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Tonga Consolidated Legislation |
LAWS OF TONGA
[1988 Ed.]
CHAPTER 118
CO-OPERATIVE SOCIETIES
ARRANGEMENT OF SECTIONS
SECTION
PART I. - PRELIMINARY
1. Short title.
2. Parts.
3. Definitions.
PART II. - REGISTRATION
4. Appointment of Registrar and Assistant Registrars.
5. Societies which may be registered.
6. Conditions of Registration.
7. Application for Registration.
8. Registration.
9. Societies to be bodies corporate.
10. Evidence of Registration.
PART III. - DUTIES AND PRIVILEGES OF SOCIETIES
11. Amendment of the by-laws of a registered society.
12. Address of society.
13. Copy of Act, rules, by-laws, etc., to be open to inspection.
14. Disposal of produce to or through a registered society.
15. Creation of charges in favour of registered societies.
16. Charge and set off in respect of shares or interest of members.
17. Shares or interest not liable to attachment or sale.
18. Transfer of interest on death of members.
19. Deposits by or on behalf of minors.
20. Register of members.
21. Proof of entries in books of society.
22. Amalgamation or transfer of societies.
23. Division of societies.
24. Conversion of a company into a society.
PART IV. - RIGHTS AND LIABILITIES OF MEMBERS
25. Qualification for membership.
26. Members not to exercise rights till due payment made.
27. Restriction of membership in society.
28. Votes of members.
29. Representation by proxy.
30. Contracts with society of members who are minors.
31. No individual to hold more than one-fifth of share capital of any society.
32. Restrictions on transfer of share or interest.
33. Liability of past member and estate of deceased member for debts of society.
PART V. - PROPERTY AND FUNDS OF REGISTERED SOCIETIES
34. Loans made by a registered society.
35. Deposits and loans received by a registered society.
36. Restrictions on other transactions with non-members.
37. Investment of Funds.
38. Disposal of profits.
PART VI. - AUDIT, INSPECTION AND ENQUIRY
39. Audit.
40. Power of Registrar to inspect societies' books, etc.
41. Inquiry and inspection.
PART VII. - DISSOLUTION
42. Dissolution of Committee.
43. Dissolution.
44. Cancellation of registration of a society due to lack of membership.
45. Effect of cancellation of registration.
46. Liquidation after cancellation of registration of society.
47. Liquidator's power.
48. Power of Registrar to control liquidation.
49. Enforcement of order.
50. Closure of liquidation.
PART VIII. - SURCHARGE AND ATTACHMENT
51. Registrar may order repayment or restoration of money or other property due to a society.
52. Attachment of property.
53. Appeal to the Minister.
PART IX. - DISPUTES
54. Settlement of disputes.
55. Case stated on question of law.
PART X. - RULES
56. Rules.
PART XI. - MISCELLANEOUS
57. Recovery of sums due to Government.
58. Powers to exempt any society from requirements as to registration.
59. Power to exempt societies from provisions of the Act.
60. Power to exempt from stamp duty and registration fees.
61. Prohibition of the use of the word "co-operative" or "fetokoni'aki".
62. Companies Law and Trade Unions Law not to apply.
63. Punishment of fraud or misappropriation.
64. Banks to give information.
65. Appointment by the Minister of Special members to committees of national and secondary societies.
66. Special members.
67. Penalty for non-compliance with the Act.
68. Saving.
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CHAPTER 118
CO-OPERATIVE SOCIETIES
Acts Nos. 15 of 1973, 15 of 1981.
AN ACT TO PROVIDE FOR THE FORMATION OF CO-OPERATIVE SOCIETIES AND TO REGULATE THEIR OPERATIONS
Commencement: [19th December, 1973]
PART I. - PRELIMINARY
Short title.
1. This Act may be cited as the Co-operative Societies Act.
Parts.
2. This Act is divided into parts as follows:
Part I PRELIMINARY (Sections 1-3)
Part II REGISTRATION (Sections 4-10)
Part III DUTIES AND PRIVILEGES OF SOCIETIES (Sections 11-24)
Part IV RIGHTS AND LIABILITIES OF MEMBERS (Sections 25-33)
Part V PROPERTY AND FUNDS OF REGISTERED SOCIETIES (Sections 34-38)
Part VI AUDIT, INSPECTION AND ENQUIRY (Sections 39-41)
Part VII DISSOLUTION (Sections 42-50)
Part VIII SURCHARGE AND ATTACHMENT (Sections 51-53)
Part IX DISPUTES (Sections 54-55)
Part X RULES (Section 56)
Part XI MISCELLANEOUS (Sections 57-67)
Definitions.
3. In this Act 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 Act, 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;
"Delegate" means the representative of a society elected to be its proxy in meetings of a secondary society with which the society is affiliated;
"Dividend" means a share of the profits or a registered society divided among its members in proportion to the share capital held by them;
"Liability of a Member" means the extent to which a member may be obliged to contribute money to meet the debts of a society on liquidation thereof;
"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;
"Minister" means the Minister of Agriculture, Forests and Fisheries or such other Minister as may be appointed by His Majesty in Council for the purposes of this Act;
"National society" means a registered society of which all members are secondary societies with similar objects and which has been formed by said secondary societies to represent them on a national level;
"Net Surplus" means the difference between income received or accrued during the financial year and the total of expenditure made or accrued during the year and provisions and allowances for the depreciation of fixed assets, or the writing off of losses or bad debts and for the creation of reserves against bad debts or depreciation of stocks;
"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;
"Primary Society" means a registered society consisting of individuals as members;
"Registered society" means a co-operative society registered under this Act;
"Registrar" means the Registrar of co-operative societies appointed under section 4 of this Act 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 Act;
"Secondary society" means a registered society of which all members are primary societies.
(Amended by Act 15 of 1981.)
PART II. - REGISTRATION
Appointment of Registrar and Assistant Registrars.
4. The Minister may appoint a person to be Registrar of Co-operative Societies 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 power of a Registrar under this Act.
Societies which may be Registered.
5. 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 Act 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.
Condition of Registration.
6. (1) No society, other than a society of which a member is a registered society, shall be registered under this Act, which does not consist of at least 5 persons, each of whom is qualified under Section 25 of this Act for membership.
(2) The word "co-operative" or "fetokoni'aki" (its Tongan equivalent) shall form part of the name of every society registered under this Act.
(3) The word "limited" or "limiteti" (its Tongan equivalent) shall be the last word in the name of every society with limited liability registered under this Act.
(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.
Application for Registration.
7. (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 5 persons qualified in accordance with the requirements of Section 6(1) of this Act; and
(b) in the case of a society of which a member is a registered society, by a duly authorised person on behalf of every such registered society, and, where all the members of the society are not registered societies, by 5 other members, or, when there are less than 5 other members, by all of them.
(3) No school society shall be registered save with the consent of the Minister, acting after consultation with the Minister charged with responsibility for Education.
(4) 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.
Registration.
8. (1) If the Registrar is satisfied that a society has complied with the provisions of this Act and the rules, and that its proposed by-laws are not contrary to this Act or to the rules, he may, if he thinks fit, register the society and its by-laws. An appeal shall lie to the Minister 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 fees as may be required by the rules.
Societies to be Bodies corporate.
9. 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.
Evidence of Registration.
10. 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
Amendment of the By-laws of a Registered Society.
11. (1) Any registered society may, subject to this Act and the rules, amend its by-laws, including the by-laws 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 Act, 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 Act or to the rules, he may, if he thinks fit, register the amendment. An appeal shall lie to the Minister against the refusal of the Registrar to register any amendment of any by-laws.
(4) An amendment which changes the name of a society shall not affect any right or obligations 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.
(6) In this section "amendment" includes the making of a new by-law and the variation or rescission of a by-law.
Address of society.
12. Every registered society shall have an address, registered in accordance with the rules, to which all notices and communications may be sent, and shall send to the Registrar notice of every change of that address.
Copy of Act, Rules, By-laws, etc., to be open to Inspection.
13. Every registered society shall keep a copy of this Act 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.
Disposal of Produce to or through a Registered Society.
14. (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 or by-laws.
(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.
Creation of Charges in Favour of Registered Societies.
15. (1) Subject to any prior claim of the Government 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 agricultural produce, felled timber or other forest produce, marine produce, fish, 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 connection 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 amount payable to such society shall be a first charge upon his interest in the immovable property of the society.
Charge and set-off in Respect of Shares or Interest of Members.
16. A registered society shall have a charge upon the shares or interest 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 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 or sums credited or payable to a member or past member or estate of a deceased member in or towards payment of any such debt.
Shares or Interest not Liable to Attachment or Sale.
17. Subject to the provisions of section 16, the share or interest of a member in the capital of a registered society shall not be liable to or sale under any decree or order of a Court in respect of Attachment 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.
