Part 1General provisions on cooperatives

A cooperative is an autonomous group of individuals who willingly join together to fullfill their aspirations and meet their common economic, social, and cultural needs so as to form a corporate body whose ownership and management are collective and where power is exercised democratically and according to the cooperative basis.

The cooperative may, in addition to its members who are the main users thereof, provide services to non-cooperative users within the limits set by the Articles of Association.

Cooperatives shall engage in all activities carried out by humans.

The cooperative shall be formed and managed in accordance with the following universally recognized cooperative principles:

Any natural person or legal entity may be a member in a cooperative when free from any legal incapacity pursuant to the provisions of the national law of each State Party.

A cooperative shall be composed of members who, united by common bond on the basis of which the cooperative was created, shall take part in the activities of the cooperative and hold shares proportional to their contributions and pursuant to cooperative principles.

Within the meaning of this Uniform Act, the common bond shall refer to the element or objective criteria that members have in common and on the basis of which they gather.

It may, in particular, be related to a profession, an identity of a purpose, business or legal form.

A membership register shall be kept at the registered office of the cooperative in which all members are entered in chronological order.

For each member, the register shall include the following:

Application for membership to the cooperative shall be sent to the administrative committee thereof. It shall be written, dated and signed by the applicant.

The management committee or the board of directors may make the admission of the member effective on the date of the application or on a later date, not exceeding three months from the date of receipt of the application. Membership shall be approved by the general meeting.

The member status shall be recorded in an act from the administrative committee of the cooperative in which are stated the identity, address, signature or fingerprints of the member and a reference to the acceptance by the latter of legal, regulatory, and statutory provisions governing the cooperative.

The member may withdraw from a cooperative only by sending a written notice thereto. The withdrawal shall take effect on the date stated in the notice or on the date on which the cooperative receives the notice.

The administrative committee of the cooperative shall record the withdrawal of the member in writing.

In the year following the effective date of a notice of withdrawal, the cooperative shall reimburse all membership shares held by the withdrawing member in accordance with the price of determined by the Articles of Association.

The cooperative shall also reimburse to the member all loans and other sums held to the member’s credit, all amounts outstanding on loans made to the cooperative by the member together with any interest accrued on these amounts up to the date of the payment.

Where the management committee holds that reimbursement of membership shares or repayment of membership loans would adversely affect the financial well-being of the cooperative, the management committee or the board of directors may direct that the reimbursement or repayment shall take place after two years through a reasoned decision, which can be appealed before the competent court.

In case the member owes the cooperative, the outgoing member shall remain until the clearance of his debt. In this case, the management committee of the cooperative shall set terms and conditions of repayment of his debt to the cooperative at the time his withdrawal is being recorded.

The member shall be and remain jointly liable for the cooperative’s debts contracted before his withdrawal under the conditions set forth in Articles 47, 48 and 50 herein as well as by the Articles of Association.

Subject to the following provisions, the Articles of Association of the cooperative may prescribe other termination terms provided that they do not infringe the rights conferred to outgoing members by this Uniform Act.

The cooperative may, after addressing a written notice to the member, terminate the membership of the latter when:

c) The member, through acts and behavior, either inside or outside the cooperative, fails to fulfill his contractual obligations in accordance with the provisions of this Uniform Act and the Articles of Association, notably the obligations of trustworthiness and loyalty to the cooperative and thus causing prejudice to the interests thereof.

Termination of membership shall be decided by a duly reasoned special resolution of the general meeting.

The termination may be also decided, as the case may be, by the management committee or the board of directors. In this case, the termination shall be final only when it is confirmed by a duly reasoned special resolution passed in the ordinary general meeting.

Within ten days from the date on which the special resolution of the general meeting deciding or confirming the termination is passed, the cooperative must give a written termination notice to the member and the reasons thereof. The effective date of the termination shall be the date specified in the written notice, but no later than thirty days from the receipt thereof.

Only a special resolution of members passed by the general meeting may reinstate the member back into the cooperative.

The member whose membership has been terminated by the board of directors or the management committee’s resolution may appeal to the general meeting for the annulment of such resolution.

The effect of the special decision of the board of directors or the management committee shall be suspended until a special resolution is passed by the general meeting.

The general meeting shall rule on the special resolution appeal either by cancelling or confirming the termination under the conditions set forth in the Articles of Association.

The termination decided by the general meeting shall, in all cases, be made without prejudice to the right of appeal of the common law available to the member against the termination decision.

The cooperative shall reimburse the member all sums due under the same conditions as the member who withdraws.

However, the termination of a member does not relieve him of his debts or obligations to the cooperative or a running contract therewith. Furthermore, the cooperative shall not be obligated to pay to the member before the maturity of the balance of any fixed-term loan that has been consented and which is not due.

When the address of the terminated member is unknown to the cooperative despite all reasonable efforts to find him, and two years have elapsed since the termination, the cooperative shall transfer all sums owed to him to a reserve fund. Such sums shall no longer bear interests beyond a period of two (2) years from their deposit into the reserve fund.

Amounts thus transferred shall be paid to any individual who shows evidence that he is entitled to that money within a period of five (05) years from the transfer. They shall be acquired on a precarious basis to the State after a five (05) year period.

The Articles of Association constitute the partnership agreement. They must be established by a private or notarized deed.

They shall be established in as many originals as necessary for the purpose of filing a copy at the registered office and for the execution of various formalities. A copy of the Articles of Association shall be put at the disposal of shareholders at the registered office of the cooperative.

The Articles of Association shall include:

7) the specific number or the minimum or maximum numbers of its directors or members of the management committee and all provisions relating to the powers of directors or members of the management committee;

8) the specific number or the minimum or maximum numbers of the members of the supervisory board or the supervisory council and all provisions relating to the exercise of the mandates of these bodies;

9) the duration of the mandate of the management committee, the board of directors, the supervisory board and the supervisory council;

11) a statement that the cooperative will be organized and operated and will carry on its business based on cooperative principles and the reminder of those principles;

12) the identity of cash contributors with, for each of them, the amount of their contributions, the number and value of the shares handed over in respect for each contribution;

13) the identity of in-kind contributors, the nature and assessment of contributions made by each of them, the number and value of shares handed over in respect for each contribution, the regime of goods or values provided when their value exceeds the required contributions;

14) the amount of share capital, related minimum and maximum restrictions, the par value of various categories of shares, specific conditions of their issuance or subscription;

18) the extent of transactions with non-cooperative users, while safeguarding the autonomy of the cooperative;

The Articles of Association may also contain:

Any cooperative shall be designated by a name that is indicated in its articles.

