Cooperative Societies (Amendment) Act (No. 5 of 1997)

ISSN 0858 0331 THE UNITED REPUBLIC OF TANZANIA Act Supplement 10 Ihe Gazette of Ihe Unued Republic of Tanzania No. H. Vol. 7H. daled 11.</ February. 1997 Printed oy the Government Printer. Dar es Salaam. hy Order of Government No.3 21a' February, 1997 NO.5 OF 1997 I ASSENT. BENJAMIN W. MKAPA. President IXth February. 1997 An Act to amend the Cooperative SodetJe Act, 1991 [ J ENACfED by the Parliament of the United Republic of Tanzania. I. This Act may be cited as the Cooperative Societies (Amendment) Act, 1997 and shall be read as one with the Cooperative Societies Act, 1991 hereinafter referred to as the "principal Act". 2. Section 2 of the principal Act is hereby amended by (a) by repealing the defi.ution of "federation" and substituting for it the following: "federation" means an association formed by apex societies and may include secondary societies which are not members of apex societies and primary societies which are not members of secon­ dary societies;" Shon title Aa No. lSof1991 Arnead· ment of se.clion 2 (b) by adding the following new definitions: "agricultural society" means a society whose principal object is the business of supplying inputs for agricultural crop production, the purchasing, processing, marketing and distribution of agricul­ tural produce; 87 2 No.5 Co-operative Societies (Amendments) 1997 Afnend­ ment of section 8 amend­ ment of section 15 New sec­ tion 16A "bank"means a cooperative bank registered at the secondary or tertiary level; "cooperative financial institution" means a society registered to render banking activities and any other financial service; "union" means a secondary society whose membefship is com­ prised of primary societies; 3. Section 8 of the principal Act is amended in subsection (I)(b) by deleting the comma occurring after the word "operation" in the second line and substituting for it a semi-colon and deleting the remainder of the sentence. 4. Section 15 of the principal Act is hereby amended­ (a) by renumbering the section as subsection (I); (b) by adding the following uew subsection (2): "(2) A banking cooperative society may be formed by savings and credit societies and other cooperative societies." 5.. The principal Act is hereby amended by adding the following new section: "Objects of primary society "16A. The objects or a primary of society shall be (a) to strive to raise the standard of living of its members; (b) to facilitate the operations of the individual.members; (c) to provide services to its members, including supplying agricultural inputs, and processing and marketing of the pro­ ducts of its mer ibers, " Amend­ ment of section III Amend­ ment of section 19 6. Section 18 of the principal Act is amended (a) by deleting the whole of paragraphs (i) to (v); and (b) by renumbering paragraphs (vi), (vii) and (viii) as paragraphs (i), (ii) and (iii) respectively. 7. Section 19 of the principal Act is amended (a) by adding immediately after subsection (I) the following new subsection (2); .. "(2) A cooperative society may j~in with anoth~r. pnvate 0: public non-cooperative company or firm. to form a joint ven.ture or company for the interest of the partl.es co.n~er~~d p~ovlded that the Registrar shall signify approval m wntmg. ; ana (b) by renumbering the existing subsection (2) as subsection (3). 88 No. 5 Co-operative Societies (Amendments) 1997 3 8. Section 20 of the principal Act is amended in subsection (2)­ (a) by deleting the whole of paragraphs (a) and (b) and substituting therefor the following new paragraphs: "(a) to render services designed to ensure e~fic.iency and un.if?r­ mity in the 'business of its member societres, standardizing their book-keeping, accounting and their procedures and pro­ viding audit services to those societies; (b) to print, publish and circulat~ any newspaper ?r other pu?li­ cation designed to foster or Increase Interest In cooperative enterprises, principles and practices; (c) to co-ordinate the economic plans of the member societies and to forward them to the Minister for the incorporation in the national plan; (2) by renumbering as paragraph (d) the contents of the present parag­ raph (c); (3) by renumbering as paragraph (e) and (f) the contents of the present paragraphs (d) and (e) respectively. 9. Section 21 of the principal Act is hereby amended in subsection (2)(b) by inserting the expression "and banks" between the words "societies" and "which" occurring in the first line. 10. Section 22 of the principal Act is hereby amended (a) in subsection (2 by deleting the whole of paragraph (i) to (vi) and substituting the following new paragraphs (i) to (vii): "(i) Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the respon­ sibilities of membership, without gender, social racial, polit­ ical or religious discrimination. (ii) Cooperatives are democratic organizations controlled by their members who actively participate in setting their policies and making decisions, men and women serving as elected represen­ tatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member one vote), and cooperatives at other levels are also organized in a democratic manner. (iii) Members contribute equitably to, and democratically control