CO-OPERATIVE SOCIETIES ORDINANCE

CO-OPERATIVE SOCIETIES ORDINANCE

LAWS OF HONG KONG

CO-OPERATIVE SOCIETIES ORDINANCE

CHAPTER 33





CHAPTER 33.

CO-OPERATIVE SOCIETIES ORDINANCE.

ARRANGEMENT OF SECTIONS.

PART 1.

section. PRELIMINARY. Page.

1..........Short title .................... ... ... ... ... ... ... ... ... ... 3
2..........Interpretation ................. ... ... ... ... ... ... ... ... ... 3

PART 11.

REGISTRATION.

3................................Appointment of Registrar and assistant registrars ... ... ... ... 4

4......................Societies which may be registered ... ... ... ... ... ... ... ... 4

5....................Conditions of registration ... ... ... ... ... ... ... ... ... 4
6....................Application for registration ... ... ... ... ... ... ... ... ... 4

7.................Registration and appeals ... ... ... ... ... ... ... ... ... 5

8......................Societies to be, bodies corporate ... ... ... ... ... ... ... ... 5

9.................Evidence of registration ... ... ... ... ... ... ... ... ... ... 5

PART Ill.

DUTIES AND PRIVILEGES OF SOCIETIES.

10...............................Amendment of the by-laws of a registered society ... ... ... ... 5

11..............Address of society ........... ... ... ... ... ... ... ... ... ... 6

12......................................Copy of Ordinance, rules, by-laws, etc., to be open to inspection ... 6

13.................................Disposal of produce to or through a registered society ... ... ... 6

14...............................Creation of charges in favour of registered societies ... ... ... ... 6

15......................................Charge and set oft in respect of shares or interest of members ... 7

16...............................Shares or interest not liable to attachment or sale ... ... ... ... 7

17..........................Transfer of interest on death of member ... ... ... ... ... ... 7

is.......................Deposits by or on behalf of minors ... ... ... ... ... ... ... 8

19..............Register of members .......... ... ... ... ... ... ... ... ... ... 8

20.......................Proof of entries in books of society ... ... ... ... ... ... ... 8

PART IV.

RIGHTS AND LIABILITIES OF MEMBERS.

21...................Qualification for membership ... ... ... ... ... ... ... ... ... 8

22.................................Members not to exercise rights till due payment made ... ... ... 9

23.......................Restriction of membership in society ... ... ... ... ... ... ... 9







24..............Votes of members .......... ... ... ... ... ... ... ... ... ... 9
25..............Representation by proxy ... .. ... ... ... ... ... ... ... ... ... 9

26...............................Contracts with society of members who are minors ... ... ... ... 9

27.....................Block holdings of shares limited ... ... ... ... ... ... ... ... 9
28. Restriction on transfer of share or interest 9

29. Liability of past member and estate of deceased member for debts of

society ... ... ... ... ... ... ... ... ... ... ... ... ... ... 10





PART V.
Section.PROPERTY AND FUNDS OF REGISTERED SOCIETIES. Page.

30........................Loans made by a registered society ... ... ... ... ... ... ... 10

31...............................Deposits and loans received by a registered society ... ... ... ... 10
32...............................Restrictions on other transactions with non-members ... ... ... 10

33..............Investment of funds .......... ... ... ... ... ... ... ... ... ... 10
34..............Disposal of profits .......... ... ... ... ... ... ... ... ... ... 10

PART VI.
AUDIT, INSPECTION AND
INQUIRY.

35.......Audit ............................ ... ... ... ... ... ... ... ... 11

36...............................Power of Registrar to inspect society's books, etc . ... ... ... ... 11

37.....................Inquiry and inspection . ... ... ... ... ... ... ... ... 12

PART VII.
DISSOLUTION.

38..........Dissolution ................... ... ... ... ... ... ... ... ... ... 12

39...............................Cancellation of registration for lack of membership ... ... ... ... 13

40........................Effect of cancellation of registration ... ... ... ... ... ... ... 13

41.................................Liquidation after cancellation of registration of society ... ... ... 13

42..............Liquidator's power ........... ... ... ... ... ... ... ... ... ... 13

43..........................Power of Registrar to control liquidation ... ... ... ... ... ... 14

44.................Enforcement of order ...... ... ... ... ... ... ... ... ... ... 15

45............................Limitation of the jurisdiction of the civil court ... ... ... ... ... 15

46.................Closure of liquidation .... ... ... ... ... ... 15

PART VIII.
SURCHARGE AND
ATTACHMENT.

47.........................................Power of Registrar to surcharge officers, etc., of a registered society 15

48..............Appeal to Governor ........ ... ... ... ... ... ... ... 16

PART IX.
DISPUTES.

49.................Settlement of disputes .... ... ... ... ... ... ... ... ... ... 16

50.....................Case stated on question of law ... ... ... ... ... ... ... ... 17

PART X.
RULES.

5 1. Rules.............. .................. ... . . ... ... ... ... ... ... 17

PART XI.
MISCELLANEOUS.







