Co-operative Societies Act, 1970

This section gives the Act its short title: the Co-operative Societies Act.

This section defines key terms used in the Act, including “society,” “Registrar,” and “special resolution.”

The Minister must take measures to encourage co-operative development and the organisation of co-operative societies.

The Minister must take, authorise, or approve measures needed to support co-operative development and carry out the Act.

The Minister must share, or arrange to share, information about co-operation and co-operative development.

Officers of societies covered by the Act must give the Minister any information he requires, and officers who ignore a request or knowingly give materially false information commit an offence.

The Minister must arrange for an annual report on the operations of registered societies to be prepared and included in the Minister’s annual report laid before the National Assembly.

This section creates a Director of Co-operative Societies, makes the Director a public officer, and assigns the Director responsibility for services and for carrying out the Act.

This section creates the Registrar, Deputy Registrar, and Assistant Registrars for co-operative societies and sets out their powers and duties.

Certain groups may register a society if they pay the fee and get the Registrar’s approval.

Before approving registration, the Registrar may ask for more information and may delay approval; if registration is refused, the Registrar must give specific reasons, and the refusal can be appealed to the Minister within 90 days.

If the Registrar approves registration, he must issue the society a certificate of registration and a certified copy of the by-laws.

A registered society becomes a body corporate with perpetual succession, a common seal, limited liability, and powers to hold property, make contracts, sue and be sued, and do necessary acts to achieve its objects.

A company may convert itself into a society by special resolution, but must follow the filing and registration steps set out here.

Each member is liable to the society’s creditors, but only up to any unpaid amount on the shares allotted to that member or on the member’s membership fee.

Every society must display its registered name clearly on its office and use it on specified records and documents.

A group of persons formed for trade or business primarily for gain cannot be registered as a society if profits are not shared with customers in proportion to patronage.

The Registrar may, after investigation and by written notice, require or recommend societies to form or join a co-operative union.

A society has the powers listed in the First Schedule, and it may add to, remove, or change those powers in its by-laws if the Registrar approves.

Every society’s by-laws must include provisions covering the matters listed in the Second Schedule.

A society may amend its by-laws, but the amendment is not valid until registered unless the Registrar has pre-approved it and it is adopted as proposed.

Every society must keep a copy of the Act, rules, by-laws, and a list of members open to inspection at its registered office, free of charge, at all reasonable times.

Societies that earn a surplus must keep a reserve fund and provide for its operation in the by-laws.

Societies that may be formed and registered under this Act are not limited to the kinds listed in Parts V to XII.

A society may be registered mainly to carry on business connected with marketing and handling agricultural products and their by-products.

A society may be registered to carry on business related to agricultural requisites, consumer goods, and household necessities, including retail sales to members or non-member patrons.

A society may be registered to provide farming services to its members, and it may also have additional farming-related objects.

A society may be registered to carry on specified co-operative business and operations.

A qualifying society may be appointed as agent of a marketing board or other authority.

A qualifying society may allot capital shares to members instead of paying cash amounts or a patronage bonus.

A qualifying society may require its members, through its by-laws, to loan the society amounts taken from sale proceeds or a patronage bonus instead of paying those amounts in cash.

A marketing society may make contracts with members only with Registrar approval, and members can be required to sell through the society under those contracts.

A qualifying society may, through its by-laws, accept interest-bearing savings deposits from members, and members may make or withdraw deposits subject to by-laws, notice rules, and a one-fifth cap for stipulated-term deposits.

The Registrar may approve and register by-laws for the section 33 purpose if specified conditions are met.

Agricultural societies with the stated objects may be authorised by their by-laws to lend to members, but lending is subject to the Act, the rules, by-laws, security requirements, Registrar approval in some cases, and a ban on lending to non-members in good standing.

The board of directors must supervise credit and loans, set loan amounts, security, and interest, and follow approval and record-keeping rules.

The Registrar may approve and register by-laws for agricultural credit if several listed conditions are met.

A society may combine thrift services with credit, and a qualifying society may be authorised by by-laws to accept interest-bearing savings deposits.

A society may be registered to provide farm machinery services and to handle related agricultural products and requisites.