The cooperative may not take the name of another company already registered in the Register of Commerce and Securities or the Register of Cooperatives.

The name must appear on all acts and documents from the cooperative and intended for third parties, including letters, invoices, notices and various publications. It must be preceded by a mention of the form of cooperative, the address of its registered office and its registration number in the Register of Cooperatives, all written in legible characters.

The name can be changed for each type of cooperative, under the conditions provided by this Uniform Act for the amendment of the Articles of Association.

Any cooperative shall have a purpose that consists of its business which must be defined and described in its articles.

The purpose of the cooperative must be lawful.

When the business carried out by the cooperative is regulated, it shall comply with the specific rules governing such business.

The corporate purpose may be changed for each form of cooperative under the conditions provided for by this Uniform Act for the amendment of the Articles of Association.

The corporate purpose of the cooperative shall determine its civil or commercial nature.

Any cooperative shall have a registered office which should be stated in its articles.

The registered office must be chosen by the members and established in the territory of one of the States Parties, either at the main center of the business of the cooperative or at its administrative and financial management center. It must have a physical address or a sufficiently specific geographical location.

Individuals other than the cooperative shareholders can avail themselves of the registered office, but it shall not be enforceable by the cooperative if the actual registered office is located somewhere else.

The registered office may be changed for each form of cooperative, under the conditions provided for by this Uniform Act for the amendment of the Articles of Association.

However, it may be transferred to another location in the same city by a decision of the management committee or the board of directors of the cooperative.

Any decision to relocate the registered office shall be recorded in the Register of Cooperatives and communicated to the regulatory authority by the management committee or the board of directors.

The duration of any cooperative shall be stated in the Articles of Association.

The duration of the cooperative shall become effective on the date of its registration in the Register of Cooperatives.

The end of its life shall entail automatic dissolution of the cooperative, unless its extension is decided under conditions set forth in this Uniform Act.

The duration of the cooperative may be modified, for each form of cooperative, under the conditions provided for in this Uniform Act for the amendment of the Articles of Association.

The duration of the cooperative may be extended one or more times. The decision of extension shall state the duration.

The extension of the duration of the cooperative shall be determined, for each form of cooperative, under the conditions provided by this Uniform Act for the amendment of the articles.

One year at least before the expiry date of the duration of the cooperative, members must be consulted in order to decide whether it should be extended. Failing this, any member may petition the competent court that shall rule expeditiously within the jurisdiction in which is located the registered office for the appointment of an agent to be responsible for organizing the consultation provided for in this paragraph.

The extension of the duration of a cooperative shall not entail the creation of a new legal entity.

Each member shall undertake to make a contribution to the cooperative.

Each member shall be liable to the cooperative for every contribution he has pledged to bring in either in cash, in-kind or through service.

In exchange for their contributions and according to the form of cooperative, members shall be issued shares by the cooperative under conditions set forth in this Uniform Act.

The provisions of this section shall apply to contributions made during the cooperative life and in respect with the increase of the minimum capital set by the articles.

Each shareholder may contribute to the cooperative:

– rights relating to in-kind goods, movable or immovable, tangible or intangible, or in-kind contributions;

Cash contributions shall be effected by transferring ownership of the amount of money that the shareholder has pledged to contribute to the cooperative.

Cash contributions for the constitution of capital set for the formation of the cooperative shall be paid in full during the constitution of the cooperative unless otherwise provided for by this Uniform Act. The same shall apply to the admission of members during the cooperative life, except otherwise provided for in the Articles of Association. Only cash contributions deemed fully paid shall be sums over which the cooperative has acquired ownership and which have been fully and finally collected.

In the event of delay in payment, sums due to the cooperative shall automatically bear interest at the official rate from the day the payment was to be made without prejudice to any damages, where applicable.

Unless otherwise stipulated in the articles, cash contributions made for a collective increase of capital of the cooperative may be achieved by offsetting a debt that is certain, of a fixed amount and due to the cooperative.

In-kind contributions shall be made by transferring real or individual rights matching the assets contributed and by actually endowing the cooperative with assets to which those rights are attached.

In-kind contributions shall be fully paid during the cooperative formation or during its life by any member who undertakes to do so.

Where the contribution is in the form of property, the contributor shall act as a guarantor for the cooperative as a vendor for the buyer.

Where the contribution consists of the enjoyment of property, the contributor shall act as a guarantor for the cooperative, as a lessor for the lessee.

However, when the contribution consists of fungible goods or all other assets meant to be renewed during the life of the cooperative, the contract shall transfer ownership of the assets to the cooperative provided that it gives equal quantity, quality and value in return.

The contribution of an asset or a right subject to publicity for its enforceability against third parties may be published before the registration of the cooperative. The retroactive effect to the date of its realization may only begin from the date of the cooperative registration.

Members shall assess in-kind contributions and warrant their value.

The articles shall contain the assessment of in-kind contributions made during the cooperative registration. Such assessment shall be recorded in a document annexed to the articles when contributions are made during the cooperative life.

The service contribution scheme shall be set out by the Articles of Association.

Failure to set out such contribution in the articles, the contribution of the member who provided the service shall be equal to the share of the member who less contributed.

The member who obligated himself to make the contribution to the cooperative shall report all gains borne by the activity that is the subject of the contribution.

The cooperative shall issue and remit to members securities called membership shares representing their contributions.

All shares issued by the cooperative shall be nominative. Their par value shall be the same for all the membership shares. It shall be set out in the articles.

Shares may not be issued at a price lower than their par value.

Membership shares shall confer to their holder:

– a right to the surplus earnings generated by the cooperative when their distribution was decided pursuant to the statutory provisions;

– The right, in any case, to exercise or benefit, within the limits of the provisions of this Uniform Act and the Articles of Association, from the rights attached to the status of a shareholder. Rights mentioned above must be exercised under the conditions laid down for each form of a cooperative. Such rights may be suspended or repealed pursuant to the express provisions of this Uniform Act.

Each member of a cooperative is required to participate in the cooperative losses under the conditions set forth by this Uniform Act, the articles and the rules of procedure for each form of the cooperative.

