Download - Kiambu county co operative societies bill 2015

PEHANI SACCO EDUCATION

KIAMBU COUNTY
CO-OPERATIVE SOCIETIES BILL 2015

By Stephen MwangiMr. Co-operative@Frenzyied on Twitter

CONTENTS OF THE BILL

Preliminary

Administration and offices

Registration of co-operatives

Management of co-operatives

Rights and obligations of co-operative societies

Rights and liabilities of members

Accounts and funds of a co-operative society

Inquiry inspections and winding-up

General provisions

PRELIMINARIES

Purpose -establishment of legal and institutional framework for registration and regulation of co-operative societies in order to-Promote growth and development

Enhance good governance

Promote local economic growth and development

Promote the realization of Article 36 of the Constitution on freedom of association.

PRELIMINARIES CONT

The Act shall apply to any person operating or intending to operate a co-operative society or a branch of a co-operative society in the County. -Will have to be licensed to operate in the county-May be fined maximum of 5 million or imprisoned for a term not exceeding 12 months or both.

PRELIMINARIES CONT

ADMINISTRATION AND OFFICES

The Executive Committee Member shall be responsible for the growth and development of co-operative societies in the county.

ADMINISTRATION AND OFFICES CONT

-There shall be a Director for Co-operative whose office shall be an office in the County Public Service. -The Director shall (a) Process applications for registration of co-operatives; (b) Supervise and inspect and ensure compliance; (c) Maintain registers; (d) Supervise dissolution, division or amalgamation; (e) Advise the Department responsible for co-operatives; (f) Undertake any other functions assigned by this Act or by County Executive Committee Member.

REGISTRATION OF CO-OPERATIVES

A co-operative society may be registered with either (a) Limited liability or(b) Unlimited liability At least 15 people intend to operate a co-operative society or a branch of a co-operative society within the County may apply to the Director for registration.

REGISTRATION OF CO-OPERATIVES CONT

A co-operative society shall be a body corporate with perpetual succession and a common seal

CONT

-All co-operative societies or branches of co-operative societies within the county shall within 6 months from the commencement of the Act apply for registration. -Failure to comply attracts a fine of 5 million Shillings or imprisonment for a term not exceeding 12 months or to both.

CONT

All co-operatives shall be issued with a license to carry out the business of co-operatives

A license shall be valid for a period of one year-renewed on an annual basis upon payment of the requisite fee.

A license shall not be renewed unless the society has

(a) Continued to comply the provisions the Act and relevant laws, regulations and guidelines; (b) Adheres to the directives issued by the Director in implementing the Act; (c) Continues to promote the principles of co-operatives; and (d) There is no valid objection from its members for renewal of the registration certificate.


-If a co-operative society fails to apply for renewal of license or the renewal of the licence is declined, the co-operative society shall cease to carry out the business of a co-operative society within the County. -Executive Committee Member may withdrawal the license for gross violation of the Act -The Director may order the closure of an office or a branch


(1) A co-operative society shall display the Certificate of Registration and the license at its registered office and at its branch offices or places that it carries on its business. (2) Failure attracts a fine not exceeding one hundred thousand.

MANAGEMENT OF CO-OPERATIVE SOCIETIES CONT

The Annual general meeting of a co-operative society shall be supreme authority of the co-operative society.

The annual general meeting shall be held within four months from end of each financial year of the co-operative society and shall be convened by written notice of at least fifteen days to the date of the meeting.

The quorum for an annual general meeting shall be fifty plus one of the voting members.


(1) A co-operative society may convene a general meeting for purposes of discussing a matter which by agreement of members was set to be discussed at such a meeting during the Annual General Meeting. (2) A co-operative society may convene a special general meeting to- (a) discuss a matter which in the opinion of the Executive Committee is of an urgent nature; (b) To receive the report of the supervisory committee; or (c) To address any directive issued by the Director which may not wait for the Annual General Meeting.


(1) Committees: (a) Administration Committee responsible for giving directions in regard to the business of the society; and (b) Supervisory Committee which be responsible for verification of all transactions and report to the AGM and the Director. (2) Members of the committees may be remunerated for only four sittings in a year at such rate the members in an annual general meeting shall determine subject to approval by the Director. (3) Notwithstanding, in circumstances warranting special sittings, members of the committees may be remunerated for the special sittings subject to prior sanction of such meetings by the Annual General Meeting and approval by the Director.


(1) A person shall not be elected as a committee member of a co-operative society unless that person- (a) has attained the minimum basic education; (b) has met the constitutional threshold of integrity; (c) is a member of the co-operative society; and(d) has held an elective position for two terms;(2) The tenure of an elected committee member shall be as set out in the By-laws but shall not exceed three years subject to renewal of such term once.


-A member of a committee shall be removed from his position if Following an audit, is under investigation for mismanaged of the affairs of the society

Is under investigation for a criminal offense not related to the co-operative societys operations; or

(c) Is under bankruptcy proceedings. (d) is unable to conduct his or her business due to ill health; (e) has held the office for a period of two terms; or (f) dies.


