ESSETIALS OF CO-OPERATIVE SOCIETIES BY OSOBA-ENAKALI, C. O (CHAPTER FOUR)

ESSENTIALS OF CO-OPERATIVE SOCIETIES BY OSOBA-ENAKALI. C. O

CHAPTER FOUR

THE STATUTORY FUNCTIONS OF THE REGISTRAR OF CO-OPERATIVES

 

 Chapter’s Objective:

After reading through this chapter, the student would be able to:

(i)                Identify the functions of the Registrar of Co-operatives.

(ii)              Appreciate the importance of co-operatives.

(iii)            Understand the advantages and disadvantage of registering the co-operatives.

Functions of the Co-operative Registrar

Co-operatives in developing countries came into existence through government initiative and assistance. Government exerted a lot of financial and material resources in the development of the co-operatives. In this regard, to ensure its success, the Registrar apart from registering and canceling societies, registration, also undertakes the education, protection, promotion, inspection and auditing of the activities of co-operations.  However, some of these functions require legal authority. The functions which the law makers consider to have express or explicit powers are provided for in the law which is eventually known as the statutory functions of the registrar the statutory. Though educational function is a non-statutory function, but because of the lukewarm attitude of co-operatives towards education and training of its members, makes it aS necessity to be made a statutory function of the registrar. Hence he (Registrar) could institute action against any co-operative society that refuses to make provision in its final accounts for education which is the cornerstone of progress.

The Registrar, could register a co-operative where he is satisfied that the society. Is eligible for registration under section 5(1) and has complied with the provisions not inconsistent with the provisions of this law, he may, if he deems it fit to register the society of this law and that its bye-laws are not inconsistent with the provisions of this law, he may, if he deems fit to register the society and its bye-laws.

The committee of the proposed co-operative submits application for its registration to the registrar through the registrar’s most senior representative in the local government area where the co-operative is located. In primary auxiliary (service) co-operative, It should be signed by at least ten, (10) members. In the case of a primary productive society, at least six (6) members should sign.

Conditions for Registering Co-operatives

Before a registrar considers a society eligible for registration, the following conditions must be satisfied:

(i)                That the object of the co-operative is to promote the economic interest of members.

(ii)              That the society is capable of actualizing its objective. This necessitates the examination of its financial status, the understanding of the principles and practices of co-operative its members.

(iii)            That the minimum membership condition which require ten (10) persons in the case of auxiliary service primary co-operative; six (6) in case of productive primary society; and two registered societies in a secondary co-operative society are fulfilled.

(iv)            That the proposed bye-laws should contained provisions on all matters as required under section 11 (2) of the law. Provision should also be made for the minimum share capital to be subscribed by members and any of other matters which in the opinion of the registrar, will assist in the attainment of the objectives of the co-operative.

(v)              Any proposed co-operative is under legal obligation to provide all necessary information that will enable the registrar to carry out feasibility study to determine its suitability for registration.

Controlling Functions of the Registrar

The control of co-operatives enhances its efficiency and effectiveness. This makes the autonomy and self reliance of the co-operative a reality. The regular inspection of the activities of the co-operatives enables the government to determine the level of assistance by way of sponsorship it could give to it. The need for government control of the co-operatives becomes more necessary because of the weak nature of its internal control and feedback mechanisms. The inspection and auditing of the co-operatives help in protecting the interests of its members, the government’s and third parties. By it, the government is able to identify and investigate any form of mismanagement. It is however important to state that where too much emphasis is placed on the control of the co-operative, it could apart from generating apathy among co-operatives, it could also generate both inter, and intra, personal conflict of interest which consequently, further aggravates inefficiency.

The Registrar and Arbitration

Disputes occur where one party refuses or is unable to fulfill his or her contractual agreement with another part. For example where a member refuses to pay back a loan given to him by the co-operative, even when he had received several reminders could lead to a declaration of a dispute. This must get the consent of the registrar of cooperative after he had examined the complaint of the aggrieved party. Possible parties to disputes include: members, legal representatives of members (both past and deceased), co-operative societies and committee members as well as a member and the society.

The Registrar could decide to arbitrate or appoint a sole arbitrator. Where he requires arbitrators, each of the parties appoints an arbitrator and the registrar appoints a chairman for the arbitration panel.  Arbitration is the reference of a matter in dispute to one or more persons. These persons are called arbitrator. After arbitration, aggrieved party to an award of an arbitrator or arbitration as the case may be, may appeal within thirty (30) days of the award to the Registrar. The aggrieved party to the award specifies the part of the award against which he is appealing and stating in detail why he is making the appeal.

