CO-OPERATIVE SOCIETIES g CAP. 442.  1
CHAPTER 442
CO-OPERATIVE SOCIETIES  ACT
To provide for the constitution, registration and control of co-operative
societies   and for matters connected therewith or ancillary thereto.
16th April, 2002
1st July, 2002
1st January, 2002
ACT XXX of 2001.
PART I
P R E L I M I N A R Y
Short title.
Interpretation.
"abridged set of audited financial statements" means the
financial statements placed for public inspection in accordance
with articles 11 and 48 and prepared in accordance with Part V of
the Third Schedule;
''active member'' is a member of a society who has carried out a
minimum amount or value of transactions with the same society, as
may be defined in the statute of a society;
"allowance" means the remuneration paid to the President,
secretary or treasurer of a society in consideration of their
voluntary services rendered to the society on a regular part-time
basis;
"Apex   organisation'' means an association registered under Part
X to facilitate the operations of all primary, secondary and tertiary
co-operative societies in Malta;
Cap. 387.
"Arbitration Centre" means the Malta Arbitration Centre
established under the Arbitration Act;
"Board" means the Co-operatives Board established under article
3, and includes any person exercising such powers of the Board as
may have been conferred upon him by the Board;
"Chairman" means the Chairman of the Board;
Cap. 386.
"commercial partnership" means a commercial partnership
registered under the Companies Act, or its equivalent under a
foreign law;
"delegate", in the case of a society which is itself a member of
another society, means the representative of the former, elected or
appointed to attend and vote at meetings of the latter society;
"dividend" means a share of the net surplus of a society divided
among the members in proportion to the paid up share capital held
by them in the society;
"honorarium" means the remuneration given to some or all of the
members of the committee of management or supervisory board ,  if
any, in consideration of their services which would not otherwise
2 g CAP. 442. CO-OPERATIVE SOCIETIES
be remunerated; 
Cap. 281.
"International Accounting Standards" means standards issued
from time to time by the International Accounting Standards
Committee of the International Federation of Accountants, as may
be made applicable from time to time in terms of the Accountancy
Professions Act;
"International Standards on Auditing" means the standards
approved by the Council of the International Federation of
Accountants, as amended from time to time;
"manager" is an officer appointed by the committee of
management of a society to be responsible for the executive
running and administration of a society in line with the overall
policy established by the said committee of management;
"member" in relation to a registered society includes a person, a
commercial partnership, or society admitted to membership upon,
or after, the registration of the society;
"Minister" means the Minister responsible for matters relating to
co-operative societies;
"net surplus" means the remaining portion of the surplus after
adequate provision has been made for the Central Co-operative
Fund and the reserve fund;
"officer" includes the President, Vice-President, secretary,
assistant secretary, treasurer, assistant treasurer, member of
committee of management, and manager of a society and includes
also any employee or other person empowered under this Act, the
Regulations or the statute of the society to give directives in regard
to the business of a society or to supervise such business, but does
not include an auditor of a society or a member of a supervisory
board;
"officer of the Board" means a member of the staff of the office
of the Board or any other person duly authorized by the Board for a
specific purpose;
"patronage refund" has the same meaning as is assigned to it by
article 93; 
"primary society" means a society in which a majority of
members are individual persons;
"registered" means registered under this Act;
"regulations" means regulations made under this Act;
"secondary society" means a society in which a majority of
members are themselves primary societies;
"society" means a co-operative society registered or
provisionally registered under this Act and includes a primary
society, a secondary society and a tertiary society;
''statute" means the registered statute of a society, including a
registered amendment thereto; 
"supervisory board" means the supervisory board elected by the
general meeting of members in accordance with and for the
CO-OPERATIVE SOCIETIES g CAP. 442.  3
purposes of articles 83 to 85 and other relevant provisions of this
Act; 
"surplus" means the net income less expenditure immediately
before adequate provisions have been made for the Central Co-
operative Fund and the reserve fund;
"subsidiary company" means a commercial partnership in which
a society, referred to as the "parent society", holds the majority of
shares or equivalent capital, or the majority of the voting rights, or
the right to appoint more than half of the Board of Directors or
equivalent organ, or a combination of such factors giving the
society control;
"tertiary society" means a co-operative society in which a
majority of members are themselves primary and, or, secondary
societies.