The member shall also be required to transact with the cooperative in accordance with its corporate purpose.

Unless otherwise agreed to in the articles and with regard to the distribution of earnings, the rights and obligations of all members referred to in Articles 46 and 47 above shall be equal regardless of the amount of their contributions.

Membership shares shall be nominative, individual, non-negotiable, elusive and assignable in accordance with the conditions set forth in the articles.

They shall not be subject to pledge.

The articles of association shall define the assignment and reimbursement conditions and shall determine the value of such rights, in all cases where there is provision for the assignment of a member’s social rights or reimbursement thereof by the cooperative.

In the event of a dispute, the assignment or reimbursement value shall be determined by the parent institution to which the cooperative is a subsidiary and failing that, by an expert appointed by mutual agreement of the parties or appointed by the competent court ruling expeditiously.

During the life of the cooperative, the reduction of the number of members below the number legally authorized for the form of the cooperative concerned shall not result in the automatic dissolution of the cooperative.

Any interested individual may petition for such dissolution to the competent court where the situation has not been rectified within a period of one year.

The competent court may grant the cooperative a maximum period of six months to rectify the situation; it cannot pronounce the dissolution if, on the day when it rules on the substance of the case, such rectification is done.

The capital of the cooperative shall be variable.

It may be increased or decreased under the conditions set forth in Articles 56, 57 and 58 below.

The initial share capital shall be stated in the articles which set its amount.

The initial share capital shall represent the amount of capital contributions made by the members to the cooperative during its formation.

Service contributions shall also apply to the constitution of the initial share capital and shall give right to the allocation of membership shares conferring the qualification of member.

The share capital shall be divided in membership shares.

In exchange for contributions, the cooperative shall issue shares to the contributor for a value equal to the value of contributions made.

Except in cases of variation of the initial capital due to withdrawals or admission of members, the amount of the initial capital may be increased or decreased by the general meeting for each form of cooperative under the conditions provided for by this Uniform Act for the amendment of the articles.

The increase of capital by the general meeting may be realized by subscribing to a proportional number of shares in addition to those already held by each cooperative shareholder, by increasing the share par value or by incorporating reserves free of allocation.

The reduction of capital by the general meeting may be realized by reducing the nominal amount of shares held by each member or by total or partial reimbursement of the contributions made.

Sub-paragraph 2: Other equity capital

Cooperatives may receive grants, donations and bequests for the development of their activities. Such grants, donations or bequests shall not be taken into account for the calculation of interest paid on membership shares.

The cooperative may seek to borrow money under conditions legally admitted on the territory of the State of the registered office pursuant to the provisions specific to the various forms of cooperatives and the articles.

The Articles of Association may be amended. Such amendment may only be decided by the extraordinary general meeting and under the conditions set forth by this Uniform Act for each form of cooperative.

Unless otherwise specifically motivated by the competent court seized for this purpose and ruling expeditiously, no increase in the commitments of the members toward the cooperative may be decided without their consent.

Where the articles do not contain all the stipulations required by this Uniform Act or where a formality prescribed thereby for the formation of the cooperative has been omitted or improperly completed, any interested party may petition the competent court or the competent administrative authority in the jurisdiction where the registered office is located for the correction of the formation. The public prosecutor may also act for the same purpose.

The action for the purposes of regularization shall be prescribed for three years from the date of the registration of the cooperative or the publication of the instrument amending the articles.

The founding members as well as the first members of the management or administration committees shall be jointly liable for the prejudice caused, either by the omission of a mandatory statement in the articles, or by the omission or improper completion of a formality required for the formation of a cooperative.

Similarly, members of the management or administration committee who are in office then shall incur the same liability under the above paragraph in the event of irregularity in the amendment of the articles.

The suit for civil liability provided for in Article 65 above shall be prescribed for five years, as the case may be, beginning on the day of the registration of the cooperative or the publication of the instrument amending the articles.

The rules of procedures shall be established by a private or notarized deed.

As many originals as possible shall be established for the purposes of filing a copy at the registered office and the execution of various formalities. A copy of the rules of procedure shall be held at the disposal of any member at the registered office of the cooperative.

In addition to mandatory statements, the rules of procedures shall contain the following particulars:

- - payment terms of allowances to members of the board of directors or the management committee, the supervisory board or council defined pursuant to the provisions of Article 225 and 305 below;

– the possibility of allocation of the right to plural vote in case of unions, federations and confederations;

– Any other recommendations deemed necessary for the realization of the corporate purpose of the cooperative and compliant with the cooperative basis as well as withthe mandatory provisions of this Uniform Act.

The purpose of the Register of Cooperatives is to:

– receive the registration of cooperatives and their parent institutions governed by this Uniform Act;

– Receive also the registrations and statements of changes brought, since their registration, to the legal status of cooperatives and parent institutions.

The Register of Cooperative shall be administered by the local authority in charge of keeping such Register.

In each State party, the administrative authority in charge of the Register of Cooperatives shall be the decentralized national authority of the territorial administration body or the competent authority to which the registered office of the cooperative is immediately attached.

The National Registry provided for by the Uniform Act on General Commercial Law shall centralize the information in each Register of Cooperatives.

The Regional Registry provided for by the Uniform Act on General Commercial Law shall centralize information consigned in each National Registry.

Information contained in the forms given to the administrative authority in charge of the Register of Cooperatives is destined to the public.

The Register of Cooperatives shall include:

1) a register for incoming correspondence stating, in chronological order, the date and number of each accepted declaration, the full names or the corporate name of the registrant, and the purpose of the declaration;

2) The collection of individual files kept in alphabetical order, which include particulars of their names, legal form, nature of their business, address of the registered office, all declarations, acts and documents concerning the cooperatives and their parent company.

All declarations shall be established in four copies on forms furnished by the administrative authority in charge of the Register of Cooperatives.

The declarations shall bear the signature or fingerprints of the registrant or his authorized agent who shall show proof of his identity and, unless he is a lawyer or notary, the power of attorney signed by the registrant or on which is affixed his fingerprints.

The first copy shall be kept by the administrative authority in charge of keeping the Register of Cooperatives.

The second copy stating the date and the name of formality carried out shall be given to the registrant.

The third and fourth copies shall be sent by the administrative authority in charge of the Register of Cooperatives to the National Registry for transmission of one of them to the Regional Registry.

