Cooperative Societies (Amendment) Proclamation (No. 402/2004)

1. Short Title .f.U 1\'P~ "fU1lG-l- p,t,. "7U0t,.-l- 1\'P~ "7?f This Proclamation may be cited as if.f 1\'P~ cfl'l'C !!flU!iif:li" +-fl/lo ll.m+f) "Cooperative Societies (Amendment) .e'f'lA:: Proclamation No. 402/2004."

2. Amendments f U-0~ -l- P' t,. "7U0t,.-l- 1\ 'P ~ cfl 'l'C Cooperative Societies Proclamation lif!iii!Ittf'ili >-"J~°!.h+lla>- +?f7i~A: No.147/1998 shall be amended as follows. ii, htt'J+st u -,o-,,-. tt'J+st (; +'l'flo roih 1. The following new Sub Articles (6), (7); Th--l- J\}lf) '}().,() "''l+ ,c'f /J/l /J/l (8) and (9) are added after Sub Articles 5 /J/I /jj/ T~9°~'PA1 of Articles 9: ,.f'"JJS. ,,,:, ~,:,6-l- ,:JH."l ;r."1.4' it it ~ Unit Price 2·60 Negarit G. P.O.Box 80001 Federal Negarit Gazt;ta - No. 43 111h May, 2004 Page 2630 "It o.H.u >t"}+fl' 10.11 1t1+" r ODlPt.+ " 6. Any cooperative society which has been Oih;>'e 00111: fTODff10 "71~1&9° legally registered pursuant to Sub Articles 3 of this Article shall engage in ih11t.+ Ft.. "7UOC hT 00 tt100+ any business as of the date of +1 J! 9°C' TQ;l."76 ">"It: Lft-t: registration without the necessity of 'l.filLA 11& 0"71~1&9° f1"/t: Ft.. securing additional trade license. tl.e OD(t"7t.,:,W .e "ft)A:: 'ti OH.U 1'1.+1' 010.il 1'1+1' fl /U/ Ailh 7. Where the appropriate authority ensures that /(I/ fTHl.H.,._:,. 00111..C-f "f fT"l,t\. requirements indicated under Sub ontr~1 h"/'111 .fill& 'lilFIA"l1 (l..f • Article 2(a)-(g) are met, it shall grant temporary certificate which may serve l.;>"lrr h1'1.e- 1ton:,W tlAOilm 'lit not more than a year and shall cause the f"'t.f1il"/A 'ltt.f'e rrilhC tDt.++ rest requirements to be observed within llrr.Y.. r..,..+.,._:,. 00 111..c.Y.. "f 0Tllmt& a specified period of time." f'ltt 1~11 t&il'f' A1-'l"l.t\. °7il~l. "I ,e"ftlA::

8. Where any society is found operating out of :t;/ °71~t&9° "7UOC hTWW 00 0:,W 1'ttl"7'i the objectives for which it is oucu t&6f!' (l. 1+ta+il hT11 OH.U established, it may be suspended by the ih"/ fTLcf>~il+1 Ft.. A1~,elPt., appropriate authority from carrying out h"/'111 'lilt& 'lilFIA"l1 ll.:1'11: .e"f activities permitted by this law. t)fA::

9. Where the general assembly of a society 9/ OH.U 1'1+1' 10.il 1'1+1' :t; ODlP{.:,. suspended pursuant to Sub Articles 8 of r :1'1~ "7UOC m~"" -,..qh. /J°IP,. A1 this Article submits its request to ,tt~ta/\:,W 1'1"/'111 tll\t& 'll\FIA"l1 reverse the decision for suspension and 'I' J'«k ll..fcf>C11 ,e"ft)A:: 'I' J'«kt&1 where the appropriate authority found fTcf>O/\t& h"/'111 J'l\t& 'll\P'IA"l1 the request appropriate, it may reverse f"7UO.,._ m~tltl -,..qh. /J"/P,. A1-'t ~ the decision for suspension. Where the tal\:,W J'+t.Ot& 9°h1.f+ Ocf:'i h"/'111 appropriate authority did not reverse the suspension it shall give a written tr'i (l.1~ A"/P,.1 ll.J'~la .e"ftlA:: h°I explanation to the General Assembly of '111 J'l\t& 'll\FIA"l1 A"/Pr 1 J'tl~la the society. The General Assembly may A1~tr~ J'tl~tao:,W1 9°h1.f:,W /\"7UO.,._ appeal to the higher court which has m~tl tl -,..q h. 01" th-'i! J' tat& ft- IA: : h "I jurisdiction on the decision made by the '111 J'ilt& 'll\FIA"l1 'lcf>l.Ot& 9°h1 appropriate Authority." .r+ .fATil"7"7 FIA"l1 tll\t& m~"" h'i!T~ -,..q"- r~~~:,. 'i!Ct: o.:,. ,e"/'l~ "7~l.11 .e"ftlA::"