PART II
C O N S T I T U T I O N , F U N C T I O N S , P O W E R S   A N D  C O M P O S I T I O N   O F   T H E  
B O A R D
The Board.
Co-operatives Board, whose functions shall be -   
( a ) to register, monitor and exercise supervision over co-
operative societies and to ensure compliance with the
provisions of this Act;
( b ) to support and assist the establishment of co-operative
societies in all sections of the economy and society;
( c ) to furnish information regarding co-operative
principles, practices and management.
(2) The Board may, subject to the provisions of this Act and to
any general or special directions of the Minister, delegate any of its
functions under this Act. 
(3) The Board shall be a statutory body having a distinct legal
personality and, subject to the provisions of this Act, shall be
capable of entering into contracts, of suing and being sued, and
doing all such things and entering into all such transactions as are
incidental or conducive to the exercise of its functions under this
Act.
Composition.
than two and not more than six other members. The members of the
Board, including the Chairman, shall be appointed by the Minister
from among persons who, in his opinion, have experience of, and
shown competence   in, matters relating to co-operatives,
agriculture, industry, organisation of workers, trade, finance or
administration.
(2) Each member of the Board shall be appointed for a period
of not less than two years and   not exceeding five years, shall hold
and vacate office in accordance with the provisions of this Act and
with the terms of his appointment, and shall on termination of
appointment be eligible for re-appointment:
Provided that a member of the Board may at any time, by
4 g CAP. 442. CO-OPERATIVE SOCIETIES
notice in writing to the Minister, resign his office.
(3) No person shall be appointed or shall remain a member of
the Board who:
( a ) is a member of the House of Representatives; or
( b ) is an officer or member of any society or the Apex
organisation.
(4) When the office of the Chairman of the Board is vacant or
the Chairman is absent from Malta or on vacation, or is
incapacitated from performing the functions of his office, the
Minister may appoint any other person, whether a member of the
Board or otherwise, to act as Chairman during such vacancy,
absence, vacation or incapacity; and the person so appointed shall
exercise all the rights and functions of the Chairman of the Board
for the duration of such appointment.
(5) A member of the Board may be removed from office by the
Minister if in the opinion of the Minister such member is guilty of
serious misconduct in the performance of his duties or is incapable
of carrying out his duties, or is absent from the meetings of the
Board, without reasonable cause, for such number of meetings as
the Minister may consider excessive.
(6) The Minister shall also appoint a Secretary to the Board.
(7) A member of the Board shall be paid such remuneration as
the Minister may, with the concurrence of the Minister responsible
for finance, from time to time determine.
Representation. 5. The judicial and legal representation of the Board shall
vest in the Chairman: 
Provided that the Board may appoint any one or more of
the other members, or of the officers or employees of the Board, or
any person performing duties for the Board, to appear in the name
and on behalf of the Board in any judicial proceedings, and in any
act, contract, instrument or other transaction whatsoever.
Office. 6. (1) There shall be an office of the Board which shall be
managed and staffed in accordance with the provisions of this Act.
(2) Subject to the provisions of this Act and to any directives
of the Board, the management and conduct of the office of the
Board and the administrative control of its staff, shall be the
responsibility of the Chairman.
(3) The staff of the office of the Board shall consist of such
officers and employees of the Board, or of such employees in the
service of the Government as may be detailed for duty with the
Board, or of both such officers and employees.
(4) The terms and conditions of employment of any officers or
employees of the Board shall be comparable with those of
employees in the service of the Government and shall be
established by the Board with the concurrence of the Minister. 
Quorum. 7. (1) The Board may act notwithstanding any vacancy
among its members:
Provided that the Board shall not act if the office of
CO-OPERATIVE SOCIETIES g CAP. 442.  5
Chairman is vacant and an acting chairman is not appointed.
(2) The quorum at all meetings of the Board shall be not less
than half the number of members.