A society may be registered to assist livestock, dairy, and poultry producers with listed services, but registration for veterinary-services objects needs written approval from the Minister responsible for veterinary services.

A society may be registered for certain land improvement-related purposes, including water supply, irrigation, watershed development, flood control, drainage, soil erosion control, and crop rotation.

Certain societies may put these rules in their by-laws: members can be required to contribute funds, capital, labour, or services; directors can be given quota-setting powers; and the by-laws can bar dividends and patronage bonuses and send surplus to reserves.

A society may be registered to arrange advisory and supervisory services for farmers and collect member fees to pay for those services.

A society may be registered to run warehouses and handle equipment for storing and moving agricultural products made by its members.

A society may be registered to buy, hire, acquire, operate, and maintain transport equipment for moving its members’ agricultural products and farm supplies to market.

A society may be registered to produce, process, use, or market natural products, provide related services, appoints as an agent of a marketing board or other authority, and enter marketing contracts with members.

A building construction society may be registered for specified construction and materials-related purposes.

A housing society may be registered to build, acquire, manage, or plan houses, flats, and land for its members.

Building construction societies and housing societies may do certain financial and member-service activities if their by-laws allow it.

A building construction or housing society may not start operations until it gives the Registrar evidence that members have received the required training and that member capital meets the amount set by the by-laws.

By-laws of a building construction or housing society must set rules, where applicable, for members’ capital contributions, payments for society services, and valuing labour or materials used as payment.

Every housing society must set aside an annual sinking fund before distributing any net surplus.

A co-operative savings and credit society may be registered as a credit union for member thrift and member credit at controlled interest rates.

Certain registered societies must include one or more of the words “savings”, “thrift”, and “credit” in their name; with the Registrar’s approval, “co-operative” may be omitted.

A credit union must draw its membership from people with a common occupation or association, or from people living in the same neighbourhood, community, or rural or urban district, subject to section 56.

Credit unions may admit certain organisations as members with the Registrar’s approval, member organisations may vote by delegate, and loans to member organisations are capped at one-quarter of paid-up capital plus deposits.

A credit union may take deposits, lend to members, place money with certain institutions, invest within stated limits, and borrow money under section 58.

A credit union may borrow, but only with Registrar approval and within stated limits; it may also secure borrowings over its property with Registrar approval.

A credit union may not start lending operations until it gives the Registrar satisfactory evidence that enough members have subscribed for the required shares and made the initial payments.

A credit union may deal in land or buildings for its purposes, but only with the Registrar’s approval.

A credit union must elect a board of directors, credit committee, and supervisory committee at its first general meeting after registration, and certain employees or committee members cannot serve on the supervisory committee.

A credit union’s board of directors must set certain loan and shareholding limits, set loan and deposit interest rates, declare dividends, and manage the credit union’s investments.

The credit committee supervises member loans, sets each loan amount, and must keep full records available to the Registrar.

Credit unions must make loans only for provident or productive purposes, and the credit committee must review applications, require security in most cases, and control when loan proceeds may be released.

A credit union may not make a loan that would push a borrower over the stated lending limit, and it may not make new loans if reserves are below the stated minimum unless the Registrar approves.

A credit union may make loans only for specified purposes and only if it meets prescribed conditions, and its total loans under this section must stay within a one-quarter cap.

A loan application under section 67 must be considered and approved by majority vote of the required group meeting together.

A credit union officer may not borrow more than the value of specified shares, deposits, and assigned Government of Zambia securities unless the application is approved by a majority vote of named committee members and directors.

A credit union must not lend money to, or accept deposits from, someone who is not a member, subject to section 57.

Credit union officers and employees must not lend credit union funds to a loan applicant unless the application and loan have been approved as required by the Act.

A credit union’s loan interest rates must not exceed 1% per month on unpaid balances.

The credit committee must report regularly to the board and annually to the annual general meeting, including loan and committee-work details, and it must not reveal any borrower’s name.

The supervisory committee of a credit union must carry out regular examinations, handle audit and reporting duties, fill vacancies, may suspend an officer if all members approve, and must keep and provide records to the Registrar.

When a credit union’s share capital and deposits exceed a prescribed amount, the supervisory committee must seek approval to engage an auditor and then submit the auditor’s report to the next annual general meeting.

