfer the share or interest of the member to such nominee . heir or legal representative, as the case may be, being qualified in accordance with the rules and by-laws for membership of the society. or on his application within six months of the date of the death or declaration or permanent insanity to any person specified in the application who is so qualified. (2) A registered society shall pay other moneys due to the deceased member from the society to such nominee, heir or legal representative. as the case may be. (3) All transfer and payment made by a registered society in accor- dance with the provisions of this section shall be valid and effective against any demand made upon the society by any other person. 186 ·'0. 15 1991 (4) The Registrar may prescribe the mode in ""l1ieh the value of a deceased members interest shall he ascertained and the nomination of a person to whom such interest may be paid or transferred shall be made. (5) The Registrar may prescribe the mode in which value of the in- terest of a member who has become of unsound mind and incapable of managing himself or his affairs shall be as certained and the nominating of any person to whom such interest may b' paid or transferred shall he made.

58.-( 1) Any register or list of members kept by any registered society Register shall be prima facie evidence of any of the following particulars entered of mem- bers therein- (a) the date at which the name of any person was entered in such register or list as a member; (b) the date at which any such member ceased to be a member.

59.-( I) A copy of any entry in a boo]; of a registered society regularly Proof of kept in the course of business shall, if certified in such manner as may. entrte~ In I1e presentedJ l'y t he ru lesc receive d iIf! uy suu es. be recei . or Iega I frocee d'mgs socienes bocks civil or criminal as prima facie evidence of tht existence 0 such entry and shall be admitted as evidence of the matters, transactions and ac- counts therein recorded in every case where and to the same extent as, the original entry is admissible. (2) No officer of any registered society shall, in any legal proceedings to which the registered society is not 0 party be compelled to produce "ny of the society's books the contents of which can be proved under section (I) or to appear as a witness to prove any matter, transaction or accounts therein recorded unless the court for special reasons so direct. 60: .Subjec~ to t~e pro~isions of Part xm nothing in any written law Exernp- requmng registration of Instruments relating to shares and debentures lion from shall apply to:- cornpul- . . sory re- ( a ) a~y Instr~ment relating to shares in a registered society, not- gistration withstanding that the assets of such society consist in whole of of instru- in part of immovable property; or rnents re- . lating to (b) an~: de.bent~r~s.lssuedby such society and not creating, declaring, shares and asslgnl.ng. limiting or extinguishing any right, title, or interest to deben- or an lI~l11ovable property except in so far instrument whereby tur~s of I he society has mortgaged, conveyed or otherwise transferred registered the h I fi bi . 1C woe or part 0 Its imrnova e property or any Interest therein society. to trustees upon trust for the eenefit of the holders of such deben- tures; or (c) any endorsement upon or transfer of any debentures issued by any such society. 187 No. 15 Co-operative Societies 1991 Power to 61.-(1) Notwithstanding the provisions of any law to the contrary exempt from duty the President may. by notice in the Gazette. in the case of any registered or tax society or class of registered society reduce or remit:- (a) the duty or tax which under any law for the time being in force may be payable in respect of the accumulated funds of the society or of the dividends or other payments received by the members of the society on account of the accumulated funds: Acts. 1974 (b) the stamp duty payable under the Stamp Duty Act. on instru- No. 20 ments executed by or on behalf of a registered society or by an officer or member and relating to the business of such society of any class of such instruments, are respectively chargeable: (c) any registration fee payable under any law for the time being in force. (2) Nothing in subsection (I) shall be construed as restricting or limit- ing any power conferred on any authority to grant exemption from any tax duty, stamp duty or fee by the written law imposing the tax. duty, stamp duty or fee. PART X MANAGEMENT OF REGISTERED SOCIETIES General 62.-( 1) The control of the affairs of a registered society shall be meeting vested in the general meeting summoned in accordance with the by-laws of the society and the rules. (2) Without prejudice to the generality of the.provisions of subsection (I) the general meeting shall have the following functions:- (a) the election, suspension or removal of members of the committee: (b) the consideration and adoption of the annual balance shed: (c) the disposal of sums available for distribution: (d) determining the amount of honoraria, if any. for unsalaried officers and committee members: (e) the acquisition or disposal by the society of all immovable prop- erty and of movable property of a value in excess of ten thousand shillings in the case of a primary society, and twenty thousand shiltings in the case of secondary society; (3) Every society shall hold a general meeting at least two times in a year except that the federation shall hold a general meetings .u Ic,'sl once in a year. (4) The Registrar or any other person authorized by him may summon a special general meeting of the society in such a manner and at such a time and place as he may direct. He may also direct what matters shall he discussed at the meeting. Such meeting shall have all the powers and subject to the same rules as-meeting called in accordance with the by-laws of the society. /88 No. 15 Co-operative Societies 1991 (5) (a) A Special meeting shall be held by a society where at least one third of members signify writing their intention to hold such meeting. (h) In the event the procedure to hold a special General Meeting under paragraph (a) above fails. an appeal to hold such a meeting shall he lodged to the Minister.

63.-( 1) Every committee of a registered society shall consist of at Constitu- least four members but not more than fifteen members including the tion of commit- chairman and vice chairman. tee (2) The members of the committee, shall be elected by the general meeting of the society and shall hold office for a period of three years and shall be eligible for re-election; Provided that in the case of those members of the committee elected at the first general meeting of the society, one third of such members, to be determined by the ballot drawn by the chairman at the first meeting of the committee held after such election, shaJI retire at the expiration of a period of one year from the date of their election and of the remaining members one half, to he determined as aforesaid, shall retire at the expiration of a period of two years after the date of their election. (-+) For the purpose of the proviso to subsection (2), the expression "one third" shall mean. where the number of members is not three or a multiple of three, the nearest whole number below one third and the expression "one half' shall mean, where the number of the members is not an even number the nearest whole oomber below one half.

64.-( 1) The committee shall exercise all powers necessary to ensure Power of the full and proper administration of tbe society subject to the by-laws the com- . mittcc. of the society. the rules and any resolutions passe d at the general meeting. (2) The cornmrnee may, to oon~io" with the apex society, if any. appoint a suitable person to administer and manage the affairs of the society and may emplo)' such number of persons as the committee may think fit to assist such person in the discharge of his functions: Provided thot ~h person -.u IIOt-.w • ~. of prtviQ.u§ conviction on a criminal clwte ~.h.oNttyOf . , . , . . .. . _ in tbe past been dismissed ft~ puNk IerviA -1JW*t of ~me.nt or on any ttisciplr-y IN • (3) Where. in the opinion of the apex society. any person employed under subliecti-on (7) is not.»er. . . . _ functions satisfactorily, the apex SOCiety may advise the cOllWtTiffi!oe to terMtftftte the employment of that person and the committee shall consider such advice and subject to any law for the time being regulating termination of employment. shall terminate the employment of such person.

65.-( 1) No member of the committee of a registered society shall I{l',lrJC- hold any office of profit under the society. lion rcl.u- In!! to (2) A member of the committee of a registered society may receive member, an honorarium from the society if: of corn- mittel' 189 No. 15 Co-operative Societies 1991 (a) The payment of an honorarium is authorized by a resolution to that effect passed at a general meeting of the society; (b) the amount of the honorarium shall be determined by the general meeting. (3) A member of a committee who is in the employment of a registered society and is in receipt of emoluments for such employment shall not be entitled to receive any honorarium as a member of the committee. (4) Where a person is a member of the committees of two or more vertically related registered societies he shall not be entitled to received an honorarium in respect of more than one registered society. otherwise he may receive honorarium in respect of more than one horizontally related registered societies. Dissolu- 66.-(1) If the Registrar is of the opinion that the committee of a lion of the registered society is not performing its duties properly he shall cause to commit- be held special general meeting by notice in writing and advise \t as tee of soc- iety appropriate. If the special general meeting resolves to suspend tile man- agement committee, it shall elect a care taker committee from amongst the delegates to administer the affairs of the society. Consequent to the suspension of the management committee, the special general meeting shall require it to state its objection if any, in writing jointly and severally in the next general meeting. (2) Subject to subsection (1) where the special general meeting resol- ves to disagree with the advise of the Registrar on financial malpractises the effects of which the society is rendered unable t(\ settle its liabilities the members shall be liable for the payment of the debts. (3) Where after giving an opportunity to the committee to state its objections, if any of its dissolution in the general meeting and the latter disapproves the objections, then a new management committee shall be elected to that effect by the general meeting, otherwise the provision of subsection (2) shall also apply. The Registrar shall publish in the Gazette the decision in favour of any change made by the general meet- ing. (4) It shall be the duty of the care taker committee appointed under this section to manage the affairs of a registered society and to comply with the directions which the special general meeting may give. (5) No order under subsection (1) shall be made by the Registrar in respect of any registered society if the society is indebted to any bank, except with prior notification with bank inregard to the dissolution of the committee and the person by whom and the manner in which the affairs of the society are to be managed and administered. (6) Nothing in the section shall be deemed tp effect the power of the Registrar to cancel the registration of the society under section 98. (7) An appeal shall be to the Minister from any order made by the Registrar under subsection (1) and the decision of the Minister on any such appeal shall be final and shall nn t be subject to review in any court. 190 No. 15 Co-operative Societies 1991 -------------- (8) Every appeal under subsection (1) shall be made within sixty days from the date of the publication in the Gazette, of the order appealed against.