52........................Recovery of sums due to Government ... ... ... ... ... ... ... 19

53. Special power of Governor to exempt any society from requirements

as to registration .................... ... ... ... ... ... ... ... 19

54. Special power of Governor to exempt societies from provisions of

Ordinance ... ... ... ... ... ... ... ... ... ... ... ... 19

55.................................Power to exempt from stamp duty and registration fees ... ... ... 20
56. Prohibition of the use of the word 'co-operative' 20

57. Certain legislation not to apply to registered societies ... ... ... ... 20
58. Penalty for non-compliance with Ordinance ... ... ... ... ... ... 20

59. Punishment of fraud or misappropriation ... ... 21





CHAPTER 33.

CO-OPERATIVE SOCIETIES.

Toprovide for the formation and to regulate the operation of co-
operative societies.

[15th February. 1951.1

PART 1.

PRELIMINARY.

1. This Ordinance may be cited as the Co-operative Societies
Ordinance.

2. In this Ordinance, unless the context otherwise requires

'bonus' means a share of the profits of a registered society divided
among its members in proportion to the. volume of business done
with the society by them from which the profits of the society were
derived;

'by-laws' means the registered by-laws made by a society in the
exercise of any power conferred by this Ordinance, and includes a
registered amendment of the by-laws,

'committee' means the governing body of a registered society to whom
the management of its affairs is entrusted;

'dividend' means a share of the profits of a registered society divided
among its members in proportion to the share capital held by them;

'member' includes a person or registered society joining in the
application for the registration of a society, and a person or
registered society admitted to membership after registration in
accordance with the by-laws;

'officer' includes a chairman, secretary, treasurer, member of committee,
or other person empowered under the rules or by-laws to give
directions in regard to the business of a registered society;

'registered society' means a co-operative society registered under this
Ordinance.

'Registrar' means the Registrar of Co-operative Societies appointed
under section 3 and includes any person when exercising such
powers of the Registrar as may have been conferred upon him
under that section;

'rules' means rules made under this Ordinance.





PART 11.

REGISTRATION.

3. The Governor may'appoint a person to be Registrar of Co-
operative Societies for the Colony and may appoint persons to assist
such Registrar, and may, by general or special order published in the
Gazette, confer on any such persons all or any of the powers of a
Registrar under this Ordinance.

4. Subject to the provisions hereinafter contained, a society which
has as its object the promotion of the economic interests of its members
in accordance with co-operative principles, or a society established with
the object of facilitating the operations of such a society, may be
registered under this Ordinance with or without limited liability as the
Registrar may decide:

Provided that the liability of a society which includes at least one
registered society among its members shall be limited.

5. (1) No society, other than a society of which a member is a
registered society, shall be registered under this Ordinance, which does
not consist of at least ten persons each of whom is qualified under
section 21 for membership.

(2) The word 'co-operative' or its Chinese equivalent shall form
part of the name of every society registered under this Ordinance.

(3) The word 'limited' or its Chinese equivalent shall be
the 1 name of every society with limited
liability registered under this Ordinance.

(4) When for the purposes of this section any question arises as to
age, residence, or occupation of land constituting the qualification of
any person, that question shall be decided by the Registrar whose
decision shall be final.

6. (1) For the purposes of registration an application shall be made
to the Registrar.

(2)The application shall be signed-

(a)in the case of a society of which no member is a registered
society, by at least ten persons qualified in accordance with
the requirements of subsection (1) of section 5; and

(b)in the case of a society of which a member is a registered
society, by a duly authorized person on behalf of every such
registered society, and, where all the members of the society
are not registered societies, by ten other members, or, when
there are less than ten other members, by all of them.





(3) The application shall be accompanied by copies of the
proposed by-laws of the society, and the persons by whom or on
whose behalf such application is made shall furnish such information in
regard to the society as the Registrar may require.

7. (1) If the Registrar is satisfied that a society has complied with
the provisions of this Ordinance and the rules, and that its proposed by-
laws are not contrary to this Ordinance or to the rules, he may, if he
thinks fit, register the society and its by-laws. An appeal shall lie to the
Governor in Council against the refusal of the Registrar to register any
society within one month from the date of such refusal.

(2) On registration the society shall pay such fee as may be
required by the rules.

8. The registration of a society shall render it a body corporate by
the name under which it is registered, with perpetual succession and
with power to hold property, to enter into contracts, to institute and
defend suits and other legal proceedings, and to do all things necessary
for the purpose of its constitution.

9. A certificate of registration signed by the Registrar shall be
conclusive evidence that the society therein mentioned is duly
registered, unless it is proved that the registration of the society has
been cancelled.

PART III.

DUTIES AND PRIVILEGES OF SOCIETIES,

10. (1) Any registered society may, subject to this Ordinance and
the rules, amend its by-laws, including the by-law which declares the
name of the society.

(2) No amendment of the by-laws of a registered society shall be
valid until that amendment has been registered under this Ordinance, for
which purpose copies of the amendment shall be forwarded to the
Registrar.

(3) If the Registrar is satisfied that any amendment of the by-laws
is not contrary to this Ordinance or to the rules, he may, if he thinks fit,
register the amendment. An appeal shall he to the Governor in Council
against the refusal of the Registrar to register any amendment of any by-
law.