Furthermore, the Register of Cooperatives shall also contain automatically:

The particulars provided for in this Article shall be forwarded by the court which issued the decision, or failing that, by any interested individual to the administrative authority of the Register of Cooperatives within the jurisdictional territory and to the parent company of the cooperatives.

Any cooperative must be registered in the Register of Cooperatives established in each State Party.

A cooperative needs to be registered, within the month of its formation, to the Register of Cooperatives.

Such application shall state:

5) the amount of the initial share capital with the amount of cash contributions and possibly, the assessment of in-kind or service contributions;

6) the address of the registered office and, where appropriate, the address of the main institution and that of each of the other institutions;

8) The full names, nationality, date and place of birth as well as domicileof officers who have the powers to commit the cooperative.

To that application, the following supporting documents shall be attached:

2) two copies of the list of members of the management committee or the board of directors of the cooperative;

No cooperative may be registered at several registers or at the same Register under several numbers.

As soon as the applicant's application is in order, the administrative authority in charge of the Register of Cooperatives shall assign a registration number and indicate it on the form given to the registrant; the authority shall then transmit a copy of the personal file and the other documents filed by the applicant to the National Registry.

Any cooperative shall enjoy legal personality from the day of its registration in the Register of Cooperatives.

However, the business shall be subject to rules governing such activity.

In the event the cooperative changes the address of the registered office within the territorial jurisdiction of another administrative authority in charge of the Register of Cooperatives, the latter shall seek:

– A new registration at the Register of Cooperatives in the jurisdiction where it moves after the authority in the new jurisdiction has verified that the former registration has been deleted.

For this purpose, the cooperative must provide the information and documents referred to in Articles 75 and 76 above.

These formalities shall be carried out by the cooperative concerned within one m onth of the relocation.

Where the cooperative undergoes subsequent changes that require the correction or supplement of the particulars entered in the Register of Cooperatives, it shall request an amendment of additional entries within thirty days of these changes.

Any changes concerning the Articles of Association of the cooperative shall be declared at the Register of Cooperatives.

Any request for entering an amendment, correction or additional entry shall be signed by the individual responsible for the declaration or who affixed his fingerprint, or by a proxy who must prove his identity and, if it is a lawyer, notary, trustee or other officer of the court duly authorized by law, he shall present a special power of attorney signed by the registrant or on which are affixed his fingerprints.

Any registration, as well as any entry or reference recording the changes that have occurred since the date of its registration in the State and its status as a cooperative shall, in addition, within one month of the registration of this formality, be subject to a notice to be inserted in a newspaper empowered to publish legal notices. Such notice shall contain the particulars provided for in Article 75 above.

Each cooperative is required to request a second registration within a month from the day of the beginning of operations in the event it operates a secondary institution or subsidiaries within the jurisdiction of other administrative authorities in charge of the Register of Cooperatives.

Such declaration shall state, in addition to the reference to the main registration, the above required information for cooperatives in Article 75.

The request for a secondary registration must be filed with the administrative authority in charge of the Register of Cooperatives in the jurisdiction in which is located the registered office of the secondary institution or subsidiary.

The administrative authority in charge of the Register of Cooperatives shall forward, within one month of the secondary registration, a copy of the declaration of the secondary registration to the administrative authority in charge of the Register of Cooperatives where the main registration took place.

Any registration of a secondary institution shall result in the assignment of a registration number and shall be published in a newspaper empowered to publish legal notices within one month of such registration.

The dissolution of a cooperative, for whatever reason, must be declared to the administrative authority in charge of the Register within one month in order to have it recorded in the Register of Cooperatives in which it was registered.

The same shall apply for the nullity of the cooperative from the day the decision thereof was made. The removal must be requested by the liquidator within a period of one month from the close of the liquidation operations.

Failing to request the removal within the prescribed period, the competent administrative authority in charge of the Register of Cooperatives shall proceed with the removal based on the decision of the competent court acting from a petition of the authority or any interested party.

Any removal shall be published in a newspaper empowered to publish legal notices.

A cooperative shall be deemed to be under formation where it has not yet been incorporated.

Any cooperative is formed from the day of the organizational meeting and signature of the articles by the members.

Before its registration in the Register of Cooperatives, the existence thereof shall not be enforceable to individuals other than the members. Nevertheless, they can use it.

People who take the initiative to create a cooperative must have their residence in the territory of one of the State Parties.

The residence address may not consist only of a post office box. It must be a physical address or an adequate specific geographical location.

From the signing of the Articles of Association, the officers shall override the founding members. They shall act on behalf of the cooperative formed and not yet registered.

Their powers and obligations shall be determined in accordance with provisions laid down in this Uniform Act and the articles.

Between the date of the formation of the cooperative and its registration in the Register of Cooperatives, relations between the members shall be governed by the articles and general rules of the legislation applicable to their obligations in the State where the registered office is located.

Acts and commitments made by the founding members on behalf of the cooperative before its formation shall be reported to the cooperative shareholders at the constituent meeting.

The resumption of acts and commitments undertaken on behalf of the cooperative being formed shall be subject to a special resolution of the constituent general meeting passed under the conditions laid down by this Uniform Act.

The meeting shall be fully informed on the nature and scope of each of the acts and commitments that have to be passed on. Individuals who have undertaken such acts and commitments shall not vote and their vote shall not be taken into account for the calculation of quorum and majority.

Acts and commitments taken over by the cooperative regularly formed and registered shall be deemed having been undertaken from the outset.

Acts and commitments which have not been accepted by the cooperative under the conditions provided for by this Uniform Act shall not be enforceable thereto and individuals who have undertaken them shall be held jointly and indefinitely liable for their inherent obligations.

Members may, in the Articles of Association, or in a separate document or, where applicable, during the general organizational meeting, grant powers to one or more officers, depending on the case, to make commitments on behalf of a formed cooperative, but not yet registered in the Register of Cooperatives. Provided that such commitments are defined and their scope specified in the terms of reference, the registration of the cooperative means that the cooperative is taking over such undertakings.

Acts exceeding the powers conferred to officers in their terms of reference, or unrelated to such terms, may be taken over by the cooperative provided that they have been approved by the ordinary general meeting under the conditions set forth in this Uniform Act for each form of cooperatives unless otherwise provided for in the Articles of Association.

Members who have undertaken such acts and commitments shall not vote and their votes shall

not be taken into account in the calculation of quorum and majority.