67. Subject to the general direction and control of the special general Power of meeting any person or persons appointed under section 64 to assume persons' the functions of the committee of any registered society shall have all ap: t d the powers, rights and privileges of a duly constituted committee of the ~~~~: society. section 64

68. The committee shall without delay comply with any directions Commit- contained in an inspection report of the Registrar or in an audit report. tee to comply with any direc- tionscon- tained in reports PART XI PROPERTY AND FUNDS OF REGISTERED SOCIETIES

69.-( 1) The by-laws of a registered society shall provide for the Revenue raising of funds to finance its activities by:- of regis- tered soc- (a) All moneys derived from fees or charges specified by the by-laws ietv of the society. - (b) All moneys derived from payment of subscription where this is applicable. (c) All moneys derived from issue of shares. (d) All revenue accruing to the registered society from deposits and loans from persons who are not members as provided under the by-laws of registered society. (e) All revenue accruing to the registered society from savings and deposits made by its members. (f) All moneys derived from the sale of any produce of the registered society. (g) All moneys which a registered society may borrow from lending institutions or any other source under its general powers of raising money by borrowing. (h) All moneys derived from fines imposed in respect of contraven- tion of any by-law made by a registered society. (2) Any other money lawfully derived by a registered society from any source not mentioned specifically in subsection (1) shall be and form part of the revenue and funds of that registered society. 191 No. 15 Co-operative Societies 1991 (3) All revenue of a registered society shall be paid into the general fUDd of me r~eQ society: Provided that any receipt derived from any trade, industry, works, service or undertaking carried on or belong- ing to registered society may, be paid either in whole or in part into a separate fund. Rules to 70.-( 1) The following provisions shall apply inrespect of the revenues govern and funds of a registered society; that is to say:- the mainte- (a) An admission fee shall not be refunded except in the case where nance of an application for membership has been rejected. the re- qvenue (b) A regular obligatory deposit shall be made in accordance with and the by-laws of the society and shall not be withdrawn except for funds of a purposes and in accordance with conditions spcified in the rules regis- tered soc- or on termination of membership, or for the purposes of securing iety a loan taken by or a guarantee given by a member, voluntary deposits may be withdrawn, subject to any conditions or restric- tion specified in the by-law of the registred society. (c) Deposit or loans from persons who are not members of the regis- tered society shall be subject to the provisions of this Act and of the by-laws of the society. (d) A registered society which under this Act is required to maintain a reserve fund shall maintain the fund in accordance with the provisions of this Act and of the by-laws ofthe registered society. (2) Where the funds of a registered society to finance its activities are obtained by the issue of shares. the following provi- sions shall apply- (a) A share shall not be redeemed except in accordance with the provisions of by-laws of the society where such by-laws allow such redemption and in which case the said by-laws shall also specify the minimum number of shares a member shall hold while he is a member. (b) The share capital shall not be reduced without the consent of the general meeting. (c) Unless the general meeting otherwise resolve to direct a fund, which shall be known as the share transfer fund, shall be formed and maintained to meet expenditure which may be incurred by _ the society in purchasing the shares of the members whose mem- bership has terminated with the consent of the committee. (d) No payment from the share transfer fund shall be made for the purchase of the shares of any member whose membership has terminated without the consent of the committee. (e) The amount standing to the credit of a share transfer fund shall include the value of any unallocated shares purchased from mem- bers under the foregoing provisions, and such amount shall not exceed ten percentum of the subscribed share capital. 192 No. 15 Co-operative Societies 1991 (f) Where the share of a member is purchased by the society under the foregoing provisions. the amount paid therefore shall not exceed the par value of the share. and it shaH be lawfull for the society to pay such less sum than the par value as it considers reasonable regard being had to the financial position of the society at the time of purchase. (h) The shares of members purchased as aforesaid shall be re-issued before any new allocation of shares is made. (3) A society shall not issue bonds or debentures without the authority of the Registrar and shall in any such issue comply with any conditions prescribed by the general meeting.

71.-( 1) A registered society shall not make a loan to any person Restric- other than a member: lion on Loans Provided that. with the approval of the General Meeting, a registered society may, make loans to another registered society; Provided further that subject to the provisions of its by-laws a regis- tercd society may with the approval of the Registrar and in accordance with any conditions which the Registrar may from time to time prescribe. allow normal business credit to bona-fide persons to whom goods have been sold or services rendered by the registered society. (2) Except with the permission of the Registrar a society shall not lend money on the security of any movable property other than produce or goods in which the society is authorized to deal. (3) The Registrar may by a general or special order prohibit or restrict the lending of money by any society of class of societies on the security of immovable property.

72.-( I) A registered society shall receive deposits and loans from Restric. persons who are not members only to such extent and under such con- lion on ditions as may be prescribed by the rules or by the Act. borrowing from non- members

73. Save as provided under sections 62 and 63 the transactions of a Restric- registered society with persons other than members shallbe subject to lion of such prohibition and restriction. any. as the Minister may, by rules transac- prescribe nons with members

74.-( I) A registered society may invest its funds:- I I nves - (a) in interest bearing deposit in the Co-operative Financial Institu- rnent of tions. Cooperative Rural Development Bank, the National Bank Funds of Commerce or any financial institution such as may be approved by the Minister; (b) in the shares of any other registered society; (c) in government bonds and other securities; or (d) in such other investments as the Minister may by order published in the Gazette declare to be authorized investments for the pur- pose of this section. No. 15 ro-oeerative Societies 1991 (2) The Registrar may direct any registered society to invest its runds or any portion of its funds in anyone or more of the investments au- thorized by or under subsection (1) and it shall be the duty of every registered society to l:ompl, with such directions. (3) If a registered sootety fail. to comply with any direction given by the Regtstrar undet .u*~tton (1) the society and every officer thereof who is kno_inaly a patt to thi default shall be guilty of an offence and shall be liable on cotlflttian to a Ane not exceeding five thousand shillings. Creation 15. There shall bea Central Cooperative Fund which shall be adminis- of a Cent- tered in such manner as tl\. Minister may, by regulations. prescribe. ral Coopera- tiveFunds Purpose 76. The Fund shall be used in furtherance of cooperative education of the training and research, audit and for the general development of the Funds cooperative societies in Tanzania. Secon- 77. Every secondary sodety and apex society shall contribute to the dary Societies Fund a fixed amount to b. determined by the annual general meetings to contri- of the societies subject to the approval of the Registrar. bute financial proeisions Financial 78. The by-laws of a rtaistercd society shall provide for the raising provision of funds to finance its activities either by the issue of shares or by a cess or levy on agricultural or other produce or handicraft marketed through the society or by other means as may be approved by the Registrar. (2) Where the funds of a registered society to finance its activiues are obtained by the issue of Shares, the following provisions shall apply:- (a) the share capital shall not be reduced without the consent of the Registrar; (b) unless the R-egistrar otherwise in writing directs, a fund which shall be known as the share transfer fund shall be formed and maintained to meet expenditure which may be incurred by the society in pur;haiina the share of members whose membership has terminated wlth the consent of the committee; (c) no payment from the share transfer funds shall be made for the purchase Of the share If any rnember who has terminated his membership without the consent of the committee; (d) no purchase of the shares of a member whose membership has been terminated by reason of any causes other than death shall be made except with monies then available in the share transfer fund; 19., No. 15 Co-operative Societies 1991 (e) the amount standing to the credit of a share transfer fund shall not exceed ten parcentum of the subscribed share capital. (f) where the share of a member is purchased by the society under the foregoing provisions, the amount paid therefor shall not ex- ceed the par value of the share, and it shall be lawful for the society to pay such less sum than the par value as it considers reasonable. regard beig had to the financial position of the society at the time of purhase; (g) the shares of members purchased as aforesaid shall be re-issued before any new allocation of shares is made.

