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Maltese Laws |
CO-OPERATIVE SOCIETIES ACT
To provide for the constitution, registration and control of co-operative societies and for matters connected therewith or ancillary thereto.
16th April, 2002
1st July, 2002
1st January, 2002
ACT XXX of 2001, as amended by Legal Notice 426 of 2007; Act V of
2007; and Legal Notice 346 of 2008.
"abridged set o f audi ted fi nancial statements" m e ans t h e financial statements placed for public inspection in accordance
with articles 11 and 48 and prepared in accordance with Part V of the Third Schedule;
''active member'' is a member of a society who has carried out a minimum amount or value of transactions with the
same society, as may be defined in the statute of a society;
"allowance" means the rem uner a tion paid to the President, secretary or treasurer of a soci ety in consideration of the
i r voluntary services rendered to the society on a regular part-time basis;
"Apex organisation'' means an association registered under Part X to facilitate the operations of all primary, secondary
and tertiary co-operative societies in Malta;
"Arbitration Centre" m e ans the Malta Arbitration Centre established under the Arbitration Act;
"Board" means the Co-operatives Board established under article
3, and includes any person exercising such powers of the Board as may have been conferred upon him by the Board;
"Chairman" means the Chairman of the Board;
"commercial partnership" means a c o mmercial partnership re gi ste r e d un de r th e Comp anies Act , o r i t s eq ui va le nt u n d e r a foreign law;
"delegate", in the case of a society which is itself a member of another society, means the representative of the former,
elected or appointed to attend and vote at meetings of the latter society;
"dividend" means a share of the net surplus of a society divided among the members in proportion to the paid up share capital
held by them in the society;
"honorarium" means the remuneration given to some or all of the
Short title. Interpretation.
Cap. 387.
Cap. 386.
Cap. 281.
members of the committee of management or supervisory board, if any, in consideration of their services which would not otherwise be remunerated;
"International Accounting Standards" means standards issued f r om time t o tim e by the I n ternation a l Acco unting St
andard s Committee of the International Federation of Accountants, as may be made applicable from time to time in terms of the Accountancy Professions Act;
"International St andards on Auditing" m e ans the standards ap proved b y th e Coun cil of t h e Internation a l Federation
of Accountants, as amended from time to time;
"manager" is an of ficer ap pointed by the committee of man a gement o f a soci ety to be resp onsibl e f o r th e executiv
e running and administration of a society in line with the overall policy established by the said committee of management;
"member" in relation to a registered society includes a person, a commercial partnership, or society admitted to membership
upon, or after, the registration of the society;
"Minister" means the Minister responsible for matters relating to co-operative societies;
"net surplus" means the remaining portion of the surplus after adequate provision has been made for the Central Co-operative
Fund and the reserve fund;
"of f ic er" includes the Pre s iden t, Vi ce-Pre sident, sec r etary, assistant secretary, treas urer, assistant treasurer,
member of committee of management, and manager of a society and includes also any employee or other person empowered under this Act,
the Regulations or the statute of the society to give directives in regard to the business of a society or to supervise such business,
but does not include an auditor of a society or a member of a supervisory board;
"officer of the Board" means a member of the staff of the office of the Board or any other person duly authorized by the
Board for a specific purpose;
"patronage refund" has the same meaning as is assigned to it by article 93;
"primary society" means a society in which a majority of members are individual persons;
"registered" means registered under this Act;
"regulations" means regulations made under this Act;
"secondary society " means a society in which a maj o rity of members are themselves primary societies;
"soc iety" means a co-operative soc i ety re gistered or provisionally registered under this Act and includ es a
primary society, a secondary society and a tertiary society;
''statute" means the registered statute of a society, including a registered amendment thereto;
"supervisory board" means the supervisory board elected by the g e n e ral meeting of memb ers i n accord an ce wi th and
for the purposes of articles 83 to 85 and other relevant provisions of this Act;
"surplus" means the net income less expenditure immediately before adequate provisions have been made for the Central Co-
operative Fund and the reserve fund;
"subsidiary company" means a commercial partnership in which a society, referred to as the "parent society", holds
the majority of shares or equivalent capital, or the majority of the voting rights, or the right to appoint more than half of the
Board of Directors or eq uivalent organ, or a combi n ation of such fact ors giv i ng t h e society control;
"tertia ry s o ciety" m e a n s a c o -ope rative soc i e t y in which a majority of members are themselves primary and,
or, secondary societies.
Co-operatives Board, whose functions shall be -
(a) to register, monitor and exercise supervision over co- operative societies and to ensure compliance with the provisions of this
Act;
(b) to support and assist the establishment of co-operative societies in all sections of the economy and society;
(c) to furnish information regarding co-operative principles, practices and management.
(2) The Board may, subject to the provisions of this Act and to any general or special directions of the Minister, delegate any
of its functions under this Act.
(3) The Board shall be a statutory body having a distinct legal perso n ali t y and, su bject to th e prov ision s of t h is
A c t, shal l b e capable of entering into contracts, of suing and being sued, and doing all such things and entering into all such
transactions as are incidental or conducive to the exercise of its functions under this Act.
3A. The Board, when exercising its functions under article 17, shall respect and apply the prin ciples of go od administrative behaviour
laid down in article 3 of the Administrative Justice Act.
The Board.
Observance of the principles of good administrative behaviour.
Added by:
L.N. 346 of 2008.
Cap. 490.
Composition.
administration.
(2) Each member of the Board shall be appointed for a period of not less than two years and not exceeding five years, shall hold
and vacate office in accordance with the provisions of this Act and with the terms of his appointment, and shall on termination of
appointment be eligible for re-appointment:
Provided that a member of the Board may at any time, by notice in writing to the Minister, resign his office.
(3) No person shall be appointed or shall remain a member of the Board who:
(a) is a member of the House of Representatives; or
(b) is an officer or member of any society or the Apex organisation.
(4) When the office of the Chairman of the Board is vacant or the Chairman is absent from Malta or on vacation, or is incapacitated
from performing t h e fu nctio ns of his office, th e Minister may appoint any other person, whether a member of the Board or otherwise,
t o act as Chairman durin g such vacancy, absence, vacation or incapacity; and the person so appointed shall exercise all the rights
and functions of the Chairman of the Board for the duration of such appointment.
(5) A member of the Board may be removed from office by the Minister if in the opinion of the Minister such member is guilty of
serious misconduct in the performance of his duties or is incapable of carrying out his duties, or is absent from the meetings of
the Board, without reasonable cause, for such number of meetings as the Minister may consider excessive.
(6) The Minister shall also appoint a Secretary to the Board.
(7) A member of the Board shall be paid such remuneration as the Minister may, with the concurrence of the Minister responsible
for finance, from time to time determine.
Representation. 5. The judicial and legal representation of the Board shall vest in the Chairman:
Provided that the Board may appoint any one or more of the other members, or of the officers or employees of the Board, or any person performing duties for the Board, to appear in the name and on behalf of the Board in any judicial proceedings, and in any act, contract, instrument or other transaction whatsoever.
Office. 6. (1) There shall be an office of the Board which shall be managed and staffed in accordance with the provisions of this Act.
(2) Subject to the provisions of this Act and to any directives o f t h e Bo ard, t he m a na ge me nt an d co n du ct o f th
e offi ce o f t he Bo ard and the admin istrativ e co ntro l o f it s staff, shall be th e responsibility of the Chairman.
(3) The staff of the office of the Board shall consist of such officers and employees of the Board, or of such employees in the
service of the Government as may be detailed for duty with the Board, or of both such officers and employees.
(4) The terms and conditions of employment of any officers or employees of the B o ard shall be comp arab le wi th tho s e o
f employees in the servic e of th e Gov e r n ment an d shall be established by the Board with the concurrence of the Minister.
Provided that the Board shall not act if the office of
Chairman is vacant and an acting chairman is not appointed.
(2) The quorum at all meetings of the Board shall be not less than half the number of members.
(3) A decision of the Board shall be reached by a majority of the vote s of the members presen t and voting. The Chairman or
other person chairing the meeting shall have an original vote and, in the case of an equality of votes, a second or casting vote.
(4) Every document purporting to be an instrument made or issued by the Board and which is signed by the Chairman on behalf of
the B o ard may be received in evidence and shall, until the contrary is proved, be deemed to be an instrument made or issued by
the Board.
(5) Any member of the Board who is directly or indirectly intere sted, otherwis e than as a member of the Board, in any
contract or agreement made or proposed to be made by the Board, or in any other matter or interest being raised or discussed by the
Board, shall disclose the nature of his interest at the first meeting of the Board.
(6) Any disclosure made under subarticle (5) shall be recorded in the minutes of the Board and the member who has made such disclosure
shall withdraw from the meeting while the contract or agreement or any other matter or interest is discussed or decided upon by the
Board.
(7) Subject to the provisions of this Act, the members of the Board, including the Chairman, and the officers and employees engaged
at the office of the Board, and any other person authorised to act for or on behalf of the Board shall, at all times, treat any
information on societies obtained during the course of their duties as confidential.
(8) A person who acts in violation of the provisions of subarticle (7) shall be guilty of an offence and shall be liable,
on conviction, to a fine (multa) not exceeding four thousand and six hundred and fifty-eight euro and seventy-five cents (4,658.75).
(9) Subject to the provisions of this Act, the Board shall regulate its own procedure.
(2) The Board shall afford to the Minister every facility for
Quorum.
Amended by:
L.N. 426 of 2007.
Directions.
obtaining and verifying information connected with the activities of the Board, in order to enable the Minister to properly exercise his functions under this Act.
Expenses. 9. (1) The expenses of the Board shall be borne out of such funds as may be voted by the House of Representatives.
(2) The Board shall as soon as practicable, but not later than three months after the end of each financial year, submit to the M i nister a statement of accounts duly aud ited by the Auditor General and a report of its activ it ies in r espec t of t he pr evi ou s financial year, and shall forward a copy of any such statement and report to the Minister and to the Minister responsible for finance.
Register of Co- operative Societies.
Entries and corrections in the Register.
Provided that for public purposes, only the information mentioned in article 12 may be made available by the Board.
(2) Every alteration, correction or erasure in the Register of Co-operative Societies shall be made in such manner as to show the entry a ltere d, corrected or erased an d sha ll b e in it ial le d by t he Chairman.
Public inspection. 12. The Register of Co-operative Societies, as well as the registered statute of every society with any registered amendments thereto, and the audited financial statements of societies submitted to the Board in accordance with arti cle 48(1) , shall be open to inspection by the public during such time and against payment of such fees as the Ministe r shal l fro m t ime t o ti me pr escri b e b y regulations made under this Act.
Inquiries. 13. The Board may, on its own motion, if it deems that there are reasonab le or suffi cient g rou nd s to do so, an d sh all, on the application of at least one-tenth of the members of a society, or on the application of not less than one-third of the members of the committee of management of a society, or of a majority of th e m em b ers of the supervisory board of a society, if any, hold an inquiry into the working or financial condition of a society; and all officers, employees and members of the society shall produce such books, accounts, cash, papers and securities of the society and shall furnish such information in regard to the affairs of the society as the Board or the person conducting the inquiry may require.
Result of inquiry. 14. (1) If any inquiry made under this Act discloses any irregularities or mismanagement in the working of a society, the Board shall bring such i rregulari ties or mism anagem ent to the notice of the society and, if the society is affiliated to a secondary society or tertiary society or Apex organisation, also to the notice of that other society or Apex organisation, and the Board may issue a dissolution order as provided in article 100.
(2) Without prejudice to the provisions of subarticle (1) of this article, the Board may make an order directing such society or
any
officer to take such action as may be specified in the order within the tim e menti oned therei n in o r der t o rem e d y the defects
, irregularities or acts of mismanagement disclosed in the inquiry.
(2) Any costs due to the Board under subarticle (1) shall be recoverable as a civil debt in like manner as if it were included as an executive title under article 252 of the Code of Organization and Civil Procedure.
Board shall have the power to -
(a) prescribe any form to be used for any purpose under this Act;
(b) send a representative to attend general and extraordinary meetings of a society upon the invitation of such society.
Provided that -
(i) any administrative penalty provided for by regulations made under this article shall only be imposed after the
society or the person is notified in writing of such breach or such order and is given a period of twenty days from the
date of such notification to make written representations to the Board, and this notwithstanding,
the Board concludes that the society or the person is in breach of the provisions of this Act or of any regulation
issued thereunder or of an order lawfully issued by the Board by virtue of its powers under this Act;
(ii) any administrative fine provided for by regulations made under this article shall not exceed the amount
of two thousand and three hundred and twenty-nine euro and thirty-seven cents (2,329.37) for each breach and twenty- three
euro and twenty-nine cents (23.29) for each day during which failure to observe the provisions of this Act or of any
regulation made thereunder persists;
(iii) administrative fines stipulated in paragraph (ii) of this proviso may be increased by regulation up to a maximum of twenty-three
thousand and two hundred and ninety-three euro and seventy- three cents (23,293.73) and one thousand and
Apportionment of costs.
Cap. 12.
Other powers of the Board.
Administrative penalties. Amended by:
L.N. 426 of 2007; V. 2007.25.
Cap. 12.
Cap. 490.
Use of the word "Co-operative". Amended by:
L.N. 426 of 2007.
Abuse of authority or breach of trust.
one hundred and sixty-four euro and sixty-nine cents (1, 164.69) for each day during which any contravention persists, respectively;
(iv) regulations made under this article may prescribe that any such administrative penalty or sanction shall be
payable to the Board as a civil debt constituting an executive title for the purposes of Title VII of Part I of Book
Second of the Code of Organization and Civil Procedure as if the payment of the amount of the fine had been ordered by a judgement of a court of civil jurisdiction;
(v) such regulations may also prescribe any right of appeal from decisions of the Board to impose an administrative sanction
to the Administrative Review Tribunal established in terms of article 5 of the Administrative Justice Act, and the provision of this Act shall apply to such an appeal.
(2) Every person who acts in contravention of the provisions o f suba rt icl e (1) sha ll be gu ilt y of an o f fence and sh all, on conviction, be liable to a fine (multa) not exceeding four hundred and sixty-five euro and eighty-seven cents (465.87) and in the case o f a con ti nui ng offen ce t o a fu rt her fi ne (mu lta) not exceeding twenty-three euro and twenty-nine cents (23.29) for each day on which the offence continues.