Notwithstanding the provisions of Article 93 above, the provisions of Article 92 of this Uniform Act shall govern acts and commitments taken over by the cooperative and those that are not taken over.

With regards to individuals of good faith other than the members, the management or administration committees may, within limits set by this Uniform Act for each form of cooperatives, have all the powers to commit the cooperative without being required to justify their actions with a special mandate. Any restriction to their legal powers by the articles shall not be enforceable to individuals other than the members.

In dealing with individuals other than the members, the management or administrative committees shall commit the cooperative through acts matching the corporate purpose, unless otherwise provided for in this Uniform Act.

The cooperative shall be committed by the management or administrative acts which are not in line with the corporate purpose, unless it proves that individuals other than the members knew that the acts did not fall under the corporate purpose or in light of the circumstances they could not ignore them, unless the only publication of the articles is sufficient to constitute such evidence.

With respect of relations between shareholders and subject to the legal provisions specific to each form of cooperatives, the articles may limit the powers of the management and administration committees.

Such restrictions shall be unenforceable to individuals other than members who are of good faith.

The appointment, removal or resignation of officers shall be published in the Register of Cooperatives within one month.

Unless otherwise stipulated in this Uniform Act, any member has the right to participate in the decisions of the general meeting. Any statutory clause to the contrary shall be deemed unenforceable.

Participation in general meetings shall be in person.

However, members who are prevented from attending may vote by proxy unless otherwise stipulated in the articles. In this case, the articles of the cooperative shall determine the procedures for voting by proxy including the number of members and/or the votes of proxies.

In the absence of contrary provisions in the articles, the co-owners of a share shall be represented by a sole proxy chosen among undivided co-owners. In case of disagreement, the proxy shall be appointed by the competent court in the jurisdiction in which the registered office is located at the request of the earliest undivided co-owner.

Each member shall have one vote regardless of the significance of his interests in the capital of the cooperative.

Collective decisions shall be ordinary or extraordinary. They shall be taken in the general meetings under the conditions of form and substance laid down for each form of cooperatives.

Any deliberation of the members shall be recorded in minutes stating the date and venue of the meeting, full names of members present or represented, the agenda, the documents and reports submitted for discussion, a summary of discussions, the text of the resolutions voted on and the outcome of the votes.

The minutes shall be signed under the conditions set forth in this Uniform Act for each form of cooperatives.

Minutes referred to in the foregoing article shall be established in a special registry kept at the registered office.

Copies or extracts of the minutes of the deliberations of the members shall be validly certified true and comply with the legal representative of the cooperative.

When the number of members is greater than five hundred, the articles of the cooperative may provide that the general meeting be preceded by meetings of different sections deliberating separately on the same agenda.

Section meetings shall elect delegates who are convened to the general meeting. The Articles of Association shall determine the distribution by section, the number of delegates per section and the implementing arrangements.

At the close of each financial year, the management committee or the board of directors, as the case may be, shall prepare and adopt summary financial statements in accordance with the provisions of the Uniform Act and the Uniform Act on the Organization and Harmonization of Corporate Accounting.

The financial statements shall be signed by somebody who is duly authorized to commit the responsibility of the cooperative and shall be certified by an auditor if the cooperative has appointed one.

The management committee or the board of directors, as the case may be, shall prepare a management report in which it describes the cooperative position during the ending financial year, its foreseeable trend and, in particular, an outlook on the cooperative performance, changes in net cash position and financing planning.

The management committee or the board of directors shall also explain the status of promotion of members in this report.

The following shall be included in the summary financial statements:

The annual summary financial statements and the management report shall be presented to the ordinary general meeting of the cooperative in charge of approving these documents, which must be held within six months of the close of the fiscal year.

These summary financial statements shall, where applicable, also be sent to the immediate parent institution to which the cooperative is a subsidiary within forty-five days prior to the date of the ordinary general meeting.

Any change in the presentation of the summary financial statements or in the methods of evaluation, depreciation and provisions conform to the Uniform Act on the Organization and Harmonization of Corporate Accounting shall be indicated in the annual report.

The articles may provide for the payment of rebates to members proportionally to operations carried out by them with the cooperative or the work done in favour thereof.

The general meeting shall decide on the allocation of earnings in compliance with legal and statutory provisions.

The meeting shall make the necessary allocations to legal and statutory reserves.

The articles provide for the constitution of a general reserve by annual levies on the operating net surpluses before any other allocation.

The articles provide in the same conditions as in the paragraph above, the constitution of a reserve for training, education and awareness campaign to cooperative principles.

Insofar as each of these legal reserves does not reach the amount of capital determined by the articles, levies made in respect of each reserve may be less than twenty per cent of the net operating surpluses.

The articles may provide for optional reserves powered by the allocation of a percentage of net operating surpluses. The total amount in respect of optional reserves shall not exceed twenty per

cent of the net surpluses.

Resigning or terminated members shall not be entitled to funds allocated to the general reserve and to reserves for training, education and awareness campaign.

Similarly, optional reserves referred to in Article 115 above shall not be distributed among members.

Any dispute among members or among one or more members and the cooperative shall be referred to the competent court.

Such dispute may also be subject to mediation, conciliation or arbitration.

Cooperatives, their unions, federations, confederations or networks subject to the provisions of this Uniform Act may create, within their institutions, organs of arbitration, conciliation and mediation in accordance with the provisions of the Uniform Act on Arbitration and the International Law on Arbitration, Conciliation and Mediation.

The supervisory board or council, depending on the form of cooperative concerned, shall request in writing or verbally to the management committee or the board of directors which must reply within the time limits and conditions prescribed in the next paragraph of this Article, explanations on any fact which might jeopardize the performance of the cooperative that it noted during the performance of its duties.

The management committee or the board of directors shall reply in writing or verbally during a special meeting within the month following the request for explanations. In its reply, it shall provide a thorough analysis of the situation in question, and where appropriate, it shall state planned measures.

In the event of non-compliance with the provisions laid down in the preceding paragraph or if, despite the decisions taken, the supervisory board, or the supervisory council finds that the cooperative operations remain in jeopardy, its shall establish a special report to present to the next general meeting or, in case of emergency, to a meeting specially convened for that purpose.

This option is vested, under the same conditions, to the parent institution to which the cooperative is a subsidiary.