79.-(1) No society shall pay a dividend of bonus or distribute any Voluntan part of its accumulated funds before the balance sheet has been audited division . by a duly authorized auditor and approved by the general meeting. (2) No society with unlimited liability which advances money or goods to any member in excess of the money or the value of the goods deposited by him shall pay a dividend during the period of ten years from the date of its registration.

80.-(1) Every society which does or can derive a profit from its Reserve transaction shall maintain a reserve fund. Fund (2) A society with unlimited liability, which advances money or goods to any member in excess of money or goods deposited by him, shall carry one fourth of the annual net surplus to the reserve fund. (3) All other societies shall carry to the reserve fund such portion of the annual net surplus as may be prescribed by the rules and by-laws.

81. Subject to the provisions of this Act and of any rules made there Distribu- under, a registered society may apply the annual net balance together tion 01 net with any sum available for distribution from previous years to payment balances of bonus and to any staff incentive bonus scheme in such manner and is such proportion as may be prescribed by the rules or its by-laws.

82. A regi -tereu society may, by resolution in general meeting approp- <?ontribu. riate from its funds and expend on any charitable, educational or medical t'hon for . c artable purposes or such other objects. educa- tional and medical purpo5t:', PART XII REGISTRATION OF CHARGES

83.-(1) Subject to the provisions of this Part, every charge-to", hich Regisua- this section applies created by a registered society, shall so far as any lion of security on the society's property is thereby conferred, be void against charges the liquidator and any creditor of the society unless the prescribed par- tier-lars of the charge. together with the instrument if any. by which the 195 No. 15 Co-operative Societies 1991 charge is created or evidenced, or a copy thercot verified in the prescribed m.anncf, arc delivered to the Registrar for registration within thirty days alter the date of the creation of the charge. but without prejudice to any contract or obligation for payment of the money thereby secured. and when the charge becomes void under this section the money secured thereby shall immediately become payable. (2) This section applies to the following charges: (a) a charge for the purpose of securing any issue of debentures; (b) a charge created or evidenced by an instrument which, if executed by an individual. would require registration under the Chattels Cap. 210 Transfer Ordinance; (c) a charge on immovable property, wherever situate. or any interest therein: (d) a charge on book debt of the society; (c) a floating charge on the property of the society. (3) Where a negotiable instrument has been given to secure the pay- ment of any book debts of a registered society. the deposit of the instru- ment for the purpose of securing an advance to the society shall not for the purpose of this section be treated as a charge on those book debts. (.. ) The holding of debentures entitling the holder to a charge on immovable property shall not for the purposes of this section be deemed to be an interest in immovable property. (5) Where a series of debentures containing or giving by reference to any other instrument, any charge to the benefit of which the debenture holders of that series arc entitled pari passu is created by registered society, it shall, for the purposes of this section be sufficient if there are delivered to or received by the Registrar, within forty-five days after the execution, of the deed containing the charge or, if there is no such deed after the execution of any debentures of the series. the following particulars- (a) the total amount secured by the whole series; and (b) the date of any resolution authorizing the issue of the series and the date of the covering deed. if any by which the security is created or defined; and (c) a general description of the property charged: and (d) the names of the trustees, if any of the debenture holders: to- gether with the deed containing the charge, or. if there is no such deed. one of the debentures of the series: Provided that. where more than one issue is made of debentures in the series. there shall be sent to the Registrar for entry in the register particulars of the date and amount of each issue, but an omission to do this shall not affect the validity of the debentures issued. No. 15 Co-operative Societies 1991 (6) In this and the succeeding provisions of this Part "charge" includes a mortage and a letter of hypothecation, and references to the property and assets of a registered society include property and assets which the registered society is authorized to charge. -

84.-( 1) It shall be the duty of the registered society to send to the Duty' of Registrar the particulars of every charge created by the society to which society to section 81 applies, but registration of any such charge mav be effected r~glster on the application of any person interested therein.' ~rea;fee~ by (2) Where registration is effected on the application of some person society other than the society that person shall be entitled to recover from the society the amount of any fees properly paid by him to the Registrar on registration. (3) If any registered society makes default in sending to the Registrar for registration the particulars of any charge to which section (81) applies, created by the society then unless the registration has been effected by some other person the society and every officer thereof who is knowingly a party to the default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding one hundred shillings for every day during which the default continues.

85.-( 1) Where a registered society acquires any property which is Duty cf subject to a charge to which section (81) would apply if the charge had society to been created by the society after the acquisition of the property, the chargesregister society shall cause the prescribed particulars of the charge, together with existing .8 copy (certified in the prescribed manner to be correct copy) of the on prop- instrument, if any by which the charge was created or is evidenced to crty ac- be delivered to the registrar of registration within forty-five days after. quircd the date of which the acquisition is completed. (2) If default is made in complying with the provisions of this section the society and every officer thereof who is knowingly a -party to the default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding one hundred shillings for every day during which the default continues.

86.-(1) The Registrar shall keep, with respect to each registered Register society a register in the prescribed form of all charges requiring regist- of charges ration under the provisions of this Part, and shall on payment of the prescribed fee, enter in the register with respect to any such charge the following particulars- (a) in the case of a charge to the benefit of which the holders of a series of debentures are entitled, such particulars as are specified in subsection (5) of section 81. (b) in the case of any other charge: (i) if the charge is a charge created by the society, the date of its creation, and if the charge was a charge existing on the property acquired by the society.the date ofthe acquis- ition of the property; 197 No. 15 Co-operative Societies 1991 (ii) the amount secured by the charge; (iii) short particulars of the property charged and (iv) the persons entitled to the charge. (2) The Registar shall give a certificate under his hand of the regist- ration of any charge registered in pursuance of the provisions of this Part, stating the amount thereby secured, and the certificate shall be conclusive evidence that the requirements of this Part as to registration have been complied with. (3) The register kept in pursuance of this section shall be open to inspection by any person on payment of the prescribed fee, as may be determined from time to time by the Registrar. (4) The Registrar shall keep a chronological index. in the prescribed form and containing the prescribed particular, of the charges entered in the register. Endorse- 87.-(1) Every regisred society shall cause a copy of every certificate ment uf of registration given under section 84 to be endorsed on every debenture certificate of regist- or certificate of debenture stock which is issued by the society..and the ration -de- payment of which is secured by the charge so registered: b bentures Provided that nothing in this subsection shall be construed as requiring a society to cause a certificate of registration of any charge so given to be endorsed on any debenture or certificate of debenture stock issued by the society before the charge was created. (2) If any person knowingly and wilfully authorized or permits the delivery of any debenture or certificate of debenture stock which under the provisions of this section is required to have endorsed on it, a copy of a certificate of registration without the copy being so endorsed on it, he shall, without prejudice to any other liability. be guilty of an offence and liable on conviction to a fine not exceeding one thousand shillings. H8.-( I) The Registrar may, on evidence being given to his satisfaction ~atl·.rdC­ that the debt for which any registered charge was given has been paid tiou and rectifica- or satisfied. order that a memorandum of satisfaction be entered on the tion of re- register. and shall. if required. furnish the society with a copy thereof. ~i,ter (2) The Registrar. on being satisfied that the omission to register a charge within the time required by this Part, or that the omission or mis-state.nent of any particular with respect to any such charge or in a memorandum of satisfaction. was accidental or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or members of the society or that on other grounds it is just and equitable to grant relief may, on the application of the registered society or any person interested and in such terms and condi- tions as seen to hilil just and expedient, order that the time for registration shall be extended, or. as the case may be, that the omission or mis-state- mer t shall be rectified. 198 No. IS Co-operative Societies 1991 89.--(1) If any person obtains an order for the appointment of a Enforce- receiver or manager of the property of a registered society or appoints rnent (If such a receiver or manager under any powers contained in any instru- ~e(UIIIY ment, he shall, within seven days from the date 0, the order or of the appointment under the said powers, given notice or the fact to the Registrar and the Registrar shall, on payment of the prescribed fee, enter the fact in the register of charge. (2) Where any person appointed receiver or manager of the property of a registered society under the powers contained in any instrument ceases to act as such receiver or manager, he shall 011 so ceasing, give the Registrar notice to that effect, and the Registrar shall enter the notice in the register of charges. (3) If any person makes default in complying with any of the require- ments of this section, he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding one hundred shillings for every day during which the default continues. 90.~1) Every registered society shall cause a copy of every instru- COPIC, of ment creating any charge requiring to be registered under the provisions instru- of this part to be kept at the registered address of the society. ment creating (2) If any registered society fails to comply with the provisions of charges to subsection (1) the society and every officer thereof who is knowingly a be kepi b) party to the default shall be guilty of an offence and shall be liable on sociery conviction to a fine not exceeding one hundred shillings for every day during which the default continues.