Transfer of interest on death of member.
18. (1) On the death of a member, a registered society may transfer the share or interest of the deceased member to the person interest on death of nominated in accordance with the rules made in this behalf, or, 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 deceased member, or may pay to such nominee, 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 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 member to such nominee, heir or legal representative, as the case
may be, being qualified in accordance with rules and by-laws for membership of the society, or on his application within 6 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) All 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.
Deposits by or on behalf of minors.
19. (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.
Register of members.
20. 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.
Proof of Entries in Books of Society.
21. (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 proceedings, 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 reasons so directs.
Amalgamation or Transfer of Societies.
22. (1) Any two or more societies may, with the approval of the Registrar by a resolution passed by a three-fourths majority of the members present at a special general meeting of each such society held for the purpose, amalgamate as a single society; provided that each member has had clear 15 days written notice of the resolution and the date of the meeting. Such an amalgamation may be effected without a dissolution, or a division of the funds, of the amalgamating societies. The resolution of the societies concerned shall on such amalgamation be a sufficient conveyance to vest the assets and liabilities of the amalgamating societies in the amalgamated society.
(2) Any society may by a resolution passed in accordance with the procedure laid down in subsection (1) transfer its assets and liabilities to any other society which is prepared to accept them:
Provided that when any such amalgamation or transfer of assets and liabilities involves the transfer of its liabilities by any society to any other society, it will not be made without giving 3 months notice to the creditors of both or all such societies:
Provided further that if a creditor or creditors of any of the societies concerned objects or object to such amalgamation or transfer of assets and liabilities and gives or give written notice to that effect to the society or societies concerned one month before the date fixed for such amalgamation or transfer, the amalgamation or transfer shall not be made until the dues of such creditor or creditors have been satisfied.
Division of Societies.
23. (1) Any society may, with the approval of the Registrar, by a resolution passed by a three-fourths majority of the members present at a special general meeting of the society held for the purpose, resolve to divide itself into two or more societies, provided that each member has had 15 clear days written notice of the resolution and the date of the meeting. The resolution (hereinafter in this section referred to as a preliminary resolution) shall contain proposals for the division of the assets and liabilities of the society among the new societies in which it is proposed to divide it and may prescribe the area of operation of, and specify the members who will constitute, each of the new societies.
(2) A copy of the preliminary resolution shall be sent to all the members and creditors of the society. A notice of the resolution shall also be given to all other persons whose interests will be affected by the division of the society.
(3) Any member of the society may, notwithstanding any by-law to the contrary, by notice given to the society within a period of 3 months from his receipt of the resolution, intimate his intention not to become a member of any of the new societies.
(4) Any creditor of the society may, notwithstanding any agreement to the contrary, by notice given to the society within the said period intimate his intention to demand a return of amount due to him.
(5) Any other person whose interest will be affected by the division may by notice given to the society object to the division unless his claim is satisfied.
(6) After the expiry of three months from the receipt of the preliminary resolution by all the members and creditors of the society and of the notice by other persons given under subsection (2), another special general meeting of the society, of which at least 15 clear days notice shall be given to its members, shall be convened for considering the preliminary resolution. If, at such meeting the preliminary resolution is confirmed by a resolution passed by a majority of not less than two-thirds of the members present, either without changes or with such changes as in the opinion of the Registrar are not material, he may, subject to the provisions of subsection (9) and Section (7), register the new societies and the by-laws thereof. On such registration, the registration of the old society shall be deemed to have been cancelled and the society shall be deemed to be dissolved from the date of such cancellation.
(7) The opinion of the Registrar as to whether the changes made in the preliminary resolution are or are not material shall be final and no appeal shall lie therefrom.
(8) At the special general meeting referred to in subsection (6) provision shall be made by another resolution for:
(i) repayment of the share capital of all the members who have given notice under subsection (3);
(ii) satisfaction of the claims of all the creditors who have given notice under subsection (4);
(iii) satisfaction of the claims of such of the other persons who have given notice under subsection (5) as the Registrar decides or securing their claims in such manner as the Registrar directs;
Provided that no member or creditor or other person shall be entitled to such repayment or satisfaction until the preliminary resolution is confirmed as provided in subsection (6).
(9) If within such time as the Registrar considers reasonable, the share capital of the members referred to in subsection (8) is not repaid or the claims of the creditors referred to in that subsection are not satisfied, or the claims of the other persons are not satisfied or secured as provided in clause (iii) of subsection (8), the Registrar may refuse to register the new societies.
(10) The registration of the new societies shall be a sufficient conveyance to vest the assets and liabilities of the original society in the new societies in the manner specified in the preliminary resolution as confirmed under subsection (6).
Conversion of Company into Society.
24. (1) A company registered under the Companies Act may, by a special resolution determine to convert itself into a registered society.
(2) A resolution for the conversion of a company into a registered society shall be accompanied by a copy of the by-laws of the society therein referred to, and shall appoint 7 persons, members of the company, who, together with the secretary shall sign the by-laws, and who may either be authorised to accept any alterations made by the Registrar therein, without further consulting the company, or may be required to lay all such alterations before the company in general meeting for acceptance as the resolution may direct.
(3) With the by-laws a copy of the special resolution for conversion of the company into a registered society shall be sent to the Registrar, who shall thereupon proceed to deal with the resolution as if it were an application for registration under section 7 of this Act.
(4) A copy of the resolution for the conversion of the company into a registered society under the seal of the company, together with the certificate of registration issued by the Registrar, shall be sent for registration to the office of the Registrar of Companies, and, upon the registration of such resolution and certificate, the conversion shall take effect.
(5) Upon the conversion of a company into a registered society the registry of the company under the Companies Act shall become void, and shall be cancelled by the Registrar of Companies; but the registration of a company as a registered society shall not affect any right or claim for the time being subsisting against the company, or any penalty for the time being incurred by such company, and, for the purpose of enforcing any such right, claim, or penalty, the company may be sued and proceeded against in the same manner as if it had not become registered as a society. And every such right or claim, and the liability to such penalty, shall have priority as against the property of such society over all other rights or claims against or liabilities of the society.
PART IV. - RIGHTS AND LIABILITIES OF MEMBERS
Qualification for membership.
25. (1) 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 majority according to Law;
(b) be resident within or in occupation of land within the society's area of operations as described by the by-laws.
(2) Notwithstanding the provisions of subsection (1) a pupil over the age of 6 shall be qualified for membership of a registered school society.
Members not to Excise Rights till due Payment made.
26. 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.
Registration of Membership in Society.
27. 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.
Votes of Members.
28. No member of any registered society shall have more than one vote in the conduct of the affairs of the society; provided that in the case of equality of votes the chairman shall have a casting vote; provided further that 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 or by-laws.
Representation by Proxy.
29. 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.
Contracts with Society of Members who are Minors.
30. 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 Act 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.
No Individual to hold more than one-fifth of Share Capital of any Society.
31. No member, other than a registered society, shall hold more than one-fifth of the share capital of any co-operative society.
Restrictions on Transfer Share or Interest.
32. (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 Act 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.
Liability of past Member and Estate of Deceased Member for Debts of Society.
33. (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 2 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 2 years reckoned from the date of his decease.
PART V. - PROPERTY AND FUNDS OF REGISTERED SOCIETIES
Loans made by a Registered Society.
34. (1) A registered society shall not, except as provided in Section 37, 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 authorised to deal.
(3) The Minister 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.
Deposits and Loans received by a Registered Society.
35. A registered society shall receive deposits and loans from persons who are not members only to such extent and under such condition as may be prescribed by the rules or by-laws.
Restrictions on other transactions with Non-Members.
36. Save as provided in this Act, 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.
Investment of Funds.
37. A registered society may invest or deposit its funds:
(a) in the Treasury 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 the Government; or
(c) with any other registered society approved for this purpose by the Registrar; or
(d) in any other mode approved by the Registrar.
Disposal of Profits.
38. At least one-fourth of the net profits of every registered society, as ascertained by the audit prescribed by Section 39, shall be carried to a fund to be called the reserve fund, which shall be employed as prescribed by the rules. Declaring that the Registrar may, at his sole discretion, either on application by a registered society, or ex proprio motu, vary such proportion of the net profits of that registered society to be carried to the reserve fund. 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 condition 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 Minister.
(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 10 per cent of the remaining net profits to any charitable purpose or to a common-good fund.
PART VI. - AUDIT, INSPECTION AND INQUIRY
Audit.
39. (1) The Registrar shall audit or cause to be audited by some person authorised 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 of 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 security.
Power of Registrar to Inspect Societies' Book etc.
40. The Registrar, or any person authorised 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.
Inquiry and Inspection.