(2) On the conclusion of any such inquiry, the Board may make an order requiring the person who was the subject of such
inqui ry to repay or restore the money or p r operty, or any part thereof, with interest at such rate, not being higher than the
then prevailing commerc ial rate, as t h e Board th in ks just , o r to cont ri bu te su ch sum to th e assets of such so ci ety
by w a y of compensation as the Board may deem appropriate to make good for the misapplication, dishonesty, financial irregularity
or breach of trust resulting from the inquiry.
(3) Any order made under subarticle (2) shall be enforceable by the Civil Court or by the Court of Magistrates (Malta) or the
Court of Magistrates (Gozo) in its superior jurisdiction, as if it were a judgement of that Court. Such en forcement, and any appropriate
precaution or execu tive warrant or other fo rm of execution, shall be effected on application made by the Board.
(4) The provisions of this article shall apply even where the act is one for which the offender may be criminally responsible.
(a) suspend or restrict all or any of the activities of the society, for such period as it shall in the order specify; or
(b) remove the committee of management of the society and order that the affairs of the society be managed and administered by a
committee of not less than two persons and a manager, all appointed by it, for a period not exceeding one year, which may be extended
by the Board for a further period of one year, and whose allowances and salary shall be payable out of the funds of the
society.
(2) The powers conferred by subarticle (1) shall not be exercisable before a reasonabl e opp ort uni ty is g i ven to
the committee of management to show cause why action under that article should not be taken and before due consideration is given
to the objections of the committee of management.
(3) The persons appointed under subarticle (1)(b) shall, prior to the date on which their appointment ceases to have effect, inform the members of the society of the reasons leading
to the exercise of the powers under this article, and arrange for the election of a new committee of management in accordance with
the statute of the society.
(4) Subject to the general direction and control of the Board, any pe rso n a ppo in ted u nder su bart icl e (1)( b ) to assu me th e functions of the com mittee of m anagement of any society shall have all the powers and duties of a duly constituted
committee of management of a society.
(2) For the purposes of subarticle (1), co-operative principles
Non-performance of duties.
Promotion of economic and other interests.
are:
First principle - Voluntary and open membership:
Co-operatives are voluntary organisations. open to all persons who are able to use their services and willing to accept their responsibilities
of membership, without gender, social, racial, political or religious discrimination.
Second principle - Democratic member control:
Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and taking
decisions. Men and women serving as elected representatives are accountable to the members. In primary co-operatives, members have
equal voting rights - each member having one vote only. Co-operatives at other levels are also organised in a democratic manner.
Third principle - Member economic participation:
Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is
usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital
subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their
co-operative, possibly by setting up reserves, at least part of which would be indivisible; benefitting members in proportion to
their transactions with the co-operative; and supporting other activities approved by the members.
Fourth principle - Autonomy and independence:
Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with
other organisations, including the Government, or raise capital from external sources, they do so on terms that ensure
democratic control by their members and maintain their co-operative autonomy.
Fifth principle - Education, training and information:
Co-operatives provide education and training for their members, elected representatives, managers and employees so that they
may contribute effectively to the development of their co-operatives. They inform the general public - particularly young
people and opinion leaders - about the nature and benefits of co- operation.
Sixth principle - Co-operation among co-operatives:
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through
local, national, regional and international structures.
Seventh principle - Concern for the community:
Co-operatives work for the sustainable development of their communities through policies approved by their members.
(3) The principles stated in subarticle (2) shall not be directly enforceable in any court or tribunal, but shall be adhered to
in the i n terp retation and i m p l ementati on of t h is Act and of an y regulations made thereunder.
(2) A society shall be registered under this Act:
(a) where the proposed society is a primary society, if the founding members consist of at least five persons qualifying
for membership in a primary society in accordance with article 53:
Provided that, in the case of primary societies where the number of founding members is more than five, the founding members shall
duly elect at least three individuals from amongst themselves to sit on the committee of management of the proposed society;
(b) where the proposed society is a secondary society, if the founding members consist of at least two primary societies;
(c) where the proposed society is a tertiary society, if the founding members consist of at least two societies, of which at least
one is a secondary society:
Provided that, in the case of secondary or tertiary societies, the founding members shall duly elect at least three individuals,
who shall be suitably representative of the founding members, to be the first committee of management of the society.
(3) It shall be lawful for a parent society to have a subsidiary company, provided the following conditions are fulfilled:
(a) the objects of the subsidiary company serve to fulfil, promote, complement or advance the objects of the parent society;
(b) adequate measures are in place to ensure that the members of the parent society are kept adequately informed of
the operations and performance of the subsidiary company; and
(c) adequate measures are in place to ensure that the powers of the parent society with respect to the subsidiary
company are exercised, having due regard to the wishes of the parent society.
(a) determine the type of society to be formed and draw up its objects;
Formation.
Founding members.
Name of registered society.
Powers and duties of founding members.
Application for registration.
(b) assess the probable membership and expected volume of business;
(c) undertake a feasibility study into the economic and practical aspects of the activities to be carried out by the proposed
society;
(d) prepare, on the basis of the study referred to in paragraph (c), and in such form as the Board may require, a viability statement for submission to that Board;
(e) compile a list of prospective members and a record of the probable capital contributions in the form of shares;
(f) organise educational meetings to discuss the proposed society, its operations and its benefits to members;
(g) prepare an appropriate statute for the proposed society;
and
(h) undertake such other functions as may be necessary for the purpose of submitting an application for the registration of
the proposed society.
(2) Every society shall have -
(a) the word "co-operative" or the abbreviation ''co-op'' as part of its name; and
(b) the word "limited" or the abbreviation ''ltd.'' at the end of its name.
(a) in the case of a primary society, by at least five persons, all of whom qualify for membership of a primary
society and are prospective members of the society;
(b) in the case of a secondary society, by individuals duly authorised in that behalf by not less than two societies qualifying for
membership of a secondary society and which are prospective members of the society; and
(c) in the case of a tertiary society, by individuals duly authorised in that behalf by not less than two societies qualifying for
membership of a tertiary society and which are prospective members of the society.
(2) The application shall be accompanied by -
(a) one copy of the statute, signed by all prospective members;
(b) one copy of the feasibility study as is referred to in article 23(c), and which is carried out by a person who, in the opinion of the Board, is competent for the purpose.
(a) the economic or other need for the formation of the society;
(b) the educational and advisory work pertaining to co- operative principles and practices already being carried out among
the applicants for registration and prospective members;
(c) the availability of sufficient capital, in accordance with regulations as may be prescribed under this article,
for the commencement of operations;
(d) the availability of officers, including professional management, capable of directing and managing the affairs of the society and of keeping such records and
accounts for the society as the Board may require; and
(e) such other additional information as the Board deems fit.
(2) The Board, having received an application for registration of a co-operative society in conformity with the requirements of
this Act, and having been satisfied that the proposed society does not require to submit further information relating to its possible
registration, may -
(a) reject an application, specifying the reasons for such a decision and communicating these reasons to the proposers; or
(b) provisionally register the proposed society under article 28; or
(c) fully register the proposed society under article 29.
(3) In exercising its powers under this article, the Board shall take into account all the circumstances of the case, including
the abi lit y of t h e prop osed foun di ng m e m b ers t o carry th e p r o j ect through, the proposed objectives of the society
and the proposed mode of operation.
Additional information.
Provisional registration. Amended by:
L.N. 426 of 2007.
(2) A society which has been provisionally registered shall, subj ect to the pr ovisio n s of this ar ticle and to an y term
s and conditions that may be imposed by the Board under subarticle (1), be entitled to operate as a registered society, and while
so entitled to operate shall have the status and powers of a registered society.
(3) A society which is provisionally registered under this article shall cause the fact that it is provisionally registered
to be stat ed in legi ble lett er s in al l bi lls, l e t t erhead s, no tices, advertisements and other official publications
of the society and particularly on a signboard placed in a conspicuous position outside every premises in which it operates.
(4) The Board may at any time cancel the provisional registration of a society by a notice in writing addressed
to the society and such cancellation shall operate as a refusal to register the society, and the society shall from the date of service
of the notice cease to be a registered society.
(5) Where a society ceases to be a registered society under subarticle (4), the Board may appoint a competent person to be the
liquidator of the society in terms of article 100(4); but the validity of any transaction entered into by or with the society while
it was provisionally registered shall not be affected thereby.
(6) If, at any time during the period of provisional registration, th e Board is sat i sf ied t h at th e society c o mplies
with a l l requirements and conditions for registration, it may register the society under article 2 9 , and thereupon such society
shall be deemed to have been so registered on the date of its provisional registration, and the foregoing provisions of this article
shall cease to apply to such society.
Cap. 249. (7) Subject to the provisions of the Interpretation Act regardin g the liab i l ity of m e mbers of an ass o ciation for contraventions, where a society contravenes any of the provisions
of subarticle (3), it shall be guilty of an offence and shall be liable, on conviction, to a fine (multa) not exceeding one hundred and sixteen euro and forty-seven cents (116.47), and in the case of a continuing offence to a further
fine (multa) not exceeding twenty- three euro and twenty-nine cents (23.29) for every d ay during which the offence continues.
Registration of society.
(2) Upon the full registration or provisional registration of a society, the B o ard shall issue a n appropriate c e rtific ate
of registration and shall cause the fact of registration to be published in the Gazette.
(3) Societies set up in accordance with co-operative schemes developed by Government for public employees shall be registered
in a separate register, clearly identified for this purpose. In such cases the d u ratio n for an y provision al registratio n
sh all b e
established by the Minister in consultation with the Board.
(2) The object of secondary societies and tertiary societies shall be to facilitate, co-ordinate, promote and enhance the joint operations of those societies which are their members.
(2) The statute of a society shall provide for the matters listed in the Second Schedule.
(2) An amendment which changes the name of the society shall not af fect any righ t o r obl ig atio n o f the societ y o r any
of it s members or past m e m b ers, and any legal proceedings pending may be continued by or against the society under its
new name.
(3) An amendment to the statute of a society shall not have effect until it has been registered by the Board.
(4) An amendment to the statute shall not be valid and shall therefore not be registered by the Board unless -
(a) a resolution to amend the statute has been passed by not less than three-fourths, or such other higher majority as
may be stipulated in the statute, of the members present and voting at a general meeting duly convened for that purpose; and
(b) not less than fifteen days’ notice of the proposed amendment and of the meeting has been given to the members.
Certificate of registration.
Legal entity.
Defects.
Formation of secondary or tertiary societies or subsidiary companies.
Statute to be registered.
Amendments to statute.
Members bound by statute.
(5) A copy of any amendment to the statute of a society, duly pass ed as aforesa i d, shall be signed by the Presid ent or Vi
ce- President and any other member of the committee of management of a society, and shall be submitted to the Board for registration,
together with a copy of the revised and updated statute as amended by the said society.
(6) The Board shall register an amendment to the statute if it is satisfied that the am endm ent in no way contravenes any of
the provisions of this Act.
(7) If the Board refuses to register an amendment to a statute, it shall inform the society of its decision in writing together
with the reasons for its refusal.
(8) Where the Board registers an amendment to the statute of a society, it shall publish in the Gazette a notice that such statute
has been so amended.
(2) A member of a society shall not, without his consent in writing having been first obtained, be bound by any amendment of the
society’s statute registered after he became a member, if and so far as that amendment requires him to take or to subscribe for
more shares than the number held by him at the date of registration of the amendment, or to pay upon the shares so held any sum exceeding
the amount unpaid upon them at that date , or in any ot her way increases the liability of that member to contribute to the share
or loan capital of the society.
(3) Any dispute that may arise, concerning any of the matters referred to in art i cle 109, shall, if included in th e statu t
e o f a society, or if agreed between the parties involved in the dispute, be referred to arbitration by an arbitrator appointed
by the Chairman o f th e Ma lta Ar b itr at ion C e nt re, in wh ich case, th e so ciet y’s members shall abide by the awards of
the arbitrator. Membership of a society shall automatically imply a tacit agreement, on the part of the member, to submission to
arbitration as aforesaid.
Registered address. 37. (1) Every society shall have an address registered in accordance with this Act to which all notices and communications shall be sent.
(2) A change of address shall be notified to the Board. The Board shall cause the new address to be registered as the registered address of the society and to be published in the Gazette.
Register of members and of shares.
(2) The register of members and of shares 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 as a member;
(b) the date at which any such person ceased to be a member; and
(c) the number of shares held by a member.
(2) At the end of December of each year, or at earlier intervals as the Board may require from time to time, every society shall send an updated list of its members to the Board. Such lists shall be open for inspection to the public at the office of the Board.
(a) every such member who produces such goods or provides such services shall dispose of, or otherwise arrange for the disposal
of, the whole or any specified amount or proportion, of such goods or services to or through the society in conformity with any
agreement entered into or arrangement made between the society and any third party;
(b) every such member shall purchase from the society the material required by the member for the purpose or in connection with the
production of such goods or the provision of such services, in whole or in any specified amount or proportion thereof, from the
society:
Provided that such rules and obligations shall be directly related, necessary and proportionate to the formation and proper functioning
of the society and that the compatibility of such rules and obligations with the provisions of the Competition Act shall, in every event, be assessed together with and within the context of the economic conditions prevailing in the relevant market
in particular the market power of the society concerned.
(2) The statute, or contract, as the case may be, may also provi de for reasonable and propo rtio nate penalties or
other consequences to be incurred by a member of a society who acts in violation of the provision referred to in subarticle (1).
Inspection of statute.
Sale or provision of goods.
Cap. 379.
Disciplinary penalties.
Privileges.
Cap. 16.
Cap. 16.
42. (1) Without prejudice to any other law to the contrary, where a society has supplied to any member any material, eq ui pm
en t, fu nd s o r servi ces di re ctl y re lat e d to t h e act iv it ie s carried out by the society, the society shall have a special
privilege over such material, equipment, funds or goods produced therewith or therefrom or by virtue of such funds or services; such
privilege shall rank concurrently with the privilege mentioned in article 2009 of the Civil Code:
Provided that nothing herein contained shall affect the rights of any bona fide purchaser or transferee.
(2) A society shall have a special privilege upon the share or other interest in the capital and on the deposits of a member or
past member or decea sed member and upon any dividend, patronage refund, or other sum payable to a member or past member or to the
e s ta te of a de ceas ed member in respect of any de bt due to the society from such member or past member or estate, and may set
off any such debt against any sum credited or payable to a member or past member or estate of a deceased member as aforesaid. Such
privilege shall rank concurrently with the privilege mentioned in article 2009(a) of the Civil Code.