(3) A decision of the Board shall be reached by a majority of
the votes of the members present and voting. The Chairman or
other person chairing the meeting shall have an original vote and,
in the case of an equality of votes, a second or casting vote.
(4) Every document purporting to be an instrument made or
issued by the Board and which is signed by the Chairman on behalf
of the Board may be received in evidence and shall, until the
contrary is proved, be deemed to be an instrument made or issued
by the Board.
(5) Any member of the Board who is directly or indirectly
interested, otherwise than as a member of the Board, in any
contract or agreement made or proposed to be made by the Board,
or in any other matter or interest being raised or discussed by the
Board, shall disclose the nature of his interest at the first meeting of
the Board.
(6) Any disclosure made under subarticle (5) shall be recorded
in the minutes of the Board and the member who has made such
disclosure shall withdraw from the meeting while the contract or
agreement or any other matter or interest is discussed or decided
upon by the Board.
(7) Subject to the provisions of this Act, the members of the
Board, including the Chairman, and the officers and employees
engaged at the office of the Board, and any other person authorised
to act for or on behalf of the Board shall, at all times, treat any
information on societies obtained during the course of their duties
as confidential.
(8) A person who acts in violation of the provisions of
subarticle (7) shall be guilty of an offence and shall be liable, on
conviction, to a fine  (multa)  not exceeding two thousand liri.
(9) Subject to the provisions of this Act, the Board shall
regulate its own procedure.
Directions.
affect the public interest, from time to time give to the Board
directions in writing of a general character on the policy to be
followed by the Board in carrying out its functions under this Act;
and the Board shall, as soon as practicable, give effect to all such
directions.
(2) The Board shall afford to the Minister every facility for
obtaining and verifying information connected with the activities of
the Board, in order to enable the Minister to properly exercise his
functions under this Act.
Expenses.
funds as may be voted by the House of Representatives.
(2) The Board shall as soon as practicable, but not later than
three months after the end of each financial year, submit to the
Minister a statement of accounts duly audited by the Auditor
6 g CAP. 442. CO-OPERATIVE SOCIETIES
General and a report of its activities in respect of the previous
financial year, and shall forward a copy of any such statement and
report to the Minister and to the Minister responsible for finance.
Register of Co-
operative 
Societies.
10. The Board shall keep or cause to be kept at its office a
Register of Co-operative Societies. The Board shall also keep such
other registers, statistics or documentation on societies as it may
deem appropriate from time to time:
Provided that for public purposes, only the information
mentioned in article 12 may be made available by the Board.
Entries and 
corrections in the 
Register.
11. (1) All entries in the Register of Co-operative Societies
shall be signed by the Chairman of the Board.
(2) Every alteration, correction or erasure in the Register of
Co-operative Societies shall be made in such manner as to show the
entry altered, corrected or erased and shall be initialled by the
Chairman.
Public inspection. 12. The Register of Co-operative Societies, as well as the
registered statute of every society with any registered amendments
thereto, and the audited financial statements of societies submitted
to the Board in accordance with article 48(1), shall be open to
inspection by the public during such time and against payment of
such fees as the Minister shall from time to time prescribe by
regulations made under this Act.
Inquiries. 13. The Board may, on its own motion, if it deems that there
are reasonable or sufficient grounds to do so, and shall, on the
application of at least one-tenth of the members of a society, or on
the application of not less than one-third of the members of the
committee of management of a society, or of a majority of the
members of the supervisory board of a society, if any, hold an
inquiry into the working or financial condition of a society; and all
officers, employees and members of the society shall produce such
books, accounts, cash, papers and securities of the society and shall
furnish such information in regard to the affairs of the society as
the Board or the person conducting the inquiry may require.
Result of inquiry. 14. (1) If any inquiry made under this Act discloses any
irregularities or mismanagement in the working of a society, the
Board shall bring such irregularities or mismanagement to the
notice of the society and, if the society is affiliated to a secondary
society or tertiary society or Apex organisation, also to the notice
of that other society or Apex organisation, and the Board may issue
a dissolution order as provided in article 100.