Members may, provided that their number reaches at least 25 per cent of memberships in the cooperative, ask the chairman of the competent court where the registered office is located to appoint one or more experts to report on one or more management operations by forming a group under a form they deem appropriate.

If the request is granted, the judge shall determine the scope of the duties and powers of the experts. The fees of the experts shall be borne by the members. The report shall be sent to the applicant and to the management or administrative board of the cooperative.

Cooperatives with a board of directors are required to appoint at least one auditor when they meet the following conditions:

The auditor shall be appointed by the general meeting for three years.

He shall be selected from among the auditors approved in the State concerned. The appointment of an auditor is optional for simplified cooperatives.

Without prejudice to potential liability of the cooperative, every officer shall be individually liable to third parties for misconduct in the performance of his duties.

Where several cooperative officers are involved in collective misconduct, they shall be jointly liable to third parties. However, with respect to relations among the officers, the competent court shall determine the share to be borne by each of them in apportioning damages to be paid.

Individual suits for damages due to losses suffered by a third party or a member shall lapse after three years from the day of the harmful event or, following its disclosure if it was concealed.

An individual suit shall be a suit for damages due to losses suffered by a third party or a member, when the latter suffers losses distinct from those suffered by the cooperative as a result of individual or collective misconduct of officers in the performance of their duties.

Such lawsuit shall be filed by the individual who suffered the loss.

The competent court handling such lawsuit shall be within the jurisdiction of the cooperative registered office.

Individual lawsuits shall lapse after three years following the harmful event or, following its disclosure if it was concealed.

The individual lawsuit for crimes shall lapse after ten years.

Every officer shall be individually liable to third parties for misconduct in the performance of his duties.

Where several cooperative officers are involved in collective misconduct, the competent court shall determine the share to be borne by each of them in apportioning damages to be paid under the conditions set forth in this Uniform Act for each form of cooperatives.

One or several members may file derivative lawsuits after a formal notice of the competent bodies remains unanswered within a time limit of thirty days. Petitioners shall be entitled to pursue the suit for damages due to losses suffered by the cooperative. In the event of conviction, damages shall be awarded to the cooperative.

Any clause of the Articles of Association subordinating the exercise of the derivative lawsuit to the prior notice or authorization of the general meeting, the administrative and management committee or which should waive in advance the right to file such a suit may be deemed unenforceable.

Moreover, no decision of the general meeting of the members, the management or administration board may have the effect of closing any tort action against managers for misconduct in the performance of their duties.

The competent court, hearing such lawsuit, shall be within the jurisdiction of the cooperative registered office.

Individual lawsuits shall lapse after three years following the harmful event, or following its disclosure if it was concealed.

The individual lawsuit for crimes shall lapse after ten years.

Filing a derivative lawsuit shall not preclude a shareholder from suing the cooperative for damages for a damage he might have personally suffered.

At least two cooperatives with the same corporate purpose(s) may form a union of cooperatives for the management of their common interests.

The union of cooperatives shall be formed by the adoption of its articles by the organizational general meeting comprising at least three delegates duly appointed by each of the cooperatives’ founding members.

The union shall be registered at the Register of Cooperatives pursuant to the provisions of this Uniform Act relating to the registration of cooperatives and shall then acquire a legal personality under the same conditions.

The union of cooperatives may engage in all economic activities. However, such economic activities shall be carried out in compliance with the principle of subsidiarity in connection with the activities of cooperative affiliates.

In coordination with its federation or confederation or in the absence of the latter, the union shall perform all or part of the duties assigned to a federation and confederation in respect with the

cooperative affiliates.

Each cooperative member shall be automatically represented at the general meeting of the union by its chairman or, failing that, by an individual chosen by the board of directors or management committee of the cooperative among its members and who can justify his mandate.

The union of cooperatives may provide the possibility of plural votes for some of its members in its articles and rules of procedure and shall determine the criteria.

Unless otherwise provided by this Uniform Act, the union of more than two cooperatives shall not be dissolved by voluntary or forced withdrawal, the liquidation of property ruled by a court decision, by voluntary or forced dissolution of a cooperative member or by the withdrawal of the agreement of such cooperative. It shall automatically continue among other members.

In all cases not expressly provided for by this section, the provisions of this Uniform Act and the principles that govern the cooperative with a board of directors shall apply to the union of cooperatives.

At least two unions, even if they have different corporate purposes, may form a federation together in order to manage their interests.

A federation may admit as affiliates, cooperatives which are unable to form or join a union.

The federation of cooperatives shall be constituted by the adoption of its articles by the organizational general meeting bringing together at least three delegates duly appointed by each of the unions and cooperatives which are founding members.

The federation of cooperatives shall be registered in the Register of Cooperatives in accordance with the provisions of this Uniform Act relating to the registration of cooperatives and shall acquire a legal personality under the same conditions.

The purpose of the federation is notably:

– to ensure the application of the cooperative basis within the cooperatives and unions which are subsidiaries thereof;

– to provide all necessary assistance for the formation, administration and management of subsidiary unions and cooperatives;

– to promote and develop the cooperative movement as well as cooperation between cooperative organizations;

– to provide subsidiaries with all necessary services, including educational, administrative, professional, financial and ongoing training of members and to contribute to the realization of their objectives;

– to study the interests of subsidiaries through statistics, and provide them with all information that can improve their operations;

– to assist its subsidiaries, subject to the specific duties of their bodies, in their monitoring assignments;

– to trigger the alert, for its subsidiaries, or inform the meeting of unions and subsidiary cooperatives of any observed irregularity;

– To establish a fund to finance audits or external controls of its subsidiaries. The fund shall be powered by annual dues in proportion to the subscribed shares.

The federation may carry out economic activities in the interest of its subsidiaries. The exercise of such activities shall be subject to the compliance with the subsidiarity principle with respect to the unions and subsidiary cooperatives.

Subject to compliance with the legal provisions, the federation shall prescribe administrative rules that shall govern the unions and subsidiary cooperatives.

The federation of cooperatives may provide the possibility of plural votes for some of its members in its articles and rules of procedure and it shall set the criteria thereof.

The federation may join regional or international organizations.

Unless otherwise provided by this Uniform Act, the federation with over two unions shall not be dissolved by voluntary or forced removal, the liquidation of property by virtue of a court decision or by voluntary or forced dissolution of a union or subsidiary cooperative or by the withdrawal of the agreement thereof. It shall continue automatically among the other members.