(4) An amendment which changes the name of a society shall not
affect any right or obligation of the society or of any of its members or
past members, and any legal proceedings pending may be continued by
or against the society under its new name.

(5) 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 by him, which shall be conclusive evidence of the
fact that the amendment has been duly registered.





11. Every registered society shall have an address, registered
in accordance with the rules, to which all notices and communica-
tions may be sent, and shall send to the Registrar notice of every
change of that a address.

12. Every registered society shall keep a copy of this Ordinance
and of the rules and of its by-laws and a list of its members open to
inspection, free of charge, at all reasonable times at the registered
address of the society.

13. (1) A registered society which has as one of its objects the
disposal of any article produced or obtained by the work or industry of
its members whether the produce of agriculture, animal husbandry,
forestry, fisheries, handicrafts or otherwise may provide in its by-laws
or may otherwise contract with its members

(a)that every such member who produces any such article shall
dispose of the whole or any specified amount. proportion or
description thereof to or through the society; and

(b)that any member who is proved or adjudged, in such manner as
may be prescribed by the rules to be guilty of a breach of the
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 the aforesaid rules.

(2) No contract entered into under the provisions of this section
shall be contested in any court on the ground only that it constitutes a
contract in restraint of trade.

14. (1) Subject to any prior claim of the Crown on the property of
the debtor and to the lien or claim of a landlord in respect of rent or any
money recoverable as rent and in the case of immovable property to any
prior registered charge thereon

(a)any debt or outstanding demand payable to a registered
society by any member or past member shall be a first charge
on all crops or other agricultural produce, felled timber or other
forest produce, marine produce, fish (fresh-water and salt-
water), livestock, fodder, agricultural, industrial and fishing
implements, plant, machinery, boats, tackle and nets, raw
materials, stock in trade and generally all produce of labour and
things used in connexion with production raised, purchased or
produced in whole or in part from any loan whether in money
or in goods given 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 a first
charge upon his interest in the immovable property of the
society.

15. A registered society shall have a charge upon the shares
or interests in the capital and on the deposits of a member or
past member or deceased member and upon any dividend, bonus,
or profits payable to a member or past member or to the estate
of a deceased member in respect of any debt due to the society
from such member or past member or estate, and may set off any
sum credited or payable to a member or past member or estate
of a deceased member in or towards payment of any such debt.

16. Subject to the provisions of section 15, the share or in-
terest of a member in the capital of a registered society shall not
be liable to attachment or sale under any decree or order of a
court in respect of any debt or liability incurred by such member.
and neither his assignee in insolvency nor a receiver duly appointed
shall be entitled to, or have any claim on, such share or interest.

17. (1) On the death of a member, a registered society may
transfer the share or interest of the deceased member to the person
nominated in accordance with the rules made in this behalf, or,
if there is no person so nominated, to such persons as may appear
to the committee to be the heir or legal representative of the
deceased member, or may pay to such nominee. heir or legal repre-
sentative, as the case may be, a sum representing the value of such
member's share or interest, as ascertained in accordance with the
rules or by-laws:

Provided that-

(a)in the case of a 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
share 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 deceased mem-
ber 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 death of the deceased
member to any person specified in the application who
is so qualified.

(2) A registered society shall pay all other moneys due to the
deceased member from the society to such nominee, heir or legal
representative, as the case may be.





(3) AR transfers and payments made by a registered society in
accordance with the provisions of this section shall be valid and
effectual against any demand made upon the society by any other
person.

18. (1) A registered society may receive deposits from or for the
benefit of minors and it shall be lawful for a registered society to pay
such minors the interest which may become due on such deposits. Any
deposits made by a minor may, together with the interest accrued
thereon, be paid to that minor, and any deposit made on behalf of a
minor may, together with the interest accrued thereon, be paid to the
guardian of that minor for the use of the minor.

(2) The receipt of any minor or guardian for money paid to him
under this section shall be a sufficient discharge of the liability of the
society in respect of that money.

19. Any register or list of members kept by any registered society
shall be prima facie evidence of any of the following particulars entered
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 person ceased to be a member.

20. (1) A copy of any entry in a book of a registered society
regularly kept in the course of business shall, if certified in such manner
as may be prescribed by the rules, be received in any legal proceeding,
civil or criminal, as prima facie evidence of the existence of such entry
and shall be admitted as evidence of the matters, transactions and
accounts therein recorded in every case where, and to the same extent
as, the original entry itself is admissible.

(2) No officer of any such society shall, in any legal proceedings to
which the society is not a party, be compelled to produce any of the
society's books, the contents of which can be proved under subsection
(1) or to appear as a witness to prove any matters, transactions or
accounts therein recorded, unless the court for special reason so
directs.

PART IV.

RIGHTS AND LIABILITIES OF MEMBERS.

21. In order to be qualified for membership of a co-operative
society a person, other than a registered society, must

(a) have attained the age of 18 years.,

(b)be resident within or in occupation of land within the society's
area of operations as described by the by-laws.