(2) Without prejudice to the provisions of subarticle (1) of this
article, the Board may make an order directing such society or any
officer to take such action as may be specified in the order within
the time mentioned therein in order to remedy the defects ,
irregularities or acts of mismanagement disclosed in the inquiry.
Apportionment of 
costs.
15. (1) Where an inquiry is held under article 13, the Board
may make an award apportioning the costs of the inquiry, or such
part thereof as it may think fit, between the society, the members,
the officers or past officers of the society.
CO-OPERATIVE SOCIETIES g CAP. 442.  7
Cap. 12.
(2) Any costs due to the Board under subarticle (1) shall be
recoverable as a civil debt in like manner as if it were included as
an executive title under article 252 of the Code of Organization and
Civil Procedure.
Other powers of 
the Board.
16. Without prejudice to any other power under this Act, the
Board shall have the power to - 
( a ) prescribe any form to be used for any purpose under
this Act;
( b ) send a representative to attend general and extraordinary
meetings of a society upon the invitation of such society .
Administrative 
penalties.
17. The Minister may make regulations authorising the Board
to impose administrative fines or sanctions on any society or
officer thereof, or an auditor of a society, in the event of any breach
of the provisions of this Act or of any regulations issued
thereunder, or of an order lawfully issued by the Board by virtue of
its powers under this Act:
Provided that -
(i) any administrative penalty provided for by
regulations made under this article shall only be
imposed after the society or the person is
notified in writing of such breach or such order
and is given a period of twenty days from the
date of such notification to make written
representations to the Board, and this
notwithstanding, the Board concludes that the
society or the person is in breach of the
provisions of this Act or of any regulation issued
thereunder or of an order lawfully issued by the
Board by virtue of its powers under this Act;
(ii) any administrative fine provided for by
regulations made under this article shall not
exceed the amount of one thousand liri for each
breach and ten liri for each day during which
failure to observe the provisions of this Act or of
any regulation made thereunder persists;
(iii) administrative fines stipulated in paragraph (ii)
of this proviso may be increased by regulation
up to a maximum of ten thousand liri and five
hundred liri for each day during which any
contravention persists, respectively;
Cap. 12.
(iv) regulations made under this article may
prescribe that any such administrative penalty or
sanction shall be payable to the Board as a civil
debt constituting an executive title for the
purposes of Title VII of Part I of Book Second of
the Code of Organization and Civil Procedure as
if the payment of the amount of the fine had
been ordered by a judgement of a court of civil
jurisdiction;
(v) such regulations may also prescribe any right of
appeal from decisions of the Board to impose an
8 g CAP. 442. CO-OPERATIVE SOCIETIES
administrative sanction.
Use of the word 
"Co-operative".
18. (1) No person other than a society shall trade or carry on
business or otherwise operate in any field under any name or title
of which the word "Co-operative", "Coop", or any other
abbreviation or derivative thereof, is a part, without the written
authorisation of the Board. 
(2) Every person who acts in contravention of the provisions
of subarticle (1) shall be guilty of an offence and shall, on
conviction, be liable to a fine ( multa ) not exceeding two hundred
liri   and in the case of a continuing offence to a further fine ( multa)
not exceeding ten liri for each day on which the offence continues.
Abuse of authority 
or breach of trust.
19. (1) Where, in the course of an audit of a society held
under the provisions of article 45, or in the course of an inquiry
into the affairs of a society held under article 13, or in the course of
the winding up of a society ,  it appears that any person who has
taken part in the organisation or management of such society or any
past or present officer of the society has misapplied or retained or
become liable or accountable for any money or property of such
society or has been guilty of abuse of authority or breach of trust in
relation to such society, the Board may, on its own motion, or on a
request of the liquidator or any creditor or contributor, inquire or
cause an inquiry to be held into the conduct of such person.
(2) On the conclusion of any such inquiry, the Board may
make an order requiring the person who was the subject of such
inquiry to repay or restore the money or property, or any part
thereof, with interest at such rate, not being higher than the then
prevailing commercial rate, as the Board thinks just, or to
contribute such sum to the assets of such society by way of
compensation as the Board may deem appropriate to make good for
the misapplication, dishonesty, financial irregularity or breach of
trust resulting from the inquiry.
