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Co-operatives Act, 2005 (Act No. 14 of 2005)

Chapter 1 : Definitions, Purpose and Application of Act

3. Compliance with co-operative principles

 

(1) A co-operative must comply with the co-operative principles referred to in this Act and is deemed to do so if—

[Words preceding section 3(1)(a) substituted by section 3(a) of Notice No. 558, GG 36729, dated 5 August 2013]

(a) membership of that co-operative is open to persons who can use the services of that co-operative and who are able to accept the responsibilities of membership;
(b) in the case of category A and B primary co-operatives, each member has only one vote;

[Section 3(1)(b) substituted by section 3(b) of Notice No. 558, GG 36729, dated 5 August 2013]

(c) to the extent feasible, members provide the capital required by that co-operative;
(d) the return paid on member capital is limited to the maximum percentage fixed in accordance with the constitution of that co-operative;
(e) a percentage of the surplus is set aside as an indivisible reserve in accordance with the requirements of section 46(1);

[Section 3(1)(e) substituted by section 3(b) of Notice No. 558, GG 36729, dated 5 August 2013]

(f) it provides education and training to its members and employees.

 

(2) Despite subsection (1)(a), the constitution of a co-operative may restrict the persons eligible for membership if the restriction—
(a) reasonably relates to the business of a co-operative set out in its constitution and to the commercial ability of a co-operative to provide services to prospective members; and
(b) does not constitute unfair discrimination.

 

(3) The constitution of a category C primary, secondary, tertiary or the national apex co-operative may provide that the members have more than one vote: Provided that where a co-operative has—
(a) three members, no member has voting rights in excess of 40 per cent;
(b) four members, no member has voting rights in excess of 30 per cent;
(c) five members, no member has voting rights in excess of 25 per cent.

[Section 3(3) substituted by section 3(c) of Notice No. 558, GG 36729, dated 5 August 2013]

 

(4) In instances where there are more than five members, the constitution of a category C primary, secondary, tertiary or the national apex co-operative may provide that the members have more than one vote, provided that no member shall have more than seventeen per cent of the votes of all the members of the co-operative.

[Section 3(4) inserted by section 3(d) of Notice No. 558, GG 36729, dated 5 August 2013]

 

(5) Voting rights in respect of category C primary co-operatives, secondary and tertiary co-operatives registered in terms of applicable legislation prior to the commencement of the Co-operatives Amendment Act, 2013, are regulated by the provision on voting rights contained in its constitution as it was immediately prior to the commencement of the Co-operatives Amendment Act, 2013.

[Section 3(5) inserted by section 3(d) of Notice No. 558, GG 36729, dated 5 August 2013]

 

(6) All co-operatives must comply with the prescribed principles of good governance for co-operatives.

[Section 3(6) inserted by section 3(d) of Notice No. 558, GG 36729, dated 5 August 2013]

 

(7) The Minister must publish the principles of good governance for co-operatives referred to in subsection (6) by notice in the Gazette within six months of the commencement of the Co-operatives Amendment Act, 2013.

[Section 3(7) inserted by section 3(d) of Notice No. 558, GG 36729, dated 5 August 2013]