22. No member of a registered society shall exercise the rights
of a member unless or until he has made such payment to the
society in respect of membership or acquired such interest in the
society, as may be prescribed by the rules or by-laws.

23. Except with the sanction of the Registrar, no person shall
be a member of more than one registered society whose primary
object is to grant loans to its members.

24. No member of any registered society shall have more
than one vote in the conduct of the affairs of the society:

Provided that-

(a)in the case of an equality of votes the chairman shall
have a casting vote;

(b)in the case of societies of which a registered society is
a member that society may have such voting powers as
are provided in the rules.

25. A registered society which is a member of any other
registered society may appoint any one of its members as its
proxy for the purpose of voting in the conduct of the affairs of
such other registered society.

26. The minority or non-age of any person duly admitted
as a member of any registered society shall not debar that person
from executing any instrument or giving any acquittance necessary
to be executed or given under this Ordinance or the rules made
thereunder, and shall not be a ground for invalidating or avoiding
any contract entered into by any such person with the society.,
and any such contract entered into by any such person with the
society, whether as principal or as surety, shall be enforceable at
law or against such person notwithstanding his minority or non-age.

27. No member, other than a registered society, shall hold
more than one-fifth of the share capital of any co-operative society.

28. (1) The transfer or charge of the share or interest of a
member or past member or deceased member in the capital of a
registered society shall be subject to such conditions as to
maximum holding as may be prescribed by this Ordinance or by
the rules.

(2) In the case of a society registered with unlimited liability,
a member shall not transfer any share held by him or his interest
in the capital of the society or any part thereof, unless-

(a)he has held such share or interest for not less than one
year; and

(b)the transfer or charge is made to the society, or to a
member of the society, or to a person whose application
for membership has been accepted by the committee.





29. (1) The liability of a past member for the debts of a registered
society as they existed on the date on which he ceased to be a member
shall not continue for a period of more than two years reckoned from
that date.

(2) The estate of a deceased member shall not be liable for the
debts of the society as they existed on the date of his decease for a
period of more than two years reckoned from the date of his decease.

PART V.

PROPERTY AND FUNDS OF REGISTERED SOCIETIES.

30. (1) A registered society shall not. except as provided in section
33, make any loan to any person other than a member:

Provided that, with the consent of the Registrar, a registered
society may make loans to another registered society.

(2) Except with the permission of the Registrar, a registered 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 Governor may, by general or special order, prohibit or
restrict the lending of money on mortgage of any description of
immovable property by any registered society.

31. A registered society shall receive deposits and loans from
persons who are not members only to such extent and under such
conditions as may be prescribed by the rules or by-laws.

32. Save as provided in sections 30 and 31, the transactions of a
registered society with persons other than members shall be subject to
such prohibitions and restrictions as may be prescribed by the rules.

33. A registered society may invest or deposit its funds-

(a)in a post office savings bank. or with any bank or person
carrying on the business of banking approved for this
purpose by the Registrar; or

(b)in any securities issued or guaranteed by a Government
within the Commonwealth; or

(c)with any other registered society approved for this purpose
by the Registrar; or

(d) in any other mode approved by the Registrar.

34. (1) At least one-fourth of the net profits of every registered
society, as ascertained by the audit prescribed by section 35, shall be
carried to a fund to be called the reserve fund. which shall be employed
as prescribed by the rules. After deduction of





any tax which may have been charged on such society in accordance
with the provisions of the Inland Revenue Ordinance, the remainder of
such profits and any profits of past years available for distribution may
be divided among the members by way of dividend or bonus, or
allocated to any funds constituted by the society, to such extent or
under such conditions as may be prescribed by the rules or by-laws:

Provided that in the case of a society with unlimited liability, no
distribution of profits shall be made without the general or special order
of the Governor.

(2) Any registered society, may, with the sanction of the Registrar,
after one-fourth of the net profits in any year has been carried to a
reserve fund, contribute an amount not exceeding ten per cent of the
remaining net profits to any charitable purpose or to a common-good
fund.

PART VI.

AUDIT, INSPECTION AND INQUIRY.

35. (1) The Registrar shall audit or cause to be audited by some
person authorized by him by general or special order in writing the
accounts of every registered society once at least in every year.

(2) The audit under subsection (1) shall include an examination of
overdue debts, if any, and a valuation of the assets and liabilities of the
registered society.

(3) The Registrar and every other person appointed to.audit the
accounts of a society shall have power when necessary

(a)to summon at the time of his audit any officer, agent, servant
or member of the society who he has reason to believe can
give material information in regard to any transactions of the
society or the management of its affairs; or

(b)to require the production of any book or document relating to
the affairs of, or any cash or securities belonging to, the
society by the officer, agent, servant or member in possession
of such book, document, cash or securities.

36. The Registrar, or any person authorized by general or special
order in writing by the Registrar, shall at all times have access to all the
books, accounts, papers and securities of a registered society, and shall
be entitled to inspect the cash in hand; and every officer of the society
shall furnish such information in regard to the transactions and working
of the society as the person making such inspection may require.