41. (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, authorised by him may require.
(2) The Registrar shall, on the application of a creditor of the registered society, inspect or direct some person authorised 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 magistrates' court having jurisdiction in the place where the registered office of the society is situated or the person resides or carries on business for the time being, in like manner as a fine imposed by the Court.
PART VII. - DISSOLUTION
Dissolution of Committee.
42. (1) If the Registrar is of the opinion that the committee of any registered society is not performing its duties properly, he may after giving an opportunity to the committee to state its objections, if any, to its dissolution, and after considering such objections at a general meeting of the society summoned by him, by order in writing-
(a) dissolve the committee; and
(b) direct that the affairs of the society shall be managed and administered by a suitable person or persons appointed as hereinafter provided.
(2) Every direction under paragraph (b) of subsection (1) shall have effect for such period not exceeding 2 years as may be specified in the order containing such direction:
Provided, however, that the Registrar may in his discretion from time to time amend the order for the purpose of extending the period during which the direction shall have effect, so however that the aggregate period during which the direction shall so have effect shall not exceed 4 years.
(3) Where any order is made under subsection (1), the Registrar shall by the same or a subsequent order appoint a fit and proper person or two or more such persons to manage and administer the affairs of the society, and may from time to time remove or replace any person so appointed.
(4) Subject to the general direction and control of the Registrar, any person or persons appointed under this section to manage the affairs of a registered society -
(a) shall have the power to recover the assets and discharge the liabilities of the society and take such other steps as may be necessary in its interests, and
(b) may exercise all the powers, rights and privileges constituted committee of the society.
(5) The Registrar may fix the remuneration payable to any person or persons appointed by him under this section to manage the affairs of a registered society. The amount of such remuneration and other expenses, if any, incurred in the management of the society shall be payable from its funds.
(6) It shall be the duty of the person or persons appointed by him under this section to manage the affairs of a registered society and holding office immediately prior to the date on which the direction under paragraph (b) of subsection (1) ceases to have effect, to arrange prior to the date aforesaid, for the appointment of a new committee in accordance with the by-laws of the society.
(7) 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 after prior consultation with the bank in regard to the dissolution of the committee and to the persons by whom and the manner in which the affairs of the society are to be managed and administered.
(8) Nothing in this section shall be deemed to affect the power of the Registrar to cancel the registration of the society under Section 43 of this Act.
Dissolution.
43. (1) If the Registrar, after holding an inquiry or making an inspection under Section 41 of this Act 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 2 months from the date of an order under subsection (1), appeal from such order to the Minister.
(3) Where no appeal is presented within 2 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 2 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.
Cancellation of Registration of a Society due to Lack of Membership.
44. The Registrar may, by order in writing, cancel the registration of any registered society other than a society which includes 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 5. Every such order shall take effect from the date thereof.
Effect of Cancellation of Registration.
45. Where the registration of a society is cancelled by an order under Section 43 or under Section 44 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 15, 16, 17 and 18 shall be deemed to be vested in any liquidator appointed for that society by the Registrar.
Liquidation after Cancellation of Registration of Society.
46. Where the registration of a society is cancelled under Section 43 or Section 44 the Registrar may appoint one or more persons to be, subject to his direction and control, the liquidator or liquidators of the society.
Liquidator's Powers.
47. (1) A liquidator appointed under Section 46 shall, subject to the guidance and control of the Registrar and to any limitations imposed by the Registrar by order under Section 48, 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 proclamation or notice before which creditors whose claims are not already recorded in the books of the society shall state their claims for admission or 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;
(f) decide by what persons and in what proportions the costs of liquidation are to be borne;
(g) give such directions in regard to the collection and distribution of assets as may be necessary in the course of winding up the society;
(h) compromise any claim by or against the society provided the sanction of the Registrar has first been obtained;
(i) call such general meetings of members as may be necessary for the proper conduct of the liquidation;
(j) take possession of the books, documents society;
(k) sell the property of the society; carry on the business of the society for winding it up beneficially:
Provided that nothing herein contained shall entitle the liquidator of a creditor society to issue any loan; and
(l) 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 Act shall, in so far as such powers are necessary for carrying out the purposes of this section, have power to summons 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 civil court.
Power of Registrar to control Liquidation.
48. A liquidator shall exercise his powers subject to the control and revision of the Registrar, who may:
(a) rescind or vary any order made 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 47;
(e) require accounts to be rendered to him by the liquidator;
(f) procure the auditing of the liquidator's accounts and authorise 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 consented in writing to be bound by the decision of the arbitrator.
Enforcement of Order.
49. (1) The decision of an arbitrator on any matter referred to him under Section 48 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 47 or Section 48 shall be enforced by any civil court having jurisdiction over the place where the registered office of the society is situated in the manner as decree of that court.
Closure of Liquidation.
50. (1) In the liquidation of a society whose registration has been Closure of 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 dividend at a rate not exceeding 10 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 prescribed 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 not be divided among the members but shall be devoted to any object or objects described in the by-laws of the society whose registration has been cancelled, and, where no object is so described, shall be deposited by the Registrar in a bank or with a registered society, until such time as another society operating in the same area shall have been registered when such surplus shall be transferred to such new society for the purpose of forming a reserve fund under the Rules:
Provided always that in the event of no society operating in the same area being registered within a period of 3 years from the date that the closing of the liquidation is published in the Gazette, the said surplus may be used by the Registrar for any Co-operative purpose at his discretion.
PART VIII. - SURCHARGE AND ATTACHMENT
Registrar may Order Repayment or Restoration of Money or other Property due to a Society.
51. (1) Where in the course of an audit under Section 38, or an inquiry or inspection under Section 41, or the winding-up of a registered society, it appears that any sum of money or other property is due to the society from any person who has taken part in the organisation or management of the society or from any past or present officer of the society, the Registrar may, of his own motion or upon the application of the Committee or the Liquidator or any creditor or contributory of the society, as the case may be, examine into the conduct of such person or officer and make an order requiring him:
(a) to repay with such interest as the Registrar thinks fit such money or part thereof;
(b) to restore such other property or part thereof; or
(c) to contribute such sum as the Registrar thinks fit to the assets of the society by way of compensation.
Before making any such order against any person, the Registrar shall give that person an opportunity of being heard and of showing cause why such order should not be made.
(2) Where an order under subsection (1) for the repayment of any sum to a registered society, or for the contribution of any sum to its assets by way of compensation, has not been complied with, such sum may be recovered by the society on application to the Magistrate having jurisdiction in the division in which the registered place of business of the society is situated or in which the person or officer against whom the order was made resides or carries on business, as though it were a fine imposed by a sentence of the Magistrate.
(3) Neither the preceding provisions of this section nor the making of any order thereunder may be deemed or construed to preclude or otherwise affect the institution or maintenance of a prosecution against any person or officer referred to in subsection (1) in respect of any offence under any other written law.
Attachment of Property.
52. Where the Registrar is satisfied that any person with intent to defraud or delay the execution of any order which may be made against him under Section 47 or Section 51 or of any decision that may be given in a dispute referred to the Registrar or to any arbitrators under any rules in that behalf in full for the time being is about to dispose of the whole or any part of his property, the Registrar may, unless adequate security is furnished, order the conditional attachment of such property, and such attachment shall have the same effect as if made by a competent court.
Appeal to the Minister.
53. Any person aggrieved by any order of the Registrar made under Section 51 may appeal to the Minister within 21 days from the date of such order and the decision of the Minister shall be final and conclusive.
PART IX. - DISPUTES
Settlement of Disputes.
54. (1) If any dispute touching the business of a registered society Settlement of arises-
(a) among members, past members and persons claiming through members, past members and deceased members; or
(b) between a member, past member, or persons 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 or 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 an appeal under subsection (3) shall be final and shall not be called in question in any civil court.
(5) The decision of the Registrar under subsection 2(a) and the award of the arbitrator or arbitrators under subsection 2(b) shall, if no appeal is referred 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 these awards together with the decision of the Registrar under subsection (4) shall be enforced in the same manner as if they had been judgments in a civil court.
Case stated on question of Law.
55. (1) Notwithstanding anything contained in the last foregoing section the Registrar at an time when to a decision on question under this Act, or the Minister at any time when an appeal has been preferred to him against any decision of the Registrar under this Act, may refer any question of law arising out of such decision for the opinion of the Supreme Court.
(2) Any Judge of the Supreme Court, may consider and determine any question of law so referred, and the opinion given on such questions shall be final and conclusive.
PART X. - RULES
Rules.
56. (1) The Minister 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 Act.