91.-( 1) Every registered society shall keep at registered address of s. :1<:1\', the society a register of charges and enter therein all charges specificallv register of affecting property of the society and all floating charges on the property charges or assets of the society giving in each case a short description of the property charged, the amount of the charge and the names of the persons entitled thereto. (2) If any officer of the society knowingly and wilfully authorizes or permits the omission of any entry required to be made in pursuance of this section in any such register he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five hundred shillings.

92.-(1) The copies of the instrument creating any charge required Right to to be registered with the Registrar under the provisions of this part and inspect the registered society in pursuance of section 88 shall be open during COPIC~ of husiness hours (but subject to such reasonable meeting restrictions as ~~;umeUl~ the society in general meeting may impose, so however that not 10SS:reilting than two hours in each day shall be allowed for inspection) to the inspec- morrag- tion of any creditor or members of the society without fee, and the al1,<:" and register of charges shall also he open to the inspection of any other ~~rg:~n_ person on payment of such fee as may be determined· by the general ety reil~er meeting. of charges 199 No. 15 Co-operative Societies 1991 (2) If inspection of the said copies or register is refused, any officer of the society refusing inspection or who knowingly and wilfully permits such refusal shall be guilty of an offence and shall be liable on conviction to a fine not exceeding ten shillings for every day during which such refusal continues and any court may by order compel an immediate inspection of the copies or register. PART XIII I~SPECTIO~ OF AFFAIRS Enquiry 93.-(1) The Registrar may of his own motion, and shall, on the application of the majority of the committee or of not less than one-third of th~ members direct some person authorized by him by order in writing In this behalf to hold an inquiry into the constitution, activities and financial affairs of the registered society. (2) All officers and members of the society shall produce such books and documents of the society and furnish such information in regard to the affairs of the society, as the person authorized by the Registrar may require. (J) The General Meeting may decide to hold an enquiry into the affairs of their registered society. Inspec- 94.-( 1) The Registrar shall make or cause to be made a continuous non inspection on the constitution. activities and financial affairs of a regis- tered society. (2) Without prejudice to the generality of subsection (1) the Registrar shall. on the application of a creditor of a registered society. inspect or direct some person authorized by him by order in writing in this behalf to inspect. the books of the society: Provided that no inspection under this subsection shall be carried out or directed unIcss- (a) the creditor satisfies the Registrar that the debt is a sum then due. and that he has demanded payment thereof and has not received satisfaction within a reasonable time; and (b) the creditor deposits with the Registrar such sum as security for costs of the proposed inspection as the Registrar may require. (3) The Regestrar shall communicate the results of any inspection carried out under subsection (1) to the creditor. Costs of 95.--(1) Where an inquiry is held under section 91 or an inspection lnquirv is made unsler section 92 the Registrar may. by a certificate under his hand and deal, make an award apportioning the costs. or such part of the costs as he may think right. between the society, the members or creditor demanding an inquiry or inspection. and the officer or former officers of the socictv, (2) The Registrar may lodge a certified copy of a certificate issued by him under subsection (I) in a court of a resident magistrate or a district court and upon being so lodged such certificate shall be deemed Act. IlJllh x«. 49 to be a decree passed by su-h court for the payment by the person 200 No. 15 Co-operative Societies 1991 named in the certificate to the Registrar of the sum specified in the certificate and such sum may be recovered in any manner prescribed by the Civil Procedure Code, 1966 for the enforcement of decrees and the provisions of that Code relating to executions of decrees shall apply. mutatis mutandis, to proceedings for the recovery of costs awarded under this

96.-( I) Where upon an inquiry under section 91 or upon an inspec- Surcharge tion under section 92 the Registrar is satisfied that a past or present officer or member has made or authorized an unlawful payment or has by negligence or misconduct caused a deficiency or a loss or failure to bring to account or has by negligence or misconduct caused loss of or damage to any property of the registered society the Registrar' may surcharge such person with the unlawful payment. deficiency or loss. or the sum which ought to have brought to account or the value of the property lost or damaged or portion of such unlawful payment. defi- ciency. loss. sum. value or cost as the Registrar may consider reasonable having regard to all the circumstances of the case. (2) The Registrar shall give notice in writing to every person sur- charged under the provision of subsection (I) of the amount surcharged and the grond upon which the surcharge is made and every such person may. not later thirty days from the receipt of such notice. appeal to the Minister. or. where the amount of the surcharge exceeds twenty thousand shillings. to the High Court. (3) The decision of the Minister on any appeal made under subsection (2) shall be final and shall not be subject to review in any court. (4) Where " person has been surcharged with an amount under this section and he fails to pay such amount within thirty days after the service of the notice upon him in accordance with subsection (2) or. if he has appealed to the Minister or the High Court. and he fails to pay the amount of the surcharge. if any. decided upon by the Minister or the High Court on appeal within fifteen days from the date of the decision of the Minister or the High Court the Registrar may issue a certificate under his hand and seal specifying the name and address of the person who has been surcharged and the amount of the surcharge and such certificate or a certified copy thereof may he lodged in a court of a resident magistrate or a district court and'iipon being so lodged it shall he deemed to be a decree passed by such a court for the payment by the person named in the certificate ttl the Registrar of the sum specified in the certificate and sue"! sum may he recovered in any manner prescribed by the Civil procedure Code. I %6 for the enforcement of decree and the provisions of thaI code relating to execution of decrees shall apply. mutatis mutandis. to proceedings for the recovery of such amount specified in the certificate. (5) The Chid Justice 1Il,1!, make rules regulating the procedure on an appeal to the High Court under this section. ]O! !\o. IS Co-operative Societies 1'191 PART XI\- A't\L(i"MATI()~ " ' 0 Dtv hl()' '. ,-1WI:.il ~ 97.- -( 1) Anv two or more registered societies 1l1~IY. I~ ~dl\ C, by ,I ..\II"t1~;I­ resolution approved at a general meeting of each of the s,lcictics at m.ui.in which not less than two-thirds of the members Ilr delegates III the societv arc present and h.Id after reasonable notice gi\1.11 .ll the plac, and time of the meeting and of the intention h) move such revolution 111l.'j et». tll amalgamate as a single society (2) Where the Registrar is satisfied that--- (:t) two 01 more registered societies have I,'S'''' cu tll .nnalg.un.uc a, a single socictv in accordance with the provisions III subsection ( I ): (h) the proposed by-law s oi the proposed amalg,lI11~lted socict \ arv unobjccmahlc: and (c) the proposed amalgamation is not 'Igainst the uucrc-t ot the members of the societies proposing to amalgamate or ag.unst the public interest. he may. hv order published in the '-. ialcttc, amal- gamate the societies, IJ) Every order made under subsection l~) ,11 •.11 ,pecily- (a \ the d.uc on which the societies shall amalg.uu.uc t lurcinattcr referred to as "the effective date"): t hi till.' names of the amalgamating socicncs: and the name of the amalgamated society anJ may contain 'lidl dire, (l.'l tions as the Registrar may consider necessary for the purpose ot giving effect to the amalgamation or for salcg,uarJing the interests ot any person. (~, Where an order is made under subsection (2)-- (a) all the assets and liabilities of the amalgamating societies shall. hy virtue of such order and without further assuarance. vest in the arnalgamated society: (b) the Registrar shall cancel the registration of the amalgamating societies and such cancellation shall he effective as from the effective date: and (c) the Registrar shall. notwithstanding the provisions ,)! section 2l-i and section 29, register the amalgamated society anJ the by-Jaws of the amalgamated society, (5) Notwithstanding subsection (l) the Registrar may advice to amal- gamate two or more societies if he is satisfied that it is in the interest of the societies, Dd.:.:t or 98. No amalgamation of registered societies or division ,II <i rc~is· invgulur- tcrcd society shall be invalid by reason only of defect or irrcgularii ~ III ity III lI:)ti\.'\..' (.-h: any notice or order required to be given or made under this Pan, 202 Co-operative Societies No. :.:...._-------_..:.-_---------.....;;.;;.;..;;....-- 15 1991

