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

Regulations

Principles of Good Governance for Co-operatives

6. Structure for decision making in the co-operative
Purchase cart Previous page Return to chapter overview Next page

 

The highest decision making structure in a co-operative is the annual general meeting of members. Members thus decide on the business of the co-operative and not the directors, the board of directors or the supervisory committee. Recommendations by the board of directors or the supervisory committee regarding the business of the co-operative must be submitted at general meetings for consideration by the members of the co-operative.

 

The board of directors is accountable to the general meeting and the supervisory committee, if the constitution of the co-operative provides for a supervisory committee. Should the board of directors decide to appoint a manager and delegate the management of the co-operative to the manger, the manager will be accountable to the board, but the board ultimately remains accountable for the management of the co-operative to the members of the co-operative.

 

6.1Annual general meetings

 

A co-operative must hold its first annual general meeting within in 18 months of its registration and thereafter annual general meetings must be held within 6 months of the end of the preceding financial year end.

 

The annual general meeting must:

(a)In the case of a category B primary co-operative, appoint an independent reviewer and, in the case of a category C, primary -, secondary -, tertiary – and the national apex co-operative, appoint an auditor;
(b)Approve a report of the board on the affairs of the co-operative for the previous financial year;
(c)Approve the financial statements and auditor’s report where applicable for the previous financial year;
(d)Elect directors;
(e)Elect a supervisory committee, if required by the constitution of the co-operative;
(f)Approve internal policies of the co-operative;
(g)Consider the activity plan6 presented by the board of directors;
(h)Decide on the future business of the co-operative

 

A juristic person entitled to vote at a meeting of a co-operative may be represented by any natural person authorised to do so.

 

The chairperson of the meeting must ensure that minutes of all general and special meetings are kept in one of the official languages at the office of the co-operative. Minutes of general meeting must be presented at the next general meeting for approval. Upon request, minutes of general meetings must be made available to members. Should the members want copies of the minutes the co-operative may charge the members the cost of making available copies of the minutes.

 

The minutes of any general meeting, approved by the members and signed by the chairperson, or a resolution adopted in terms of the constitution of the co-operative is, in the absence of evidence to the contrary, proof of the outcome of the vote or the resolution taken at the meeting.

 

Self-assessment questions to ensure compliance to all legislative requirements with regard to annual general meetings of a co-operative are provided under section 11 of the principles of good governance for co-operatives.

 

6.2        Special and ordinary resolutions

 

A special resolution means a resolution passed by a general meeting7 by not less than two-thirds of the members present, or such greater majority as may be stipulated in the constitution of the co-operative.

 

Members of a co-operative may by special resolution, provided that they have complied with the notification requirements to members:

(i)Amend the constitution of the co-operative;
(ii)Approve the amalgamation of the co-operative with another co-operative;
(iii)Approve the division of a co-operative into more than one co-operative;
(iv)Approve the transfer of assets, rights, liabilities and obligations by mutual agreement to another co-operative;
(v)Approve to convert a co-operative into a company;
(vi)Approve the voluntary winding up of a co-operative;
(vii)Approve that a co-operative voluntarily be placed under judicial management; and
(viii)If provided for in the constitution of the co-operative, approve the termination or suspension of a member from the co-operative.

 

If members find justifiable good reasons that the board of directors is dysfunctional or has acted contrary to any law, the members may dissolve the board by special resolution passed at a special general meeting—

(a)convened by the supervisory committee, or
(b)called by at least 25% of members where such co-operative does not have a supervisory committee.

 

Ordinary resolution means a resolution passed at a general meeting by the majority of the members present. Members of a co-operative may by ordinary resolution:

(a) Remove an independent reviewer, if it is a category B primary co-operative, or an auditor, if it is a category C primary -, tertiary – or the national apex co-operative; and
(b)Within a month after its registration, ratify a contract entered into by a person in the name of, or on behalf of, a co-operative before the co-operative was registered.

 

 

                                                                                               

6 Activity plan means a document that summarises the operational and financial objectives of the co-operative for the next financial year, including clear business goals with reasons why these goals are believed to be attainable and how funds in the co-operative will be utilised.
7 The constitution of a co-operative determines the quorum requirements for general meetings.