(2) In particular, and without prejudice to the generality of the power conferred by subsection (1), such rules may-
(a) prescribe the forms to be used and the conditions to be complied with in applying for the registration of a society and the procedure in the matter of such applications;
(b) 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 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 31 of this Act prescribe the maximum number of shares or portion of the capital of a registered society which may be held by a member;
(d) prescribe the extent to which a registered society may limit the number of its members;
(e) provide for the withdrawal and expulsion of members and for the payments to be made to members who withdraw or are expelled, and for the liabilities of past members;
(f) provide for general meetings of the members and for the procedure at such meetings and the powers to be exercised by such meetings;
(g) provide for the appointment, suspension and removal of the members of the committee and other officers, and for the procedure at meetings of the committee, and for the powers to be exercised and the duties to be performed by the committee and other officers;
(h) prescribe the matters in respect of which a society may or shall make by-laws and for 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) regulate the manner in which funds may be raised by means of shares or debentures or otherwise;
(j) prescribe the conditions to be observed by a registered society applying for financial assistance from government;
(k) prescribe 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;
(l) 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;
(m) provide for 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 for the nomination of any person to whom such interest may be paid or transferred;
(n) provide for the formation and the 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 any registered society;
(o) prescribe the conditions under which profits may be distributed to the members of the society with unlimited liability and the maximum rate of dividend which may be paid by societies;
(p) prescribe the 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) 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 co-operative propaganda and prescribe for the administration of such a fund;
(r) prescribe the 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) provide for the persons by whom, and the form in which, copies of entries in books of registered societies may be certified;
(t) provide for the formation and maintenance of a register of members, and where the liability of members is limited by shares, of a register of shares;
(u) provide for the 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) prescribe 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) prescribe the mode of appointing an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar of such arbitrator or arbitrators;
(x) prescribe the procedure to be followed by a liquidator appointed under Section 46 and the cases in which appeals shall lie from the orders of such liquidator;
(y) prescribe the forms to be used, the fees to be paid, the procedure to be observed and all other matters connected with or incidental to the presentation, hearing and disposal of appeals under this Act or the rules.
PART XI. - MISCELLANEOUS
Recovery of sums due to Government.
57. (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 the members subject to the limit of their liability; and thirdly in the case of other societies, from the members.
Powers to exempt any Society from Requirements as to Registration.
58. Notwithstanding anything contained in this Act, the Minister 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 Act as to registration.
Power to exempts Societies from Provisions of the Act.
59. The Minister may by general or special order exempt any registered society or class of societies from any of the provisions of this Act, 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.
Power to exempt from Stamp Duty and Registration Fees.
60. (1) The Minister 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 Act for the time being in force, instruments executed by or in behalf of a registered society, or by an officer or member, and relating to the business of such society, or any class of such instruments are respectively chargeable; or
(b) any fee payable 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.
Prohibition of the use of the word "co-operative" or "fetokoni'aki".
61. (1) No person other than a registered society shall trade or carry on business under any name or title of which the words "co-operative" or "fetokoni'aki" (its Tongan equivalent) is part without the sanction of the Minister:
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 Act.
(2) Any person who contravenes the provisions of this section shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding $10, and in the case of a continuing offence to a further fine not exceeding $2 for each day during which the offence continues.
Companies Law and Trade Unions Law not to apply.
62. The provisions of the Companies Act, and of the Trade Unions Act shall not apply to a registered society.
Punishment of Fraud or Misappropriation.
63. If any person obtains possession by false representation or imposition of any property of a society, or having the same in his possession withholds or misapplies the same or wilfully applies any part thereof to purposes other than those expressed or directed in the by-laws of the society, and authorised by this Act, he shall on the complaint of the society, or of any member authorised by the society, or the committee thereof, or of the Registrar or any Assistant Registrar by his authority, be liable on summary conviction to a fine not exceeding $40 with costs, and to be ordered to deliver up all such property or repay, all moneys applied improperly, and in default of such delivery or repayment, or of the payment of such fine to be imprisoned for any time not exceeding 3 months, but nothing in this section shall prevent any such person from being proceeded against for an indictable offence if not previously convicted of the same offence under this Act.
Banks to give Information.
64. Notwithstanding anything in any other written law, the Registrar may, where he considers it necessary to do so, require any bank-
(a) to furnish any information regarding the transactions of any registered society with the bank;
(b) to produce a copy showing the account of the society with the bank from the ledger kept by the bank; or
(c) to produce any cheques paid to the credit of the society or endorsed by the society.
Appointment by the Minister of special Members to Committees of National and Secondary Societies.
65. (1) Notwithstanding any other provisions of this Act, the Minister may, subject to the provisions of this section, appoint special members to the committee of any national society or of any secondary society if such national society or secondary society is in receipt of financial assistance from the Government or if the Minister considers such appointments to be necessary in the interests of the national economy.
(Amended by Act 15 of 1981.)
(2) The number of special members appointed to a committee under this section shall not exceed one-third of the number of ordinary members, including the chairman and vice-chairman (if any) of the committee.
(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 preceding 3 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 (including interest, if any, thereon) paid by the Government under the terms of the guarantee; and
(b) the expression "one-third" shall mean the nearest whole number below one-third.
Special members.
66. (1) A special member of a committee appointed under Section 65 shall remain a member of the committee until his appointment is determined by the Minister.
(2) Where the Minister has appointed special members to a committee any such special member may require that any decision taken by such committee shall not have effect until the approval of the Minister has been obtained and, where any such requirement is made in respect of any such decision, the decision shall be of no force or effect and shall not in any way be acted upon until the Minister has signified his approval thereof.
(3) In addition to the powers conferred by subsection (2) a special member appointed to a committee shall, unless the Minister otherwise directs, have all the powers which are had by the ordinary members of that committee.
Penalty for Non-Compliance with the Act.
67. Where any registered society-
(a) fails to give any notice, send any return or document or to do or allow to be done any act or thing which is required by this Act or the Rules made thereunder;
(b) wilfully refuses or omits to do any act or to furnish any information required for the purposes of this Act or of the Rules by the Registrar or other authorised person;
(c) does anything forbidden by this Act or by the Rules;
(d) wilfully furnishes false or insufficient information or returns,
the society and every officer who is bound by the Rules or otherwise to fulfil the duty whereof the breach is an offence, unless such officer is proved to have been ignorant of or to have attempted to prevent the commission of the offence, shall be liable to a fine not exceeding $100 and every such offence if continued shall constitute a new offence in every week during which the default continues.
Saving.
68. Any co-operative society duly registered in terms of the Agricultural Organisation Act shall be deemed to be a co-operative society properly registered within the terms of this Act.
Provided that, within one year from the date of commencement of this Act, the members thereof approve the adoption of by-laws in accordance with the provisions of this Act or the Rules made in pursuance thereof, and that these by-laws are submitted to the Registrar and are approved by him.
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Subsidiary Legislation
CHAPTER 118
CO-OPERATIVE SOCIETIES
SECTION 56 - Co-operative Societies Rules
ARRANGEMENT OF RULES
RULES
1. Short title.
2. Register of Societies.
3. Original entries.
4. Alteration. 5. Inspection. 6. Applications for registration.
7. Registration.
8. Documents to be forwarded.
9. Refusal to register.
10. Register of members.
11. Keeping accounts.
12. Election and admission of members.
13. Withdrawal.
14. Expulsion.
15. Loss of qualifications for membership.
16. No repayment of money upon withdrawal, removal, expulsion.
17. No limit to number of members.
18. Nominees.
19. Division of profits.
20. Maximum liability.
21. General meeting.
22. First meeting.
23. Annual general meeting.
24. Functions of annual general meeting.
25. Special general meeting.
26. Quorum at meetings.
27. Chairman of meetings.
28. Majority of votes.
29. Voting. 30. Minutes. 31. Election of Committee.
32. Chairman of Committee.
33. Duties of Committee.
34. Meetings of Committee.
35. Procedure at Meetings of Committee.
36. Minutes of Meetings of Committee.
37. Failure to attend Meetings of Committee.
38. Vacancies on Committee.
39. Borrowing Powers.
40. Banking Account.
41. Employees.
LOANS TO MEMBERS
42. Application for a Loan.
43. Sanction of Loan.
44. Security for Loans.
45. Purposes of Loans.
46. Documents relating to Loans.
47. Restriction on Loans to Defaulters.
48. Extensions of Loans.
49. Misapplication of Loan.
50. Recovery of Loans.
51. Marketing.
52. Bad Debts.
53. Preparation of Annual Accounts and Report.
54. Transfer of Shares.
55. Sales of Shares of Members in Default.
56. Secretary.
57. Payment of Secretary.
58. Security by Secretary.
59. Suspension of Secretary.
60. Temporary Absence of Secretary.
61. Duties of Secretary.
62. Treasurer.
63. Security by Treasurer.
64. Duties of Treasurer.
65. Unfit Officers.
66. Reserve Fund.
67. Audit of Accounts.
68. Audit and Supervision Fund.
69. By-laws.
70. Amendment of By-laws.
71. Copies of Entries.
72. Reference of a Dispute to the Registrar for Decision.
73. Reference to Arbitration by the Registrar.
74. Proceedings before the Arbitrator or Arbitrators.
75. Proceedings before the Registrar.
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CHAPTER 118
CO-OPERATIVE SOCIETIES
SECTION 56 - Co-operative Societies Rules
G.S.1/74, G. 8/75, G. 5/77, G.S. 3/82
Made by the Minister of Agriculture
Commencement: [29th March 1974]
Short title.
