There are three
types of cooperatives:
Society - a co-operative in which a majority of members are individual
Society - a co-operative in which a majority of members are themselves
Society - a co-operative society in which a majority of members are
themselves primary and, or, secondary
Co-operative Societies Act defines a co-operative society an autonomous
association of persons united voluntarily to meet their economic, social and
cultural needs and aspirations, including employment, through a jointly-owned
and democratically-controlled enterprise, in accordance with cooperative
principles, and which, may be registered as co-operative society under the act.
is base on seven fundamental principles:
principle - voluntary and open membership:
are voluntary organizations open to all persons who are able to use their
services and willing to accept their responsibilities of membership, without
gender, social, racial, political or religious discrimination.
principle - democratic member control:
are democratic organisations controlled by their members, who actively
participate in setting their policies and taking decisions. Those persons
serving as elected representatives are accountable to the members. In primary
co-operatives, members have equal voting rights - each member having one vote
only. Co-operatives at other levels are also organized in a democratic manner.
principle - member economic participation:
contribute equitably to, and democratically control, the capital of their
co-operative. At least part of that capital is usually the common property of
the co-operative. Members usually receive limited compensation, if any, on
capital subscribed as a condition of membership. Members allocate surpluses for
any or all of the following purposes:
their co-operative, possibly by setting up reserves, at least part of which
would be indivisible;
members in proportion to their transactions with the co-operative; and
other activities approved by the members.
principle - autonomy and independence:
are autonomous, self-help organizations controlled by their members. If they
enter into agreements with other organisations, including the Government, or
raise capital from external sources, they do so on terms that ensure democratic
control by their members and maintain their co-operative autonomy.
principle - education, training and information:
provide education and training for their members, elected representatives,
managers and employees so that they may contribute effectively to the
development of their co-operatives. They inform the general public -
particularly young people and opinion leaders - about the nature and benefits of
principle - co-operation among co-operatives:
serve their members most effectively and strengthen the co-operative movement by
working together through local, national, regional and international structures.
principle - concern for the community:
work for the sustainable development of their communities through policies
approved by their members.
provides that a society, on registration, shall be known by the name under which
it is registered and shall be a body corporate, having power to hold movable and
immovable property, to enter into contracts, to sue and be sued, and to do all
things necessary for the purposes for which it is constituted.
A member of a
co-operatives enjoys limited liability. In fact , just as a shareholder in a
company, the liability of a member present or past, of a co-operative is limited
to the amount, if any, unpaid of the shares held by him.
with liability, the Act also regulates particular instances. It provides that
the liability of a past member for the debts of a society is limited to those
which existed on the date on which he ceased to be a member. Such liability
ceases on the expiration of two years commencing on that date on which he ceased
to be a member. On the other hand, the Act provides that the liability of the
estate of a deceased member is limited to the debts of the society, as they
existed on the date of the death of the member . Such liability ceases on the
expiration of two years from his death.
A COMPANY OR
Both a company
and a co-operative have legal personality and afford limited liability to their
shareholders/members limited liability. Nonetheless, the main difference between
a company and a co-operative is that while on the one hand a company is set up
by shareholders having the primary aim of getting prosperous and making profit,
on the other hand the co-operative is a gathering of person having a common goal
and pursuing that same.
about a primary difference also in voting rights. In a company , the voting
rights depends on the ownership of shares by the shareholders. Thus, the more
shares a shareholder owns, the more he has power to influence the decision
making. In a co-operative, on the other hand, each member always has one vote,
irrespective of his shareholding in the co-operative. The principle of one
member, one vote is applied unless otherwise is provided in the statute of the
principle “United we stand, divided we fall”, Maltese law on co-operatives
provides a structure whereby competing entrepreneurs, usually of small or medium
size business, team up together, to pursue a common goal.
Just like a
company, a co-operative holds general meetings, can increase its share capital
and can be liquidated and dissolved.
FOR REGISTRATION OF A CO-OPERATIVE
provides for a number of requirements for a Co-operative to be registered:
1. In those
cases where the proposed society is:
- a primary
society ,the founding members must be at least five persons, and must be of 18
years of age and not an undischarged bankrupt.
- a secondary
society, the founding members must consist of at least two primary societies;
- a tertiary
society, the founding members must consist of at least two societies, of which
at least one is a secondary society:
2. In the case
of secondary or tertiary societies, the founding members shall duly elect at
least three individuals, who shall be suitably representative of the founding
members, to be the first committee of management of the society.
application for registration, in the form stipulated by law, must be filed with
The Board of Co-operatives together with a statute for the particular
co-operative to be set up, listing the regulations by which membership and
running of such co-operative shall be regulated.
4. The Board of
Co-operatives registers, monitors and exercises supervision over co-operatives
and ensures compliance with the provisions of this Act;
5. Where the
Board is satisfied that a co-operative has complied with the provisions of this
Act, that its proposed statute in no way contravenes those provisions, that the
proposed cooperative is likely to be viable and that the proposed management of
the co-operative is appropriate, it registers the society and issues a
certificate of registration;
registration, the members of the co-operative are bound by its statute;
registration, the co-operative has the obligation of keeping audited accounts,
and submit a copy of such audited accounts to The Board of Co-operatives, not
later than five months from the end of each financial year;
8. Any member
in a co-operative cannot hold more than 40% of the shares of the co-operative.