2. Articles 16(1)-(3) is hereby deleted and II h1+1' II/I - rt T7if!" R"'th+/\t& h.tlll replaced by the following new h1+2t II ++h:J:fA; "Article 16: Payment of shares Al °71~t&9° "7UOC Ft..t&1 /\"71cf>tacf>il 1/ Any cooperative society shall, after securing the decision of the general f"'t.filLA 11&1 t11::rA "7"/1:,W A1 assembly, sell shares that shall have .tl "fA Ah-A 'P ;> A'i 11tt+ J'tl-rt&1 equal number and parvalue with the /J"l 9' "f Om~tl tl -,..q '1. l'tiltDil'i A1-'l view to enable the society to obtain i'i,n. J'~C;>A:: capital necessary to start its function. 1ft' 11Uf©6 Federal Negarit Gazeta - No. 43 I I th May, 2004 Page 2631 ii IP/'l~tD-9° 11'/UOC f\DDlPl.T Om:,0'\'\ 2/ Any cooperative society shall collect, upon its formation from the members at 1-'lh. '-'l~i'i'f' hTm(l~a>- rtJ"l oom"} least 1/5 of the amount of the share that a>-ilrr 0..f'lil ?ill;~a>- hh'l'\ :,-. f.{10 the general assembly has decided to be (l{],!\:: '-'lF.tltJ.9° 4'6tD-'1- tJ"l hTDD sold. And it shall sell the rest of the lP l. TO:,-. 1. It :e: 9°C' 'l t\-T "~ :,-. shares within four years as of the time '}oo,:r:,-. m-ilrr ooi'irr .ecrco:rA:: of its establishment. r./ Om:,0'\'\ 1-'lh. m-tt~ DDlPl.T ,- 'l~i'i'f' 3/ Where the need for additional capital is fTm(l~ ftJ"l 00 m'l f\m'i+:,. T(;Q. arose, upon completion of the sell of °76 '1-C:rA tiilLt\1 T(;Q.°76 lJ"l9'°:f shares in accordance with the decision of the general assembly, the general '-'l~i'im. f°7UO?- m:,O'\'\ 1-'lh. OtlU assembly may decide once again for the h'l4'1' "}O-il h'l4'1' Ii DDlPl.T sell of additional shares in accordance '-'lF.1'i t\.mil"} ,e"f'\A:: with Sub article I of this Article. !ii 11'/UO?- roii'ima>- ""' O'f'~ 1'lH1l 4/ The share that the society sells may be m,e9° o,,e~:,-. roihLA t\.tr'l .e"f sold either in cash or in kind. Shares '\A:: o,,e~:,-. roihLA t,a, 00 m'l paid in kind shall be determined by the 011'/UO?- ooT~F.6.f F. 'l1l ,em(l'," A:: by-law of the society. l;I h'lJ.': h'lA Om:,0'\'\ 1-'lh. '-'l~i'i'f' 5/ Any member may not hold more than hTm(l~a>- rtJ"l 00 m'l a>-i»rr hI I 0% of shares out of those that the h 00 .Y. O'\,e J.':C"li t\. C: l.tD- hf. "fA9°:: general assembly decide to be sold. 6/ A society which faces shortage of II rti-c:rA '-rrl.T .r.:>m 00 m- °7UOC capital may sell certain shares to a f°7UO?-'l 00 cu 0°7/.:l>l.'l tJ.~,:r person who is not a member of the fT{))(l~ ""' f°7U04r h'lA '\Al.I"~ society without contradicting the (la>- 00 7i'f' ,e "f'\A:: principle of the society. j/ hh'l'\T a>-6JJ> '\t\ (Im- f°tF.l.1tD- 7/ Particulars as regards to manner of sale rtJ"l 7i f6JJ' 11c11c u-~:r 0°1uo?- of shares to a person who is not 00T~F.6f F.'l1l ,em(l',"A:: member to the society shall be determined by the by-laws of the society." r/ hA'J + 1t '1Jli 'lO-il h 'l + 1t I + rr t\o