1. These Rules may be cited as the Co-operative Societies Rules.
Register of societies.
2. The Registrar shall keep or cause to be kept at his office a register to be called "the Register of Societies" wherein shall be entered particulars relating to the registration of societies and their by-laws.
Original entries.
3. All original entries in the Register of Societies shall be made by, or under the direction of, the Registrar and shall be signed by him.
Alteration.
4. Every alteration, interlineation or erasure in the Register of Societies shall be initialled by the Registrar.
Inspection.
5. The Register of Societies shall be open to inspection by the public at all reasonable times and free of charge.
Application for registration.
6. (1) Every application for the registration of a society shall be submitted to the Registrar in the form prescribed by him.
(2) Two copies of the by-laws in Tongan and English which the society proposes to adopt shall be submitted together with the application.
Registration.
7. Where the Registrar decides to register a proposed society the society and its by-laws shall be registered in the Register of Societies.
8. Upon the registration of a society the Registrar shall forward to the society, free of charge-
(a) a Certificate of Registration;
(b) a copy of the by-laws in Tongan and English of the society as approved by him and certified under his hand as having been approved by him;
(c) a copy of the Act and of the rules.
Documents to be forwarded.
9. When the Registrar refuses to register a society or its by-laws he shall Refusal to record in writing his reasons for doing so.
Register of members.
10. Every registered society shall keep a Register to be called "the Register of Members" wherein shall be entered -
(a) the name, address and occupation of each member and a statement of the shares, if any, held by him;
(b) the date on which each member's name was entered in the register;
(c) the date on which any member ceased to be a member; and
(d) the nominee, if any, appointed under Rule 18.
Keeping accounts.
11. Every registered society shall keep such accounts and shall use such books and shall submit such returns as may from time to time be prescribed by the Registrar.
(Amended by G. 5/77.)
Election and admission of members.
12. The election and admission of members to a registered society, other than original members, shall be in such manner and on such conditions as the by-laws shall prescribe.
Withdrawal.
13. A member may withdraw from a registered society by giving written notice to the secretary, but such withdrawal shall be without prejudice to Section 33(1) of the Act.
Expulsion.
14. If a member acts in contravention of the rules or by-laws or acts in any way detrimental to the interests of the registered society such member may be expelled by a vote of two-thirds of the members present at a general meeting upon a charge communicated to him in writing by the committee no less than one week before the meeting. Such expulsion shall, however, be without prejudice to Section 33(1) of the Act.
Loss of qualifications for membership.
15. Any member who loses any of the qualifications for membership prescribed by the Act or the rules or the by-laws shall cease to be a member of the registered society and the committee shall cause his name to be struck off the Register of Members without prejudice to any liabilities of such person under Section 33(1) of the Act.
No repayment of money upon withdrawal, removal, expulsion.
16. In the case of any registered society of limited liability holding deposits no member withdrawing, removed or expelled a repayment of any money paid by him towards or loans from non-members, therefrom shall be entitled to the purchase of shares.
No limit to number of members.
17. No registered society shall fix any limit to the number of its members.
Nominees.
18. (1) Every appointment of a nominee by any member of a registered society for the purposes of Section 18 of the Act shall be made in writing signed by the member in the presence of two attesting witnesses.
(2) No member of a registered society with share capital shall be entitled to appoint more than one nominee unless that member holds more than one share.
(3) In any case, where more than one nominee is appointed by any member the number of shares to be transferred or the exact proportion of the amount available that is to be transferred to each of these nominees shall be specified at the time of the appointment.
(4) Every appointment of a nominee shall be recorded in the Register of Members.
(5) For the purpose of a transfer to a nominee, the value of any share or interest shall be represented by the sum actually paid for that share or interest by the member holding it unless the by-laws of the registered society otherwise provide.
(6) Where any money is paid to a nominee who is a minor, a receipt given either by the minor or by his guardian shall be sufficient discharge to the registered society.
Division of profits.
19. (1) Unless otherwise authorised by the Minister under the proviso to Section 38, subsection (1) of the Act no dividend or payment on account of profits shall be made by a society registered with unlimited liability until the reserve fund has reached a proportion of not less than one-tenth of the society's total liabilities.
(2) No registered society shall pay a dividend if the rate of interest on loans granted by it to its members exceeds the maximum rate laid down from time to time by the Minister in writing.
(Amended G.S.3/82.)
(3) No registered society shall pay a dividend on share capital exceeding the maximum rate laid down from time to time by the Minister in writing.
(Amended G. S. 3/82.)
(4) A bonus based on wages or on the value of the products of a member, or a bonus or rebate on patronage calculated in proportion to the amount of the business done by each member with the registered society may be distributed periodically to the members from surplus funds after the deduction of all expenditure and after making provision for bad and doubtful debts and making allocation to the reserve fund.
Maximum liability.
20. (1) Every registered society shall, from time to time, fix at a general meeting the maximum liability it may incur in loans or deposits whether from members or non-members.
(2) The maximum so fixed shall be subject to the sanction of the Registrar, who may at any time reduce it. No registered society shall receive loans or deposits which will make its liability exceed the limit sanctioned by the Registrar.
General meeting.
21. The supreme authority in a registered society shall be vested in the general meeting of members at which every member has a right to attend and vote on all questions. Subject to the provisions of Sections 28 and 29 of the Act each number shall have one vote only which shall be exercised in person and not by proxy.
First meeting.
22. The first meeting of members shall have the same powers as are given to the annual general meeting, and shall be held immediately or not later than one month after the receipt of the certificate or registration of the society.
Annual general meeting.
23. The annual general meeting of members shall be convened by the committee as soon as the report on the audit of the accounts of the registered society by the Registrar or person authorised by him is received by the committee. At least 8 days' notice shall be given before any such general meeting is held:
Provided that the Registrar may at any time after the audit of the accounts has been completed convene the annual general meeting which shall proceed as if it had been convened by the committee.
Functions of annual general meeting.
24. The functions of the annual general meeting shall be-
(a) to confirm the minutes of the previous annual meeting and of any intervening special general meeting; meeting;
(b) to consider the reports of the committee and the balance sheet together with the report on the audit of the accounts of the registered society for the previous year as prepared by the Registrar or the person authorised by him.
(c) to approve the accounts or if the accounts are not approved to cause the secretary to notify the Registrar who shall consider the matter and make his decision thereon, and such decision as to the correctness of the accounts shall be final and conclusive.
(d) to hear and decide upon any complaints brought by members aggrieved by a decision of the committee:
Provided that notice of such complaints to be brought before the meeting has been given to the secretary at least two days prior to the meeting; and
(e) to transact any other general business of the registered society.
Special general meeting.
25. A special general meeting of members may be convened at any time by the committee; and on receipt of a demand stating the object of the proposed meeting signed by not less than one-fifth of the members of the registered society, if such society is composed of less than 100 members, or by 25 members if such society consists of more than 100 members, it shall be the duty of the chairman of the committee to convene such a meeting giving 8 days' notice. If the chairman of the committee fails to convene a meeting within 14 days from the receipt of a demand as aforesaid the members applying for such a meeting will have the right to convene the meeting by notice which must contain the object of the proposed meeting and a statement to the effect that the meeting is convened on the failure of the chairman of the committee to convene the meeting demanded:
Provided that the Registrar or a person authorised by him may at any time summon a special general meeting of the registered society in such manner and at such time and place as he may direct. He may also direct what matters shall be discussed at the meeting. Such meeting shall have all the powers of a meeting called according to the rules.
Quorum at meetings.
26. (1) When a registered society consists of not more than 40 members one-half of the number of the members or 10 members, whichever is the less, shall form a quorum for the purposes of the annual or a special general meeting, and when a registered society consists of more than 40 members one-fourth of the total number of the members of such society shall form a quorum for the purposes of the annual or a special general meeting:
Provided that when any meeting is summoned by the Registrar any members present at such meeting shall be deemed to form a quorum.