If a vacancy in the position of a member of the committee falls before the next annual general meeting, the Members of the Committee shall nominate one of the members as an interim member to transact business until the next annual general meeting and such member shall not be deemed an elected member for purposes of the Act.


A person appointed as a member of a committee shall within thirty days of such appointment and not later than thirty days after ceasing to be such a member submit with the Director a declaration of his or her wealth.

RIGHTS AND OBLIGATIONS OF
CO-OPERATIVE SOCIETIES CONT

A co-operative shall be governed by the provisions of its By-laws approved by the Director.

A co-operative may from time to time amend its by-laws subject to approval by the Annual general meeting and the Director.

A co-operative may develop rules for better carrying out of the functions set out in the by-laws subject to approval by the Annual general meeting and the Director.


(4) The by-laws shall bind the co-operative society and the members to the same extent as if they were signed by each member (5) The By-laws of a co-operative society may provide for the imposition of fines not exceeding 50,000 shillings on its members for any infringement of the by-laws.

RIGHTS AND OBLIGATIONS OF CO-OPERATIVE SOCIETIES CONT

A co-operative society or a branch of a co-operative society may recruit persons to their membership provided the person has attained the age of fifteen years and either - (a) Is within common bond; or (b) Is a resident within or occupies land within the area of operation of the co-operative society. (c) must meet the criteria set out in the Regulations under this Act.


-No co-operative society shall fix any limit to the number of its members. -No co-operative society shall recruit into its membership more than a third of non-Kenyan nor shall non Kenyan members be allocated more than a third of the total shares.


-A co-operative society shall keep at its registered office and at its branch offices (a) A copy of its by-laws and rules; (b) Books of accounts including the audited accounts in the last five years; (c) Records of members including the members profiles; (d) Minutes of the meetings; (e) Any other documents as may be directed by the Director. -Any member of the co-operative or the Director or a person authorized by the Director shall have unlimited access to the records of the co-operative society at reasonable time.


-A co-operative society shall not later than ninety days from the final day of the financial year submit an annual report detailing- (a) Assessment of the co-operative operations during the year concluded; (b) Profile of new members of the co-operative society; (c) Any occurrence of vacancy and names or names of nominated committee member; (d) Record of all the resolutions of the co-operative society; (e) Profile of the appointed auditor; and (f) Audited accounts of the year just concluded. -A co-operative society that fails to submit its annual report shall not qualify for renewal of license.

RIGHTS AND OBLIGATIONS OF MEMBERS CONT

A member of a co-operative society shall be entitled to appoint a nominee

A co-operative society shall within sixty days of notice of incapacity or death of a member ascertain and pay the shares or benefits payable to a nominee.

The Director may issue directives or order the conduct of an inquiry of a co-operative society that fails to comply with this section.


The share or interest of a member in the capital of a co-operative society shall not be liable to attachment or sale under any decree or order of a court in respect of any debt or liability

A co-operative society shall have a first charge upon the share or interest in the capital and on the deposits of a member or a past member.


(1) A past member of the co-operative society shall be discharged from any future liabilities of the co-operative society but shall be liable for any debt of the co-operative society existing at the time of termination of membership and proceedings in this respect may be commenced within two years from the date of termination of membership. (2) Where the first audit of the accounts of the co-operative society after the termination of membership discloses that the society is solvent the financial liability of such past member shall cease forthwith.

ACCOUNTS AND FUNDS OF A CO-OPERATIVE SOCIETIES CONT

(1) A co-operative shall during annual general meeting appoint an auditor from among the list of auditors gazetted by the Director to audit its accounts. (2) A co-operative shall cause its audited accounts to be published in the County gazette. (1) Each member of the Administration Committee shall be personally liable for failure to ensure that the books of accounts of a co-operative are audited and submitted to the Director within the timelines set out in the Act and shall be liable to a fine not exceeding one hundred thousand shillings for every month of the delay. (2) The members of the Administration Committee shall not be liable if the delay in auditing is due to an act of God or act beyond the control of the members as certified by the Director.

ACCOUNTS AND FUNDS OF A CO-OPERATIVE SOCIETIES CONT

(1) A co-operative society which derives surplus from its transactions shall maintain a reserve fund. (2) A co-operative society shall within thirty days of declaration of surplus deposit to the reserve fund at least ten percent of the declared surplus. (3) The reserve fund of a co-operative society shall be indivisible and no member shall be entitled to claim a specific any share of it. (4) Upon dissolution of a co-operative society the funds under reserve funds shall first be applied to discharge the liabilities of the society.

INSPECTION, INQUIRY AND WINDING UP

The Director or its authorized officer shall on reasonable notice and at least once every year at the expense of the co-operative society carry out routine inspection into the affairs of a co-operative society to confirm that the co-operative society is complying with the law.

