Cooperative societies can be formed for the purpose of developing the economy of the nation.
Cooperative societies can be formed independently by a group of people on their own initiative to promote and fulfill their socio-economic needs. The owners of the society should be from among its members and all the authority regarding the management of the society should be with its members. As such, the management of the society should be chosen by vote of the members. Opportunity to join the society should be available to all members of the community without any prejudice. The shares of the society should also be divided equally among the members. If the capital of the society is to be increased, it should be decided at the annual general meeting of the society. The decision will require a 60% majority vote of those present. In order to become a member of the society, one must purchase the number of shares required for membership. The Government can purchase shares from the society. The government can also provide loans and other aid to the society in accordance with the laws and regulations of Maldives.
Documents required for the registration of Cooperative Societies
a) Original copies of the Basic and Operational Regulations of the Society
b) The business plan of the Society
c) Individuals appointed to temporarily manage the society until the Management Committee can be elected in accordance with 28 (a) of the Cooperative Society Act.
d) Application form for registration of Cooperative Societies.
e) Photocopies of the ID Cards of the founder members.
A plan on how to acquire adequate finances to carry out the mandate of the Society and a plan of how the accounts and documents of the society will be maintained should be included in the business plan.
Name of the Society
a) The name of the society should be approved by the Registrar. The name should include “Cooperative” as a suffix.
b) If the majority of the community is not involved in the society, it cannot have “ … people’s Cooperative Society” as a suffix to its name.
Conditions for members of Cooperative Societies
a) Members of Cooperative Societies should be Maldivian Citizens. Clubs, Committees, Companies and Partnerships, except the Government, cannot participate in Cooperative Societies.
b) All members should be above 18 years of age and should be actively involved in the society or a segment of the society. The community in which the Cooperative Society will be active should be specified in the regulation of the society.
c) Each person should purchase or acquire at least one share of the society in order to become a member.
d) The individual should not have been previously expelled from any society due to abuse of funds.
e) The individual should not have previously been charged, or currently be serving a criminal or legal sentence. (If a member of the society is charged with a criminal or legal offence, the member shall be removed from the society.)
f) Proposed members of Cooperative Societies should be of sane mind.
Certification given to members of Cooperative Societies
The society should issue share certificates upon purchase of shares. When an individual purchases shares and becomes a member of the Society, the individual should be recorded in the Registry of the Society, and documentation should be issued ensuring the individual’s membership of the society.
Policies of Cooperative Societies
The basic policy of Cooperative Societies is specified in Article 7 of the Cooperative Societies Act. All registered Cooperative Societies should comply with these policies.
Cooperative Society Governance Code
All Cooperative Societies registered in Maldives should follow the Cooperative Society Governance Code, which was implemented starting 01 September 2010.
Course of Action for Cooperative Society Management Committee
a) The Management Committee of a Cooperative Society is the most senior Committee of the society. The society should be managed in accordance with the policies outlined in the Cooperative Society Act.
b) The Management Committee should be entirely and individually responsible for the Society and its members.
The accounts and budget of the society
The accounts of the Cooperative Society should be audited and maintained by an Auditor approved by the registrar. Prior approval should be obtained from the registrar regarding this matter.
The annual accounts of each year should be documented, and the accounts and audit reports should be presented in the annual general meeting of the society.
The annual accounts should be published each year after approval from the Audit Officer. It should also be posted at the headquarters of the Cooperative Society so that the members can see it without administering any fee.
The reserve amount for the duration of two years shall be determined by the Managing Committee of the Cooperative Society.
Annual report of the Cooperative Society
The Managing Committee of the Cooperative Society should prepare a report on the events of each year, and present it during the annual general meeting. It should also be posted at the headquarters of the Cooperative Society so that the members can see it without administering any fee.
The following should be included in the annual report.
a) Main activities carried out by the society
b) Details of trade and other activities carried out by the society
c) Details of the members of the society throughout the past year, details of those who left the society within the past year, and details of new members of the society during the past year.
d) Changes brought to the Managing Committee.
e) Details of profit or loss endured by the society during the past year.
f) The amount of profit distributed to its members and the amount deposited in the reserve fund of the society.
g) The annual report should contain details of how female members were recruited to the number specified in the Cooperative Society Regulations, and the salary of the employees of the society.
The manager of the society and his responsibilities
a) The members of the society can elect a manager or managers to carry out tasks as instructed by the Managing Committee of the society. Staff can also be appointed to work under the manager.
b) The main responsibility of the manager is to manage the Cooperative Society in accordance with the relevant regulations and policies and as instructed by the Managing Committee of the society.
c) If a manager is elected, his duties and responsibilities should be outlined in the Regulations of the Cooperative Society.