Credit union shares may be paid for in instalments under the by-laws, members may be required to subscribe for a minimum number of shares, and withdrawals of share money can be subject to written application and up to 90 days' notice.

Members may deposit money in a credit union and withdraw it when the credit union is open, subject to by-laws and possible notice rules.

Every credit union must keep a reserve for withdrawals and keep it at least 10% of relevant liabilities at each month end; cash on hand may be kept only under prescribed safeguards approved by the Registrar.

A credit union’s board must set aside part of annual surplus into a reserve fund and then present a surplus-distribution declaration to the annual general meeting.

A society may be registered for certain listed principal objects and purposes.

A registered society may put special rules in its by-laws about member funding, labour contributions, member loans, and sales of consumer and household goods.

A consumers' society may be registered for retail supply to members and non-members, and its membership may be limited to people living in a defined neighbourhood, community, district, or rural area.

A consumers’ society may set by-laws limiting credit sales and may use patronage bonus to allot shares or require member loans.

Directors of a consumers' society must regularly review the society’s business and credit or hire-purchase transactions, and may require officers to stop new credit or hire-purchase business if financial harm is likely.

Officers or employees of a consumers' society acting for it must not buy or sell goods on credit unless they are following instructions from the board of directors.

A consumers' society may set by-laws that make members ineligible for election to the board if they are in arrears or have not bought the required value of goods from the society in the previous financial year.

Part X still applies to a consumers' society for retail buying and selling of goods, wares, merchandise, or agricultural requisites, even if the society mainly provides other services.

A society may be registered for community purposes, but a society registered under section 88 must not pay dividends or patronage bonuses and must treat yearly surplus as a reserve fund unless directors are authorised to donate it to local community-benefit organisations.

A community service society cannot be registered for these health-service payment arrangements unless the Minister in charge of health services gives written approval.

Certain federations of societies or co-operative unions may be registered as a society under this Act if they are formed for one or more listed co-operative purposes.

The Registrar may allow a federation society to omit the word "co-operative" from its name.

A society’s membership must be governed by its by-laws, and the society may not set any limit on the number of members.

This section sets who can become a member of a society, including approval, age, and local-residence conditions.

A society may handle a minor’s share or deposit money only if its by-laws allow it, and may pay related dividend or interest to the minor or to the minor’s guardian for the minor’s use.

A society member must not exercise member rights until the required payment or prescribed interest has been made or acquired.

A member must receive a certificate of membership if there is no share capital and any membership fee has been paid in full.

Every society has a lien over members’ shares or other interests for debts owed to the society.

Most societies must give each member a statement after every annual general meeting.

Every society must keep a register of its members and any shares they hold.

Members and delegates get one vote each at society meetings, proxy voting is banned, the Chairman has a casting vote if votes are equal, and the by-laws must set delegate numbers or how they are determined.

A society member who is under 21 may still execute required instruments or give required acquittances, and their contracts with the society remain valid and enforceable.

A member may not hold more than one-fifth of a society’s share capital, unless the member is another society.

Shares may be assigned, transferred, redeemed, or repurchased, but any such transaction must follow the society’s by-laws and board approval rules.

A member’s shares or interest in a society cannot be attached or sold by court order for that member’s debts, but transfer, assignment, or sale to the society or another member is allowed if the by-laws allow it.

If a member dies, the society may transfer or pay the value of the member’s shares or other interest to a nominated person or, if none, to the legal personal representative, and must pay other money due to the representative.

A past member and a deceased member’s estate stay liable for society debts for up to two years, unless a first audit shows a credit balance for the society.

Certain debts owed to a society or housing society become a first charge on specified property, subject to listed prior claims and a bona fide purchaser exception.

A member may withdraw from a registered society if the by-laws and required notice conditions are met; directors must deal promptly with withdrawal applications.

This section sets out the procedure for expelling a member of a society, including notice, a hearing, a possible appeal, and refund and re-admission rules.

Every society must have a board of directors sized as its by-laws prescribe.

If a society’s by-laws allow directors to be elected by districts, those directors are treated as elected by all members or delegates.