INSPECTION, INQUIRY AND WINDING UP CONT

The Director may of its own accord or on direction of the Executive Committee Member or on the application of at least one third of the members present and voting at a meeting of the co-operative society hold an inquiry or direct any person to hold an inquiry into the operations, management or financial conditions of a co-operative society.

The Director shall consider the findings of the inquiry and may-

Direct the co-operative society to take measures to remedy a finding;

Adopt the report with no recommendations if no negative findings are made; or

Recommend the Cancellation of registration certificate to the Executive Committee Member.


Where an inquiry or an inspection is held under this Act the Director may by a certificate make an order apportioning the expenses or such part of the expenses incurred between the co-operative society the member or creditor demanding the inquiry or inspection and the officers or former officers of the co-operative society and the decision of the Director shall be final.


(1) The Executive Committee Member may on the recommendation of the Director cancel a registration certificate of a co-operative if the business of a co-operative is-(a) Fraudulent (b) Insolvent(c) Against the principles of co-operative society(d) Is not promoting or likely to promote the economic wellbeing of its members (e) Is prejudicial to the general public interest. (2) No certificate of registration of a co-operative society may be cancelled unless- (a) The co-operative society has been notified in writing on the reasons for proposed cancellation and within six months has failed to attend to the reasons raised to the satisfaction of the Director; and (b) The co-operative society has been given an opportunity to be heard. 3) A co-operative society whose registration certificate has been cancelled shall be subject to the winding up process in accordance with the Act. (4) The name of a co-operative society which has been wound up shall be struck off the register of co-operatives and a notice published in the County Gazette.

GENERAL PROVISIONS

(1) A co-operative society operating under the Act shall adhere to the following principles: Voluntary and open membership;

Democratic governance;

Corporate governance;

Pursuit of common lawful interests;

Benefits to members as a core purpose;

Desire to improve the economic and social welfare of its members;

Education and training of its members;

Cooperation; and

Free participation of members in the activities of the society.

(2) The Directorate shall ensure that a co-operative society operating under the Act adheres to the principles of co-operatives.

GENERAL PROVISIONS CONT

(1) The word co-operative and society shall form part of the name of every co-operative society registered under the Act. (2) No person shall use the words co-operative society as part of the name of a business within the County unless they are registered. (3) A person who contravenes these provisions commits an offence liable to a fine of 5 million or to imprisonment for a term not exceeding twelve months or to both.


-The Director shall ensure that no co-operative society is registered in the name - Of a registered co-operative society within Kenya;

Which is identical or similar to or bears close semblance to a name of a co-operative society

Likely to mislead members of the public as to its identity;

Consists of abbreviations or initials; or

In the opinion of the Director is undesirable in the public interest.

-The Director shall publish the name of a co-operative society registered under this Act in the County Gazette within thirty days from the date of grant of a certificate of registration.


-The Executive Committee Member may from time to time by a notice in the County gazette publish regulations for the better carrying out of the objects of the Act, in particular to provide for- (a) The winding up process of a co-operative society; (b) Conduct of an inquiry or an inspection; (c) Prescribing fees for services rendered; (d) Conduct and procedure of meeting of co-operatives; (e) Transfer of shares and rights of members of co-operative society; and (f) Any other regulations deemed necessary for better implementation of the Act.


The Director may make an order requiring a person to repay or restore the money to the co-operative society together with interest at such rate as the Director thinks just

This shall apply notwithstanding that the order made may constitute an offence under another law for which the person has been prosecuted or is being or is likely to be prosecuted.

Any person aggrieved by the decision of the Director or a liquidator may appeal in writing to the Executive Committee Member within thirty days from the date of communication of the decision of the Director or liquidator and the decision of the Executive Committee Member shall be final.


No member of a co-operative society shall receive remuneration, salary, commission or any other payment from the society for services rendered save by resolution of the members in an annual general meeting and approved by the Director.


-Without prejudice to any other powers under the Act, the Director may- (a) Call for elections in any co-operative society that has failed to undertake this function in accordance with its by-laws; (b) Attend meetings of a co-operative society and require a co-operative society to send within proper time a notice and agenda of every meeting and all minutes and communications in respect thereof; (c) Require that co-operative societies update their by-laws; and (d) Exercise such other powers consistent with the Act.


-It shall be an offence to contravene the Act and shall be liable to a fine not exceeding one million shillings or to imprisonment for a term not exceeding twelve months or to both. -The Executive Committee Member may recommend to the Director of Public Prosecution persons who may be appointed public prosecutors for cases arising under the provisions of the Act.


A co-operative society existing before the enactment of the Act shall within one year from the date of enactment ensure that it is in compliance with the provisions of the Act and in particular Hold fresh elections

Amend its by-laws and any rules

Undertake such other actions as shall be necessary.

THE ENDTHANK YOU

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Download - Kiambu county co operative societies bill 2015

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