Transfer of shares. 43. On the death of a member, a society may transfer the share or other interest of the deceased member to the person entitled to such share or interest according to law or pay to such person a sum representing the nominal value of such member ’s share or interest as ascertained in accordance with the society’s statute:
Provided that where the heir of a deceased member, or in the event of more than one heir, then one of such heirs as may be appointed by them, is eligible for membership of the society, then such heir shall have the right to request and obtain membership in the society and shall be registered accordingly in his own name.
Copies of entries in book.
Financial statements.
44. (1) A copy of any entry in a book of a society regularly kept in the course of business, shall, if duly certified as provided in
subarticle (2), be prima facie evidence in any legal proceedings, civil or criminal, of the existence of such entry and 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) The copy of an entry in the book of a society shall be certified by a declaration in writing at the foot of such
copy stating 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 declaration shall be dated and signed by the President and the secretary of the society.
(3) No officer of any society shall, in any legal proceedings to which the society or the liquidator of the society is not a party,
be compelled to produce any of the society’s books, the contents of which can be proved in accordance with subarticle (1) or to
appear as witness to prove any matters, transactions or accounts therein recorded, unless the court for special reasons so directs.
statements are presented. Such auditors shall hold office from the conclusion of that general meeting until the next general meeting
at which audited financial statements are presented. The audit fee shall be approved at the general meeting.
(2) For the purposes of this Act, an auditor means a person who is an individual who holds a warrant to act as auditor issued
u nder t h e Accoun tancy Pro f essio n A c t , or is a p a rt nership of auditors duly registered under the said Act.
(3) Every society shall appoint, and cause to have at all times appointed, a person qualified and authorised as aforesaid to be
the a u d i t o r of t h e s o ci et y. Th e fi rst auditor of a socie t y may be appointed by the committee of management of the
society at the first opportunity and definitely before the first general meeting of the society at which annual accounts are presented,
and the auditor so appointed shall hold office until the conclusion of that meeting.
(4) The committee of management shall, at any time before the general me eting of a socie t y a t wh ic h th e an nu al a c c
o u n t s a r e presented, fill a casual vacancy in the office of auditor:
Provided that the society in general meeting may fill such a casual vacancy itself.
(5) If no auditors are appointed or re-appointed by the committee of management or by the general meeting of a society
as required by the foregoing provisions of this article, then the Board may, on an application made by any member of the society,
appoint an auditor to fill the vacancy.
Cap. 281.
Disqualification.
(a) an officer, member or employee of the society; or
(b) a member, employer or employee of an officer of the society; or
(c) a member or employee of an employee of the society;
or
(d) related by consanguinity or affinity in the direct line, or, up to the third degree, in the collateral line, to any officer of
the society.
(a) have a right of access at all times to the society’s accounting records, accounts and vouchers;
(b) require from the society’s officers such information and explanations as they think necessary for the performance
of their duties as auditors;
(c) receive all notes of, and other communications relating to, any general meeting which a member of the society is entitled to receive;
(d) attend any general meeting of the society; and
(e) be heard at any general meeting which they attend on
Powers of auditors.
Submissions to the
Board.
any part of the business of the meeting which concerns them as auditors.
(2) An officer of a society who, knowingly or recklessly, makes to the society’s auditors a statement, whether written
or oral, wh ich con v eys or pu rp ort s t o co nv ey an y inf o rm at io n or explanations which the auditors require, or
are entitled to require, as auditors of the society, which is misleading, false or deceptive in a material particular, shall be guilty
of an offence under this Act.
(3) A secondary or tertiary society, and the auditors of such a society, and the auditors of any subsidiaries of any society,
shall give to the audito rs of any of th eir member societ ies such information and explanations as they may reasonably require
for the purpose of their duties as auditors of that society.
(a) one certified true copy of the audited financial statements of the society as laid down in Parts I to IV of the
Third Schedule, together with the audit report for that period prepared in accordance with article 49;
(b) one certified true copy of audited financial statements for public inspection, as laid down in Part V of the Third Schedule,
together with the audit report for that period prepared in accordance with article 49 and stating whether in the auditor
’s opinion the society is entitled to prepare an abridged set of audited financial statements, for public inspection.
(2) A society may elect not to submit to the Board an abridged set of audited financial statements together with the audit report
mentioned in subarticle (1)(b), in which case the Board shall make the society’s audited financial statements, together with the audit report , r e f e rred
to i n subarti c le (1) ( a ), avai l a bl e fo r pu bl ic inspection.
(3) The Board may, if the auditor of the society is not of the opinion that the society is entitled to prepare an abridged set
of audited financial statements, make available for public inspection the society’s audited financial statements mentioned in subarticle
(1)(a).
(4) The audit reports mentioned in subarticle (1)(a) and (b)
shall be signed by the auditors.
(5) The society shall keep proper accounts and records of its transactions and affairs and shall do all things necessary to ensure
that all payments out of its moneys are correctly made and properly authorised and that adequate control is maintained over the assets
of, or in th e cu stod y of, the so ci et y an d o v er t h e exp e ndi tur e incurred by the societ y. Such a ccounts shall, subject
to the p r ov ision s of thi s Act, con f or m to Int e rnat ion a l Acco unti n g Standards.
(6) The society shall, as soon as practicable but not later than three months after the close of each financial year, prepare
and
submit the financial statements in respect of that year to the auditor who shall audit and report on them. Such an audit shall, subject
to the provisions of this Act, conform to the International Standards on Auditing.
(7) References in this article to signature by the auditor shall refer to the signature of an individual partner or partners signing
on behalf of the partnership and authorised to sign on its behalf, in those cases where the office of auditor is held by a partnership.
(2) A society’s auditor shall present a report on all financial statements of the society to the society’s members. Copies
of the financial statements and of the auditor ’s report thereon are to be laid before the society in general meeting, but shall
be available for inspection by the members at the society’s premises as from five w o rk in g d a y s fro m t h e d a t e an no
unced for the hol din g of the meeting.
(3) The auditor ’s report shall be drawn up in accordance with International Standards on Auditing and shall state whether,
in the au dito r ’s o p ini on, the financi al statemen ts have b een pro p erly prepared in accordance with this Act, and in particular
whether a true and fair view is given -
(a) of the state of affairs of the society as at the end of the accounting period; and
(b) of the income and expenditure of the society for the accounting period.
(4) A society’s auditor shall, in preparing his report, carry out such investigations as will enable him to form an opinion
as to whether -
(a) proper accounting records have been kept by the society;
(b) proper returns adequate for the audit have been received from branches not visited by him;
(c) the society’s accounts are in agreement with the accounting records and returns; and
(d) the society has functioned in accordance with its statute and the provisions of this Act.
(5) If the auditor -
(a) is of the opinion that any of the items mentioned in subarticle (4) are not in conformity with the requirements
of this Act; or
(b) is unable to obtain all the information and explanations which, to the best of his knowledge and belief, are necessary for
the purpose of his audit,
Audit report.
Remuneration of auditors.
Regulations regarding auditors.
he shall state that fact in his report.
(6) The auditor may at any other time report to the Board and to the society upon any matters arising out of the performance of
the audit.
(7) The audit of the accounts of a society may, for management purposes, include an examination of and a report on overdue debts,
if any, and an examination of and a report on the valuation of the assets and liabilities of the society.
(2) There shall be stated in the notes to the accounts the amount of the remuneration paid to the society’s auditors,
including any other remuneration earned by the auditors in any other capacity from the same society.
(3) For the purposes of this article, "remuneration" includes sums paid in respect of expenses.
(4) The provisions of this article shall apply in relation to benefits in kind and to payments in cash; and, in relation
to any such benefit, re ferences to it s amount are to be construed a s references to its estimated money value. The nature of
any such benefit shall also be disclosed.
(5) The Minister may by regulations provide for the manner in which the amount of any remuneration received or receivable by a
society’s auditors or associates of such auditors shall be disclosed; in particular, the regulations may prescribe the circumstances
in which a person or body shall, for the purposes of such regulations, be considered as an associate of the auditors.
(a) the appointment, removal, qualification, disqualification, remuneration and resignation of auditors;
(b) the powers, functions and duties of auditors;
(c) the keeping of accounting records, and the form and content of accounts;
(d) the auditor ’s report and any other reporting duties; and
(e) any other matter as may be necessary or appropriate for the better carrying out of the provisions of this Part of the Act.
(2) New members shall be admitted by the committee of management on an application made for that purpose:
Provided that if a person’s application is refused by the com mittee, such person may ap peal to th e general meeting of members
and in any such case he may be admitted as a member by a reso lut ion passed by not le ss than tw o-t hirds o f the mem bers present
and voting at such a meeting.
(a) has attained the age of eighteen years and is of sound mind; and
(b) satisfies such other requirements with regard to residence, employment, profession or other matter as may be prescribed
by the statute; and
(c) is not an undischarged bankrupt.
(2) Where the statute of a society specifically so permits, a co mmerci a l p a rt nersh i p may also q u al if y for memb ersh
ip of a society:
Register of members.
Qualification for membership.
Provided that -
(a) the operations of the commercial partnership are wholly or mainly similar or equivalent to the operations
of the society;
(b) the commercial partnership shall be represented by a duly authorised individual at the general meetings of the society; and
that such an individual shall be a director, partner or the majority shareholder of the said partnership;
(c) a commercial partnership may not be a member of a committee of management or of a supervisory board, if any; and
(d) the Board is informed immediately, by the society, whenever a commercial partnership is accepted as a member of that society.
(3) It shall not be lawful for a person to appear as a member of a society as nominee or for the interest of any undisclosed person.
Any nomi n ee ag reem ent or similar agreement contrary to this sub a rt ic le shal l be nu ll a nd vo id , an d th e p e rson w
h o s e n a m e appears on the statute or in the Register of members shall, for all purposes, be deemed to be the member.
(4) Any person who at any time does not have the qualifications for membership as provided in this article shall
be
Exercise of membership rights.
struck off the register of members by the committee of management and shall thereupon cease to be a member of the society.
Conflict of interest. 55. (1) No member of a primary society shall be a member of any other primary society having the same or similar objects or activities.
(2) The statute of a society may contain rules prohibiting or restricting its members from carrying out activities in competition with those carried out by the society.
Votes. 56. (1) Unless the statute of a society provides otherwise, each member of a primary society shall only have one vote in the affairs of the society, including at general meetings, irrespective of t h e n u m b er of sh ares h e ho ld s, and the ri ght to v o te shall be exercised in person and not by proxy. Notwithstanding anything contained in any statute, the granting of a proxy shall be in written form, and a proxy may not represent more than two members at a meeting, including the member exercising the proxy.
(2) In a secondary society or tertiary society, each society which is a member shall have as many votes as may be provided by the statute of the secondary society or tertiary society, and may, subject to such a stat ut e, ap po in t any n um be r of d ele gat es, n ot exceeding the number of such votes, to exercise its right to vote.
Share capital. 57. Notwithstanding anything which may be contained in the statute of a society, no member shall hold more than forty per cent of the share capital of any society:
Provided that in the case of secondary or tertiary societies, a member which is itself a co-operative society may hold more than forty per cent of such share capital.
Transfer of shares or other interest.
(a) he has held such share or other interest for not less than one year; and
(b) the transfer is in favour of the society, a member of the society or a person whose application for membership has been accepted
by the committee of management of the society.
(2) No transfer of a share or other interest shall be valid and ef fecti v e un less an d u n ti l su ch transfer an d t h e
name of th e transferee has been approved and registered by the committee of management.
Limited liability. 59. (1) The liability of a member, present or past, of a society, shall be limited to the amount, if any, unpaid of the shares held by him.
(2) The liability of a past member for the debts of a society in
terms of subarticle (1) shall be limited to those which existed on the date on which he ceased to be a member and shall cease on
the expiration of two years commencing on that date.
(3) The liability of the estate of a deceased member shall be limited to the debts of the society, as they existed on the date
of the death of the member and shall cease on the expiration of two years commencing on that date.
(2) The amount that should be paid to the withdrawing member for the redem ption of his share or interest shall be t he nom inal
amount thereof.
(3) The statute of a society may stipulate the manner in which such payment is to be effected.
Withdrawal.
Expulsion.
Provided that the statute of a society may provide for a different procedure for the expulsion of members, as long as such procedure provides for the giving to the person charged reasonable notice of the charge and an opportunity to make representations and to present evidence against the charge.
(2) Subject to article 56 and to the provisions of this Act, every member shall have the righ t to attend and vote at all g e ner a l meetings of the society, in person or by proxy.
(2) The business of the first meeting shall include the election o f the offi cers who are to serve un til t h e first annual g e neral meeting.
(2) Notice of every general meeting shall be given in writing
General meetings.
Legal and judicial representation.
First general meeting.
Annual general meeting.
Functions of the annual general meeting.
to each member or delegate entitled to attend the meeting. Such notice shall be given at least fifteen clear days prior to the date
of the meeting:
Provided that in cases of urgency a general meeting, other than an annual general meeting or a general meeting having on the agenda
an amendment of the statute, may be called by a notice of not less than three working days.
(3) Every notice of a general meeting shall state the matters for discussion and the resolutions to be proposed, and no other
subject shall be di scussed w ithout t h e co nsent o f the m a j o rity of the members present and voting at such general meeting.
(4) The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled
to receive notice, shall not invalidate the proceedings at that meeting.
(a) to consider and confirm, with such amendments as it may deem fit, the minutes of the previous annual general meeting
and of any other intervening general meeting not previously approved at another general meeting;
(b) to consider the auditor ’s report, the reports of the committee of management and the supervisory board, if any, and
any report made by the Board;
(c) to consider and approve the financial statements;
(d) subject to the provisions of this Act and the statute, to consider and determine the manner in which any available net
surplus shall be distributed or invested;
(e) to consider and adopt any amendments to the statute; (f) to propose and approve any honoraria, allowances,
audit fees and/or other remuneration as defined in
article 77;
(g) to elect members of the committee of management and of the supervisory board, if any;
(h) to appoint the auditors of the society;
(i) to decide appeals of persons whose application for membership has been rejected by the committee of management;
(j) to consider and determine the maximum amount the society may borrow;
(k) to hear and decide upon any complaints brought by members aggrieved by a decision of the committee of management, provided that
notice of the intention to bring such complaints before the meeting has been given to the secretary or manager at least
two days prior to the meeting;
(l) if so requested by him, to hear any auditor who has been removed by the society;
(m) to transact any other general business of the society of which due notice has been given to members.