99.-( 1) An exisnng registered society (hereinafter referred to as "existing society") may. resolve. by a resolution approved at a general meeting at which not less than two thirds of the members or delegates of the society are present and held after reasonable notice given of the place and time of the meeting and of the intention to move such resolution thereat, to devide itself into two or more registered societies (hereinafter referred to as "new societies"). (2) A resolution passed under subsection (l) shall contain proposals for the division of the assets and liabilities of the existing society among the proposed new societies. and may prescribe the area of operation of. and specify the members who will constitute. each of the proposed new societies. (3) the Registrar may advise on voluntary division where he is satisfied that-- (a) an existing society has resolved to divide itself into two or more new societies in accordance with subsection (I); (b) such resolution complies with the provisions of subsection (2); (c) the proposed new societies shall be economically viable when registered: (d) the proposed division is not against the interests of the members of the existing society or against the public interest. he may, by order published in the Gazette. divide the existing society into the proposed new societies. (4) Every order made under subsection (3) shall specify- (a) the date on which the existing society shall be divided into the new societies (hereinafter referred to as "the effective date"); (b) the name of the existing society and the names of the new societies into which it is divided; (e) the manner in which the assets and liabilities of the existing society shall be divided among the new societies; and (d) where necessary, the area of operation of each of the new societies. and may contain such directions as the Registrar may consider necessary for the purpose of giving effect to the division or for safeguarding the interests of any person. (5) Where an order is made under subsection (3)- (a) the assets and liabilities of the existing society subsisting on the effective date shall, by virtue of such order and without further assurance. vest in the new societies in the manner specified in such order; (b) the Registrar shall cancel the registration of the existing society and such cancellation shall be effective as from the effective dae: and (c) the Registrar shall, notwithstanding the provisions of section 28 and section 29, register the new societies and their respective bv-laws. 203 No. 15 Co-operative Societies 1991 PART XV DISSOLUTION OF SOCIETY Dissolu- 100. If the Registrar after an inquiry has been held under section 91 tion or after an inspection has been made under section 92 or on receipt of an application made by three-fourths of the members of a registered 'society, is of the opinion that the society ought to be dissolved he may, by order in writing and after notifying the general meeting of the feder- ation if any cancel the registration of the society. Cancella- 101.-(1) Where it is a condition of the registration of a society that tion of re- it should consist of at least required minimum members the Registrar gistration of society may, by order in writing, cancel the registration of the society if at any time it is proved to his satisfaction that the number of the members has been reduced to less than the required minimum as per section 14 of this Act. (2) When the Registrar has reasonable cause to believe that a regis- tered society has not commenced within six months of registration, or has ceased to carryon business, he may, after the expiry of three months from the date of publishing a notice to that effect in the Gazette, by order in writing, cancel the registration of such society. Appeal 102.-(1) Where the registration of a society is cancelled under the against provisions of:- cancella- tion of (a) Section 97 or registra- tion. (b) Section 98 any member of the society the registration of which is cancelled may. within thirty days from the date of the order cancelling the registration, appeal from such order to the Minister. (2) Where no appeal is presented within thirty days from the making of an order cancelling the registration of a society, the order shall take effect on the expiry of that period. (3) Where an appeal is presented within thirty days the order shall not take effect until it is confirmed by the Minister. (4) Where an appeal has been presented within thirty days the Minis- ter may proceed to consider the same and confirm the order not- withstanding that thirty days have not elapsed and where an order is so confirmed no further appeal shall be allowed against such order. Effect of 103.-(1) Where the registration of a society is cancelled, the cancel- cancella- lation shall take effect and the society shall, save for the purposes of tion of registra- the winding-up of its affairs, cease to exist as a corporate body from the tion date when the order of cancellation takes effect. 204 No. 15 Co-operative Societies 1991 (2) Where the Registrar cancels the registration of a society under any of the provisions of this Act, he shall make such order as he may deem fit respecting the custody of the books and documents and for the protection of the assets of the society until the order cancelling the registration of the society takes effect.

104. Where the registration of a society is cancelled under any of the Winding- sections 97 and 98 the Registrar shall: up (a) Appoint by order in writing a custodian of assets and liabilities of the society immediately after cencellaction is effected. (h) Within forty days appoint a competent person or persons to be liquidator of the society's assets and Iiahilities.

105.-( I) A liquidator appointed under section 101 shall have the Powers of power suhject to the guidance and control of the registrar, and to any liquidator limitations imposed by the Registrar- (a) to institute and defend suits and other legal proceedings by and on hehalf of the society by his name or office and to appear in court as a litigant in person on behalf of the society; (h) to refcr disputes to arhitration; (c) to determine the contribution to he made by the members and past memhers and hy the estates of deceased members of the society respectively to the assets of the society; (d) to investigate all claims against the society. and, subject to the provisions of this Act, to decide questions of priority arising he tween claimants; (e) to determine from time to time by what persons and in what proportion the costs of the liquidation are to be borne; (f) to examine and investigate any claim which the society may have against any person; (g) to take possession of the hooks, documents and assets of the society; and (h) to give such directions in regard to the collection and distribution of the assets of the society and the disposal of the books and documents of the society as may appear to him to be necessary for winding-up the affairs of the society. (2) Subject to any rules made under section 119 a liquidator appointed under this section shall. in so far as such powers are necessary for carrying out the purpose of this section, have power to summon and anforce the attendance of witnesses and to compel the production of documents by the same means and (so far as may be) in the same manner as is provided in the case of a court under the Civil Procedure Code, 1966. 205 No. 15 Co-operative Societies 1991 (3) The rules may provide for an appeal to a court of a resident magistrate having jurisdiction over the area in.which the headquarters of the society are situated from any decision made by a liquidator under this section and may provide for further appeal to the High Court. Power of 106. A liquidator shall exercise his powers subject to control and Registrar revison by the registrar, who may- to control liquida- (a) rescind or vary any order made by a liquidator and make whatever tion new order is .required. (b) remove a liquidator from office. (c) call for all books, documents and assets of the society, (d) by order in writing limit the powers of the liquidator under the provisions of the foregoing section. (e) require accounts to be rendered to him by the liquidator. (f) procure the auditing 'of the liquidator's accounts and authorize the distribution of the assets of the society. (g) make or order for the renumeration of the liquidator. (h) refer any subject of dispute between a liquidator and any third party to settlement if that party shall have assented in writing to be bound by the decision to be given on the dispute. (4) Decisions made under this section may be enforced as follows:- (a) when made by a liquidator, by any court of resident magistrate having jurisdiction in the same manner as the decree of such court; (b) when made by a court of appeal, in the manner of any. such appeal as aforesaid in the same manner as a decree of SItch court in any suit pending therein. Powers to t07. At any time after the cancellation of a registered society takes stay or re- effect the liquidator, or any creditor or member of the society, may, strain pro- where any suit or proceedings against the society is pending in any court, ceedings against apply to the court in which the suit or proceedings is pendin~ for a stay society of proceedings therein and the court to which such application is made may stay the proceedings accordingly on such terms as it thinks fit. Avoi- 108. Any disposition of the property including things in action of a dance of disposi- registered society and any transfer of shares or alteration in the status tions of of the members of the society made after the cancellation of the registered property, society takes effect shall, unless such disposition, transfer or alteration etc; after is made by the liquidator, be void. cancella- tion Avoi- 109. Where the registration of a society cancelled any attachment, dance of distress or execution put in force against the assets of the society after attach- such cancellation takes effect shall be avoid. ment, etc. 206 No. 15 Co-operative Societies 1991

110.-( 1) Where, in the case of the winding-up Of a society, it appears Power of that any person who has taken part in the organization or management Registrar of the society or any past or present chairman, secretary member of the ~~ ~ssess commitee or officer of the society has disapplied or retained or become a;~~~te liable or accountable for any money or property of the society or has deliquent been guilty of misfeasance or breach of trust in relation to the society, prornot- the Registrar may, on the application of the liquidator or of any creditor ers. etc. or contributor, investigate the conduct of such person and make an order requiring him to repay or restore the money or property or any part thereof as the case may be with interest at such rate as the Registrar thinks just or to contribute such sum to the assets of the society by way of compensation in regard to the misapplication, retainer, misfeasance or breach of trust as the Registrar thinks just. (2) Where the Registrar has ordered payment of any money or deliv- ery of any property under subsection (1) such money or property may be recovered on production of such order to the district court or the court of a resident magistrate having jurisdiction over the person from whom the money or property is claimable in the same manner as if such order were the decree of that court. III. Any court of a resident magistrate may, on the application of Power to the Registrar or of the liquidator and on proof of probable cause for arrest believing that any person or officer of the society mentioned in subsection abscond- (1) of section 106 is about to quit the United Republic or otherwise to ing prom- otor. offi- abscond or remove any of his property for the purpose of evading calls cer, etc. or of avoiding investigation of his conduct or of avoiding examination by the liquidator or by the registrar respecting the affairs of the society or of avoiding compliance with any order made by the registrar under the said subsection (1) of section 106 cause him to be arrested and his books and papers and movable property to be detained until such time as the court may order. •

112. In every winding-up of a registered society all debts payable on Debts of a contingency, and all claims against the society, present or future, all de- certain or contingent, ascertained or sounding only in damages, shall scription may be be admissible to proof against the society, a just estimate being made proved so far as possible, or the value of such debts or claims as may be subject to any contigency or sound only in damages. or for some other reason do not bear a certain value.