37. (1) The Registrar may of his own motion, and shall on the
application of a majority of the committee, or of not less than one-third
of the members of a registered society, hold an inquiry or direct some
person authorized by him by order in writing in this behalf to hold an
inquiry into the constitution, working, and financial condition of a
registered society; and all officers and members of the society shall
furnish such information in regard to the affairs of the society and
produce the cash in hand and such books, accounts, papers and
securities of the society as the Registrar or the person authorized by him
may require.

(2) The Registrar shall, on the application of a creditor of the
registered society, inspect or direct some person authorized by him in
writing in this behalf to inspect the books of the society. if the applicant

(a)proves that an ascertained sum of money is then due to him
and that he has demanded payment thereof and has not
received satisfaction within a reasonable time; and

(b)deposits with the Registrar such sum as security for the costs
of the proposed inspection as the Registrar may require.

(3) The Registrar shall communicate the results of any such
inspection to the creditor and to the society into whose affairs inquiry
has been made.

(4) Where an inquiry is held under subsection (1) or an inspection
is made under subsection (2), the Registrar may apportion the costs or
such part of the costs, as he may think right, between the registered
society, the members demanding an inquiry, the officers or former
officers of the society, and the creditor, if any, on whose application the
inquiry was made.

(5) Any sum awarded by way of costs against any society or
person under this section may be recovered, on application to a
magistrate having jurisdiction in the place where the registered office of
the society is situate or the person resides or carries on business for the
time being, in like manner as a fine imposed by such court.

PART VII.

DISSOLUTION.

38. (1) If the Registrar, after holding an inquiry or making an
inspection under section 37 or on receipt of an application made by
three-fourths of the members of a registered society, is of opinion that
the society ought to be dissolved, he may make an order for the
cancellation of the registration of the society.

(2) Any member of a registered society may, within two months
from the date of an order under subsection (1), appeal from such order
to the Governor.





(3) Where no appeal is presented within two months from the
making of an order cancelling the registration of a society, the
order shall take effect on the expiry of that period. Where an
appeal is presented within two months, the order shall not take
effect until it is confirmed.

(4) Where the Registrar makes an order for the cancellation
of the registration of a society under subsection (1) he may make
such further order as he may think fit for the custody of the books
and documents and the protection of the assets of the society until
the order cancelling registration takes effect.

(5) No registered society shall be wound up save by an order
of the Registrar.

39. The Registrar may, by order in writing, cancel the regis-
tration of any registered society other than a society which in-
cludes among its members one or more registered societies, if at
any time it is proved to his satisfaction that the number of the
members has been reduced to less than ten. Every such order
shall take effect from the date thereof.

40. Where the registration of a society is cancelled by an
order under section 38 or 39 the society shall cease to exist as a
corporate body from the date on which the order takes effect,
hereinafter referred to as the date of dissolution:

Provided that any privileges conferred on the society by or
under sections 14, 15, 16 and 17 shall be deemed to be vested
in any liquidator appointed for that society by the Registrar.

41. Where the registration of a society is cancelled under
section 38 or 39 the Registrar may appoint one or more persons
to be, subject to his direction and control, the liquidator or liquida-
tors of the society.

42. (1) A liquidator appointed under section 41 shall, subject
to the guidance and control of the Registrar and to any limitations
imposed by the Registrar by order under section 43, have power
to-

(a)determine from time to time the contribution to be made
by members and past members or by the estates of
deceased members of the society to its assets;

(b)appoint a day by notice before which creditors whose
claims are not already recorded in the books of the society
shall state their claims for admission or to be excluded
from any distribution made before they have proved
them;

(c)decide any question of priority which arises between
creditors;





(d)refer disputes to arbitration and institute and defend suits
and other legal proceedings on behalf of the society by
his name or office;
(e)decide by what persons and in what proportions the costs
of liquidation are to be borne;
give such directions in regard to the collection and dis-
tribution of assets as may be necessary in the course of
winding up the society;
(g)compromise any claim by or against the society provided
the sanction of the Registrar has first been obtained;
(h)call such general meetings of members as may be neces-
sary for the proper conduct of the liquidation;
(i)take possession of the books, documents and assets of
the society;
(1) sell the property of the society;
(k)carry on the business of the society so far as may be
,necessary for winding it up beneficially:
Provided that nothing herein contained shall entitle
the liquidator of a credit society to issue any loan; and
arrange for the distribution of the assets of the society
in a convenient manner when a scheme of distribution
has been approved by the Registrar.

(2) Subject to such rules as may be made in this behalf, any
liquidator appointed under this Ordinance shall in so far as such
powers are necessary for carrying out the purposes of this section,
have power to summon and enforce the attendance of parties and
witnesses and to compel the production of documents by the same
means and (so far as may be) in the manner as is provided in the
case of a magistrate.

43. A liquidator shall exercise his powers subject to the con-
trol and revision of the Registrar, who may-
(a)rescind or vary any order made by a liquidator and make
whatever 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 a liquidator under
section 42;
(e) require accounts to be rendered to him by the liquidator.,
procure the auditing of the liquidator's accounts and
authorize the distribution of the assets of the society;
(g) make an order for the remuneration of the liquidator; or
(h)refer any subject of dispute between a liquidator and any
third party to arbitration if that party shall have con-
sented in writing to be bound by the decision of the
arbitrator.