(2) An extraordinary general meeting of a society shall be convened by the committee of management -
(a) on receipt of a request for such a meeting signed by at least one-fourth or fifteen of the members or delegates of the society,
whichever is the less, stating the objects of the meeting;
(b) on receipt of a request from the supervisory board, or the Board, stating the objects of the meeting.
(3) If the committee of management fails to convene an extraordinary general meeting in accordance with subarticle (2)
within on e month of receiving th e request for the meeting, the supervisory board, or the Board, as the case may be, making the
request shall have power to convene the meeting themselves by notice t o all members of the society stating th e obj ect of the meeting
and the fact that the committee of management has failed to convene the meeting.
(2) If within thirty minutes after the time fixed for a general meeting the members or delegates present are not sufficient to
form a quorum, such meeting shall be co nsidered as dissolved if it is convened on the request of members or of delegates; 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 this effect shall
be sent by post, to the registered addresses of the members and of whoever is entitled to attend, by the secretary within forty-eight
hours of the adjo urnment; and if at th e adjo urned meeti ng a quo rum is no t present within thirty minutes from the time fixed
for the meeting the members or delegates present shall form a quorum:
Provided that a general meeting with such reduced quorum shall not have the power to amend the statute.
(2) At any general meeting a resolution put to vote shall be decided by a show of hands unless voting by call of names or by ballot
is demanded by at least two members, where the number of memb er s present is l e ss than twen ty, or by at l e ast fiv e of the
members present in any other case:
Provided that for the election of officers the voting shall in all cases be carried out by ballot.
Extraordinary meeting.
Quorum.
Voting.
(3) In the case of an equality of votes the motion shall be rejected. The chairman shall have no casting vote.
Minutes. 70. (1) Minutes of the general meetings shall be entered in the minute book and shall include:
(a) the names of members or delegates present at the meeting and the name of the chairman who presided;
(b) the time the meeting commenced and ended;
(c) all resolutions and decisions taken at the meeting.
(2) The minutes of each general meeting shall be read at the next following general meeting, and when signed by the chairman of
that meeting and the secretary, whether following confirmation or amendments, they sha ll be evidence of anything contained therein.
Committee of management.
Eligibility for membership.
(2) Members of the committee of management shall be elected, suspended or removed only by a majority of members or delegates present
and voting at a general meeting of the society.
(3) All the members of a committee of management shall be individual persons and shall serve on the committee of management on
their own responsibility and not as nominees or representatives of any other person.
(a) is a member of the society;
(b) is an individual appointed in writing by a commercial partnership which is a member of the society;
(c) does not engage in an activity which gives rise to a conflict of interest;
(d) does not take part, on a permanent or occasional basis, in any activity which is directly or indirectly in competition
with that of the society;
(e) is not an undischarged bankrupt:
(f) has not been convicted of any crime punishable by more than one year ’s imprisonment;
(g) does not have any outstanding debt owing to the society at the end of the society's financial year other than in
respect of a loan made under the relevant rules of the society statute;
(h) in the case of a primary society, he is not already a member of a committee of management of another primary society having
the same or similar objects or activities;
(i) he does not receive any remuneration, salary or other payments, except as provided for in article 77:
Provided that, with respect to paragraph (c), the general meeting of the society may decide that a person shall be so eligible notwithstanding that he engages in any such activity.
Term of office.
Provided that the statute of a society may provide that in the annual general meetings that may be held following the first annu
al general meeting, one-third of the members for the time being, or if their number is not three or a multiple of three, then the
number nearest one-third shall retire from office and such members sh al l be th ose w h o h a ve been l o ng est in offi ce si nce
th eir l a st election:
Provided further that in case of persons who became members on the same day, those to retire in accordance with the prece
di ng prov i s o, sha l l , u n l ess t h e y ot he rw i s e a g ree am o n g themselves, be determined by lot.
(2) A retiring member shall be eligible for re-election.
(3) If, during the term of office of a committee of management, a vacancy occurs in the committee, the committee
may, and if the number of members falls below three shall, co-opt a member of the society to serve on the committee of management
until the next general meeting of the society:
Provided that, where the statute so provides, and where applicable, the first person to be considered for such co-option shall
be the person who had obtained the highest number of votes amongst the non-elected candidates, followed by the person with the second
highest number of votes, and so on in descending order.
(2) Without prejudice to the generality of subarticle (1), the functions of the committee of management shall include the following:
(a) to consider, in terms of the provisions of article 52, applications for membership of the society;
(b) to call for and examine reports from persons employed by the society with the object of disclosing the true position of the
society, its operations and financial condition;
(c) to open and operate banking accounts; (d) to appoint sub-committees;
Functions of the committee of management.
Meetings of the committee.
(e) to keep members informed of the progress of the society, to encourage interest and a sense of ownership on the part
of the members and to carry out educational and advisory work among the members with respect to co-operative
principles and the objects of the society;
(f) to prepare and present to the annual general meeting of the society proposals for the distribution of any net surplus accrued
during the preceding financial year in accordance with this Act and the statute of the society;
(g) to present reports to the annual general meeting on the work of the committee of management during the preceding financial
period and containing such recommendations as they deem necessary to maintain or improve the services provided by the
society to its members;
(h) to take immediate action to correct mistakes, errors or malpractices, if any, which may be disclosed in the reports of the
supervisory board, the Board and, or, the auditor.
(3) A full and correct record shall be kept of the proceedings of the committee of management. Such records shall be available
for inspection by the supervisory board of the society, if any, by the Board and by the auditor.
(4) The committee of management may appoint, on such terms and conditions as it thinks fit, a manager to administer and manage
the affairs of the society and may employ such other persons as the committee considers necessary to assist the manager in the discharge
of his duties.
(5) The committee of management may at any time suspend an of ficer fo r an y go od an d suf f ici e nt cause ar isi n g o u
t o f th e per f or man c e of h i s d u t i es. A n y such suspension sha l l be comm unicated to the Board, toget h er with
the reasons for the suspension.
(6) In the event of the suspension of an officer, the committee may appoint a substitute to hold office during the period of such
suspension. The committee shal l communicate the na me of the substitute to the Board.
(2) The quorum for a meeting of the committee of management shall be a simple majority of its members.
(3) Decisions shall be taken by a simple majority of votes of members present and the President shall have no casting vote.
(4) Minutes of committee meetings shall be recorded by the secretary in the minute book and shall include -
(a) the number and names of those present; (b) the name of the chairman of the meeting;
(c) a brief record of the business done and the decisions taken and a statement with respect to each decision whether it has
been taken unanimously or by a majority.
(5) Any member of the committee of management who, without valid reason, fails to attend three consecutive meetings of
the committee of management shall be deemed to have vacated his office which shall thereupon be filled as provided by article 73(3).
(2) Where the committee of management has employed a manager to administer and manage the affairs of the society, such appointment shall not absolve the committee from its responsibility for the proper direction of the affairs of the society.
(2) No member of a committee of management shall receive a wage or a salary, except in such societies where the members of the society are also the employees.
(2) The committee of management shall also elect a secretary and a treasurer from among its members:
Provided that where a committee of management appoints a person as a full-time manager, any of the duties of the secretary or of the
treasurer may be delegated to such manager, subject to the general supervision of the committee of management.
(3) The offices of secretary and of treasurer may be held by the same person.
(2) The President shall be responsible for the smooth and orderly running of all general meetings and all meetings of the committee of management, and shall have the rights conferred upon him by the statute.
Conduct of affairs.
Remuneration.
Composition of society.
President.
Duties of the secretary.
Duties of the treasurer.
Duties of the manager.
(a) the duty to maintain all the society’s records, papers and registers correctly and up-to-date;
(b) the duty to keep an inventory of the property belonging to the society;
(c) the duty to handle all correspondence on behalf of the committee of management;
(d) the duty to convene and attend general meetings and meetings of the committee of management and to record the proceedings
of such meetings in the minute book; and
(e) the duty to manage the day-to-day running of the society’s activities, and perform such other duties entrusted
to him by the committee.
(a) to take charge of all financial transactions of the society, including all moneys received, and to make disbursements
in accordance with the directions of the committee of management;
(b) to give or cause to be given all the receipts, vouchers and documents required by the statute or called for by the committee of
management;
(c) to keep a proper record of the society’s accounts; and
(d) to assist the auditors of the society.
(a) to manage the business and property of the society;
(b) to attend the meetings of the society and of the committee of management as may be requested by the committee from time
to time;
(c) to carry out all reasonable and legitimate instructions of the committee of management.
Supervisory board. 83. (1) Every society shall, if required by its statute, or if requested by at least a simple majority of members present and voting at a general meeting convened in terms of the provisions of this Act, have a supervisory board consisting of not less than three and not more than five members or otherwise as may be prescribed by its statu t e. The memb ers o f the supervisory board shall be el ected at the ann u al g e n e ral meeti ng aft e r the electio n o f th e members of the committee of management.
(2) No member of the committee of management may be a member of the supervisory board.
(3) The duration of the office of members of the supervisory board of a society shall be regulated by the statute of the society
or by the general meeting, as the case may be. In the absence of any
such provision, the term of the supervisory board shall expire at the next annual general meeting.
(4) The members of the supervisory board may include individ u al s wh o are not m e mbers of the soci et y, and
shall preferably be chosen from persons h a vi ng knowledge of accounting, auditing and financial procedures.
(2) The quorum of a meeting of the supervisory board shall be half the number of its members.
(3) Decisions shall be taken by a simple majority of votes of me mbe r s pre s ent at t h e m e eti ng. T h e ch air m a n sh
all have no casting vote.
(a) to present to the annual general meeting a specific report on the management and financial position of the society only
in such cases in which the committee of management has failed to act in accordance with the requirements of the statute
or with the recommendations of the same supervisory board;
(b) to summon extraordinary general meetings of the society in accordance with article 67; and
(c) bring forthwith to the attention of the committee of management any matters concerning the affairs of the society which may
require the same committee of management to take action.
(2) The supervisory board may at any time require the comm ittee of m anagement to summon an extraordinary general
meeting w h enever it con s id ers t h at the m e m b ers should be informed immediately of the position of the society and shall
also have th e power to su mm on an extrao rdin ar y g e n e ral m eeting themselves if the committee fails to do so within one month
from receiving the request.
Procedure.
Responsibility.
Convening of meetings.
Capital of a society.
(a) admission fees;
(b) subscription and payment of shares;
(c) savings deposits made by its members; (d) deposits or loans from non-members; (e) surplus carried to reserve funds.
(2) The following rules shall have effect with respect to the manner of raising capital specified in subarticle (1):
(a) no admission fee shall be refundable except in respect of an application for membership that has been rejected;
(b) no share may be redeemed except in accordance with the statute of the society and no rule in the statute allowing such
redemption shall have effect unless such rule also specifies the minimum number of shares a member shall hold while he is a member;
(c) savings deposits may be either obligatory and regular or voluntary. Regular and obligatory deposit shall be made in accordance
with the statute of the society and may not be withdrawn except for purposes and in accordance with conditions specified
in the statute, or on termination of membership; such deposits may serve to secure loans taken by or guarantees given by a
member. Voluntary deposits may be withdrawn, subject to any conditions or restrictions specified in the statute;
(d) deposits or loans from non-members shall be subject to the provisions of this Act and of the statute of the society;
(e) a reserve fund shall be kept and used in accordance with the provisions of this Act and of the statute of the society.
(3) A soci et y m ay no t issu e bo nd s o r de ben tu r es w it ho ut t he authority of the Board and shall, in any such issue, comply
with any conditions prescribed by the Board.
Deposits and loans. 88. (1) A society may receive deposits and loans from m e mb ers and fro m p e rsons wh o are not mem b ers on ly i f so authorised by its statute and only to such extent and under such conditions as may be determined or prescribed by its statute or under the following provisions of this article.
(2) A society which under its statute has power to borrow money shall determine from time to time, at a general meeting,
the maximum liability which it may, within the limits prescribed by its statute, incur in respect of loans or deposits from members
and
non-members including bank overdrafts.
(a) in accordance with the provisions of its statute; or
(b) in any other manner not inconsistent with its statute, as the committee of management may consider appropriate,
subject to any general or specific directions, if any, as may be determined by the general meeting.
(2) The reserve fund shall be kept in the form of liquid assets.
(3) Every society shall transfer into the reserve fund at least twenty per cent of its surplus at the end of each accounting period:
Provided that the requirement of this subarticle shall not apply at the end of any accounting period in which the reserve fund is
equal to the total of the paid-up share capital and of twenty per cent of the borrowed capital of the society as shown in the audited
and approved balance sheet of the preceding financial period.
(2) The Fund shall be used in furtherance of co-operative education, training, research, and for the general development
of the co-operative movement in Malta, and for such other purposes as may be stipulated in regulations made under this article.
(3) Every society shall contribute five per cent of the surplus resulting from its activities, operations, investments and any
other sources at the end of each accounting period to the Fund.
(4) Regulations made under this article may establish the highest amount that a society may be obliged to contribute in
any financial year to the Fund.
(5) The Fund shall have a distinct legal personality and, subject to the provisions of this Act, shall be capable of entering
into contracts, of suing and being sued, and doing all such things and entering in to all such tran sactions as are incidental or
conducive for the fulfilment of its objectives.
(6) The Fund shall be responsible for collecting, recovering and instituting proceedings for the payment of sums due to it, in
terms of the provisions of this Act.
(7) The Board shall, on receipt of the audited accounts of a society, furnish to the Fund such information as will enable the
Fund to determine the contribution of the said society towards the said Fund.
Investments or deposits of funds.
Reserve fund.
Central Co- operative Fund.
Division of surplus funds.
divided among the members by way of dividend or in any manner authorised by this Act or by the statute of the society, and may also
be allocated to any other funds of the society to such extent and under such conditions as may be prescribed under this Act or by
the statute of the society.
(2) (a) The statute of a society may establish the maximum rate that the society may pay to its members by way of dividend.
(b) Where a maximum rate is not specified in the statute of a society, the m axim um rate shall be that specified, from time to time,
by regulations made by the Minister, in consultation with the Board.
(3) Subject to any provisions contained in the statute of a society, or to general or specific directions determined
by a general meeting, a society may apply an amount of its net surplus for any charitable, educational or other public purpose.
Patronage refund. 93. (1) A society may distribute any part of the remainder of its net surplus by way of patronage refund.
(2) Patronage refund means the distribution of all or any part of th e n e t surp lu s o f a soci ety, pai d amon g it s memb ers i n proportion to the volume of business or other transactions done by them with the society.