113. In the winding-up of a registered society which is insolvent the Where so- same rules shall prevail and be observed with regard to the respective ciety is in- rights of secured and unsecured creditors and to debts provable and to solvent the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of bankruptcy with respect to the astates of persons adjudged bankrupt, and all persons who in any such case would be entitled to prove for and realise dividends out of the assets of the society may come in under the winding-up and make such claims against the society as they respectively are entitled to by virtue of this section. 207 No. 15 Co-operative Societies 1991 Prefercn- 114.-( I) In the winding-up of a registered society there shall be paid rial pay- in priority to all other dcbtv--> rncnts (a) all Government taxes and local rates due tro:n the societ~ at the relevant date and having become due and payable within twelve months next before that date not exceeding in the whole one vears assessment (b) all Government rents not more than one year in arrears, (c) all wages or salary (whether or not earned wholly or in part by way of commission) of services rendered to the society during four months next before the relevant date and all wages (whether payable for time or for piece work) of any workman or labourer in respect of services so rendered: and (d) Unless the society has. immediately prior to the relevant date. under any contract with insurers. rights capable of being transfer- red to and vested in the workman. all amounts due in respect of any compensation or liability for compensation under any law for the time being in force in Tanzania relating to compensation of workman. being amounts which have accrued before the rclcv- ant date, (2) Notwithstanding anything in paragraph (c) of the foregoing subsec- tion. the sum to which priority is to be given under that paragraph shall not. in the case of one climant. exceed five thousand xhillings: Provided that where a claimant under the said paragraph (c) is labourer in husbandry who has entered into a contract for the payment 01 ,I portion of his wages in a lump sum at the end of the year of hiring. he shall have pcriority in respect of the whole of such sum. a part thereof. as the liquidator may decide to be due under the contract. proportionate to the time of service up to the relevant date, (3) Where any compensation under an~ law for the time being in force in Tanzania relating to compensation of workmen is a wceklv payment. the amount due in respect thereof shall. tor the purpose of paragraph (d) of subsection ( I ) he taken to he the amount of the lump sum for which the weekly payment could. if redeemable. he redeemed if the employer made an application for that purpose under such law, (.t) Where any pavrncnt ha-, been made to am clerk. servant. workman or labourer in the employment of the socictv. on account of wages or "alary out of money advanced hy some person lor that purpose. the person hv whom the money was advanced shall in a winding-up have a right of priority in respect of the money so advanced and paid up to the amount b~ which the sum in respect of which the clerk. servant. workman or labourer. would have been entitled to priority in the winding-up has been diminished hy reason 01 the payment having been made (:'i) The debts referred to in sub...cction ( I ) shall:- (a) rank equally among themselves and he paid in full. unless th ... assets arc insufficient to meet them. in which case they shall abate in equal proporations. and 208 No. 15 Co-operative Societies 1991 (b) so far as the assets of the society available for payment of general creditors are insufficient to meet them, have priority ever the claims of holders of debentures under any floating charge created by society. and be paid accordingly out of any property comprised in or subject to that charge. (6) For the purposes of this section:- (a) any remuneration in respect of a period of absence from work through sickness or other good cause shall be deemed to be wages in respect of services rendered to the society during the period; (b) the expression "the relevant date" means the date on which the cancellation of the registration of the society takes effect.

115.-(1) Any transfer. conveyance. mortgage. charge. delivery of Fraudu- goods. payment. execution or other act relating to property made or lent pre- done by or against a registered society within six months before the date ference on which the cancellation of its registration takes effect which had it been made or done by or against an individual within six months before the presention of before the presention of bankruptcy petition of which he is adjudged bankrupt. would be deemed in his bankruptcy a fraudulent preference. shall in the event of the society being wound-up be deemed fraudulent preference of its creditors and be void accordingly. (2) Any transfer. conveyance or assignment by a society of all its property to trustees for the benefit of all its creditors shall be void to all intents.

116.-( 1) Where anything made or done is void under section 111 as Liabilities a fraudulent preference of a person interested in property mortgaged' and rights or charged to secure the society's debt. then (without prejudice to any of certain rights or liabilities arising apart from this provision) the person preferred irau.~u­ shall be subject to the same liabilities. and shall have the same rights. f~~::/re­ as if he had undertaken to be personally liable as surety for the debt to persons the extent of the mortgage or charge on the property or the value of his interest. whichever is the less. (2) The value of the said person's interest shall be determined as at the date of tke transaction constituting the fraudulent preference. and shall be determined as if the interest were free of all incumbrances other than those to which the mortgage or charge for the society's debt was then subject. (3) On any application made to the liquidator with respect to any payment on the ground that the payment was a fraudulent preference of a surety Of guarantor. the liquidator shall have jurisdiction to deter- mine any questions with respect to the payment arising between the person to whom the payment was a fraudulent preference of a surety or guarantor. the liquidator shall have jurisdiction to determine any questions with sespect to the payment arising between the person to whom the payment was made and the surety or guarantor and to grant relief in respect thereof. not withstanding that it is not necessary so to do for the purpose of the winding-up 209 No. 15 Co-operative Societies 1991 (4) Subsection (3) shall apply, with the necessary modifications, in relation to transactions other than the payment of money as it applies in relation to such payments. Effect of 117. Where a registered society is being wound-up a floating charge floating on the undertaking or property of the society created within six months charge of the cancellation of the registration of the society taking effect shall, unless it is proved that the society immediately after the creation of the charge was solvent, be invalue, except to the amount' of any cash paid to the society at the time of or subsequently be the ereation of, and in consideration for, the charge, together with interest on that amount at the rate of six percent per annum or such other rate as may for the time being be prescribed. Dis- 118.-( 1) Where any part of the property of a registered society which claimer of is being wound up consists of land of any tenure burdened with onerous onerous property convenats, of shares or stock in companies of profitable contracts or of in case of any property that is unsaleable or not readily saleable, by reason of its society binding the possessor thereof to the performance of any onerous act or wound up to payment of any sum of money, the liquidator, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, with the leave of the Registrar and subject to the provisions of this section, by writing signed by him, at any time within twelve months after the cancellation of the registration of the society taking effect or such extended period as may be allowed by the Registrar, disclaim the property. (2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interest and liabilities of the society in or in respect of the property disclaimed but shall not, except so far as is necessary for the purpose of releasing the society and the property of the society from liabilities of any other person. (3) The Registrar, before or on granting leave to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such other order in the matter as he thinks just. (4) The liquidator shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any person interested in the property requiring him to decide whether he will or will not disclaim and the liquidator has not, within a period of twenty-eight days after the receipt of the application or such further period as may be allowed by the Registrar, given notice to the applicant that he intends to apply for leave to disclaim, and, in the case of a contract, if the liquidator, after such an application as aforesaid, does not within the said period or further period disclaim the contract, he shall be deemed to have adopted it. (5) Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the society to the amount of the injury, and may accordingly prove the amount as a debt in the winding-up. 210 No. 15 Co-operative Societies I lJlJI Rt::o:t ;,> r 119.-(1) Where a creditor has issued execution againq the movable tion of or immovable property of registered society or has attached ;111~ dd-! rights ere- due to the society. and the society is subsequently \H1Und up, 11\: <hul] ditor as til execution not be entitled to retain the benefit of the execution Ill' uuuchnunt or attach- against the liquidator in the winding up of the socic ty unless he h.i- ment in completed the execution or attachment before the fate on \\ hich t hv case of so- cancellation of the registration of the society takes effect :-- ciety being wound up Provided that:- (a) a person who purchases in good faith under a sail' b~ huilit: "11 an order of a court any movable property of a socictv III wluch an execution has been levied shall in all cases acquire ;1 gl'l,.i title thereto against the liquidator; and (h) the rights conferred by this subsection on the liquidator 1~1;1\ I,,' set aside bv the Registrar in favour of the creditor to such ext. ,,! and subject to such~ terms as the Registrar l1lay thmk tit. (2) For the purpose of execution against movable property shall bl' taken to be completed by seizure and sale. and an attachment 01 a debt shall be deemed to be completed by receipt of the debt. and an execution against immovable property shall be deemed to he completed b~ seizure and. in the case of an equitable interest. by the appointmcnt .11;1 rccciv c r (3) In this section ami in section 116 the expression "n1\l\;L!'k pil'p- crty" includes all chattels personal. and the expression "builu t ' include" any officer charged with the execution or a writ Ill' other prol'l'SS, (4) The right conferred upon the liquidator by this section I1ld~ be' enforced by him by a civil suit in any court (If competent jurisdiction. Durie- ,,' 120.-( 1) When any movable property of a registered society is taken ....\ uut a' h 1 in execution and. before the sale thereof or the 'completion of the cxccu- ~"\ld:-­ tion by receipt of recovery of the full amount of the levy. notice is served \"k,'1l ill l·, v-curion upon the court which issued the execution that the registration of the society has been cancelled. the court shall require the bailiff to deliver the movable property including any 1110ney seized or received in part satisfaction of the execution to the liquidator and the bailiff shall forth- with comply with'such requirement (~) Where the bailiff on being required by the court under subsection (I) delivers the movable property including the money. if any. sciZl'd received hv him. the costs of the execution shall be a first churuc , n Ill' the gOlllls or money so delivered. and the liquidator may sell the g~lods_ or a -utficicnt part thereof. for the purpose of sutisfving that charge. 211 Co-operative Societies 1991 No. 15 Courts