3. The following new Sub Articles (3) (4) are f°thTt\-T }\~{I "}()-{I A'l+1i Ir.I I /fl/ added after Sub Articles (2) of Article 31. TQ;l.9°l.'PA:: "3) he Council of Ministers may make any "r./ roi~ilTC'"f ?°tic o.:,-. °7'l~tD-9° society free from any court fees that is 11'/UOC h'l1ll.'1: .:>C OT f .fH 0~ payable in connection with dispute cJ.': o.:,-. '\t\OT tictic h 0 ?.hLA entertained by courts. r~~~:,-. h~.f ~, t\..f F.C1tD- .e"f '\,!\:: !ii h'lJ.': 0 7UOC h'l1ll.T ."JC OT,'" 4) Any right emanated from a contract O°tL~oom- m-A roi oo~6JJ' 0011 :,-. concluded by the society involving its ht;' '}DDT (l~'\ 4-6 f.1.1"',"A:: properties shall be barred by statute of limitation after 20 years. Federal Negarit Gazeta - No. 43 11 th May, 2004 Page 2632 f!/ Jrt"J+?i iiif/b - I/ i'7iC: OH.U l\Jlll 4. Articles 33(1) and (2) are deleted and h"J+?i '1Jr i'i'h:l:A:: replaced by the following new Article 33 "~/ h"J~ °7UOC hi'"l6- :,..c~ 'l,e "I) any cooperative society shall deduct 30% '1) OOD-f "rcf>~(I OnDmflO<f!Y iti11 of the net profit and allocate for the J'llcf>?°"lA:: OODmflO<f!Y(I)- itia. reserve fund. The amount allocated for the reserve fund shall nor exceed 30% of the r"?..,. OD m(I)- h°7unc ti-c :r A © OOD-f "flh. "°" ~(,.{l ~(I)-:: capital of the society and it shall be deposited in the saving account of the society fl/ hODmflO<f!J' f"?.cf>t,.(1)- fi'"l6- :,..c~ hY..'l~.A 0°7UO?- m:i-'l'l 1-fll't. 2) The distribution of the remaining net profit ,em(lt;A:: shall be determined by the general assembly. r/ hfl'l:,.. OH.U h1cf>?i 10-t) h1cf>?i f 3) Any member who has received net ODlPt,.:,.. h"?..r11-:,.. ri'"l6- :,..c~ (1)-{l'f' i' tJJ. °7 b lJ"l fl. 1 H-0:,.. profit as per Sub Article 2 this Article .e :Y.'lt\-: :" can buy an additional share."

5. Sub 2 of Article 34 is deleted.

6. The following new Sub-Articles (3) and '!,/ hh"J+?i ~ ")O-{I Jrt"J+?i I +Tt\o (4) are added after Sub Articles (2) of f"?.hi't\--lw hJlfl "JO-ll tt"J+;c"f. Ir/= Article 40. /J!/ i' "19° t,. 'PA: : "(3) Where the court decides for its dissolution. fit 0°7uO?- riti11 ?"COD6- (1)-m..-,,.. (4) Where the auditing reveals that it is OD lP 1,. .-,,.. rh(I 1,. c; r h. ti 6,-(1)-9" bankrupt and when the appropriate ODm'} OI/U0?-1 UA(l)-t; f"?.Yti"l authority ensures that causes the ODlf'i-1 h°lfl-fl ,f t\(1)- flt\P'A"l1 dissolution and the general assembly ~ft,.~°IT'i nm:i-"" 1-fll't. decides." ~OJ(I'}::