Bonus certificates and shares.
(2) A bonus certificate shall entitle the holder to claim payment of the sum for which the certificate is issued out of
the society’s funds on a date specified in the certificate, being a date not earlier than five years from the day when the bonus
certificate was issued. No interest or divi dend shall b e pai d on su ch certificates.
(3) A bonus share may not be withdrawn or transferred before th e ex piratio n of ten years from th e date of i ts issue un less
the holder of the bonus share has ceased to be a member, in which case the sum claimed by a former member may be claimed by the same
person, or his heirs, up to twelve months after the date when the person had ceased to be a member.
Amalgamation. 95. (1) Subject to the provisions of this Act, any two or more societies may by instrument in writing amalgamate into a single society if each of such societies has so resolved, by a three-fourths majority of the members present and voting, at an extraordinary g eneral m eeti ng held for th e pu rpose and for which a notice in writing, containing the resolution and giving the date and place of the meeting, has been given at least fifteen days before the meeting is held.
(2) The new society formed as aforesaid may apply for
registration under article 26 and may be registered under article 29. (3) The instrument of amalgamation shall have no effect
until
and unless the new society is so registered.
(2) The society or societies which are acquired by the acquiring society as provided for in subarticle (1) shall be dissolved and struck off the register without winding up.
(2) The succession to all assets, rights, liabilities or o b li gat i on s of t h e soci et y o r societ ies ceasi ng to exi s t by the acquiring or by the new society, as the case may be, shall not give rise to any liability for the payment of any duty or tax under the Duty on Documents and Transfers Act or the Income Tax Act.
(2) The instrument effecting such transfer shall be registered with the Board, and shall not have effect until it is so registered.
(2) During the period referred to in subarticle (1), any creditor of the societies involved may in writing to the society object to the proposed amalgamation or transfer, and the amalgamation or transfer shall not take place unless the society in question satisfies the Board that the proposed amalg am ation or transfer sh al l not adversely affect the legitimate interests of the said creditor and that suf f icient guarantees would remain for the settlem e nt of his legitimate claims.
Amalgamation by merger.
New societies.
Cap. 364. Cap. 123.
Assets and liabilities.
Amalgamation of societies and transfer of assets and liabilities.
(3) Any member of an amalgamating society or of a transferor society may, notwithstanding any rule to the contrary, by notice
in writing given to the society of which he is a member, not later than two months from the date of the relevant resolution passed
by that society, declare his intention not to become a member of the new society, or of the acquiring society, or of the transferee society, as the case may be; and upon giving such notice he shall cease to be a
member and shall be entitled to receive the nominal value of his shares.
(4) Where a transfer of the assets and liabilities of a society to another society has been effected as provided in article 98,
the transferee society shall succeed to all such rights, assets, liabilities and obligations as may be stipulated in the transfer
agreement, duly regist er ed w ith t h e Board as pr ovi ded in arti cl e 98 (2), and all deeds, contracts, instruments and other
documents shall have effect and be construed accordingly.
Dissolution order. 100. (1) If the Board, after holding an inquiry under article 14, is of the opinion that such society ought to be dissolved, it may issu e a d i sso lu ti on o r d e r, d i sso lv in g th e so ci ety. I n taki ng i t s decision, the Board shall consider the interests of the members, creditors and employees of the said society.
(2) The Board shall, on receipt of a resolution passed by a three-fourths majority, or such other higher majority as may be
stipulated in the statute, of the members of a society present and voti ng at an ex trao rdin ary ge ner a l meetin g convened fo
r th e purpose of dissolving the said society, issue a dissolution order:
Provided that where the statute of a society requires that a resolution for the dissolution of a society be confirmed at a second
and subsequent general meeting, the Board shall only issue such order if the resolution is so confirmed.
(3) The Board may, on its own motion, make a dissolution order in respect of a society which has become insolvent, or
has not commenced operations or has ceased to operate or the membership of which is reduced to less than the minimum membership required
by article 22.
(4) When making a dissolution order under subarticle (1), (2) or (3 ), th e Board shall appoint a liquida to r for th e purposes
of winding up the affairs of the society.
(5) The liquidator shall be appointed from amongst persons who have, for at least five consecutive years, held a warrant to practise
as a Certified Public Accountant (CPA) or as a Certified Public Accountant and Auditor (CPAA), not being a person who has served
as an officer, accountant or auditor of the society, at any time during the five years prior to the date of the dissolution order.
(6) A person shall be disqualified from appointment as liquidator in the same cases, mutati s mutandis , in wh ich under article 46 he would be disqualified to be appointed as auditor.
(7) Upon the appointment of a liquidator by the Board, all powers and functions of the committee of management, and of
the supervisory board, if any, shall cease.
(8) When a society has been dissolved, it shall, from the date of dissolution, cease to carry on its business except in so far
as may be required for the beneficial winding up thereof.
(9) The costs of the liquidation, including the remuneration of the liquidator, shall be payable out of the assets of the society
in priority to all other claims.
(10) As soon as a liquidation is started, the Board shall determine whether the assets of t h e so ci ety in liq uid a
tio n are sufficient to cover all the costs of the liquidation, including the remuneration of the liquidator. If the assets of the
society are not sufficient for the above purposes, these costs, and these costs only, shall be payable by the members of the committee
of management or by all the members of the society, as the Board may determine in each particular case.
(11) The Board shall, as soon as possible, cause a notice to be published in the Gazette, giving the general particulars of any
dissolution order issued by it under this article.
(a) take immediate possession of all assets belonging to the society and of all books, records and other documents pertaining
to the business thereof;
(b) carry on the business of the society in as far as may be necessary for winding up its affairs beneficially, provided
that he shall not for this purpose be entitled to issue any loan;
(c) fix by notice published in one or more local newspapers the day before which creditors must present
their claims in order that they may be admitted to any distribution;
(d) refer any dispute to arbitration and institute and defend suits and other legal proceedings on behalf of the society;
(e) take such decisions as may be necessary in regard to the collection and realisation of assets in the course of winding up the
society;
(f) investigate all claims against the society and, subject to the provisions of this Act, decide questions of admissibility
of claims and of priority between claimants;
(g) pay claims against the society, including interest payable up to the date of the dissolution order, according
to their respective priorities, if any, in full or to such extent as the assets of such society permit;
(h) with the approval of the Board, enter into any
Power of liquidator.
Powers of Board over liquidator.
Order by liquidator.
Winding up of society.
compromise with regard to any claim by or against the society;
(i) call such meetings of members as may be necessary for the proper conduct of the liquidation, giving not less than fifteen
clear days’ notice of every such meeting;
(j) subject to any rule limiting the liability of members and subject to the provisions of article 59, decide on the contributions
to be made to its assets by members, past members or by the estates of deceased members of the society;
(k) submit a scheme of distribution to the Board for its approval, and arrange for the distribution of the assets of the society in
a convenient manner; and
(l) report to the Board any suspected irregularities which occurred either before or after the dissolution order, and which come
to his notice during the course of the dissolution.
(2) Any person aggrieved by any order of the liquidator made under the provisions of subarticle (1)(f), (j) or (l) may appeal in writing to the Board within thirty days from the date of such order.
(3) A liquidator shall deposit the funds and other assets of a dissolved society which are collected by him or which come into
his possession as liquidator in such manner and in such place as may from time to time be determined by the Board.
(4) A liquidator shall, every year, submit to the Board a report stating the progress made in winding up the affairs of the society,
as well as the audited financial statements of the society for that year and shall, on completion of the liquidation proceedings,
submit a final report which includes an audited scheme of distribution and hand o ver to the Board all books, registers and accounts
of the society in his possession.
(2) Without prejudice to the generality of the provisions of subarticle (1), the Board may -
(a) remove a liquidator from office and appoint a new one; (b) by order in writing, limit the powers of a liquidator, as
it may deem appropriate;
(c) determine the remuneration of the liquidator.
103. An order made by a liquidator in terms of article 101(1) and (2) and ratified in writing by the Board shall be enforceable by the
Civil Court or by the Court of Magistrates (Malta) or the Court of Magistrates (Gozo), in its superior jurisdiction as if it were
a judgement of that Court, and the provisions of article 19(3) shall, mutatis mutandis, apply.
to the discharge of the liabilities of the society, then to the payment of the share capital or subscription capital, and thereafter, if the sta t u t e of th e society permit s, to t h e payment o f a div i dend or p a t r onage refun d at a rate no t exce eding that spec ified in regulations made under this Act or in the statute of the society for any period during which no dividend or patronage refund was in fact paid.
(2) The claim of any creditor of the society which remained un satisfied under the approved sche me of distribution shall be
barred by prescription on the expiration of two years from the date of a cancellation order of the society.
(3) Any moneys remaining after the application of the funds to the purpose specified in article 104 and any sums unclaimed during
the period mentioned in subarticle (2), shall not be divided among the members, except in the case of the liquidation of a secondary
so ciety, bu t shal l b e dep o sited in to the Co- oper a tiv e Societ ies Liquidation Account kept by the Board.
(4) Any sum deposited into the Co-operative Societies Li qui dati on Accou n t shall, after a perio d o f f i ve
year s, be transferred to the Fund.
Cancellation of registration.
(a) that it has a membership of at least an absolute majority of all primary co-operative societies enjoying full registration
in terms of article 29;
(b) that its statute states that the principal object of the association is to facilitate the operations of all primary, secondary
and tertiary co-operative societies in Malta;
(c) that its statute states that the object of the association is to provide, organise and supervise effective centralized
services for co-operative societies and for co-operative education and training, and such other services as may be necessary
or expedient for its members;
(d) that its statute makes provision for the association to be managed by persons freely elected by the members of the association
in an election which is held at least once every calendar year;
(e) that the association does not have the making of profit as one of its objects;
(f) that the association is independent of any other
Apex organisation.
Recognition of
Apex organisation.
Power to make regulations.
association, or grouping whose principal object is not the promotion and development of co-operative societies; and
(g) that the association may accept as its members any society, whether primary, secondary or tertiary.
(a) an application on the appropriate form issued under the authority of the Board;
(b) an updated copy of its statute, duly certified by the persons elected in terms of article 106(d);
(c) a list of the officers of the association;
(d) a list of the co-operative societies which have joined as members of the association; and
(e) its official address.
(2) The Board shall, at its earliest opportunity, examine and verify whether the association satisfies the requirements laid down
in article 106. Where these requirements are satisfied, the Board shall register the association as the registered Apex organisation,
and shall issue a certificate confirming the registration of the said association and the date of registration.
(3) Where the Board determines that an association does not satisfy the requirements for registration as an Apex organisation,
it shall within fourteen days of its decision give notice thereof in writing to the association, stating the grounds for such a
decision.
(4) A certificate issued by the Board to the effect that a particular association is a registered Apex organisation
shall be valid and conclusive evidence of the fact that the association is so recognised and registered for all intents and purposes
of law.
(5) No fees shall be charged for the registration, by the Board, of an association as an Apex organisation.
PART XI MISCELLANEOUS
(2) Without prejudice to the generality of the power conferred by subarticle (1), the regulations may -
(a) make provision for the administration of the Central Co-operative Fund and of the Co-operative Societies Liquidation Fund;
(b) prescribe the maximum rate of dividend on share capital which may be paid by societies, unless specified
in the society’s statute;
(c) prescribe in which form and under what conditions the Government may recognise and support co-operative schemes in the public
sector;
(d) prescribe fees to be levied with respect to any matter required or allowed under this Act;
(e) prescribe the circumstances under which a society may be required to prepare consolidated accounts and the format and other
requirements to be adopted for this purpose;
(f) prescribe for the conduct of winding-up proceedings under Part IX of this Act; and
(g) prescribe or otherwise provide for any matter which is to be or may be prescribed or provided for by regulations under
this Act.
(3) The Minister shall also have power, by regulations made under this article, to amend or substitute the Schedules to this Act.
(4) The Minister may, acting in concurrence with the Minister respo n sib l e for com m ercial part nershi ps, make regul at
ions establishing the procedures and other requirements whereby:
(a) a commercial partnership may be converted into a society;
(b) a society may be converted into a commercial partnership.
(5) The regulations referred to in subarticle (4) may make provision for the consequences of such a conversion, and m
ay provide for the application of any provision of Part VIII of this Act, or of Part VII of the Companies Act, subject to such modifications, amendments or qualifications as m a y b e lai d d o wn in th e regulations.
(a) among members, past members and persons claiming through members, past members and deceased members; or
(b) between a member, past member or deceased member, and the society, its committee of management, its supervisory board,
or any officer of the society; or
(c) between the society or its committee of management or its supervisory board and any officer of the society; or
(d) between a society and any other society; or
(e) on the basis of a claim by a society for any debt or any other dues from a member, a past member or the heirs of a deceased member,
whether such debt or other dues are admitted or not; or
(f) any dispute arising out of the interpretation of the statute of a society, or of any rule thereof,
then such dispute may, and if provided in the statute of a society o r if ag reed to b y t h e parties in vol ved in the d i sput
e sh all , be submitted to arbitration by an arbitrator appointed by the Chairman
Cap. 386. Disputes.
Offences.
Amended by:
L.N. 426 of 2007.
of the Malta Arbitration Centre:
Provided that the provisions of this article shall not apply to a dispute between a society and its emplo y ees i n matt ers concerning
the contracts of service of such employees.
(a) a society or an officer or member thereof wilfully neglects or refuses to do any act or furnish any information
required for the purposes of this Act by the Board or by any person duly authorised in that behalf by the Board; or
(b) a society or an officer or member thereof wilfully makes a false return or furnishes false information; or
(c) any person wilfully or without reasonable excuse disobeys any summons, requisition or lawful written order issued under
the provisions of this Act, or does not furnish any information lawfully required from him by a person authorised to
do so under the provisions of this Act; or
(d) any person acts or purports to act as a member of a committee of management or supervisory board when not entitled to do so;
or
(e) a society or an officer or member thereof, wilfully performs any act which requires the consent or approval
of the Board without first having obtained such consent or approval; or
(f) a society or an officer or member thereof wilfully omits to do or to cause to be done an act or thing which is required
by or under this Act to be done or to be caused to be done; or
(g) a society or an officer or member thereof wilfully does or causes to be done any act or thing prohibited by or under this Act.
(2) Every society, officer or member of a society or other person found gui lty of an offence under this art i cle shal
l, on conviction, be liable to a fine (multa) not exceeding four thousand an d six hu ndr ed and fi fty - eigh t eu ro and sev e nty -fi ve cents (4,658.75), in the case of a
continuing offence, to a further fine (multa) not exceeding forty-six euro and fifty-nine cents (46.59) for each day during which the offence continues.