the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital sub­ scribed as a condition of membership. Members' allocate surpluses for any of the following purposes: developing their cooperative: possibly by setting up reserves; part of which at least would he divisible benefiting memhers in proportion to their transactions with the cooperative and supporting other activities approved by the members. H9 Amend­ ment of section 20 Amend­ ment o: section '21 Amend­ ment 01 section 22 4 No.5 Co-operative Societies (Amendments) 1997 Amend­ ment of section 30 Amend­ ment of section 32 Amend­ ment of section 45 (iv) Cooperatives are autonomous, self help organizations control­ led by their members. If they enter into agreement with other organizations. including governments. or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy. (v) Cooperatives provide education and training for their mem­ bers, elect representatives, managers and emplovees so they can contributc ctfccrivclv to the development 01 their L'ooplTa· tives. They inform the general public. particularly young people and opinion leaders about the nature and benefits of cooperation, (vi) Cooperative serve their members most effectively and strengthen the cooperative movement by working through local, national and international structures. (vii) Cooperatives work for the sustainable development of their communities through policies approved by their members." (b) in subsection (3) by deleting the expression "primary society" occuring in the first line. 11. Section 30 of the principal Act is amended by deleting the whole of subsection (1) and substituting for it the following new subsection: "(1) No society shall be registered unless the Registrar is satisfied that (a) the volume of business from members of the society is sufficient to cover its costs; (b) proper provision has been made for the financing of the society; (c) no society exists in the same locality performing similar activities for people of the same class or occupation, and that the registra­ tion of another society would serve no useful purpose." 12. Section 32 of the principal act is amended (a) by deleting the whole of subsection (2), (3) and (4) and by renum­ ering as subsections (2) and (3) the contents of the present sub­ sections (5) and (6); (b) by deleting the whole of the reference to the fine occurring in the third to the fifth lines and substituting the following: "a fine of ten thousand shillings and in the case of a continuing offence, a fine of one thousand shillings fur each day during which the default continues." 13. Section 45 of the principal Act is amended in subsection (2)(e) by adding the word "shares" between the word "members" and the expression "the entrance fees" occurring in the second line. 90 No.5 Co-operative Societies (Amendments) 199"1 5 14. Section 48 of the principal Act is hereby amenrled (a) in subsection (2) by inserting the expression "within three months" between the words "shall" and "prepare" occurring in the second line; (b) by adding the following new subsections (7) and (8): "(7). In the event a society fails to prepare a statement of accounts within a period of three months in respect of the business of its previous financial year, the members of the relevant com­ mittee of the society shall automatically lose their membership of the committee and shall not be eligible for re-election to the committee for the next five years. (8) Without prejudice to the generality of subsections (1), (2), (3), (4) (5) and (6) the management committee shall be held responsible for any loss occasioned to the society." IS. Section n2 of the principal Act is hereby amended (a) in subsection (2) (e) by deleting the whole of the sentence occuring after the phrase "movable property" in the second line, and sub­ stituting for it the following: "of such value as provided for in the by-lawsof the society. "; (b) in subsection (5)(b) by deleting the reference to "Minister" and substituting for it the word "Registrar". 16. Section 64 of the principal Act is amended in subsection (2) by deleting the phrase "in consultation with the apex society, if any,". 17. Section 66 of the principal Act is hereby amended by deleting the whole of subsections (5), (7) and (8). 18. Section 74 of the principal Act is amended (a) in subsection (1)(a) by deleting the expressions "Cooperative and Rural Development Bank" and "the National Bank of Com­ merce" occurring in the second and third lines; (b) in subsection (l)(d) by deleting the word "Minister" occurring in the last line, and substituting for it the word "Registrar"; (c) in subsection (2) by deleting the word "direct" occurring in the first line and substituting for it the word "advise"; (d) in subsection (3) by deleting the word "direction" occurring in the first line and substituting for it the word "advice". 91 Amend­ ment of section 48 Amend­ ment of section 62 Amend­ ment of section 64 Amend­ ment of section 60 Amend­ ment of section 74 19976 No.5 Co-operative Societies (Amendments) ~----------=- Section 75 repealed replaced 19. Section 75 of the principal Act is repealed and replaced by the following new section: "Central 75.