(2) If within one hour after the time fixed for any meeting other than a meeting convened by the Registrar the members present are not sufficient to form a quorum such meeting shall be considered as dissolved if convened on the demand of members; in all other cases it shall stand adjourned to the same day in the next week at the same time and place and a notice to that effect shall be posted by the secretary within 24 hours, and if at the adjourned meeting a quorum is not present within one hour from the time appointed for the meeting the members present shall form a quorum.
Chairman of meetings.
27. (1) The chairman of the committee or in his absence the vice-chairman or in his absence any other person elected by a majority of those present shall preside at the annual or special general meeting:
Provided that the Registrar or a person appointed by him shall preside at any meeting convened by himself or on his demand.
(2) The secretary or in his absence any other person nominated in writing by the chairman shall act as secretary at the meeting. The chairman, if necessary, may nominate other officers to assist at the meeting.
(3) The chairman may by the decision of the meeting adjourn the meeting from time to time and from place to place but no business shall be transacted at any meeting so adjourned other than the business left unfinished at the meeting from which the adjournment took place.
(4) The chairman shall have the right to order the closure of a discussion and put the matter to the vote.
Majority of votes.
28. Any question submitted to the decision of the members present at a meeting, unless otherwise dealt with in the rules, shall be decided by a majority of votes.
Votings.
29. (1) At any meeting a resolution put to the vote shall be decided on a show of hands unless voting by call of names or a ballot is demanded by at least 5 of the members present before the declaration of the result of the show of hands, and in such case voting by call of names or a ballot shall be taken as the case may be.
(2) The chairman shall have an ordinary vote and in case of an equality of votes shall be entitled to a casting vote. In the case of an equality of votes shall be entitled to a casting vote. In the case of a meeting convened by the Registrar and presided over by him or his representative, he or his representative shall not be entitled to vote except on an equality of votes, in which case they shall have a casting vote.
(3) In respect of every resolution put to the vote the chairman shall declare whether it has been carried or lost, and whether on a show of hands or unanimously or by a particular majority, and an entry to that effect in the minute book shall be conclusive evidence of anything therein contained.
Minutes.
30. Minutes of the meeting shall be recorded in the minute book by the Secretary or by a person other than the Secretary appointed by the members for the purpose, and signed by him and the Chairman, before the dissolution or adjournment of the meeting or not later than the next committee meeting and shall contain-
(a) The number of the members present at the meeting and the name of the chairman or of the person who presided at the meeting (Amended G.S. 3/82.);
(b) the time fixed for the meeting and the time the meeting commenced;
(c) the total number of members on the date on which the meeting was held; and
(d) all resolutions passed or decisions made at the meeting.
Election of committee.
31. (1) The committee shall be elected at the annual general meeting. The number of members shall not be even and the size of the committee and its quorum shall be in accordance with the by-laws of the registered society.
(2) Each member on election shall serve for a period of 3 years and be eligible for election thereafter:
Provided that at the first annual general meeting members receiving the lowest number of votes in ascending order of votes shall serve for periods of one or 2 years as the by-laws of the society shall prescribe; and
Provided further that a special general meeting convened for the purpose by or on the demand of the Registrar may remove the committee or any members thereof before the expiration of their period of office by majority of three-fourths of the members present, who shall proceed at the same meeting to the election of others in their stead who shall hold office until the election of a new committee at the next annual general meeting.
(3) The committee shall elect from amongst itself a Chairman, Vice-Chairman, and may elect a Treasurer and if deemed necessary an Assistant Treasurer to serve for a period of one year.
(Amended G.S. 3/82.)
(4) A member who is a paid officer or servant of the society shall not be a member of the committee:
Provided that such a person may be nominated for membership, and, if elected, shall thereupon resign from service of the society. He shall not be allowed to take any part in the deliberations of the committee until such resignation has become effective.
Chairman of committee.
32. The chairman shall preside at all meetings at which he is present. In his absence the vice-chairman shall preside. In the absence of both, the committee shall appoint one of its own members to perform the duties of the officer. The chairman shall have an ordinary vote and on an equality of votes shall be entitled to a casting vote.
Duties of committee.
33. (1) The committee shall represent the registered society before all competent public authorities and in all dealings and transactions with third persons, with power to institute or defend suits brought in the name of or against the society, and in general it shall carry out such duties in the management of the affairs of the registered society as have not been specially assigned by the rules or the by-laws to general meetings or to any other officer of the society.
(2) The committee shall always keep a copy of the latest annual balance sheet of the registered society together with the report referred to in Rule 23, hung in a conspicuous place at the registered office of the society.
Meetings of committee.
34. The committee shall meet as often as the business of the registered society may require and in any case not less frequently than once a month, save that the Registrar may for exceptional reasons permit in writing the committee of a secondary society to meet not less than once every 3 months.
(Amended G.S. 3/82.)
Meetings of the committee shall be summoned by the secretary in writing.
Procedure at meetings of committee.
35. At each committee meeting the secretary shall -
(a) read the minutes of the preceding meeting; provided that when reproductions of each have been circulated to and received by each member of the committee prior to the meeting, the committee may resolve to dispose of this requirement;
(b) produce in a form previously approved by the committee, a statement showing the income and expenditure of the society since the last meeting, and the balance remaining after such transactions have been recorded in the accounts;
(c) produce a statement showing the loans due and unpaid, for determination by the committee as to the action to be taken in each case;
(d) produce applications for loans, if any, for determination by the committee in accordance with the priority of receipt; and
(e) submit any other business for consideration by the committee.
Minutes of meetings of committee.
36. (1) Minutes of committee meetings shall be recorded in the minute book by the Secretary or by a person, other than the Secretary, appointed by the committee for the purpose, and shall contain the following particulars -
(a) the names of the members present and the date of the meeting;
(b) the name of the chairman or other presiding member; and
(c) a short statement of all matter discussed and decisions made and a record as to whether each decision was made unanimously or by a majority.
(2) These minutes when confirmed at the next following meeting of the committee, shall be signed by the presiding member at the meeting at which they were confirmed, and the secretary or other person who recorded them, and thereafter shall stand a true record of the proceedings of the meeting to which they refer.
Failure to attend meetings of committee.
37. Any member of the committee who, without due excuse approved by the committee, fails to attend at 3 consecutive meetings of the committee shall be deemed to have vacated his office which shall thereupon be filled as provided by Rule 38.
Vacancies on committee.
38. Vacancies occurring on the committee shall be filled as far as is on practicable and in any case within 3 months of their occurrence. Such committee shall be first offered to the unsuccessful candidates at the last previously held elections to the committee in descending order of votes cast for each, or should it prove impossible to fill any vacancy in such manner, the committee may co-opt for the remainder of the period before the next annual general meeting any person who is a member of the society, and the annual general meeting shall elect a member to serve for the remainder of the period for which the member causing the vacancy was originally elected:
Provided when such election does not take place the Registrar may appoint the required substitute.
Borrowing powers.
39. The committee may borrow money on behalf of the registered society to an amount not exceeding such total amount as may have been fixed in accordance with Rule 20.
Banking account.
40. The committee may, subject to the approval of the Registrar, open a banking account. All cheques shall be signed by two members of the committee and the secretary:
Provided that with the authority in writing of the Registrar previously obtained, cheques may be signed by one member of the committee and the secretary.
Employees.
41. (1) The committee may -
(a) appoint such clerks or employees as it considers necessary; and
(b) fix the salary, wages or remuneration and determine the conditions of employment of every such clerk or employee.
(2) Every clerk or employee appointed under this rule shall hold office during the pleasure of the committee.
Application for a loan.
42. Members who desire to obtain a loan shall submit an application to the committee stating the amount and the purpose for which the loan is required, the term for which it is asked, whether it is desired to repay it by instalments, and the names of the proposed sureties or any other security which is offered.
Sanction of loan.
43. (1) The committee shall consider at a meeting every application for a loan and if the committee is satisfied with the trustworthiness of the applicant, the sufficiency of the security offered and the prospects of advantage to the borrower, in the way of increased production or economy or otherwise, it may sanction the loan.
(2) No person other than members of the committee and secretary and the Registrar and his staff shall be present at any meeting of the committee when an application for a loan is under consideration. A member of the committee who applies for a loan or who is proposed as surety for a loan must withdraw while the relevant application is being discussed. If there is a difference of opinion concerning the granting of a loan, the voting shall be taken by ballot. The proceedings with regard to loans at committee meetings shall be kept secret, and any member of the committee or officer of the registered society infringing this rule shall be liable to immediate expulsion or dismissal.
Security for loans.
44. Loans, when approved by the committee, shall be granted to members who are able to obtain two sureties approved by the committee, or who can give other security to the satisfaction of the committee.
Purposes of loans.
45. (1) No loan shall be made except for a purpose to be approved in each case by the committee.
(2) All loans made shall be applied by the borrowing members to such purpose as the committee has approved.