Saving. 111. Any registration, authorization, approval, appointment, order, regulations or other action whatsoever made or issued by virtue of the Co-operative Societies Act (Cap. 278, repealed by this Act) shall continue in force as if made under this Act.
FIRST SCHEDULE Amended by:
L.N. 426 of 2007.
Article 26(1)
1. We, the undersigned .............................................................................................
.........................................................................................................................................
.........................................................................................................................................
(insert name, age, address and occupation of at least five persons, or of at least two persons duly authorised in this behalf of each
society (if the application is made by societies) who desire to form a co-operative society under the Co-operative Societies Act,
and hereby apply for registration).
2. The name of the proposed society shall be
.......................................................................... insert name proposed).
3. The registered office of the proposed society shall be at .....................……… (insert proposed address) and
its postal address shall be ..................................................
.........................................................................................................................................
4. Enclosed is a signed copy of the proposed statute, specifying the objects of the society and a copy of the viability statement
(if already requested by the Board), and a copy of the feasibility study (prepared and signed by) ……..............................………...
5. The proposed statute was approved on .…......................… 20 ………..
6. The persons undersigned are now willing to become members and have made the payments necessary for admission to membership
as provided in the enclosed statute.
7. Enclosed is also the additional information which may assist the Board in considering this application.
8. We, the undersigned, are the founding members or the representatives thereof and have consented to manage the affairs of
the proposed society and otherwise perform the functions of such committee in accordance with the Co-operative Societies Act, until
our successors are elected at the first general meeting held after registration of the society.
…………………………… …………………………… Provisional President
Provisional Secretary
..................................................................................................................................
.........................................................................................................................................
Founding Members
1. Location of proposed society
Give location and approximate site of area in which the proposed society will provide services to members (if other societies are
to be members, give their names and location) ......................................................................……………….....................……
..................................................................................................................................
2. Kind of co-operative society required
Describe briefly the main purpose for which the society is to be organised
.........................................................................................................................................
.........................................................................................................................................
3. Reasons
Give detailed reasons for forming the society
..................................................................................................................................
..................................................................................................................................
4. Source of membership support
Briefly describe the main occupation or employment, or residential area, or other bond of association or occupation of the people
expected to become members
..................................................................................................................................
.........................................................................................................................................
5. Attitude towards community projects
Do the people referred to in item 4 work together in voluntary projects to benefit the community or area in which they live, or the
occupational, employment or other group to which they belong?
6. Expected membership
(a) Number of persons ready to join now.
(b) Estimated number of persons expected to join within the first year of operation
.........................................................................................................................................
...... ..................................................................................................................................
7. Management
If the society is registered, will the services of a competent manager (or secretary or treasurer) be available? ......................................................…….……………………….
(a) Name ...................................................…………………...…………….. (b) Experience and training ..........................................…………...……….. (c) Will he be able to keep or supervise the keeping of accurate books or
records?
.............................................................................................................................
.............................................................................................................................
8. Financial participation by members
(a) Will members provide share capital or other funds to start the society and continue to give it financial support after operations
commence?
............................................................................................................................. (b) Value of each share .................... euro. Total expected to be paid on
shares and/or subscriptions when operations commence .....................
euro.
(c) Total paid-up membership fees expected when operations commence…...… euro.
Total entrance fees to be paid when operations commence ......………
euro.
(d) From what source of income will members provide the capital required? (e.g. salaries, wages, business, etc.) …..............................………………………
9. Educational meetings
Have educational meetings been held to discuss the proposed society, its operations and its benefits to members if they support it?
............................................................................................................................. (a) If so, how many? .......................……………...........…………………
(b) Average number of attendance .......………..............……………….. (c) Speakers………………………………………………………………..
10. Discussion on Statute
Have study and discussion groups been organised to involve and inform people who wish to become members? ....…………………………………………………..
Has a model statute been discussed? If so, when, how, by whom and with whose assistance? ..…………………......….........……………….
11. Office space
If office space, a building or equipment is required for the purposes of the society, how will this be obtained and financed ?
..................................................................................................................................
.........................................................................................................................................
12. Planning and Technical Advice
Has advice been obtained on whether planning of the proposed society seems adequate and whether it has reasonable prospects of success
if the members give it their support?
................................................................................................…………………………..
If so, give the source of such advice ………………………...............………………
..................................................................................................................................
.........................................................................................................................................
13. Consultation with an officer of the Board
Has an officer of the Board been consulted on the need for the proposed society and necessary preparations for organisation?
(give details) ....................................................................................................................
..................................................................................................................................
..................................................................................................................................
Dated at…………………… the.......................... day of ……..……. 20 ...
Names and signatures of original prospective members:
…………………………………………………..
…………………………………………………..
…………………………………………………..
SECOND SCHEDULE Article 34(2)
The following is a non-exhaustive list of matters required to be included in the statute of a Co-operative Society:
1. The name of the society.
2. The place and postal address of its registered office.
3. The objects of the society.
4. The geographical area of operation of the society.
5. The purposes to which the society’s fund may be applied.
6. The value of each share, if the society is formed with share capital, or the minimum amount of monthly subscriptions.
7. The qualifications for membership, the terms of admission of members, the
entrance or affiliation fees, if any, payable, and the mode of admission.
8. The manner of raising share capital, if any, and other funds and the terms of withdrawal or transfer of shares and, or,
subscription capital.
9. The rights and obligations of members and the extent of the liability of members for debts of the society.
10. The conditions in which a member may withdraw from membership, including the procedure whereby the nominal value of the
shares held by a withdrawing member shall be redeemed.
11. The mode of summoning and conducting meetings, and the rights of voting.
12. The powers and duties of general meetings, committee of management, officers, and supervisory board (where applicable).
13. The mode of election, appointment, suspension and removal of the committee of management, the supervisory board (where applicable),
and officers of the society.
14. The legal and judicial representation of the society, including the authorisation of an officer or officers to sign documents
and otherwise act on behalf of the society.
15. The method of constituting, operating and allocating the reserve fund and the amount or method of fixing the amount to be
contributed thereto.
16. The disposal of the annual net surplus.
17. The honoraria or allowances, if any, to be paid to officers of the society.
18. Restrictions of transactions with persons other than members, if any.
19. In the case of a society the objects of which include the creation of funds to be lent to the members, additional rules
in its statute with respect of the following matters:
(a) the conditions on which loans may be made to members, including - (i) the maximum rate of interest;
(ii) the maximum period allowed for the repayment of a loan;
(iii) the extension of the term and renewal of a loan;
(iv) the purposes for which a loan may be granted; and
(v) the security required for repayment.
(b) the consequences of default in payment of any sum due on account of shares, subscriptions, deposits or loans and the consequence
of failure to use a loan for the purpose for which it was granted;
(c) the occupation or residence of persons who may become members; and
(d) the conditions on which loans and deposits may be received from members and non-members and the extent to which the
society may borrow from members and non-members.
20. In the case of a secondary society or tertiary society or the Apex organisation, the method of representation of members
at general meetings, the removal of delegates
and the manner of voting of delegates.
21. If deemed appropriate, rules distinguishing between active members and non- active members in relation to the qualification
for membership of the society and any other matters related thereto.
22. Rules in respect of any other matter incidental to the management of the society’s business.
23. If deemed appropriate, rules with respect to the referral of disputes to the
Arbitration Centre.
24. The maximum rate that the society may pay to its members by way of dividend.
25. If deemed appropriate, the provision of proxy rights.
26. If deemed appropriate, the provision of holding general meetings through suitable electronic or other means.
27. The maximum amount that a society may borrow, including bank overdrafts.
28. A procedure for the expulsion of members.
29. If deemed appropriate, the provision for including the possibility of having commercial partnerships as members.
30. The manner for convening the annual general meeting.
31. The number of members composing the committee of management.
32. Restrictions on members in relation to membership in other societies having the same or similar objects or in relation to
activities carried out in competition with those of the society.
33. Rules on the transmission of shares causa mortis.
34. Rules concerning the majority of votes required for amendments to the statute, conversions, amalgamations or dissolution
of the society.
35. Rules on the receipt, expenditure and investment of monies and the acquisition and disposal of assets by the society.
36. If deemed appropriate, the provision for requiring a second general meeting to confirm a resolution for the dissolution
of the society.
37. If deemed appropriate, the provision for the distribution of any part of the net surplus of a society among its members
in the form of bonus certificates or bonus shares.
THIRD SCHEDULE Amended by:
L.N. 426 of 2007.
FORM AND CONTENT OF INDIVIDUAL ACCOUNTS
1. (1) Subject to the following provisions of this Schedule -
(a) every balance sheet of a society shall show the items listed in the balance sheet format set out immediately following
paragraph 13 of this Schedule: and
(b) every income and expenditure account of a society shall show the items listed in the income and expenditure account format set
out immediately following the balance sheet format,
in either case in the order and under the headings and subheadings given in the format adopted. For this purpose the words in brackets
against the headings, the subheadings and the items are explanatory and do not have to be reproduced in the individual accounts.
(2) Sub-paragraph (1) is not to be read as requiring any item, or the heading or subheading for any item, to be distinguished
by any letter or number assigned thereto in the format adopted.
2. (1) Where, in accordance with paragraph 1, a society’s balance sheet or income and expenditure account for any accounting
period has been prepared by reference to one of the formats set out herein, the committee of management of the soc i ety shall adopt
the sa me forma t in preparing the financial statements for subsequent accountin g periods of the society unless, in t heir opi nion,
there are special reasons for a change.
(2) Particulars of any change in the format adopted in preparing a society’s balance sheet or income and expenditure account
in accordance with paragraph 1 shall be disclosed, and the reasons for the change shall be explained, in the notes to the accounts
drawn up when the new format is first adopted.
3. (1) Any item required in accordance with paragraph 1 to be shown in a society’s balance sheet or income and expenditure
account may be shown in greater detail than required by the format adopted.
(2) A society’s balance sheet or income and expenditure account may include an i t e m r e pr es en t i n g or co ver i n g
t h e amou n t of an y asset or l i a b i li ty, i n come or expenditure not otherwise covered by any of the items listed in the
format adopted, but the following shall not be treated as assets in a society’s balance sheet -
(a) expenses of and commission on any issue of shares; and
(b) costs of research.
Any additi onal items as aforesaid sha ll be included under either an ex ist i ng heading or subheading or under a new heading or
subheading as appropriate.
(3) The layout, nomenclature and terminology of items in the balance sheet and
income and expenditure account that are preceded by A rabic numerals shall be adapted where the special nature of an undertaking so
requires.
(4) Items to which Arabic numbers are assigned in any of the formats set out herein may be combined in a society's individual
accounts for any accounting period if either -
(a) their individual amounts are not material to assessing the state of affairs or surplus or loss of the society for that accounting
period; or
(b) the combination facilitates that assessment,
but where the provisions of sub-paragraph (b) apply, the individual amounts of any items so combined shall be disclosed in the notes to the accounts.
(5) Save where there is a corresponding item for the preceding accounting period, a balance sheet or income and expenditure
account item for which there is no amount shall not be shown. In such case, the heading or subheading in respect of that item shall
al so n ot be shown if that it em is the only one under such h eadin g of subheading.
4. (1) In respect of every item shown in a society’s balance sheet or income and expenditure account or in the notes to the
accounts, there shall also be shown the correspon din g amount for the acco unting period immediately preceding that to which the
individual accounts relate.
(2) Where that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the accounting
period to which the individual accounts relate, the former amount shall be adjusted and particulars of the adjustment and the reasons
for it shall be disclosed in the notes to the accounts. Such adjustments shall be made in accordan ce with gene rally ac cepted accounting
principles and practice.
5. Save as otherwise provided in this Schedule, or as may be permitted by generally accepted accounting principles and practice,
any set-off between asset and liability items, or between income and expenditure items, shall be prohibited.
6. (1) In determining whether particular assets are to be shown as fixed assets or current assets reference shall be made to
the purpose for which they are intended.
(2) Fixed assets shall comprise those assets which are intended to be held on a continuing basis in connection with the undertaking’s
activities.
(3) Where an asset or liability relates to more than one layout item, its relationship to the other item or items
shall be disclosed either under the item where it appears or in the notes to the accounts, if such disclosure is essential to the
comprehension of the individual accounts.
(4) Shares in secondary and tertiary undertakings may be shown only under the items prescribed for that purpose.
7. (1) "Provisions for liabilities or charges" are intended to cover losses or debts the nature of which is clearly
defined and which at the date of the balance sheet are either likely to be incurred, or certain to be incurred but uncertain as to
amount or as to the date on which they will arise.
(2) "Provisions for liabilities or charges" may not be used to adjust the values of assets.
8. (1) "Secondary and tertiary societies" shall have the meaning assigned to it by the Act.
(2) "Turnover" shall comprise the amounts derived from the sale of products and the provision of services falling within
the society’s ordinary activities, after deduction of sales rebates and taxes directly linked to the turnover.
9. (1) Income and charges that arise otherwise than in the course of the society’s or dina ry acti vities shall
be shown under "Extraor dina ry Income" and "Extraordinary Charges".
(2) Unless the income and charges referred to in sub-paragraph (1) hereof are immaterial for the assessment of the results, explanations
of their amount and nature shall be given in the notes to the accounts. The same shall apply to income and charges relating to another
accounting period.
10. (1) Every income and expenditure account of a society shall show the amount of the society’s surplus or loss on
ordinary activities before taxation.
(2) Taxes on the surplus or loss on ordinary activities and taxes on the extraordinary surplus or loss may be shown
in total as one item in the income and expenditure account before "Other Taxes not shown under the above items". In such
a case "Surplus or Loss on Ordinary Activities after Taxation" shall be omitted from the income and expenditure account
layouts prescribed in this Schedule.
(3) Where this derogation is applied there shall be disclosed in the notes to the accounts the extent to which the taxes on the
surplus or loss affect the surplus or loss on ordinary activities and the extraordinary surplus or loss.
11. Every surplus and loss account of a society shall show separately as additional items:
(a) any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves; and
(b) the aggregate amounts of -
(i) any dividends paid; and
(ii) any dividends proposed.
12. (1) The provisions of this Schedule shall be interpreted by reference to the application of generally accepted accounting
principles and practice to give a true and fair view within the meaning of this Act.
(2) Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes
of that provision.