-( I) There shall be a central cooperative fund which Coopera- Shall be created and administered by the Federation in accor­ tive Fund dance with such regulations as the Minister shall make in that behalf. (2) Without prejudice to the aforegoing the fund may be applied for the furtherance of cooperative education. training and research, for auditing and the general development of cooperative societies in Tanzania. (3) Every society shall contribute to a fund to be estab­ lished by the Minister of Finance under the Exchequer and Audit Ordinance for the purpose of meeting the expenses of inspection and promotion of cooperatives. Repeal of section 76 20. Section 76 of the principal Act is hereby repealed. Amend­ ment of section 77 Amend­ ment of section 84 Amend­ ment of section 85 21. Section 77 of the principal Act is repealed and replaced by the following new section. "77. Every primary society. secondary society, apex society and fed­ eration shall contribute to the Fund a fixed amount to be deter­ mined by the annual general meetings of the societies subject to the approval of the Registrar." 22.. Section 84 of .the principal Act is amended in subsection (3) by deleting the expression "one hundred" occurring in the sixth line and substituting therefor the expression "five hundred" 23.. Section 85 of the principal Act is amended in subsection (2) by deleting the expression "one hundred" occurring in the fourth line and substituting for it the expression "five hundred". 24. The principal Act is amended by adding the following new sec­ tions: New sec­ tions 99A and 998 added "Com­ pulsory amalga­ mation 99A.-(1) Where the Registrar is satisfied that it is in the interest of two or mure societies to amalgamate as a single society and that such amalgamation will not be against the interest of the members, he may by notice in writing. require the societies to amalgamate. (2) Where a notice has been given to the societies under subsection (1). the Registrar shall by notice published in the Gazette and in any newspaper circulating in the area where the societies conduct their business invite members of the societies to lodge witn him any objections or other represen­ tations in writing within a period of two months from the date of such n(ltirp 42 No. 5 Compul­ sory divi­ sion Co-operative Societies (Amendments) (3) Where no objection has been lodged pursuant to sub­ section (2) the Registrar may direct the societies to whom the notice has been delivered under subsection (1) to prepare by-laws for the proposed amalgamated society and the societies shall submit the by-laws for the approval of the Registrar, and the Registrar may, after consultation with societies, vary or amend the proposed by-laws. (4) Where the Registrar has approved the proposed by­ laws, he may by order published in the Gazette amalgamate the societies. (5) Where any objection has been raised by a member pursuant to subsection (2) and it is supported by not less than one third of the other members of the society to which the member belongs the Registrar shall convene a meeting of the members to consider the representations of the members on the question of amalgamation. Should the majority of the members present opt for amalgamation the Registrar shal proceed under the provisions of subsection (3) (3) When the Registrar has approved the proposed by­ laws, he may be order published in the Gazette, amalgamate t he societies. 998.-(1) Where the Registrar is satisfied that it is in the interest of an existing society to divide itself into two or more new societies and such division will not be against the ioterest of the members, he may. by notice in writing, require the existing society to so divide itself. (2) A notice given under subsection (1) shall contain prop­ osals 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) Where a notice is given to an existing society under subsection (1) such society shall, within such time as may be specified in the notice, prepare by-laws for the proposed new societies and submit the by-laws for the approval of the Registrar, and the Registrar may, after consultation with the existing society. vary or amend the proposed by-laws. (4) Where the Registrar is satisfied that the proposed new societies are not object iouab!c. he may. by order published in the Gazette, divide the existing society into the proposed new societies. 93 1997 No.5 Co-operative Societies (Amendments) 1997 (5) Where a notice has been given to the existing society under subsection (1), the Registrar shall by notice published in the Gazette, and in any newspaper circulating in the area where the exisiting society conducts its business invite mem­ bers of the society to lodge with him any objections or other representations within a period of two months from the date of such notice. (6) Where any objection has been raised by a member pursuant to subsection (5) and it is supported by not less than one third of the members of the existing society the Registrar shall convene a meeting of the members to consider the rep­ resentations of the members as to the question of the division of the existing society. Shoufi1 the majonty of the members present opt for the division the Registrar shall proceed to effect the division under this section. Passed in the National Assembly on the 30th January, 1997. GEORGE FRANCIS MLAWA, Clerk of the National Assembly Price Shs. /40/