121. Save so far as is expressly provided i~ this Act. no court shall not to have any jurisdiction in respect of any matter connected with the dissol- have juris- ution of a registered society. diction in dissolu- tion of societies Preserva- 122. On the completion of his duties the liquidator shall hand over tion of to the Registrar all the books and records of the society. and the Registrar hooks and records may order the society. and the Registrar may order the removal of the name of the society from the registrar and cause such books and records to be preserved in an achieve. PART XVI RULES AND REGULATIONS Rules 123.-( 1) The Minister may. for any registered society or class of such societies.make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the forego- ing power. such rules may- (a) subject to the provisions of section 23 prescribe the maximum number of shares or portion of the capital of a society which may be held by a member: (b) prescribe the forms to be used and the conditions to be complied with in the making of applications for the registration of a society and the procedure in the matter of such applications: (c) prescribe the matters in respect of which a society mayor shall make by-laws and for the procedure to be followed in making. altering and abrogating by-laws. and the conditions to be satisfied prior to such making alteration or abrogation: (d) prescribe the conditions to be complied with by persons applying for admission or admitted as members and provide for the election and admission of members. and the payment to be made and the interest to be acquired before the exercise of the right of membership and to provide for the termination of membership: (e) regulate the manner in which funds may be raised by means of shares or debentures or otherwise and the form in which any application for financial assistance from Government. any bank or any financial institutions shall be made: (f) provide for general meetings of the members and for the procc- dure at such meetings and the powers to be exercised by such meetings and for the method of summoning members to such meetings and giving notice of such meetings to members: 212 ~o. 15 Co-operative Sucieties 1991 provide fur I he appointment. remuneration. suspension and re- (!,!.) rnoval of the member of the committee and other officers and for the procedure at meetings of the committee and for the powers 10 he exercised and the duties to be performed by the committee and other officers and to provide for the delegation of the powers of the committee: (h) provide fur the appointment and terms of service of employees of a society: (i) provide for the submission of annual estimates for the approval of the registrar: (j) provide for the periodical publication of a balance sheet showing the assets and liabilities of a society: (k) provide for the persons by whom and the form in which copies of entries in hooks of societies may be certified: (I) provide for the form of the register of members and for the par- ticulars to be entered therein: (rn ) provide that any dispute touching the business of a society be- tween the members or past members of the society or persons claiming through a member or past member or between a. member or past member or persons so claiming and the commit- tee or any officer shall be referred to the Registrar for decision Cap. IS or if he so directs to arbitration under the Arbitration Ordinance; - (n) provide for the withdrawal and expulsion of members and for the payments. if any. to be made to members who withdraw or an: expelled and for the liabilities of past members; (0) provide for the mode in which the value of a deceased member's interest shall be ascertained and for the nomination of a person to whom such interest may be paid or transferred; (p) provide for the mode in which the value of the interest of a member who has become of unsound mind and incapable of managing his affairs shall be ascertained and for the nomination of any person to whom such interest may be paid or transferred; (q ) prescribe the payments to be made and the conditions to be complied with by members applying for loans; the period for loans. the period for which loans may be made and amount which ma. he lent. to an individual member and the manner in which such loans shall be repaid: (r ) provide for the lormation and maintenance of reserve funds, and the objects to which such funds may be applied, and for the investment of any funds under the control of the society; (s) prescribe the extent to which a society may limit the number of its members: (I) prescribe the conditions under which accumulated funds may be distributed to the members of a society with unlimited liability and the maximum rate of divident which max be paid by societies; 213 No. IS Co-operative Societies J991 (u) prescribe the procedure for amalgamation and division of societies and conditions subject to which such amalgamation or division may be affected; (v) prescribe the procedure to be followed by a liquidator appointed under section 101 and the case in which an appeal shall lie from any order of such liquidator; (w) provide for the powers to be exercised and the duties to be performed by and the remuneration and other terms of service of a supervising Manager; (x) provide for the audit of the accounts of registered societies and for the charges, if any. to be made for such audit and provide for the levy of contributions from all or any registered societies to a fund to be used for the audit and supervision of existing societies and prescribe for the administration for such a fund; and (y) prescribe anything that may be, or is required to be prescribed under this Act. (3) In any case where the Registrar is satisfied that a substantial number of members of any society are unacquainted with the English language he shall cause such rules to be translated into Swahili and additionally to be made known in such manner as is customary for the community concerned, but in the event of any dispute the English version shall be deemed to be the correct version. Power of 124. The Registrar after consulting the chief executive of the respec- Registrar tive apex society, shall make regulations prescribing: to make regula- (a) the accounts and books to be kept by a society; tions (b) the returns.to be submitted by a society to the Registrar and the persons by whom and the form and language in which such returns shall be submitted; (c) the maximum amount which a society may without the prior consent of the Registrar borrow either from members or from non-members; (d) any form to be used for any purpose under this Act; (e) anything for ensuring the proper administration of the affairs of registered societies.

12S. -( 1) Such fees as may be prescribed shall be charged in respect of the following matters- (a) an application for registration; (b) the issue of a registration certificate: (c) the registration of by-laws: (d) the registration of amendments to by-laws: (e) a search in the registration register: (f) inspection of documents; 214 No. IS Co-operative Societies 1991 (g) certified or uncertified copies of documents; (h) translation of documents; (i) the registration of charges; (j) the inspection of registers of charges; (k) any other matter in respect of which a fee is chargeable under the provisions of this Act: Provided that the Registrar may in his discretion vary or waive any of the said fees in the case of a primary society. (2) Different fees may be prescribed for different types or kind of societies.