13. References in this Schedule to the items listed in any of the formats set out below are to those items read together with any of the notes in the formats which apply to any of those items, and the requirement imposed by paragraph 1 to show the items listed in any such format in the order adopted in the format is subject to any provision in those notes for alternative positions for any particular items.
A. Called Up issued share capital not paid (may be shown in either of the two positions herein)
B. Formation Expenses (may be shown as the first item under "Intangible Assets") C. Fixed Assets
I. Intangible Assets
1. Development costs
2. Concessions, patents, licences, trade marks and similar rights and assets (if these were acquired for valuable consideration
and are not to be shown under goodwill or these were created by the society itself)
3. Goodwill (only to the extent that this was acquired for valuable consideration)
4. Payments on account
II. Tangible Assets
1. Land and buildings (including all rights on immovables)
2. Plant and machinery
3. Other fixtures, fittings, tools and equipment
4. Payments on account and tangible assets in the course of construction
III. Financial Assets
1. Loans to members
2. Shares in secondary societies
3. Loans to secondary societies
4. Shares in tertiary societies
5. Loans to tertiary societies
6. Shares in subsidiary undertakings
7. Loans to subsidiary undertakings
8. Shares in associated undertakings
9. Loans to associated undertakings
10. Other investments other than loans
11. Other loans
D. Current Assets
I. Stocks
l. Raw materials and consumables
2. Work in progress
3. Finished goods and goods for resale
4. Payments on account
II. Debtors (The amount falling due after more than one year shall be shown separately for each item included under debtors)
l. Trade debtors
2. Amounts owed by members
3. Amounts owed by secondary societies
4. Amounts owed by tertiary societies
5. Amounts owed by subsidiary undertakings
6. Amounts owed by associated undertakings
7. Other debtors
8. Called up issued share capital not paid (may be shown in either of the two positions herein)
9. Prepayments and accrued income (may be shown in either of the two positions herein)
III. Investments
1. Shares in secondary societies
2. Shares in tertiary societies
3. Shares in subsidiary undertakings
4. Shares in associated undertakings
5. Other investments
IV. Cash at Bank and in Hand
E. Prepayments and Accrued Income (may be shown in either of the two positions herein)
F. Creditors: Amounts falling due within One Year
1. Bank loans and overdrafts
2. Payments received on account (payments received on account of orders shall be shown here in so far as they are not shown as
deductions from stocks)
3. Trade creditors
4. Bills of exchange payable
5. Amounts owed to members
6. Amounts owed to secondary societies
7. Amounts owed to tertiary societies
8. Amounts owed to subsidiary undertakings
9. Amounts owed to associated undertakings
10. Amounts owed to the Central Co-operative Fund
11. Other creditors including taxation and social security (the amounts for creditors in respect of taxation and social
security shall be shown separately from the amount for other creditors)
12. Accruals and deferred income
G. Net Current Assets/Liabilities (in determining the amount to be shown for this item any amounts shown under "prepayments
and accrued income" shall be taken into account wherever shown)
H. Total Assets less Current Liabilities
I. Creditors: Amounts falling due after more than one year
1. Bank loans and overdrafts
2. Payments received on account (payments received on account of orders shall be shown here in so far as they are not shown as
deductions from stocks)
3. Trade creditors
4. Bills of exchange payable
5. Amounts owed to members
6. Amounts owed to secondary societies
7. Amounts owed to tertiary societies
8. Amounts owed to subsidiary undertakings
9. Amounts owed to associated undertakings
10. Other creditors including taxation and social security (the amounts for creditors in respect of taxation and social
security shall be shown separately from the amount for other creditors)
11. Accruals and deferred income
J. Provisions for Liabilities and Charges
1. Pensions and similar obligations
2. Taxation, including deferred taxation
3. Other provisions
K. Capital and Reserves
I. Called Up Issued Share Capital (in addition, the amount of the issued share capital and the amount of the called up issued share capital which has been paid up shall be shown separately in the notes to the accounts)
II. Reserve Fund
III. Share Premium Account
IV. Revaluation Reserve
V. Other Reserves
1. Capital redemption reserve
2. Reserves provided for by the statute
3. Other reserves
VI. Accumulated Surplus and Deficit Account
1. Turnover
2. Cost of sales (after taking into account any necessary provisions for depreciation or diminution in the value
of assets)
3. Gross surplus or loss
4. Distribution costs (after taking into account any necessary provisions for depreciation or diminution in the value
of assets)
5. Administrative expenses (after taking into account any necessary provisions for depreciation or diminution in the value
of assets)
6. Other operating income
7. Income from shares in secondary societies
8. Income from shares in tertiary societies
9. Income from shares in subsidiary undertakings
10. Income from shares in associated undertakings
11. Income from other financial fixed assets (income, including interest, derived fro m m e m b ers, second ary an d/o r t e
rti a ry and/ or su bsidi a ry and/ or associ ated undertakings shall be shown separately from income derived from other sources)
12. Other interest receivable and similar income (interest and similar income derived from members, secondary and/or
tertiary and/or subsidiary and/or associated undertakings shall be shown separately from that derived from other sources)
13. Amounts written off in respect of financial fixed assets and investments held as current assets
14. Interest payable and similar charges (the amount payable to members, secondary and/or tertiary and/or subsidiary
and/or associated undertakings shall be shown separately)
15. Tax on surplus or loss on ordinary activities
16. Surplus or loss on ordinary activities after taxation
17. Extraordinary income
18. Extraordinary charges
19. Extraordinary surplus or loss
20. Tax on extraordinary surplus or loss
21. Other taxes not shown under the above items
22. Surplus or loss
23. Contribution to the Central Co-operative Fund
24. Provision to the Reserve Fund
25. Net surplus or loss
26. Provision to any reserve fund provided by statute
27. Provision for any purpose allowed by the Act or provided by statute
28. Dividend
29. Patronage refund
30. Bonus certificate or bonus share issue
31. Income and expenditure account balance for the accounting period
14. Items shown in the individual accounts shall be valued in accordance with the following general principles -
(a) the society must be presumed to be carrying on its business as a going concern;
(b) the methods of valuation must be applied consistently from one accounting period to another;
(c) valuation must be made on a prudent basis, and in particular:
(i) only surplus realised at the balance sheet date may be included in the income and expenditure account,
(ii) account shall be taken of all foreseeable liabilities and potential losses arising in the course of the accounting period
concerned or of a previous one, even if such liabilities or losses become apparent only between the date of the balance
sheet and the date on which it is drawn up,
(iii) account must be taken of all depreciation whether the result of the accounting period is a loss or a surplus;
(d) account must be taken of income and charges relating to the accounting period, irrespective of the date of receipt or payment
of such income or charges;
(e) the components of asset and liability items must be valued separately;
(f) the opening balance sheet for each accounting period must correspond to the closing balance sheet for the preceding accounting
period.
15. (1) Formation expenses shown as assets in the balance sheet shall be written off within a maximum period of five
years.
(2) The amounts entered under "Formation Expenses" shall be explained in the notes to the accounts.
16. (1) In the case of any fixed asset which has a limited useful economic life,
the amount of -
(a) its purchase price or production cost; or
(b) where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life,
its purchase price or production cost less that estimated residual value,
shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset’s
useful economic life. Such provisions shall be charged in the income and expenditure account.
(2) The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.
(3) The production cost of an asset shall be determined by adding to the purchase price of the raw materials and consumables
used the amount of the costs incurred by the society which are directly attributable to the production of that asset.
(4) In addition to the costs specified in sub-paragraph (3) of this paragraph there may be included in the production cost of
an asset -
(a) a reasonable proportion of the costs incurred by the society which are only indirectly attributable to the production of that
asset, but only to the extent that they relate to the period of production; and
(b) interest on capital borrowed to finance the production of that asset, to the extent that it relates to the period of production.
The inclusion of such interest and the amount thereof shall be disclosed in the notes to the accounts.
(5) Fixed asset investments shall be accounted for in accordance with the following rules:
(a) such investments shall be included in the society’s individual accounts by using the cost method;
(b) the cost method referred to in sub-paragraph (a) is a method of accounting whereby the investment is recorded at cost. The income and expenditure account reflects income from
the investment only to the extent that distributions are received or are receivable by the investor from accumulated net surplus
of the investment arising subsequent to the date of acquisition;
17. (1) Where a financial fixed asset has diminished in value, provision for diminution in value may be made in respect of it
and the amount to be included in respect of it may be reduced accordingly. Any such provisions shall be charged in the profit and
loss account and if not shown separately in the profit and loss account, shall be disclosed (either separately or in aggregate) in
the notes to the accounts.
(2) Provision for diminution in value shall be made in respect of any fixed asset wh ich has diminished in value if the r e duction
in its value is expected to be p e rmanen t ( w h e t h er it s econo mic li fe is li mit ed o r not ), and th e amou nt t o b e
included in respect of it shall be reduced accordingly. Any such provision shall be charged in the income and expenditure account
and, if not shown separately in the incom e and ex pendi ture acco unt, shall be di scl o sed (ei t her separately or in aggregate)
in the notes to the accounts.
(3) Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any
extent, that provision shall be
written back to the extent that it is no longer necessary. Any amounts written back in accordance with this sub-paragraph which are
not shown separately in the income and expenditure account shall be disclosed (either separately or in aggregate) in the notes to
the accounts.
18. (1) Notwithstanding that an item in respect of "development costs" is in cl uded un der "fix ed assets"
in th e ba lance shee t formats conta i ned in this Schedule, an amount may only be included in a society’s balance sheet in respect
of development costs in special circumstances.
(2) If any amount is included in the society’s balance sheet in respect of deve lopment costs the foll owing in
formation shall be given in the notes to the accounts:
(a) the period over which the amount of those costs originally capitalised is being or is to be written off; and
(b) the reasons for capitalising the development costs in question.
19. (1) Where goodwill is treated as an asset the following provisions of this paragraph shall apply.
(2) Subject to sub-paragraphs (3) and (4), the amount of the consideration for any goodwill acquired by a society shall be reduced
by provisions for amortisation calcul ated to write off that amount systematically ov er a period chosen by the committee of management
of the society.
(3) The period chosen shall not exceed the useful economic life of the goodwill in question.
(4) In any case where any goodwill acquired by a society is shown or included as an as se t in the so ciet y’s balance sh eet
the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed
in the notes to the accounts.
20. (1) Subject to the following paragraph, assets which fall to be included -
(a) amongst the fixed assets of a society under the item "tangible assets"; or
(b) amongst the current assets of a society under the item "raw materials and consumables",
may be included at a fixed quantity and value.
(2) Sub-paragraph (1) applies to assets of a kind which are constantly being replaced, where -
(a) their overall value is not material to assessing the society’s state of affairs; and
(b) their quantity, value and composition are not subject to material variation.
21. (1) Subject to sub-paragraphs (2) and (3), the amount to be included in respect of any current asset shall, insofar as it
is applicable, be its purchase price or production cost.
(2) If the net realisable value of any current asset is lower than its purchase price or production cost, the amount to be included
in respect of that asset shall be the net realisable value.
(3) Where the reasons for which any provision for diminution in value made in accordance with sub-paragraph (2) have ceased to
apply to any extent, that provision shall be written back to the extent that it is no longer necessary.
22. The method of determination of purchase price and the method of determination of production cost given in paragraph
16 of this Schedule shall apply for the purposes of paragraph 21 of this Schedule. Furthermore, distribution costs may not be included
in production costs.
23. (1) Subject to the qualification mentioned in sub-paragraph (3), the purchase price or production cost of -
(a) any assets which fall to be included under any item shown in a society’s balance sheet under the subheading "stocks";
and
(b) any assets which are fungible assets (including investments),
shall be determined by the application of one of the methods mentioned in sub- paragraph (2) in relation to any such assets of the
same class.
(2) The methods referred to in sub-paragraph (1) are - (a) the method known as "first in, first out" (FIFO); (b) the weighted average price method; and
(c) any other method similar to any of the methods mentioned above.
(3) The method actually chosen for the purposes of this paragraph shall be the one which appears to the comm ittee of management
to be appr opriate in the circumstances of the society.
(4) Where in the case of any society -
(a) the purchase price or production cost of assets falling to be included under any item shown in the society’s balance
sheet has been determined by the application of any method permitted by this paragraph; and
(b) the amount shown in respect of that item differs materially from the relevant alternative amount given in sub-paragraph (5),
the amount of that difference shall be disclosed in the notes to the accounts.
(5) Subject to sub-paragraph (6), for the purposes of sub-paragraph (4)(b), the relevant alternative amount, in relation to any item shown in a society’s balance sheet, is the amount which would have been
shown in respect of that item if assets of any class included under that item at an amount determined by any method permitted by
this para graph had instead be en incl ude d at their re placemen t cost as at the balance sheet date.
(6) The relevant alternative amount may be determined by reference to the most recent actual purchase price or production cost
before the balance sheet date of assets of any class included under the item in question instead of by reference to their replacement
cost as at that date, but only if the former appears to the committee of management of the society to constitute the more appropri
a te stand a rd of comparison in the case of assets of that class.
(7) For the purpose of this paragraph, assets of any description shall be regarded as fungible if assets of that description are
substantially indistinguishable one from another.
24. (1) Where the amount repayable on any debt owed by a society is greater than the value of the consideration received in the
transaction giving rise to the debt, the amount of the difference may be treated as an asset.
(2) Where any amount as referred to in sub-paragraph (1) is treated as an asset - (a) it shall be written off by reasonable amounts each year;
(b) it shall be completely written off before repayment of the debt; and
(c) if the current amount is not shown as a separate item in the society’s balance sheet it shall be disclosed in the notes to
the accounts.
25. (1) Provisions for liabilities and charges may not exceed in amount the sums which are reasonably necessary.
(2) Particulars shall be given of each provision included in the item "other provisions" in the society’s
balance sheet in any case where the amount of that provision is material.
26. (1) Subject to paragraphs 28, 29 and 30 of this Schedule, the amounts to be included in respect of assets of any description
mentioned in paragraph 27 of this Schedule shall be determined on any basis mentioned in that paragraph.
(2) References in paragraphs 27 to 30 of this Schedule to "the depreciation rules" are to the rules embodied in
paragraphs 16, 17, 18, 20, 21 and 24 of this Schedule.
27. (1) Tangible fixed assets may be included at a market value determined as at the date of their last valuation.