44. (1) The decision of an arbitrator on any matter referred to him
under section 43 shall be binding upon the parties, and shall be
enforceable in like manner as an order made by the Registrar under that
section.

(2) An order made by a liquidator or by the Registrar under section
42 or 43 shall be enforced by any civil court having jurisdiction over the
place where the registered office of the society is situate in like manner
as a decree of that court.

45. Save in so far as is hereinbefore expressly provided, no civil
court shall have any jurisdiction in respect of any matter concemed with
the dissolution of a registered society under this Ordinance.

46. (1) In the liquidation of a society whose registration has been
cancelled, the funds, including the reserve fund, shall be applied first to
the costs of liquidation, then to the discharge of the liabilities of the
society, then to the payment of the share capital and then, provided the
by-laws of the society permit, to the payment of a dividend at a rate not
exceeding ten per cent per annum for any period for which no disposal
of profits was made.

(2) When the liquidation of a society has been closed and any
creditor of that society has not claimed or received what is due to him
under the scheme of distribution, notice of the closing of the liquidation
shall be published in the Gazette; and, all claims against the funds of
the society liquidated shall be proscribed when two years have elapsed
from the date of the publication of the Gazette notice.

(3) Any surplus remaining after the application of the funds to the
purposes specified in subsection (1) and the payment of any claims for
which an action is instituted under subsection (2) shall be available for
use by the Registrar for any co-operative purpose at his discretion.

PART VIII.

SURCHARGE AND ATTACHMENT.

47. (1) Where, in the course of the winding up of a registered
society it appears that any person who has taken part in the
organization or management of such society or any past or present
officer of the society has misapplied or retained or become liable or
accountable for any money or property of such society or has been
guilty of misfeasance or breach of trust in relation to such society, the
Registrar may, on the application of the liquidator or of any creditor or
contributory, examine into the conduct of such person and make an
order requiring him to repay or restore the money or property or any part
thereof with interest at such





rate as the Registrar thinks just or to contribute such sum to the assets
of such society by way of compensation in regard to the misapplication,
retainer, dishonesty or breach of trust as the Registrar thinks fit.

(2) This section shall apply notwithstanding that the act is one for
which the offender may be criminally responsible.

48. Any person aggrieved by any order of the Registrar made under
section 47 may appeal to the Governor within twenty-one days from the
date of such order and the decision of the Governor shall be final and
conclusive.

PART IX.

DISPUTES.

49. (1) If any dispute touching the business of a registered society
arises

(a)among members, past members and persons claiming through
members, past members and deceased members; or

(b)between a member, past member, or person claiming through a
member, past member or deceased member, and the society, its
committee, or any officer of the society; or

(c)between the society or its committee and any officer of the
society, or

(d) between the society and any other registered society;

such dispute shall be referred to the Registrar for decision. A claim by a
registered society for any debt or demand due to it from a member, past
member or the nominee, heir or legal representative of a deceased
member, shall be deemed to be a dispute touching the business of the
society within the meaning of this subsection.

(2) The Registrar may, on receipt of a reference under subsection
(1)

(a) decide the dispute himself; or

(b) refer it for disposal to an arbitrator or arbitrators.

(3) Any party aggrieved by the award of the arbitrator or
arbitrators may appeal therefrom to the Registrar within such
period and in such manner as may be prescribed.

4) A decision of the Registrar under subsection (2) or in
appeal under subsection (3) shall be final and shall not be called
in question in any civil court.

(5) The award of the arbitrator or arbitrators under subsection (2)
shall, if no appeal is preferred to the Registrar under subsection (3), or if
any such appeal is abandoned or withdrawn, be final





and shall not be called in question in any civil court and shall be
enforced in the same manner as if the award had been a judgment
of a civil court.

50. (1) Notwithstanding anything contained in section 49,
the Registrar at any time when proceeding to a decision under this
Ordinance, or the Governor at any time when an appeal has been
preferred to him against any decision of the Registrar under this
Ordinance, may refer any question of law arising out of such deci-
sion for the ruling of the court.

(2) Such judge or judges as the Chief Justice may direct, may
consider and determine any question of law so referred and the
ruling given on such question shall be final and conclusive.

PART X.

RULES.

51. (1) The Governor in Council may make all such rules
as may be necessary for the purpose of carrying out or giving effect
to the principles and provisions of this Ordinance.