Directors must manage and supervise the society, perform several reporting and membership duties, and disclose conflicts before a contract is made.

Directors must choose a Chairman and at least one Vice-Chairman from among themselves, and may appoint and set pay for a Secretary, Treasurer, Secretary-treasurer, or manager.

The directors’ term of office must be set by the by-laws.

Only a society member or a delegate of a member society may be elected or appointed as a director, subject to sections 161 and 162.

If a board vacancy happens for reasons other than expiry of the term, the remaining board members may fill it until the next annual general meeting unless the by-laws say otherwise. If vacancies reduce the board below the by-law quorum, the remaining directors must immediately call a special general meeting to fill the vacancies.

A director’s office ends if certain events happen, including removal, holding disallowed profit office, bankruptcy, unsound mind, non-disclosure of a conflicting interest, dishonesty convictions or imprisonment of three months or more, or death.

Directors, committee members, and other officers who make or agree to an unlawful loan or other transaction are jointly and severally liable to the society up to the amount involved, but a court may reduce or remove personal liability in qualifying cases.

Directors must hold meetings as provided by the by-laws, and the Chairman may or must call a special meeting in specified cases.

The directors may require certain officeholders to give security that the directors consider sufficient.

A society may remove a director before the end of the director’s term if there is no by-law provision on the matter and the removal is supported by good reason and a two-thirds resolution at the required meeting.

Every society must provide for an annual general meeting in its by-laws, and may provide for other general meetings too.

Rules for calling and running special meetings of a society.

If it is impracticable to call a society meeting in the usual way, the Registrar may prescribe how the meeting is called, but only on application.

A society has a quorum at a general or special meeting when a majority of the members, delegates, or both, entitled to attend and vote are present, unless the Act, rules, or by-laws say otherwise.

The Registrar may call a meeting if a society misses its annual general meeting, and may also call a special meeting to report audit or investigation results.

Members’ authority is exercised through the annual general meeting and any properly called special meeting.

Societies must register certain charges with the Registrar within 30 days, and keep copies of charge instruments at the registered address.

People who appoint or obtain a receiver/manager for a society must notify the Registrar within 7 days, and receivers/managers in possession must file half-yearly accounts and a notice when they stop acting.

A Judge may extend the time for registering a charge or rectify an omission or mis-statement if the stated conditions are met.

The Registrar must enter a memorandum of satisfaction on the register when satisfied that the debt secured by the registered charge has been paid or satisfied, and must give the society a copy if required.

A society must send the Registrar the particulars of any charge that must be registered under this Part, unless someone else has already applied for registration.

Every society must keep a register of charges and record specified charge details; an officer who knowingly and wilfully allows a required entry to be omitted commits an offence and may be fined up to 1,000 penalty units.

The society must keep the specified charge documents and register available for inspection, with some inspections free and others subject to a fee.

A condition in a charge created by a society is not invalid just because it makes the charge irredeemable or redeemable only on a contingency or after a long period.

Every society must have a registered office for communications and notices.

Every society must have a corporate seal showing the society’s name.

Societies must keep records and books of accounts as required by the Registrar, and members or delegates may inspect the records during office hours at the registered office, subject to rules and consent limits.

The Registrar must audit each society’s accounts at least once a year, and may order a special investigation when needed to protect members or creditors.

Societies above a prescribed asset threshold must have their annual audit done by a qualified accountant in Zambia, with Registrar involvement.

The Registrar, or a person authorised by the Registrar in writing, may inspect a society’s records and cash at all reasonable times, and society officers must provide requested information about the society’s transactions and operations.

Societies must send requested audited annual statements to members within six months after year-end, and furnish the Registrar with annual or other returns and information as required.

Societies may amalgamate or transfer engagements only with Registrar approval and special resolutions, and related filings and registration steps must be completed.

A society may divide into two or more societies with the Registrar’s approval and required conditions.

The Registrar may cancel a society’s registration in specified circumstances, and a cancelled society can be wound up only by the Registrar’s order.

If the Registrar cancels a society’s registration, the Registrar may appoint liquidator(s); the society’s assets then vest in the liquidator(s) until the appointment ends or the cancellation is set aside on appeal.