(3) Any order made under subarticle (2) shall be enforceable
by the Civil Court or by the Court of Magistrates (Malta) or the
Court of Magistrates (Gozo) in its superior jurisdiction, as if it
were a judgement of that Court. Such enforcement, and any
appropriate precaution or executive warrant or other form of
execution, shall be effected on application made by the Board. 
(4) The provisions of this article shall apply even where the act
is one for which the offender may be criminally responsible.
Non-performance 
of duties.
20. (1) If the Board is satisfied, after due inquiry carried out
or caused to be carried out by it, that the committee of management
of any society is not performing its duties properly, it may by order
published in the Gazette -
( a ) suspend or restrict all or any of the activities of the
society, for such period as it shall in the order specify;
or
( b ) remove the committee of management of the society
and order that the affairs of the society be managed
and administered by a committee of not less than two
persons and a manager, all appointed by it, for a period
CO-OPERATIVE SOCIETIES g CAP. 442.  9
not exceeding one year, which may be extended by the
Board for a further period of one year, and whose
allowances and salary shall be payable out of the funds
of the society.
(2) The powers conferred by subarticle (1) shall not be
exercisable before a reasonable opportunity is given to the
committee of management to show cause why action under that
article should not be taken and before due consideration is given to
the objections of the committee of management.
(3) The persons appointed under subarticle (1)( b ) shall, prior
to the date on which their appointment ceases to have effect, inform
the members of the society of the reasons leading to the exercise of
the powers under this article, and arrange for the election of a new
committee of management in accordance with the statute of the
society.
(4) Subject to the general direction and control of the Board,
any person appointed under subarticle (1)( b ) to assume the
functions of the committee of management of any society shall
have all the powers and duties of a duly constituted committee of
management of a society. 
PART III
F O R M A T I O N   A N D  R E G I S T R A T I O N   O F  S O C I E T I E S
Promotion of 
economic and 
other interests.
21. (1) A society is 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 co-
operative principles, and which, subject to the provisions of this
Act, may be registered by the Board as a co-operative society under
this Act.
(2) For the purposes of subarticle (1), co-operative principles
are:
First principle - Voluntary and open membership:
Co-operatives are voluntary organisations. 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.
Second principle - Democratic member control:
Co-operatives are democratic organisations controlled
by their members, who actively participate in setting
their policies and taking decisions. Men and women
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 organised
in a democratic manner.
Third principle - Member economic participation:
Members contribute equitably to, and democratically
10 g CAP. 442. CO-OPERATIVE SOCIETIES
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: developing
their co-operative, possibly by setting up reserves, at
least part of which would be indivisible; benefitting
members in proportion to their transactions with the
co-operative; and supporting other activities approved
by the members.
Fourth principle - Autonomy and independence:
Co-operatives are autonomous, self-help organisations
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.
Fifth principle - Education, training and information:
Co-operatives 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 co-
operation.
Sixth principle - Co-operation among co-operatives:
Co-operatives serve their members most effectively
and strengthen the co-operative movement by working
together through local, national, regional and
international structures.
Seventh principle - Concern for the community:
Co-operatives work for the sustainable development of
their communities through policies approved by their
members.
(3) The principles stated in subarticle (2) shall not be directly
enforceable in any court or tribunal, but shall be adhered to in the
interpretation and implementation of this Act and of any
regulations made thereunder.
Formation.  22.  (1) Persons wishing to form a society may request an
officer of the Board to   assist them in the formation of the proposed
society.
(2)  A society shall be registered under this Act:
( a ) where the proposed society is a primary society, if the
founding members consist of at least five persons
qualifying for membership in a primary society in
accordance with article 53:
Provided that, in the case of primary societies
CO-OPERATIVE SOCIETIES g CAP. 442.  11
where the number of founding members is more than
five, the founding members shall duly elect at least
three individuals from amongst themselves to sit on
the committee of management of the proposed society;
( b ) where the proposed society is a secondary society, if
the founding members consist of at least two primary
societies;
( c ) where the proposed society is a tertiary society, if the
founding members consist of at least two societies, of
which at least one is a secondary society:
Provided that, 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.