In all cases not expressly provided for in this section, the provisions of this Uniform Act and the principles governing the registration of the cooperative with a board of directors shall apply to the federation of cooperatives.

The confederation may take one of the forms of groupings recognized by the national legislation of the State concerned.

In the case of an option for the cooperative form, the provisions of this Uniform Act shall apply.

At least two federations, even if they have different corporate purposes, may form between them a confederation of cooperatives in order to manage their interests. A confederation can accept as members, unions and cooperatives which are unable to form or join a federation.

The confederation of cooperatives shall be formed by the adoption of its articles by the organizational general meeting bringing together at least three delegates duly appointed by each of the unions and cooperatives which are founding members.

The confederation of cooperatives shall be registered at the Register of Cooperatives in accordance with the provisions of this Uniform Act relating to the registration of cooperatives and shall acquire a legal personality under the same conditions.

In addition to the mandate stipulated in Articles 144 to 146 above, the mandate of the confederation is notably:

– to maintain a permanent and adequate awareness campaign of this Uniform Act and other standards to which it refers;

The confederation of cooperatives may provide the possibility of plural votes for some of its members in its articles and rules of procedure and it shall set the criteria thereof.

The confederation may join regional or international organizations.

Unless otherwise provided by this Uniform Act, the confederation with more than two unions shall not be dissolved by voluntary or forced removal, the liquidation of property by virtue of a court decision or by voluntary or forced dissolution of a union or subsidiary cooperative or by the withdrawal of the agreement thereof. It shall continue automatically among other members.

In all cases not expressly provided for in this chapter, the provisions of this Uniform Act and the principles that govern cooperatives with a board of directors shall govern the confederation of cooperatives.

Cooperatives, their unions, federations and confederations, not having the same common bond, may form a group of cooperative networks of means or goals aimed exclusively at implementing, for a fixed term, all proper ways and means to facilitate or develop the businesses of their members, improve or increase the earnings of such business, or in order to reach the goals for the promotion of the cooperative basis.

Cooperative networks of means or goals may be established between organizations not covered within the same territory, or between organizations not registered in the same State Party.

The initiators of the network shall mutually agree on the registered office and place of registration of the latter.

The administration, management, operation and dissolution of the cooperative network of means or goals, consistent with cooperative basis and provisions governing simplified cooperatives to the extent compatible, shall be set out in an agreement signed by the members.

Control of the management and audit of the summary financial statements shall be exercised under the conditions laid down by the agreement referred to in the preceding article.

The cooperative network of means or goals shall be dissolved:

5) By dissolution of one legal member of the network, unless otherwise provided for in the agreement.

The dissolution of the cooperative network of means or goals shall entail its liquidation. The legal personality of the network shall remain valid for the purposes of liquidation.

The liquidation shall be carried out in accordance with the provisions of the agreement. Failing this, a liquidator shall be appointed by the general meeting of the members of the network or if the meeting is unable to proceed with such appointment, by the decision of the competent court.

After payment of debts, surplus assets shall be vested either to other networks of cooperatives or to cooperatives of one of the States Parties, or to one or several organizations that support and promote cooperatives.

The conversion of a cooperative is the operation whereby a cooperative changes its legal form by a decision of the cooperative shareholders.

Regular conversion of a cooperative in another form of cooperative shall be governed by this Uniform Act and does not create a new legal entity. It only stems from the amendment of its articles and shall be subjected to the same conditions of form and time limit that are governed by the provisions of this Title.

The provisions of Article 167 above shall not apply to the conversion of a cooperative in any other form of cooperative not governed by this Uniform Act.

The conversion shall take effect on the day the decision recording it is taken. However, it shall become binding on individuals other than the members only after amending the registration in the Register of Cooperatives and after publication of such conversion and entry in official places of display of the registered office.

The conversion may not have retroactive effect.

The conversion of the cooperative shall not result in the closing of accounts where it occurs during the financial year, unless the members decide otherwise.

The summary financial statements of the fiscal year during which the conversion occurred shall be closed and approved in accordance with the rules governing the new legal form of the cooperative.

The decision to convert shall put an end to the powers of the administration or management committees of the transformed cooperative.

A management report shall be prepared by the former and new management committees, each of these boards reporting on their management term.

The rights and obligations contracted by the cooperative in its original form shall remain in the new form. The same shall apply to securities, except in case of a contrary clause in the constitution of these securities.

Merger and dissolution shall intervene only between cooperatives governed by this Uniform Act. The merger and dissolution may be carried out for cooperatives whose registered offices are not

located on the territory of a same State party to the Treaty on the Harmonization of Business Law in Africa. In this case, each cooperative concerned shall be subject to the provisions of this Uniform Act in the State where its registered office is located.

The practical procedures for merger or dissolution shall be adopted by an agreement signed between the cooperatives concerned, under the control of the parent organizations to which they are subsidiaries.

However, if the proposed transaction has the effect of increasing the commitments of the members, or of one or several cooperatives in question, it may only be decided unanimously by such cooperative or cooperatives.

The merger or dissolution shall take effect:

1) In case of creation of one or more new cooperatives, on the date of registration at the Register of Cooperatives of the new cooperative or of the last of them; each new cooperative shall be formed in accordance with the rules governing the adopted form of the cooperative;

2) In other cases, at the date of the last general meeting that approved the transaction unless the agreement referred to in the foregoing article provides that the transaction takes effect at another date, which shall not be later than the date of the close of the current financial year of the beneficiary cooperative(s) or prior to the closing date of the last ending financial year of the cooperative(s) that assign(s) its/their assets.

The cooperative shall be dissolved by:

- the early dissolution pronounced by the competent court, at the request of one or several members for just cause, particularly in the event of disagreement between shareholders preventing the normal operation of the cooperative;

The competent court may also, on referral by the administrative authority responsible for cooperatives or any interested person, dissolve any cooperative if, as the case may be:

c) it has not complied with the provisions of this Uniform Act by holding annual meetings for at least two consecutive years;

d) it failed, for a period of one year, to send notices or documents required by this Uniform Act to the competent institutions or authorities;

e) it is operating without management, administrative or supervisory board for at least three months;

f) When the cooperative is not organized or has made no transactions in accordance with the cooperative basis.