(2) In particular, and without prejudice to the generality of
the power conferred by subsection (1), such rules may provide for-

(a)forms to be used and the conditions to be complied with
in applying for the registration of a society and the pro-
cedure in the matter of such applications;

(b)conditions to be complied with by persons applying for
admission or admitted as members, election and admis-
sion of members from time to time, and the payment to
be made and interest to be acquired before exercising
rights of membership,
(c)subject to the provisions of section 27, the maximum
number of shares or portion of the capital of a registered
society which may be held by a member;

(d)the extent to which a registered society may limit the
number of its members;
(e)withdrawal and expulsion of members and payments to
be made to members who withdraw or are expelled, and
the liabilities of past members;
general meetings of the members and for the procedure
at such meetings and the powers to be exercised by such
meetings,

(g)appointment, suspension and removal of the members of
the committee and other officers, and the procedure at
meetings of the committee, and the powers to be exercised
and the duties to be performed by the committee and
other officers,





(h)matters in respect of which a society may or shall make
by-laws and the procedure to be followed in making,
altering and rescinding by-laws, and the conditions to be
satisfied prior to such making, alteration or rescission;
(i)the manner in which funds may be raised by means of
shares or debentures or otherwise.,

(1)conditions to be observed by a registered society applying
for financial assistance from government;

(k)the payments to be made, the conditions to be complied
with and the forms of the bonds, instruments or other
documents to be executed by members applying for loans
or cash credits, the period for which loans may be made
or credits granted, and the maximum amount which may
be lent and the maximum credit which may be allowed
to individual members with or without the consent of the
Registrar;
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 trans-
ferred;

(m)the mode in which the value of the interest of a member
who has become of unsound mind and incapable of
managing himself or his affairs shall be ascertained and
the nomination of any person to whom such interest may
be paid or transferred,

(n)formation and maintenance of reserve funds, and the
objects to which such funds may be applied, and invest-
ment of any funds under the control of any registered
society,

(o)conditions under which profits may be distributed to the
members of a society with unlimited liability and the
maximum rate of dividend which may be paid by
societies;

(p)accounts and books to be kept by a registered society,
and for the periodical publication of a balance sheet
showing the assets and liabilities of a registered society.,

(q)audit of the accounts of registered societies and for the
charges, if any, to be made for such audit and 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 co-operative propaganda and the administra-
tion of such a fund;

(r)returns to be submitted by registered societies to the
Registrar, and the persons by whom and the form in
which the same are to be made;

(s)the persons by whom, and the form in which, copies of
entries in books of registered societies may be certified;





(t)formation and maintenance of a register of members, and,
where the liability of members is limited by shares, of a
register of shares;

(u)inspection of documents and registers at the Registrar's office
and the fees to be paid therefor and the issue of copies of
such documents or registers;

(v)the manner in which any question as to the breach of any by-
law or contract relating to the disposal of produce to or
through a society may be determined, and the manner in
which the liquidated damages for any such breach may be
ascertained or assessed;

(w)the mode of appointing an arbitrator or arbitrators and the
procedure to be followed in proceedings before the Registrar
or such arbitrator or arbitrators;

(x)the procedure to be followed by a liquidator appointed under
section 41 and the cases in which appeals shall lie from the
orders of such liquidator.,

(y)forms and fees and the procedure to be observed and all other
matters connected with or incidental to the presentation.
hearing and disposal of appeals under this Ordinance or the
rules.

PART Xl.

MISCELLANEOUS.

52. (1) All sums due from a registered society or from an officer or
member or past member of a registered society as such to the
Government may be recovered in the manner provided for the recovery
of debts due to the Government under the law for the time being in
force.

(2) Sums due from a registered society to the Government and
recoverable under subsection (1) may be recovered first, from the
property of the society., secondly, in the case of a society of which the
liability of members is limited, from members, subject to the limit of their
liability; and thirdly, in the case of other societies, from the members.

53. Notwithstanding anything contained in this Ordinance the
Governor may by special order in each case and subject to such
conditions as he may impose, exempt any society from any of the
requirements of this Ordinance as to registration.

54. The Governor may by general or special order exempt any
registered society or class of societies from any of the provisions of this
Ordinance, or may direct that such provisions shall apply to any society
or class of societies with effect from such date or with such
modifications as may be specified in the order.





55. (1) The Governor by notification in the Gazette may, in the
case of any registered society or class of registered societies,
remit
(a) the stamp duty with which, under any law for the time
being in force, instruments executed by or in behalf of a
registered society, or by an officer or member, and re-
lating to the business of such society, or any class of such
instruments are respectively chargeable; or

(b) any fee payable able under the law of registration for the time
being in force.

(2) A notification exempting any registered society from the
fees referred to in paragraph (b) of subsection (1) may provide
for the withdrawal of such exemption

56. (1) No person other than a registered society shall trade or carry
on business under any name or title of which the word ---co-
operative'is part without the sanction of the Governor:

Provided that nothing in this section shall apply to the use by any
person or his successor in interest of any name or title under which he
traded or carried on business at the commencement of this Ordinance.

(2) Any person who contravenes the provisions of this section
shall be guilty of an offence and shall be liable to a fine of one
hundred dollars and in the case of a continuing offence to a further fine
of twenty dollars for each day during which the offence continues.

57. The provisions of the Companies Ordinance, and of any law
relating to trade unions, shall not apply to societies registered under
this Ordinance.