126. All sums due from a registered society or from an officer or Recoverv member or past member of a registered society as such to the Govern- of su~s ment and other recognised financial organisation may be recovered in due 10 Govern- the manner provided for the recovery of debts due to the Government rnent under the law for the time being in force. PART XVII OFFENCES

127.-(1) It shall be an offence under this Act if- Offences (a) a registered society or an officer or a member thereof wilfully neglects or refuses to do any act or to furnish any information required for the purpose of this Act by the Minister, the Registrar or any other person duly authorized in that behalf by the Minister or the Registrar, as the case may be; or (b) a registered society or an officer or member thereof wilfully makes a false return or furnishes false information; or (c) any person wilfully or without any reasonable excuse disobeys any summons, requisition or lawful written order issued under the provisions of this Act or does not furnish any information lawfully required from him by a person authorised to do so under the provisions of this Act. or (d) any person acts or purports to act as a committee member when not entitled to do so; or (e) a registered society. or an officer or a member thereof, wilfully performs any act which requires the consent or approval of the Registrar without first having obtained such consent or approval; (f) a registered society or an officer or a member thereof wilfully omits to do or to cause to be done an act or thing which is required by or under this Act to be done; (g) a registered society or an officer or a member thereof wilfully does or causes to be ";Jne any act or thing prohibited by or under this Act. 215 No. 15 Co-operative Societies 1991 (2) Every registered society, officer or member of a society or other person guilty of an offence under this section shall be liable to a fine not exceeding ten thousand shillings and, where such offence has been committed by an individual, to imprisonment for a term not exceeding six months in addition to or in lieu of such fine. Penalty 128.-(1) Any person, firm or company having knowledge or notice for solicit- of the existence of a contract described in section 51 or of an obligation ing viola- tion of imposed upon producers in accordance with the provisions of section contracts 49 who solicits or persuades any person to sell or deliver produce in violation 'of that contract or obligation shall be liable to a fine not exceed- ing two thousand shillings for each offence, and shall in addition pay to the society concerned the market price of such produce as at the date of such offence. (2) Any person, firm or company, as aforesaid, shall be deemed to have knowledge or notice of the existence of such contract or of such obligation if the said society has notified the existence of such contract or of such obligation in the Gazette and in any newspaper circulating in Tanzania. Prohibi- 129. If any person, being a past or present officer of member or a tion of the use of registered society the registration of which has been cancelled and in word respect of which a liquidator has been appointed- "Coopera- (a) does not, to the best of his knowledge and belief, fully and truely tive" disclosed to the liquidator all the property, movable andimmov- able, of the society; . (b) does not deliver up to the liquidator or as he directs, all such part of the movable or immovable property of the society as is in his custody or under his control; (c) does not deliver up to the liquidator, or as he directs, all books and papers belonging to the society; or (d) fraudulently, parts with, conceals, destroys, falsifies, matilates or alter or is privy to the fraudulent parting with, concealment, destruction, falsification, mutilation or alteration, any book or paper relating to or affecting the property or affairs of the society, he shall be guilty of an offence and shall be liable on conviction to imprisonment for a term not exceeding five years. Offence l30.-( 1) No person other than a registered society shall trade or by officer carryon business under any name or title of which the word "coopera- of society tive" or its equivalent in any other language is part without the sanction being wound up of the Registrar. (2) No person other than a bona fide savings and credit society shall trade or carryon business under any name or title of which the words "Savings and Credit Society" or their equivalent in any other language is part without the sanction of the Registrar. 216 No. 15 Co-operative Societies 1991 (3) Every person who contravenes any of the provisions of this section shall be guilty of an offence and shall on conviction be liable to a fine not exceeding four thousand shillings and in the case of a continuing offence to a further five hundred shillings for each day on which the offence is continued after conviction therefor. PART XVIII MISCELLANEOUS

131. Notwithstanding anything contained in this Act the Minister may, Power to by order published in the Gazette and subject to such conditions, if any, exempt as e may iImpose, exempt any society f rom any 0 f t e requirements 0 f socienes h e r n a v i e t v h e f r e c u i hi A ,. rom con- t IS ct as to registranon. ditions as registra- tion

132. The Minister may, by order published in the Gazette exempt any Power '., registered society from any of the provisions of this Act or may direct cxern]. t h at sue h . . provisrons s h a II app Iy to sue h soci society wit, h sue h mo difi . societies I cation registered as may be specified in the orders, from pro- vision of the ACT

133.-( 1) Notwithstanding any other provisions of this Act the Regis- Appoint- . trar may, subject to the provisions of this Section appoint special mem- mc.~t. I ot bers to the committee of any registered society if such society is in receipt ~~~~er of financial assistance from the Government or if the Registrar considers to com- such appointments to be necessary in the public interest or in the interest minces of the society, (2) The number of special members appointed to a committee under this section shall not exceed one-third of the number of ordinary mem- bers, including the Chairman and Vice-Chairman (if any) of the commit- tee. (3) For the purposes of this section- (a) a society shall be deemed to be in receipt of financial assistance from the Government- (i) if within the immediately proceeding three years the society has received any grant of money from the Government; (ii) if any money has been lent to the society by the Government and the loan has not been repaid; or (iii) if any loan made to the society has been guaranteed by the Government and either the guarantee is still outstanding or the guarantee has been honoured by the Government and the society has not paid to the Government all sums (includ- ing interests. if any. thereon) paid by the Government under the terms of the guarantee: and 217 No. 15 Co-operative Societies 1991 (b) the expression "one-third" shall mean. where the number of members is not three or a multiple of three. the nearest whole number below one-third, Terms of 134.-( I) A special member of a committee appointed under section appoint- 129 shall remain a member of the committee until his appointment is ment and determined by the Registrar, power of special (2) Where the Registrar has appointed special members to a commit- members tee any such special member may require that any decision taken hy such committee shall not have effect until the approval of the Registrar has been obtained and. where any such requirement is made in respect of anv such decisions. the decision shall be of no force or effect and shall not in any way be acted upon until the Registrar has signified hi, approval thereof. (3) In addition to the powers conferred hy subsection (2). a special member appointed to a committee shall. unless the Registrar otherwise directs. have all the powers of an ordinary member of that committee. Sa\'ing

135. The provisions of the Companies Ordinance. and the Business Cap. 212 Cap. 21.~ Names (Registration) Ordinance. shall not apply to societies registered under this Act. PART XIX REI'!'A!. A~D TRA~SIlI(l'·\1 Construe- 136. In this part the Act means the Cooperative Societies Act. IlJ~2. lion 'ljo. I~ 137. The ell-operative Societies Act. IlJX2 is hereby repealed. ot \'1X2 !\io. 7 138. The National Apex Organization of Tanzania (Formation) Act of 1')'111 IlJ911 is hereby repealed. Transi- 139. Not withstanding the provisions of section 133. tional Provision (a) every society. and all by-laws of a society and any amendment' thereof. deemed to have been registered under this Act: (b) every committee of a registered society lawfully constituted under the provisions of the Act shall be deemed to have been constituted under this Act: (e) any register kept in pursuance of the Act shall be deemed til have been kept. and shall continue 10 h" kept in accordance with the provisions of this ACI: (d) any document referring to a provisions of the Act shall hl' con- strued as referring to the corresponding provisions of this Ad: 218 No. 15 Co-operative Societies J991 (e) all orders, directions appointments and other acts and things lawfully made or done under any of the provisions of the Act and in force immediately before the commencement of this Act shall be deemed to have been made or done under the correspond- ing provisions of this Act and shall continue to have effect accord- ingly; (f) all rules and regulations made under the Act and in force im- mediately prior to the date upon which this Act comes into oper- ation shall remain in force as ifthey had been made under this Act; (g) subject to this Act. where in pursuance to General Notice Number 1137 of 1976 the registration of any society was cancelled any immovable property which prior to the cancellation of that society vested in that society, and where subsequent to the cancellation of that society another society with similar objects is formed in the area of operation of the society which was so cancelled, then such immovable property as has not been disposed of as at the time when that other society is formed, shall vest in that other society: Provided that where any property so vested in that other society is subject of any mortgage, charge, liability or any oncurnberance whatsoever, then the liability to satisfy the mortgage, charge. liability or the encumberance as the case may be. shall vest in that other society, and the name of that other society shall be substituted for that of the former society or for that of the liquidator in any contract or instrument where the property is the subject matter and such contract shall continue as if it has been entered into between that other society and the other party to the contract: Provided further that any vesting of property under this paragra ph shall be subject to any directions that the Minister may give under this Act",

140.-( 1) Parliament may enact legislation modifying any law or laws Furthl:r relating to the functions of any crop marketing Board for the purpose Transi· of facilitating effective assumption of functions of cooperative societies tional pfll· visions under this Act. (2) The Minister may, by notice published in the Gazette, at any time before the expiry of twelve months from the commencement of this Act. make such consequential, transitional or supplementary provisions as he may consider necessary consequent upon the enactment of this Act, Passed in the National Assembly on the nineteenth day of April. Il)l) I, M, MWI:\DADI. Clerk of The National Assemhly 219