(3) It shall be lawful for a parent society to have a subsidiary
company, provided the following conditions are fulfilled:
( a ) the objects of the subsidiary company serve to fulfil,
promote, complement or advance the objects of the
parent society;
( b ) adequate measures are in place to ensure that the
members of the parent society are kept adequately
informed of the operations and performance of the
subsidiary company; and
( c ) adequate measures are in place to ensure that the
powers of the parent society with respect to the
subsidiary company are exercised, having due regard
to the wishes of the parent society.
Founding 
members.
23. The founding members of a society, or their duly elected
representatives, shall -
( a ) determine the type of society to be formed and draw up
its objects;
( b ) assess the probable membership and expected volume
of business;
( c ) undertake a feasibility study into the economic and
practical aspects of the activities to be carried out by
the proposed society;
( d ) prepare, on the basis of the study referred to in
paragraph ( c ), and in such form as the Board may
require, a viability statement for submission to that
Board;
( e ) compile a list of prospective members and a record of
the probable capital contributions in the form of
shares;
( f ) organise educational meetings to discuss the proposed
society, its operations and its benefits to members;
( g ) prepare an appropriate statute for the proposed society;
and 
( h ) undertake such other functions as may be necessary for
12 g CAP. 442. CO-OPERATIVE SOCIETIES
the purpose of submitting   an application for the
registration of the proposed society. 
Name of registered 
society.
24. (1) No society shall be registered by a name which in the
opinion of the Board is undesirable   or offensive or which may
create confusion with other commercial or other undertakings.
(2) Every society shall have -
( a ) the word "co-operative" or the abbreviation ''co-op'' as
part of its name; and 
( b ) the word "limited" or the abbreviation ''ltd.'' at the end
of its name.
Powers and duties 
of founding 
members.
25. When the Board has registered a society in accordance with
the provisions of this Act, the founding members or their duly
elected representatives as stipulated in article 22, will be deemed to
have all the powers and duties of a committee of management as
provided in article 74.
Application for 
registration.
26. (1) Every application for registration shall be submitted to
the Board in the form set out in the First Schedule. Such an
application shall be signed -
( a ) in the case of a primary society, by at least five
persons, all of whom qualify for membership of a
primary society and are prospective members of the
society; 
( b ) in the case of a secondary society, by individuals duly
authorised in that behalf by not less than two societies
qualifying for membership of a secondary society and
which are prospective members of the society; and
( c ) in the case of a tertiary society, by individuals duly
authorised in that behalf by not less than two societies
qualifying for membership of a tertiary society and
which are prospective members of the society.
(2) The application shall be accompanied by -
( a ) one copy of the statute, signed by all prospective
members;
( b ) one copy of the feasibility study as is referred to in
article 23( c ), and which is carried out by a person who,
in the opinion of the Board, is competent for the
purpose.
Additional 
information.
27. (1) The Board may require the applicants to furnish it with
such information with reference to the society regarding:
( a )   the economic or other need for the formation of the
society;
( b ) the educational and advisory work pertaining to co-
operative principles and practices already being
carried out among the applicants for registration and
prospective members;
( c ) the availability of sufficient capital, in accordance
with regulations as may be prescribed under this
article, for the commencement of operations;
CO-OPERATIVE SOCIETIES g CAP. 442.  13
( d ) the availability of officers ,  including professional
management, capable of directing and managing the
affairs of the society and of keeping such records and
accounts for the society as the Board may require; and
( e ) such other additional information as the Board deems
fit.
(2) The Board, having received an application for registration
of a co-operative society in conformity with the requirements of
this Act, and having been satisfied that the proposed society does
not require to submit further information relating to its possible
registration, may - 
( a ) reject an application, specifying the reasons for such a
decision and communicating these reasons to the
proposers; or
( b ) provisionally register the proposed society under
article 28; or
( c ) fully register the proposed society under article 29.
(3) In exercising its powers under this article, the Board shall
take into account all the circumstances of the case, including the
ability of the proposed founding members to carry the project
through, the proposed objectives of the society and the proposed
mode of operation.
Provisional 
registration.