58.(a) Any registered society or an officer or a member thereof,
wilfully neglecting or refusing to do any act or to furnish any
information required for the purposes of this Ordinance by the
Registrar or other persons duly authorized by him in this
behalf, and

(b)any person wilfully or without any reasonable excuse
disobeying any summons, requisition or lawful written order
issued under the provisions of this Ordinance, or failing to
furnish any information lawfully required from him by a person
authorized to do so under the provisions of this Ordinance,

shall be guilty of an offence and shall be liable to a fine of one

hundred dollars.





59. If any person obtains possession by false representation or
imposition of any property of a society, or having it in his possession
withholds or misapplies it, or wilfully applies any part thereof to
purposes other than those expressed or directed in the rules of the society,
and authorized by this Ordinance. he shall, on the complaint of the
society, or of any member authorized by the society, or the committee
thereof, or of the Registrar, be liable to a fine of two thousand dollars.
and to be ordered to deliver up all such property or to repay all monies
applied improperly, and, in default of such delivery or repayment, or of
the payment of such fine to be imprisoned for twelve months.

(Added, 53 of 1956, s. 2)
Originally 43 of 1947. (Cap. 33, 1950.) 53 of 1956. G.N.A. 31/51. Short title. Interpretation. Appointment of Registrar and assistant registrars. Societies which may be registered. Conditions of registration. Application for registration. Registration and appeals. Societies to be bodies corporate. Evidence of registration. Amendment of the by-laws of a registered society. Address of society. Copy of Ordinance, rules, by-laws, etc., to be open to inspection. Disposal of produce to or through a registered society. Creation of charges in favour of registered societies. Charge and set off in respect of shares or interest of members. Shares or interest not liable to attachment or sale. Transfer of interest on death of member. Deposits by or on behalf of minors. Register of members. Proof of entries in books of society. Qualification for membership. Members not to exercise rights till due payment made. Restriction of membership in society. Votes of members. Representation by proxy. Contracts with society of members who are minors. Block holdings of shares limited. Restriction on transfer of share or interest. Liability of past member and estate of deceased member for debts of society. Loans made by a registered society. Deposits and loans received by a registered society. Restrictions on other transactions with non-members. Investment of funds. Disposal of profits. (Cap. 112.) Audit. Power of Registrar to inspect society's books, etc. Inquiry and inspection. Dissolution. Cancellation of registration for lack of membership. Effect of cancellation of registration. Liquidation after cancellation of registration of society. Liquidator's power. Power of Registrar to control liquidation. Enforcement of order. Limitation of the jurisdiction of the civil court. Closure of liquidation. Power of Registrar to surcharge officers, etc., of a registered society. Appeal to Governor. Settlement of disputes. Case stated on question of law. Rules. Recovery of sums due to Government. Special power of Governor to exempt any society from requirements as to registration. Special power of Governor to exempt societies from provisions of Ordinance. Power to exempt from stamp duty and registration fees. Prohibition of the use of the word 'co-operative'. Certain legislation not to apply to registered societies. (Cap. 32.) Penalty for non-compliance with Ordinance. Punishment of fraud or misappropriation. [cf. 56 & 57 Vict, c. 39, s. 64.]

Originally 43 of 1947. (Cap. 33, 1950.) 53 of 1956. G.N.A. 31/51. Short title. Interpretation. Appointment of Registrar and assistant registrars. Societies which may be registered. Conditions of registration. Application for registration. Registration and appeals. Societies to be bodies corporate. Evidence of registration. Amendment of the by-laws of a registered society. Address of society. Copy of Ordinance, rules, by-laws, etc., to be open to inspection. Disposal of produce to or through a registered society. Creation of charges in favour of registered societies. Charge and set off in respect of shares or interest of members. Shares or interest not liable to attachment or sale. Transfer of interest on death of member. Deposits by or on behalf of minors. Register of members. Proof of entries in books of society. Qualification for membership. Members not to exercise rights till due payment made. Restriction of membership in society. Votes of members. Representation by proxy. Contracts with society of members who are minors. Block holdings of shares limited. Restriction on transfer of share or interest. Liability of past member and estate of deceased member for debts of society. Loans made by a registered society. Deposits and loans received by a registered society. Restrictions on other transactions with non-members. Investment of funds. Disposal of profits. (Cap. 112.) Audit. Power of Registrar to inspect society's books, etc. Inquiry and inspection. Dissolution. Cancellation of registration for lack of membership. Effect of cancellation of registration. Liquidation after cancellation of registration of society. Liquidator's power. Power of Registrar to control liquidation. Enforcement of order. Limitation of the jurisdiction of the civil court. Closure of liquidation. Power of Registrar to surcharge officers, etc., of a registered society. Appeal to Governor. Settlement of disputes. Case stated on question of law. Rules. Recovery of sums due to Government. Special power of Governor to exempt any society from requirements as to registration. Special power of Governor to exempt societies from provisions of Ordinance. Power to exempt from stamp duty and registration fees. Prohibition of the use of the word 'co-operative'. Certain legislation not to apply to registered societies. (Cap. 32.) Penalty for non-compliance with Ordinance. Punishment of fraud or misappropriation. [cf. 56 & 57 Vict, c. 39, s. 64.]

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