Documents relating to loans.
46. When a loan is sanctioned by the committee a notice shall be sent to the borrower to that effect, and, before the amount is advanced, the borrower and his sureties shall execute an instrument in writing setting out the terms of repayment of the loan and containing such other terms and conditions as the committee may consider necessary.
Restrictions on loans to defaulters.
47. Where a member -
(a) is in default in the payment of a loan or of an instalment of a loan; and
(b) does not satisfy the committee that such default is due to a good cause,
such member shall not be entitled to receive another loan from the registered society.
Extensions of loans.
48. If, by reason of sickness or some other cause, a member finds that he will be unable to discharge his obligations to the registered society and notifies the secretary in writing before a loan is due the committee may extend the time fixed for payment on such conditions as it thinks fit.
Misapplication of loan.
49. Where the committee is satisfied that a member of the registered society who has obtained a loan has applied the proceeds thereof to a purpose other than the purpose which is stated in the application therefore under Rule 43, the committee may, by notice in writing to the debtor, demand payment of the loan before the agreed date of payment.
Recovery of loans.
50. Where -
(a) a loan or an instalment of a loan has not been paid on the date on which it became due; and
(b) no extension for the payment thereof has been given to the debtor by the committee under Rule 48,
the committee shall take steps for the recovery of the same by referring the matter to the Registrar as prescribed in Section 54 of the Act.
Marketing.
51. (1) Every member of the society shall deliver to the society at such place as the committee shall direct such amount of articles produced or obtained by him as may be prescribed in the by-laws or in the relevant contract to be disposed of by the society.
(2) Any member who is approved or adjudged in accordance with the provisions of Section 54 of the Act to be guilty of a breach of the by-laws or the relevant contract as the case may be shall pay to the society as liquidated damages such sum as may be specifically assessed or ascertained in manner prescribed by the by-laws or by the relevant contract and such sum shall be deemed to be a debt to the society.
Bad debts.
52. The committee may, with the approval of the Registrar, cause bad debts to be written off the books of the registered society in such manner and at such times as the Registrar may deem fit.
Preparation of annual accounts and report.
53. The committee shall in every year and as soon as conveniently possible within such time as the Registrar may direct -
(a) a cause the secretary to prepare and send to the Registrar the yearly balance sheet closed on the day and month as prescribed in the by-laws of the preceding year together with a detailed statement of the profit and loss account; and
(b) prepare a report on the year's working of the registered society to be presented to the annual general meeting.
Transfer of shares.
54. (1) Any share may be transferred with the approval of the committee to any other member at the option of the transferor, but if the transferee is not a member, he must be approved of as a member by the committee, or the general meeting according to the by-laws relating to the admission of members before the transfer can be registered; and if the by-laws require a member to hold more than one share, the transferee must acquire by the transfer, or by the transfer and allotment, the number so required to be held before the transfer can be registered.
(2) Special transfer forms shall be provided by the Registrar.
(3) No transfer of a share shall be valid and effective unless and until such transfer has been registered by the secretary on the direction of the committee.
(4) No transfer of a share shall be registered if made by a member indebted to the registered Society without special order of the committee, and until the transfer of a share is registered no right shall be acquired against the registered society by the transferee, nor shall any claim of the registered society upon the transferor be effected thereby.
Sales of shares of members in default.
55. The committee may in default of payment by any member indebted to the registered society to an amount not less than three-fourths of the sum paid up for the time being on any transferable share held by him, sell, transfer and register in the books of the registered society such share to any person entitled to hold the same under the rules or by-laws for the best price obtainable therefor, and apply the proceeds in or towards the discharge of the debt so due and of any expense incurred in or about the same, paying over the balance (if any) to the member, without being responsible for any loss occasioned thereby, and the defaulting member shall cease to have any further claim in respect of such share.
Secretary.
56. (1) The committee shall appoint a secretary and, unless the person so appointed is a member of the committee, shall have power to fix the remuneration and determine the conditions of employment for his service.
(2) The secretary, if a member of the committee, shall be unpaid.
(3) No appointment made under paragraph (1) of this rule shall be valid and effective, and no remuneration fixed thereunder shall be payable or recoverable, unless approved by the general meeting.
(4) In the event of failure on the part of the committee to appoint a secretary, the Registrar shall appoint a secretary and, unless the person so appointed is a member of the committee, the Registrar shall fix his remuneration. Every appointment made by the Registrar under this paragraph shall be valid and effective, and every remuneration fixed by the Registrar shall be payable and recoverable, as if made or fixed by the committee.
(5) The secretary shall occupy his office until his services are determined by one month's notice in writing given by the committee:
Provided that no determination as aforesaid shall be valid and effective unless acting upon a resolution of a previous general meeting.
(6) The secretary may resign his office by giving one month's notice to the committee in writing.
(7) On the occurrence of a vacancy in the office of the secretary, the provisions of this rule shall apply mutatis mutandis to the filling of such vacancy.
Payment of secretary.
57. The remuneration of the secretary, if any, shall be paid from the funds of the registered society monthly in arrears.
Security by secretary.
58. (1) The secretary may be required to give security in such amount as committee may from time to time determine.
(2) Every such security and the amount thereof shall be subject to the approval by the next general meeting.
Suspension of secretary.
59. (1) The committee may at any time suspend the secretary for any irregularity in the performance of his duties.
(2) Such suspension shall be reported forthwith to the next general meeting for their decision to retain, or dismiss the secretary without further notice.
(3) In the event of the suspension of the secretary the committee shall forthwith appoint a substitute to hold office during the period of such suspension.
Temporary absence of secretary.
60. (1) The secretary shall not absent himself from duty save with the permission of the committee previously obtained: provided that in circumstances where it is not practicable to obtain such permission from the committee the chairman shall be authorised to grant it in its stead.
(2) During the absence of the secretary, the committee shall appoint a temporary secretary and shall report the appointment to the next general meeting.
(3) In case the secretary desires to be absent from duty for more than one month at any time, the committee shall, before granting permission for such absence, obtain the previous approval of the general meeting.
Duties of secretary.
61. The duties of the secretary shall be -
(a) To summon and attend all meetings of the registered society and of the committee and carry out all the instructions in accordance with the Act, Rules and By-laws by such meetings and by the committee;
(b) To attend to the business of the society at the office of the society during the normal hours of business and at such other times as may be required by the committee:
Provided that nothing in this rule shall be construed to prevent the secretary from attending to the business of the society elsewhere;
(c) To receive produce of such quality as is required by law or, as approved by the committee subject to the law, into the society's stores from members only, and conduct weighing and grading where necessary;
(d) To be responsible for the safety of the society's stores and their contents;
(e) To record, or cause to be recorded to his entire satisfaction the whole of the transactions of the registered society in the books provided for that purpose; to conduct correspondence on behalf of and in the name of the registered society; to prepare or cause to be prepared to his entire satisfaction the annual statement of accounts and balance sheet; and to have charge of the documents, books, and vouchers for payment and receipts on behalf of the registered society;
(f) To receive all applications for loans and bring the same before the committee; to prepare receipts and other documents in the form prescribed for signature by the borrowers prior to their taking the loans sanctioned; and with the authority of the committee to supply information about the registered society which may be applied for by members;
(g) To receive all moneys due or payable to the registered society and to acknowledge or cause to be acknowledged in an approved form such receipt;
(h) To deposit, or cause to be deposited, in an approved bank, all money received by him in excess of any sum authorised by the committee and to obtain receipts for such deposits in an officially approved form;
(i) To keep separate all moneys belonging to the registered society and on no account to mix them with other moneys; and to produce at any reasonable time when called upon to the committee or the treasurer or assistant treasurer, or the Registrar or any person authorised by him or by law, all properties including the moneys in his hands belonging to the registered society;
(j) To make, or cause to be made to his entire satisfaction, payments on behalf of the registered society in respect of expenditure legitimately incurred in the conduct of the business of the registered society, and to obtain receipts in respect of such payments from the payees; and
(k) To summon meetings as provided in the rules and by-laws.
Treasurer.
62. The office of Treasurer and Assistant Treasurer shall be honorary, but the general meeting may approve of an allowance covering a certain period, or honoraria as eligible in accordance with the by-laws of the registered society.
Security by treasurer.
63. The treasurer and assistant treasurer may be required to give security for such amount as may be determined by, and to the satisfaction of, the committee.
Duties of treasurer.
64. (1) The duties of the treasurer shall be -
(a) To satisfy himself from time to time that all moneys received and paid in the name of, and on behalf of the registered society are properly recorded in the books of the registered society and faithfully accounted for;
(b) To report his findings to the committee at frequent intervals;
(c) To ensure that all moneys at the registered society are kept in safe custody in accordance with the by-laws;
(d) To accompany cash remittances to and from the registered society to or from its Bank or other authorised premises as approved by these rules;
(e) To sign on behalf of the committee the annual balance sheet and accounts to be presented at the annual general meeting;
(f) To sign on behalf of the registered society all cheques and legal documents concerning the transfer of funds and the acquisition of, and disposal of property of society.