The dissolution referred to in the preceding article may not occur unless the administrative authority responsible for cooperatives or the competent court has taken the following measures :

a) it has given to the dissolving cooperative, as well as its management or administrative boards a notice of one hundred twenty days, notifying them its intent, and the reversibility of the measure of dissolution in the event of regularization of the breach found;

The dissolution of the cooperative shall have no effect with respect to individuals other than the members only from its registration in the Register of Cooperatives. It shall automatically entail its liquidation. The legal personality of the cooperative shall remain valid for the purposes of liquidation and until the close thereof.

After acts or minutes deciding or recording the dissolution and its entry in the Register of Cooperatives have been delivered to the authority in charge thereof, the dissolution shall be published, on the initiative of the abovementioned authority, in a newspaper empowered to publish legal notices where the registered office is located.

Members can organize a friendly liquidation of the cooperative when the provisions of the articles so authorize.

In such a case, the articles shall:

– prescribe the conditions for carrying out the liquidation, including the appointment of the liquidator(s), his/their remuneration, the scope of his/their mandate, control arrangements of his/their mandate by members.

– define provisions relating to the liquidation surplus, which may be allocated to other cooperatives governed by the provisions of this Uniform Act or institutions or organizations working for the promotion of the cooperative movement.

– Prescribe also procedures for settlement of disputes that may arise between the parties concerned in the liquidation.

Any clause stipulating that members waive their right to go to the competent court when problems cannot be dealt with according to the provisions laid down by the articles shall be deemed unenforceable.

The cooperative shall be under liquidation for any reason whatsoever from the moment of its dissolution.

The words “cooperative under liquidation” as well as the name of the liquidator must appear on all acts and documents of the cooperative, including all letters, invoices, notices and various publications to be sent to individuals other than members.

The legal personality of the cooperative shall remain valid for the purposes of liquidation until the publication of the closing thereof.

When the liquidation is decided by the members, one or several liquidators shall be appointed under the conditions of quorum and majority provided for by the extraordinary general meetings for all forms of cooperatives.

In the simplified cooperative, a notice shall be sent to the competent authority empowered by national law to register the cooperative within a period of eight days. Such notice shall contain the decision of liquidation and the implementation arrangements.

The liquidator may be selected among the members or outside the cooperative. He may be a legal entity.

Unless there is unanimous consent of the members, the assignment of all or part of the assets of the cooperative under liquidation to an individual who was once a member of the management committee or the board of directors may take place only with the authorization of the competent court.

In all cases, such assignment may only intervene with the respect to commitments made by the cooperative for its shareholders.

The assignment of all or part of the assets of the cooperative under liquidation to the liquidator, its employees or their spouses, ascendants or descendants, is prohibited.

The overall assignment of the assets of the cooperative or contribution of assets to another cooperative, including through merger, shall be authorized by the majority required for the amendment of the articles.

The completion of the liquidation must take place within a period of three years starting from the moment the cooperative is dissolved.

Failing this, the public prosecutor or any interested party may seize the competent court within the jurisdiction in which the registered office of the cooperative is located so as to proceed with the cooperative liquidation or, if under way, its completion.

The final accounts drawn by the liquidator shall be delivered to the authority in charge of cooperatives. The following shall be attached thereto, either the decision of the meeting of the cooperating shareholders who ruled on the accounts of the liquidation, discharged the liquidators of their management and mandate, or, failing this, the court decision referred to in the preceding article.

Upon justification of the formalities referred to in the preceding article, the liquidator shall request the removal of the cooperative from the Register of Cooperatives within a period of one month from the publication of the completion of the liquidation.

The liquidator shall be liable to the cooperative and third parties for damaging consequences resulting from his misconduct during the performance of his duties.

Derivative or individual suit for civil liability against the liquidator shall lapse after three years, from the date of the damaging fact or from the date of its disclosure in case it was concealed. However, when the fact is deemed a felony, the lawsuit shall lapse after a period of ten years.

Any lawsuit against members who are not liquidators or their surviving spouse, heirs or dependents, shall lapse after five years from the date of the publication of the dissolution of the cooperative in the Register of Cooperatives.

Absent the statutory clauses relating to an amicable liquidation of the cooperative, its liquidation shall be carried out in accordance with the relevant provisions consistent with Articles 203 to 241 of the Uniform Act on Commercial Companies and Economic Interest Grouping.

Formalities that have to be carried out at the Register of Cooperatives shall be those provided for by the Register of Commerce and Securities and the provisions mentioned in paragraph 1 above.

The liquidation surplus shall be given to other cooperatives governed by the provisions of this Uniform Act or institutions or organizations working for the promotion of the cooperative movement.

The provisions of Articles 182 to 196 above shall also govern unions, federations and confederations of cooperatives.

In the case of unions, federations and confederations, the dissolution and liquidation so pronounced shall not prejudice grassroots subsidiary organizations to which such errors are not attributable.

A cooperative may not be nullified due a defective consent or inability of a member, unless it affects all members who registered the cooperative.

The action for nullity shall be extinguished when the reason therefor has ceased to exist on the day where the court decides on the merits of the case in the first instance, exceptwhen such nullity is based on the unlawful nature of the corporate purpose.

Even ex officio, the court hearing the case on nullity may set a time limit to carry out the nullity operation. The court cannot pronounce the nullity less than two months after the date of the introduction of the document instituting the proceedings.

If no decision is taken at the expiry of the period prescribed in the preceding paragraph, the court shall act at the request of the earliest petitioner.

In case the nullity of the cooperative, its acts, decisions or deliberations based on a defect consent or incapacity of a shareholder and where the nullity may be regularized, any individual having an interest therein may give a formal notice to the incapacitated shareholder or the one whose consent is defect to regularize it, or to take action for nullity within a period of six months under penalty of foreclosure.

The formal notice shall be served by a bailiff or notified by any means that shall prove receipt by the addressee. Notice thereof shall be given to the cooperative.

The action for nullity of the cooperative shall lapse after three years from the registration of the cooperative or the publication of the act amending the Articles of Association unless the nullity is based on the illegality of the corporate purpose and subject to foreclosure provided for in Article 201 above.

Actions for nullity of the acts, decisions or deliberations of the cooperative are prescribed by three years from the day the nullity occurred, unless the nullity is based on the illegality of the corporate purpose and subject to foreclosure under article 201 above.

Where the nullity of the cooperative is pronounced, it shall put an end thereto with no retroactive effect. The cooperative shall, then, be dissolved and liquidated.