Where the appellant is not satisfied with the Registrars review of the award, could appeal to the commissioner or minister. Whatever is the decision of the commissioner or minister shall be final.

The Significance of Registering Co-operative Societies

Where co-operative society is duly registered, it enjoys the following conditions:

1.     It assumes a legal personality. In which case it can sue and be sued in its cooperate name.

2.     It enjoys perpetual succession. By this it means the withdrawal or death of a member does not lead to its dissolution.

3.     Government can grant special privilege to registered co-operative.

4.     Agents of a registered co-operative society such as its officers and employees are not personally liable for contracts entered into with third parties if they acted within their competence.

5.     Apart from the capital generated from members, the registered co-operative can secure external loans and grants.

6.     The shares or interest on capital of a member are not liable to attachment or sale even when a judgment debt (garnishee order) is entered against a member.

7.     The settlement of dispute is strictly through the arbitration process.

However, where the co-operative is not to the registered, it suffers the following limitations:   

1.     Its liability is unlimited.

2.     Disputes are referred to the court and not to the Register for arbitration. Hence disputes are subject to court decisions.

3.     The protection of the interests of members and third parties are not guaranteed since the co-operative is not under the control of the Registrar.

4.     Any member acting on behalf of the society could be sued in his individual capacity.

5.     Unregistered co-operatives do not get any assistance from government because they have no official recognition.

6.     It cannot enjoy tax exemption and other privileges enjoyed by registered co-operatives.

7.     It finds it difficult to secure loans from external sources.

Appreciating the Importance of Co-operative Society

In its first session , in 1945 – 1946,  the General Assembly of the newly created United Nations accorded the International Co-operative Alliance (ICA) the highest level of consultative status with the Economic and social council. This gives the alliance the right to address all United Nations inter-governmental bodies and conference, to circulate its statements at their meetings and to receive close collaboration from the secretariat.

In 1994, the secretary – General of the United Nations in the person of Boutros Ghali reported to the General Assembly that “Co-operative enterprises provide  the organizational means whereby a significant proportion of humanity is able to take into its own hands the tasks of creating productive employment overcoming poverty and achieving social integration , they constitute a model for a people centred and sustainable form of societal organization based on equity, justice and solidarity”,

Recognition has also been made on the importance of the contribution, which co-operatively organized business enterprises have made in almost all areas of human endeavor and in communities throughout the world. It was also acknowledged that the values and principles of the International Co-operative Movement would provide solution to the problem of unemployment, poverty, social, disintegration and environmental degradation.

These public proclamations of the General Assembly, the highest inter-governmental policy and decision making body of the United Nations and the secretary General are indicative of the importance of the international cooperative movement as one among the principal stake holders within the process of global societal management for a sustainable future.

The Co-operative Housing Foundation (CHF)

The Co-operative Housing foundation came into being in 1952 in the United States of America as a non-profit institution dedicated to research and education on low and middle income housing through Co-operative. By 1960s, the body had developed to a large sponsor of non-profit co-operative lousing. It was at this stage, the United States Agency for International Development (USAID) invited the co-operative housing foundation to expand its co-operative approaches to community development, to developing countries of which today families in many countries of the world have benefited.

The success story of the co-operative housing foundation rests on its Implementation of programs based on the co-operative values of self help democracy, equity, equity and solidarity. All the programs of the co-operative housing foundation are operated on the principle of embracing local communities, engaging people in the innovative, business-like approaches to housing and community’s development.  With the assistance from diverse funding sources including the World Bank, the co-operative housing foundation (CHF) has a wide range of programs ranging from the provision of small home improvement loans to developing alternative housing for low income group. The CHF operates to strengthen the role of co-operatives in meeting the shelter needs of low income families.  In furtherance of this objectives, the foundation gives technical assistance to credit unions and co-operative members in implementing lending programs. This enables the low income families to build a new house or make substantial housing upgrades.

The co-operative housing foundation is a member of the housing committee of the International Co-operative Alliance (ICA).

SELF EVALUATION QUESTIONS

1.     What are the functions of the Registrar of co-operative?

2.     What are the merits of registering a Co-operative Society?

3.     Why has the co-operatives gained a Worldwide Recognition?