(2) It shall be the duty of the assistant treasurer to assist the treasurer in the exercise of his office in every reasonable way when called upon to do so, and in the absence of the treasurer for any reason whatsoever, to assume the duties of his office.
(3) Where no treasurer or vice-treasurer is appointed the duties of the treasurer shall be performed by the secretary.
(Inserted G.S. 3/82.)
Unfit officers.
65. If in any society, in the opinion of the Registrar, any member of the committee or other officer is unfit for the discharge of his duties, the society shall on the requirement of the Registrar dismiss him.
Reserve of fund.
66. (1) The reserve fund of a registered society, created in pursuance the provisions of Section 38(1) of the Act, may, with the sanction of the Registrar -
(a) be utilised in the business of the registered society; or
(b) be applied to meet occasional deficiencies incurred by the registered society.
(2) In sanctioning the utilisation or application of the reserve fund under paragraph (1) of this rule, the Registrar may impose such terms and conditions as he may deem fit.
(3) The reserve fund shall be indivisible and no member shall be entitled to claim any specified share in it.
Audit of accounts.
67. In pursuance of the provisions of Section 39 of the Act the accounts of every registered society shall be audited once at least in every year by some person authorised by the Registrar. Such person shall have access to all the books and accounts of the registered society and shall examine every balance sheet and annual return of the receipts and expenditure, funds and effects of the registered society, and shall verify the same with the accounts and vouchers relating thereto, and shall either sign the same as found by him to be correct, duly vouched and in accordance with the Act, and shall report to the Registrar accordingly, or shall specially report to the Registrar in what respects he finds the same incorrect unvouched or not in accordance with the Act. The Registrar shall thereupon forward the report of such person to the committee.
No distribution of net surplus shall take place until such report has been forwarded by the Registrar to the committee.
(Amended G.S. 3/82.)
Audit and supervision fund.
68. (1) There shall be constituted a fund to be known as the Audit and Supervision Fund and every registered society shall, when called upon to do so by the Registrar, make annually a contribution to such fund.
(2) Until such time as a society has been established and registered for the purposes of supervision and audit, such contributions shall be held by the Registrar and administered by him on behalf of the contributing registered societies.
(3) So long as the Registrar administers the fund on behalf of the contributing registered societies, he shall report in every year to the government in respect of the income derived from contributions, the expenditure he has sanctioned from the fund and return of the receipts and expenditure, funds and effects and of the balance in his hands.
(4) As soon as a society for supervision and audit has been established and registered the fund shall be credited to such society and shall be utilised by such society in accordance with its objects and by-laws.
(5) Until a society for supervision and audit has been established and registered, the Registrar shall fix the amount of the annual contribution to the fund of every registered society called upon to contribute to the fund. The amount of every such annual contribution shall be subject to a maximum of either 10 per cent (10%) on the net annual profits of the registered society or of 1 per cent (1%) of the working capital of the registered society, and shall not in any case be less than an amount as prescribed by the Registrar from time to time.
By-laws.
69. (1) The by-laws of a proposed society shall contain provision in respect of the following matters -
(a) the name of the society;
(b) (i) the registered address of the society;
(ii) area of operation;
(c) the objects for which the society was established;
(d) the purposes to which the funds may be applied;
(e) the qualifications for membership, the terms of admission of members, and the mode of election;
(f) the nature and extent of the liability of members; and
(g) the manner of raising funds, including the maximum rate of interest on deposits.
(2) If the objects of the proposed society include the creation of funds to be lent to the members, the proposed by-laws shall, in addition, contain provision in respect of the following matters -
(a) the occupation or residence of the members;
(b) the conditions on which loans may be made to members, including-
(i) the rate of interest, and
(ii) the maximum amount which may be lent to a member; and
(c) the consequences, if any, of default in the payment of any sum due on account of shares.
Amendment of by-laws.
70. (1) Where, in pursuance of the provisions of Section 11(1) of the Act, a registered society amends its by-laws, such amendment shall be made by a resolution of the members of the registered society at a general meeting.
(2) Every resolution under paragraph (1) of this rule shall not be valid and effective unless it was taken by a majority of not less than three-fourths of the members present at the general meeting at which the resolution was proposed.
(3) A copy of a resolution under paragraph (1) of this rule shall be forwarded to the Registrar together with two copies in Tongan and English of the amendment.
Copies of entries.
71. For the purposes of Section 21 of the Act a copy of an entry in the book of a society may be certified by a certificate written at the foot of such copy, declaring that it is a true copy of such entry and that the book containing the entry is still in the custody of the society; such certificate being dated and signed by the secretary and one member of the committee.
Reference of a dispute to the registrar for decision.
72. (1) Reference of a dispute to the Registrar for decision under the provisions of Section 54(1) of the Act may be made -
(a) by the committee; or
(b) by the registered society in pursuance of a resolution in that behalf taken in general meeting; or
(c) by any party to the dispute; or
(d) where the dispute concerns a member of the committee and the registered society, by any member of the registered society.
(2) Every reference under this rule shall be made by a statement in writing addressed to the Registrar. Such statement shall -
(a) be dated;
(b) specify the dispute;
(c) set out full particulars of the dispute; and
(d) be signed by the party making it.
Reference to arbitration by the Registrar.
73. (1) Where, in pursuance of the provisions of Section 54(2)(b) of the Act the Registrar decides to refer a dispute to arbitration, such decision shall be embodied in an order of reference under his hand.
(2) Every order of reference under this rule shall -
(a) specify the name, surname, place of abode and occupation of the arbitrator or arbitrators;
(b) set out the dispute and full particulars thereof; and
(c) limit the time within which the award shall be forwarded by the arbitrator or arbitrators to the Registrar;
Provided that, on good cause shown to his satisfaction, the Registrar may by a further order enlarge the time whether before or after the time limited by the order of reference has expired.
(3) Where the Registrar decides to refer a dispute to more than one arbitrator, such reference shall be to 3 arbitrators, of whom one shall be nominated by each of the parties to the dispute and the third shall be nominated by the Registrar and shall act as chairman.
(4) Where under paragraph (3) of this rule reference is made to 3 arbitrators, the following provisions shall have effect -
(a) if any party to the dispute fails to nominate an arbitrator within such time as the Registrar may specify, the Registrar may make the nomination himself;
(b) if an arbitrator nominated by one of the parties to the dispute dies, or refuses or neglects to act, or by absence or otherwise becomes incapable of acting, the Registrar shall call upon the party concerned to nominate a new arbitrator within such time as the Registrar may specify, and if no new arbitrator is nominated accordingly, the Registrar may nominate one himself;
(c) if the arbitrator who dies, or refuses or neglects to act, or becomes incapable of acting, was nominated by the Registrar, a new arbitrator shall be nominated in his place by the Registrar; and
(d) the opinion of the majority of the arbitrators shall prevail.
Proceedings before the arbitrator or arbitrators.
74. (1) The proceedings before the arbitrator or arbitrators shall, as nearly as possible, be conducted in the same way as proceedings before a court of law, and in particular the following provisions shall have effect in respect thereof -
(a) notice of the time and place at which the proceedings are to be held shall be given to the parties to the dispute, and such notice shall be a 10 days' notice;
(b) a record of the evidence adduced before the arbitrator or arbitrators shall be made, dated and signed by the arbitrator or arbitrators;
(c) documents produced as exhibits before the arbitrator or arbitrators shall be marked, dated and initialled by the arbitrator or arbitrators and shall be attached to the file of the proceedings; and
(d) in the absence of any party duly notified to attend, the dispute may be decided by the arbitrator or arbitrators ex parte.
(2) The award of the arbitrator or arbitrators shall -
(a) be, in writing;
(b) be dated and signed by the arbitrator or arbitrators;
(c) state the amount of the costs and expenses of the arbitration, if any, and by which party or parties to the dispute the same are to be paid.
(3) Upon the completion of the proceedings, the arbitrator or arbitrators shall forward to the Registrar -
(a) the file of the proceedings;
(b) the award.
Proceedings before the Registrar.
75. Where, in pursuance of the provisions of Section 54(2)(a) of the Act the Registrar exercises the power of deciding a dispute himself, the proceedings before him in relation thereto shall, as nearly as possible, be conducted in the same way as proceedings before a court of law and the provisions of Rule 73 shall apply mutatis mutandis to such proceedings.
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URL: http://www.paclii.org/to/legis/consol_act/csa234