7. Article 40(3) shall become Article 40(5).

8. Article 46 is deleted and replaced by the i1 h"J+?i ~'!, i'7iC: 0°thi't\(I)- hJlfl following new Article. Jrt"J+?i i'i'h:l:A:: "46. Settling disputes through concil- iation 1I Disputes indicated under Article ~/ Oh1cf>?i '?if! fi'ODflhi:.-,,.. hChC':Y. 49 may be settled through ll 7i9°°1A c; >ft~:,.. hOD:,.t,.flr(l)- reconciliation of parties elected Ok.-,.. i'h6-tib OJ1'i':Y. 0°?.,0DC by disputants before they are ~.-,.. V'fli'~ OJ11 n"c:,. OD,:rf.-,,.. submitted to arbitration. ,e:Y.'lA:: Federal Negarit Gazeta - No. 43 / 11 'h May, 2004 Page 2633 2/ Each arty'. shall elect a I/ A.f''lJl'l"'" tn1'l h'lf: hil:1'~4! reconciliation; tho, chairperson of f,ODC "I A a f' hil :" ~cf! sP l- ft 111't(l the reconciliation shall be elected in accordance with the agreement OIJ.t\1: tD1'il- 119°9°~-l- f,ODI,. \ of the two parties. "IA:: 3/ Where the two parties failed to r, r 1'111.:"~ct sP -:r-, fl 111t o. "our1,."' reach agreement to elect the IJ.t\1: tn1'il- 119°9°~-l- 'lla .f'AY. chairperson of the reconcili- ation, t,.(a. A'l Y. If~ {I-flit (la>- h '7'111 flt\a>- the chairperson shall be elected by 'lt\r A "l'l 1a081,.a,A:: the appropriate authority." II 11-,+tt !I/I/ .,.;re" R"th.,.t\OJ- h'lil 9. Articles 58(2) is deleted and replaced by 11-,+a- !~/I/ .,_.,.h:tA:: the following new Article 58(2) "I/ 010'-sPl- f'U11t,.-l- r~ "'IUO~-l- "(2) Agricultural cooperative societies, h'P~ cfl'l'C itl;IXiiiti OD1Pt,.-l- which were established pursuant to .,.,t4ioom- ooor~-l- 'lf, .,f'fl. "'IU Proclamation No.85/1995 and which o~:,. 011.u "'"'~ 00,,,1,.:,. A'lY-1'i" are still operating shall be registered .,.0011"10a>- r ~:fa>-'l .f'h'i"a>-'i"fl.::" once again in accordance with this Proclamation." . 1.1 ~u A'lil 11-,+rt !iii .,..,..A- .,.a,-;;:A 10. The following new Articles added as 11-,+rt !Ji fOD.,.fJRC "11.:19 Articles 59 "59. Obligation to cooperate OH. U h 'P~ tn-11'1' O.,_ Y. ~1-,.:,. 'leJlf-l- 'l la Any concerned organ shall have the f'"!,ODt\h.,.a>- h'1A f'OD.,.flOC "11.:19 obligation to cooperate on matters ht\R-l-:: provided in this Proclamation." 1.11 A'l+rt !iii A'l+rt ~/ ITS:A:: 11. Article 59 shall become Article 60 II/ "A'l+rt ~I 1;,p:( f"t8'iR-l- 1.IL 12. "61 Effective Date 1au "'"'~ h..,,11:,. r +, ID.f~I ,.r The Proclamation shall come into force on :e:rC" f'fJ'i" lalf'i"A::" 11 th date of May., 2004." Done at Addis Ababa, 11 tll day of May, 2004. GIRMA WOLDEGIORGIS -,c-, OJAl.1.f-C1.il PRESIDENT OF THE FEDERAL fk-l-f-ti.f '-.f.~'l'f! ,_,,.,h'9f\.f'f! ~T-OA.h DEMOCRATIC REPUBLIC OF ETHIOPIA T&H.Jl'l-l-