A liquidator may carry out listed liquidation tasks, but only under the Registrar’s control and with some Registrar approvals; the liquidator must not issue loans.

The liquidator acts under the Registrar’s control, and the Registrar may direct, limit, replace, audit, and review the liquidator’s actions.

An appeal may be made to a subordinate court of the first class over the area where the society’s headquarters are located, if the Attorney-General gives written consent.

Court orders, decisions, or instructions made under sections 148 to 150 may be enforced by a court with jurisdiction in the same way as that court would enforce its own decree.

A civil court has no jurisdiction over matters concerning dissolution of a society, except where the Act expressly provides otherwise.

When a cancelled society is being liquidated, its funds must be used in a set order, stale claims are cancelled after two years, and any surplus is distributed to members or, if that is impracticable, to community-benefit local organisations with the Registrar’s approval.

Some society disputes may be referred to the Registrar for decision unless the by-laws require arbitration.

The Registrar may refer a question of law to the High Court, and a Judge directed by the Chief Justice may decide that referred question.

The Minister may make rules and orders, by statutory instrument, for societies and societies seeking registration.

The Registrar, or someone authorised to act for the Registrar, must provide co-operative information on request from interested people or groups. The Registrar may also offer help, and may ask certain federations to provide information or do educational and advisory work.

The Registrar must provide, or arrange for, inspection, examination, and technical or other advice for a society when needed to support compliance with the Act and the society’s objects. The Registrar and the Director of Co-operative Societies also have limited powers to arrange additional advice or services through federation officers or government departments.

The Registrar may prepare by-laws for a society or proposed society if asked and given the proposed objects or purposes.

A person may inspect society by-laws at the Registrar’s office if the prescribed fee is paid; other related documents are only searchable with the Registrar’s consent.

The Registrar may appoint special members or special officers for a society, and must do so when directed by the Minister.

The Registrar may remove directors or officers of a society and replace them with special directors or officers; if the Minister directs, the Registrar must do so.

The Registrar may appoint an administrator for a society, and must do so if directed by the Minister.

The Minister may set up a board of up to five people to review certain society applications and proposed securities sales, and the board may recommend changes, set conditions, and report disapprovals.

Sums owed to the Government by a society, or by an officer, member, or past member of a society, may be recovered under the law for recovering Government debts.

This section gives certain societies, credit unions, and federations exemptions from some banking, securities, and licensing rules, and lets the Minister remit registration-related fees by statutory instrument.

The Minister can exempt a society or class of societies from this Act, or make the Act apply to them with specified modifications.

Only a society may use a business name or title containing "co-operative" or "credit union" unless the Minister approves it.

The Companies Act, and any replacement Act, does not apply to a society.

Officers or members of a society may commit an offence if they fail to do required acts, ignore Registrar requests, or give false information. Penalties can include a fine, imprisonment, or both. The Registrar may also cancel and later restore a society’s registration in specified cases.

It is an offence to unlawfully take, keep, misuse, or use society property or money for unauthorized purposes.

This section repeals the Co-operative Societies Act, Chapter 689, and sets out savings so things done under the repealed Act continue to operate as corresponding acts under this Act. It also gives every society a list of powers, subject to the Act, the rules, and any by-laws that exclude or modify them.

This provision refers to the place and postal address of a registered office.

This section is titled "The objects for which the society is established."

The provision states what must be specified about share value and whether the society’s capital is limited or unlimited, if the society is formed with share capital.

Each member must subscribe for a minimum number of shares and pay at least ten per centum of each share on application.

If a society has no share capital, its membership terms and how a member’s interest is determined must be set out.

This section states the purposes for which funds may be used.

This section is about the composition of the board of directors.

This section is about how the net surplus is to be distributed.

A member may withdraw from membership, subject to unspecified conditions.

This section states the geographical area in which the society operates.

This section is about the holding of annual general meetings.

This provision refers to any honorarium payable to the society’s officers.

This provision refers to the dates of the society’s financial year.

This provision concerns how a reserve fund is set up, run, and allocated, and how the contribution amount to it is fixed, subject to section 79 for credit unions.

The society must include any other matters about its administration and operation that are required by the rules or by the Registrar.