28. (1) Subject to article 29(3) and to the provisions of this
Act, where the Board is satisfied that a proposed society should not
be registered under this Act at the time of the application for
registration, it may, if it is of the opinion that steps can and will be
taken with diligence by the persons by whom or on whose behalf
the application for registration is made to comply with all the
conditions for registration, provisionally register the proposed
society for a period not exceeding eighteen months, and subject to
its compliance with such terms and conditions, as the Board may
determine.
(2) A society which has been provisionally registered shall,
subject to the provisions of this article and to any terms and
conditions that may be imposed by the Board under subarticle (1),
be entitled to operate as a registered society, and while so entitled
to operate shall have the status and powers of a registered society.
(3) A society which is provisionally registered under this
article shall cause the fact that it is provisionally registered to be
stated in legible letters in all bills, letterheads, notices,
advertisements and other official publications of the society and
particularly on a signboard placed in a conspicuous position outside
every premises in which it operates.
(4) The Board may at any time cancel the provisional
registration of a society by a notice in writing addressed to the
society and such cancellation shall operate as a refusal to register
the society, and the society shall from the date of service of the
notice cease to be a registered society.
(5) Where a society ceases to be a registered society under
subarticle (4), the Board may appoint a competent person to be the
14 g CAP. 442. CO-OPERATIVE SOCIETIES
liquidator of the society in terms of article 100(4); but the validity
of any transaction entered into by or with the society while it was
provisionally registered shall not be affected thereby.
(6) If, at any time during the period of provisional registration,
the Board is satisfied that the society complies with all
requirements and conditions for registration, it may register the
society under article 29, and thereupon such society shall be
deemed to have been so registered on the date of its provisional
registration, and the foregoing provisions of this article shall cease
to apply to such society.
Cap. 249. (7) Subject to the provisions of the Interpretation Act
regarding the liability of members of an association for
contraventions, where a society contravenes any of the provisions
of subarticle (3), it shall be guilty of an offence and shall be liable,
on conviction, to a fine ( multa ) not exceeding fifty liri, and in the
case of a continuing offence to a further fine ( multa ) not exceeding
ten liri for every day during which the offence continues.
Registration of 
society.
29.  (1) Where the Board is satisfied that a society has
complied with the provisions of this Act, that its proposed statute   in
no way contravenes   those provisions, that the proposed co-
operative is likely to be viable and that the proposed management
of the co-operative is appropriate, it shall register the society and
its statute.
(2) Upon the full registration or provisional registration of a
society, the Board shall issue an appropriate certificate of
registration and shall cause the fact of registration to be published
in the Gazette.
(3) Societies set up in accordance with co-operative schemes
developed by Government for public employees shall be registered
in a separate register, clearly identified for this purpose. In such
cases the duration for any provisional registration shall be
established by the Minister in consultation with the Board.
Certificate of 
registration.
30. A certificate of registration signed on behalf of the Board
shall be conclusive evidence that the society therein mentioned is
duly registered or provisionally registered, unless it is proved that
the registration or provisional registration of the society has been
cancelled or has terminated.
PART IV
O R G A N I S A T I O N   A N D  D U T I E S   O F  S O C I E T I E S  
Legal entity. 31. 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.
Defects. 32. An act of a society or of a committee of management or of
an officer of the society shall not be deemed to be invalid as against
third parties by reason only of the existence of some defect in the
constitution of the society or of the committee of management or in
the appointment or election of an officer or on the ground that such
CO-OPERATIVE SOCIETIES g CAP. 442.  15
officer was not qualified to be so appointed.
Formation of 
secondary or 
tertiary societies or 
subsidiary 
companies.
33. (1) Societies may form secondary societies, tertiary
societies and subsidiary companies.
(2) The object of secondary societies and tertiary societies
shall be to facilitate, co-ordinate, promote and enhance the joint
operations of those societies which are their members.
Statute to be 
registered.
34. (1) The statute of a society, including any amendment
thereto, shall be duly registered by the Board.
(2) The statute of a society shall provide for the matters listed
in the Second Schedule.
Amendments to 
statute.
35. (1) Any society may, subject to the provisions of this Act,
amend its statute.