Employees of the Cooperative Society
a) The staff and the manager of the society are employees of the society and will not be considered as members unless registered so. The employees of the society do not necessarily have to be registered members. However, all staff of the cooperative society should be paid their due salary.
b) Expatriate workers can be appointed as employees of a Cooperative Society. However, only Maldivian citizens can be registered as members of the society.
c) The salary of the Manager and the staff of a Cooperative Society shall be decided by the Managing Committee of the society. This salary should be proportionate to the duties and responsibilities assigned to the staff and manager.
Duties of the Secretary of the Society
The duties and responsibilities of the Secretary of a Cooperative Society is outlined below.
a) Regular dispatching of all documents to be sent to the Registrar.
b) Making all required arrangements for the Society’s general meetings and meetings of the Managing Committee and participating in such meetings.
c) Taking and maintaining minutes of all meetings and signing the minutes along with the Chairman of the society.
d) Maintaining the registry of the members of the society.
e) Notifying all members, employees and managing committee of the important points outlined in the Cooperative Society Act and Regulations which they need to adhere to.
f) Maintenance of all documents of the society.
g) Providing assistance to Auditors in auditing the society.
h) Performing any additional duty of the Secretary of the society outlined in the regulations of the Cooperative Society.
Seal of Cooperative Societies
a) Each society should have a registered seal. An application to register a seal for the Cooperative Society should be submitted to the Registrar of Cooperatives within 30 days of registration of the society.
b) If the society prepares an agreement which is mandatory in writing, all the documents to be submitted to the registrar with this agreement and the membership documents issued to all members should have the seal of the society.
c) The seal of the society can be placed on documents other than mentioned in (b) if the Managing Committee chooses. A notice should be placed on the Society Headquarters specifying the documents which requires the society’s seal, and those with the authority to sign documents with the seal.
d) The Managing Committee of the society will determine the designation of members of the Committee who can sign documents which include the society’s seal.
Legal status of the Society and Voting of members of the Society
a) All Societies have a separate legal status from its members
b) All members of a Cooperative Society should have equal rights and opportunities to vote. Regardless of the number of shares purchased by a member of a Cooperative Society, each member will get one vote.
Encouraging female participation in Cooperative Societies
All Cooperative Societies should encourage female participation. Even if the majority of members of a Cooperative Society are not female, the Society should strive to achieve at least 1/5 female participation in ratio to the total number of members of the society.
Proxy of members of Cooperative Societies
If the society approves the appointment of a proxy for one or more of its members, or if proxies are allowed by the regulation of the Cooperative Society, the regulation should specify how to appoint proxies and how to expel appointed proxies.
Financial year of Cooperative Societies
The first financial year of the Cooperative Society will be considered to start on the day the Society is registered and end on 31 December of the same year. For the following years, the financial year will be from 1 January to 31 December each year.
Changing the registered address of a Cooperative Society
The Registrar of Companies should be informed of a change of address of the Cooperative Society within 30 days.
Amendments to the Regulation of a Cooperative Society
If any amendments are made to the Regulation of a Cooperative Society, it should be approved at a general meeting of the Cooperative Society, and the Registrar of Cooperatives should be informed in writing to register the amendment.
Changing the Managing Committee of a Cooperative Society
If any changes are made to the Managing Committee of a Cooperative Society, the Registrar of Cooperatives should be notified of the change within 30 days.
Provision of loans to individuals other than members of the Cooperative Society
If loans are granted to individuals other than members of the Cooperative Society, how the loan is granted, the amount of money loaned, and the interest to be charged should be specified in the Regulation of the Cooperative Society.
Increasing the Capital of a Cooperative Society
If a Cooperative Society intends to increase its Capital, it should be approved by the Managing Committee of the Society, and also be approved at a Special General Meeting or the Annual General Meeting of the Society before getting approval from the Registrar of Cooperatives.
Decreasing the Capital of a Cooperative Society
a) In order to decrease the Capital of a Cooperative Society, the change should be approved at a Special General Meeting, and written approval is required from the Registrar of Cooperatives. When a society requests to decrease its Capital, the Registrar will approve it only after verifying that none of the stakeholders, including those the society owes money to, the members of the society or any other party has any objections. In order to verify this, the Registrar will make a public announcement, and if no objections are raised within 30 days of the announcement, the Registrar will approve the decrease of the Capital.
b) If any justifiable objections are raised, the Registrar will instruct the amount proposed to be decreased from the Capital to be deposited in a bank account specified by the Registrar for a certain duration. If this amount is deposited as instructed, and it is guaranteed to the Registrar, the Capital of the society can be decreased.
Things to be included in the Audit Report
a) In addition to the points mentioned in the Regulation of the Cooperative Society, a statement by the Auditor should be included in the Audit Report.
b) This statement should state that the Auditor received adequate assistance from the Managing Committee during the audit, and that the auditor believes that financial information provided is valid and accurate.
c) The auditor can also include any relevant financial information regarding the Society in the report.