(2) Investments of any description falling to be included under either of the balance sheet formats contained in Part I of this
Schedule may be included either -
(a) at a market value determined as at the date of their last valuation; or
(b) at a value determined on any basis which appears to the committee of management to be appropriate in the circumstances of the
society,
but in the latter case particulars of the method of valuation, etc., adopted and of the reasons for adopting it shall be disclosed
in the notes to the accounts.
(3) Notwithstanding any other provision of this Schedule, investments in which investment companies have invested their funds
shall be valued on the basis of their market value determined as at the balance sheet date.
28. (1) Where the value of any asset of a society is determined on the basis mentioned in paragraph 27 of this Schedule that value
shall be the starting point for determinin g the amount to be incl uded in respect of that asset in the soci ety’s individual accounts,
instead of its purchase price or production cost or any value previously so determin ed f o r that asse t; and th e depr eciation
r u les shall apply accordingly in relation to any such asset with the substitution for any reference to its purchase price or product
i on co st by a reference to the val u e m o st recently determined for that asset on any basis mentioned in paragraph 27 of this
Schedule.
(2) The amount of any provision for depreciation required in the case of any fixed asset as it applies by virtue of sub-paragraph
(1) is referred to in sub-paragraph (3 ) as t h e adj u sted am oun t, and the am oun t of any provisio n w h ich woul
d be
required in respect of that asset according to the historical cost accounting rules is referred to as the historical cost amount.
(3) Where sub-paragraph (1) applies in the case of any fixed asset, the amount of any provision for depreciation in respect of
that asset -
(a) included in any item shown in the income and expenditure account in respect of amounts written off against the assets of the
description in question; or
(b) taken into account in stating any item so shown which is required by the explanatory notes in the income and expenditure
account format contained in Part I of this Schedule to be stated after taking into account any necessary provisions for depreciation
or diminution in the value of assets included under it,
may be the historical cost amount instead of the adjusted amount, provided that the amount of any diff erence between th e two is
accoun te d for in the income and expenditure account and disclosed separately therein or in the notes to the accounts.
29. (1) This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a society’s
individual accounts have been determined on any basis mentioned in paragraph 27 of this Schedule.
(2) The items affected and the basis of a valuation adopted in determining the amounts of the assets in question in the case of
each of such items shall be disclosed in the notes to the accounts.
(3) In the case of each balance sheet item which is affected -
(a) the comparable amounts determined according to the historical cost accounting rules; or
(b) the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item,
shall be shown separately in the balance sheet or in the notes to the accounts.
(4) In sub-paragraph (3), references in relation to any item to the comparable amounts determined as mentioned thereto are references
to -
(a) the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect
of all the assets covered by that item were determined according to the historical cost accounting rules; and
(b) the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted
or required in determining those amounts according to those rules.
30. (1) With respect to any determination of the value of an asset of a society on any basis mentioned in paragraph 27 of this
Schedule the amount of any surplus or loss arising from that determination shall be credited or, as the case may be, debited to a
separate reserve to be called "the revaluation reserve", after allowing, where appropriate, for any provisions for depreciation
or diminution in value made otherwise than by reference to the value so determined and for any adjustments of any such provisions
made in the light of that determination.
(2) The amount of the revaluation reserve shall be shown in the society’s b a lance sheet under a separate sub
h eadi ng in the po siti on given for the item
"revaluation reserve" in Format 1 or 2 of the balance sheet formats contained in this
Schedule, but need not be shown under that name.
(3) The revaluation reserve shall be reduced to the extent that the amounts sta ndi ng t o th e c r ed it o f the rese
rve are in the op inion of the committee of management of the society no longer necessary for the purpose of the accounting policies
adopted by the society; but an amount may only be transferred from that reserve to the income and expenditure account if -
(a) the amount in question was previously charged to that account; or
(b) it represents realised surplus.
(4) Any amounts transferred from the revaluation reserve to the income and expenditure account in accordance with the provisions
of sub-paragraph (3) shall be shown separately in the income and expenditure account.
(5) Notwithstanding the provisions of sub-paragraph (3) the balance standing to the credit of the revaluation reserve may be capitalised
in whole or in part at any time.
(6) The treatment for taxation purpose of amounts credited or debited to the revaluation reserve shall be disclosed in the notes
to the accounts.
31. Any information required in the case of any society by the provisions of this paragraph shall, if not given in the balance
sheet or the income and expenditure account, be given by way of the notes to the accounts. The information in respect of the following
matters shall be provided as a minimum -
(a) The valuation methods applied to the various items in the individual accounts, and the methods employed in calculating the provisions
for depreciation and diminution in value. For items included in the individual accounts which are or were originally expressed
in foreign currency, the bases of translation used to express them in local currency shall be disclosed.
(b) The number and the nominal value of the shares subscribed during the accounting period within the limits of the authorised capital.
(c) The name, registered office and the type of each of the societies and/or partnerships, of which the society is a member, with
unlimited liability; provided that this information may be omitted if it is not material.
(d) Information in respect of each item which is or would but for paragraph
3(4)(b) of this Schedule be shown under the general item "fixed assets" in the society’s balance sheet, relating to -
(i) the amount of the purchase price or production cost, leaving out therefrom the depreciation or diminution in value in respect
of that item, as at the date of the beginning of the accounting period and as at the balance sheet date respectively;
(ii) the effect on any amount shown in the balance sheet in respect of that item of -
- any revision of the amount in respect of any assets included under that item made during that period,
- acquisitions during that period of any assets,
- disposals during that period of any assets, and
- any transfers of assets of the society to and from that item during that period.
(e) In respect of each item within indent (d) of this paragraph -
(i) the cumulative amount of provisions for depreciation or diminution in the value of assets included under that
item as at each date mentioned in indent (d)(i) of this paragraph;
(ii) the amount of any such provisions made in respect of the accounting period;
(iii) the amount of any adjustments made in respect of any such provisions during the period in consequence of the disposal
of any assets; and
(iv) the amount of any other adjustments made in respect of any such provisions during the period.
(f) The information required to be disclosed by virtue of indents (d) and (e) of this paragraph shall also be provided in the case of "Formation Expenses" where this item is shown separately
from "Fixed Assets" in the balance sheet.
(g) Amounts owed by the society and becoming due and payable after more than five years as well as the society’s entire debts covered
by valuable security furnished by the society with an indication of the nature and form of the security. This information shall
be disclosed separately for each creditor ’s item, as provided for in the formats described in Part I of this Schedule.
(h) The total amount of any financial commitments that are not included in the balance sheet, in so far as this information
is of assistance in assessing the financial position. Any commitments concerning pensions and group undertakings shall be disclosed
separately.
(i) The turnover within the meaning of paragraph 8 of this Schedule, broken down by categories of activity and into geographical
market in so far as, taking account of the manner in which the sale of products and the provision of services falling within the
society’s ordinary activities are organised, these categories and markets differ substantially from one another.
(j) The average number of persons employed during the accounting period, broken down by categories and, if they are not disclosed
separately in the income and expenditure account, the staff costs relating to the accounting period broken down as otherwise
required by Formats 2 and
4 of the income and expenditure account.
(k) The difference between the tax charged for the accounting period and for earlier accounting periods and the amount of tax payable
in respect of those periods, provided that this difference is material for purposes of future taxation. This amount may also be disclosed
in the balance sheet as a cumulative amount under a separate item with an appropriate heading.
(l) (i) The aggregate amount of the emoluments granted in respect of the accounting period to the members of the committee of
management of a society for their services as members of the committee of management of that society or for their services as members
of the committee of management of any of its secondary, tertiary, subsidiary, or associated undertakings, while acting as directors/members
of the committee of
management of that undertaking; and
(ii) The aggregate amount of any other emoluments granted in respect of the accounting period to the members of
the committee of management of a society for their services in connection with the management of the affairs of the
society or any of its secondary, tertiary, subsidiary, or associated undertakings, while acting as directors/ members
of the committee of management of that undertaking; and shown separately from the aggregate amount of emoluments referred to
in item (i) above; and
(iii) The fact that the society has, during the accounting period, purchased or maintained a provision for any of its officers
and, or, the auditor of such society, exempting them or indemnifying them, or any of them, as the case may be, against any liability
which, by virtue of any law, would in the absence of such provision have been attached to them, as the case may be, in respect of
any negligence, default or breach of duty, and the aggregate amount of premiums paid in respect thereof.
In this indent, emoluments shall include the remuneration for the services of the members of the committee of management referred
to herein and all fees, percentages, gifts, compensation for loss of office and other similar payments; as well as any commitments
arising or entered into in respect of retirement pensions, superannuation allowances, gratuities or other similar
commitments in favour of former members of the committee of management of the society referred to herein.
The commitments arising or entered into in respect of retirement pensions, superannuation allowances, gratuities or other
similar commitments in favour of former members of the committee of management of the society shall be shown separately
from the other emoluments.
(m) The amount of advances and credits granted to members of the committee of management of a society with indications of
the interest rates, main conditions and any amounts repaid; as well as commitments entered into on their behalf by way of guarantees
of any kind. The said commitments shall be shown separately.
(n) The name and registered office of the undertaking which draws up the consolidated accounts of the largest body of undertakings
of which the society forms part as a subsidiary undertaking.
(o) The name and the registered office of the undertaking which draws up the consolidated accounts of the smallest body of undertakings
of which the society forms part as a subsidiary undertaking; and
(p) Where the parent companies referred to in indents (q) and (r) of this paragraph are not registered in Malta, the place where copies of the consolidated accounts referred to in these indents
may be obtained, provided that they are available to the public.
32. (1) If at the end of its accounting period, the society has one or more secondary, tertiary, subsidiary, or associated
undertakings or participating interests in other undertakings, the following information shall, where applicable, be given with respect
to each such undertaking -
(a) the kind, name and registered or principal office of each undertaking;
(b) in relation to the shares of each class of each undertaking held by the society, the identity of each class and the proportion
of the nominal value of the issued shares of that class represented by the shares held as at the end of the undertaking’s relevant
accounting period; and
(c) the aggregate amount of the capital and reserves of each undertaking as at the end of its relevant accounting period, and its
surplus or loss for that period.
(2) For the purposes of sub-paragraph (1), the relevant accounting period is - (a) if the accounting period of the undertaking ends with that of the society
giving the information in its notes to the accounts, that accounting period; and
(b) if not, the undertaking’s accounting period ending last before the end of the accounting period of the society giving that information.
(3) The provisions of sub-paragraph (1) are subject to the exceptions and other provisions contained in paragraphs 33 and 34 of
this Schedule.
33. (1) Information otherwise required by paragraph 32(1) of this Schedule need not be given if it is not material.
(2) References in this paragraph and in paragraph 32 of this Schedule to shares of undertakings shall include references to beneficial
interests in undertakings where the capital of such undertakings is not divided into shares.
34. (1) The information referred to in indent (l) of paragraph 31 and in p a ragrap hs 32 and 33 of this Schedu le m ay b e o m i tted when i t ap pears to t h e committee of
management that their nature is such that they would be seriously prejudicial to any of the undertakings affected by these provisions
and the Board agrees that the information need not be disclosed.
(2) Where any information is omitted from the notes to the accounts by virtue of the provisions of sub-paragraph (1), that fact
shall be disclosed in the notes to the accounts.
35. (1) Particulars shall be given in the notes to the accounts of any charge on the assets of the society to secure the liabilities
of any other person including, where practicable, the amount secured.
(2) The following information shall be given with respect to any other contingent liability not provided for other than
where the possibility of a loss is judged by the committee of management of the society to be remote -
(a) the amount or estimated amount of that liability; (b) its legal nature; and
(c) whether any valuable security has been provided by the society in connection with that liability and, if so, what valuable
security has been so provided.
(3) There shall be stated, where practicable -
(a) the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for; and
(b) the aggregate amount or estimated amount of capital expenditure authorised by the committee of management which
has not been contracted for.
(4) Commitments within any of the preceding sub-paragraphs of this paragraph undertaken on behalf of or for the benefit of a group
undertaking shall be stated separately from the other commitments within that sub-paragraph.
36. (1) Where any amount is transferred - (a) to or from any reserves; or
(b) to any provision for liabilities or charges; or
(c) from any provision for liabilities and charges otherwise than for the purpose for which the provision was established,
and the reserves or provisions are shown as separate items in the society’s balance sheet or in the notes to the accounts, the information
mentioned in sub-paragraph (2) shall be given in respect of the aggregate of reserves or provisions included in the same item.
(2) That information to which reference is made in sub-paragraph (1) is -
(a) the amount of the reserves or provisions as at the date of the beginning of the accounting period and as at the balance sheet
date respectively;
(b) any amounts transferred to or from the reserves or provisions during that period; and
(c) the source and application respectively of any amounts so transferred.
37. (1) If, when individual accounts are drawn up in accordance with the provisions of this Schedule for the first time,
the purchase price or production cost of a fixed asset cannot be determined without undue expense or delay, the net book amount at
the beginning of the accounting period may be treated as the purchase price or production cost.
(2) Any application of the provisions of sub-paragraph (1) shall be disclosed in the notes to the accounts.
(1) Societies which, on their balance sheet date, do not exceed the limits of two of the three following criteria:
- balance sheet total: two million and five hundred and sixty-two thousand and three hundred and ten euro and
seventy-four cents (2,562,310.74);
- turnover: five million and one hundred and twenty-four thousand and six hundred and twenty-one euro and forty-eight cents
(5,124,621.48);
- average number of employees during the accounting period: fifty;
shall in this Act be designated as small societies and may, for the purposes of this Act, draw up an abridged set of audited financial
statements as specified in paragraphs (2) and (3) of this Part for public inspection.
(2) For the purposes of this Part, the word "abridged" -
(a) when used therein in relation to a balance sheet, shall mean an abbreviated version of the balance sheet, showing
only those items to
which a letter or Roman number is assigned in the balance sheet format shown under Part I of this Schedule, immediately following
paragraph
13, under the heading "Balance Sheet Format"; but such version shall, in all other respects, correspond to the full balance
sheet;
(b) when used therein in relation to an income and expenditure account, shall mean the full income and expenditure account with the
exception that items 1, 2, 3 and 6 in the income and expenditure format shown under Part I of this Schedule, immediately following
paragraph 13, under the heading "Income and Expenditure Format", can be combined as one item under the heading "gross
surplus or loss".
(3) Societies referred to in paragraph (1) of this Part may draw up abridged notes to the accounts, omitting the disclosures prescribed
by indents (g) to (l) of paragraph 31 of Part III of this Schedule. The notes to the accounts shall however disclose the information specified in indent
(g) of the said paragraph 31 in total for all the items concerned.
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