(2) An amendment which changes the name of the society shall
not affect any right or obligation of the society or any of its
members or past members, and any legal proceedings
pending may be continued by or against the society under its new
name.
(3) An amendment to the statute of a society shall not have
effect until it has been registered by the Board. 
(4) An amendment to the statute shall not be valid and shall
therefore not be registered by the Board unless -
( a ) a resolution to amend the statute has been passed by
not less than three-fourths, or such other higher
majority as may be stipulated in the statute, of the
members present and voting at a general meeting duly
convened for that purpose; and 
( b ) not less than fifteen days’ notice of the proposed
amendment and of the meeting has been given to the
members. 
(5) A copy of any amendment to the statute of a society, duly
passed as aforesaid, shall be signed by the President or Vice-
President and any other member of the committee of management
of a society, and shall be submitted to the Board for registration,
together with a copy of the revised and updated statute as amended
by the said society.
(6) The Board shall register an amendment to the statute if it is
satisfied that the amendment in no way contravenes any of the
provisions of this Act.
(7) If the Board refuses to register an amendment to a statute,
it shall inform the society of its decision in writing together with
the reasons for its refusal.
(8) Where the Board registers an amendment to the statute of a
society, it shall publish in the Gazette a notice that such statute has
been so amended.
Members bound by 
statute.
36. (1) The statute of a society, including any amendments
thereof shall, once registered, bind the society and the members
thereof to the same extent as if they were signed by each member.
16 g CAP. 442. CO-OPERATIVE SOCIETIES
(2) A member of a society shall not, without his consent in
writing having been first obtained, be bound by any amendment of
the society’s statute registered after he became a member, if and so
far as that amendment requires him to take or to subscribe for more
shares than the number held by him at the date of registration of the
amendment, or to pay upon the shares so held any sum exceeding
the amount unpaid upon them at that date, or in any other way
increases the liability of that member to contribute to the share or
loan capital of the society.
(3) Any dispute that may arise, concerning any of the matters
referred to in article 109, shall, if included in the statute of a
society, or if agreed between the parties involved in the dispute, be
referred to arbitration by an arbitrator appointed by the Chairman
of the Malta Arbitration Centre, in which case, the society’s
members shall abide by the awards of the arbitrator. Membership of
a society shall automatically imply a tacit agreement, on the part of
the member, to submission to arbitration as aforesaid.
Registered address. 37. (1) Every society shall have an address registered in
accordance with this Act to which all notices and communications
shall be sent.
(2) A change of address shall be notified to the Board. The
Board shall cause the new address to be registered as the registered
address of the society and to be published in the Gazette.
Register of 
members and of 
shares.
38. (1) Every society shall maintain a register of members,
and a register of shares held by each member.
(2) The register of members and of shares shall be  prima facie
evidence of any of the following particulars entered therein:
( a ) the date at which the name of any person was entered
in such register as a member;
( b ) the date at which any such person ceased to be a
member; and
( c ) the number of shares held by a member.
Inspection of 
statute.
39. (1) Every society shall, at the registered address of the
society, keep open to inspection to its own members, free of
charge, at all reasonable times a duly updated copy of its statute, a
copy of this Act and a list of its members.
(2) At the end of December of each year, or at earlier intervals
as the Board may require from time to time, every society shall
send an updated list of its members to the Board. Such lists shall be
open for inspection to the public at the office of the Board.
Sale or provision 
of goods.
40.   (1) Notwithstanding the provisions of any other law, a
society whose principal activity consists in the sale or purchase or
the provision of any goods and, or, services, may provide in its
statute, or may otherwise contract with its members, that:
( a ) every such member who produces such goods or
provides such services shall dispose of, or otherwise
arrange for the disposal of, the whole or any specified
amount or proportion, of such goods or services to or
through the society in conformity with any agreement
CO-OPERATIVE SOCIETIES g CAP. 442.  17
entered into or arrangement made between the society
and any third party;
( b ) every such member shall purchase from the society the
material required by the member for the purpose or in
connection with the production of such goods or the
provision of such services, in whole or in any specified
amount or proportion thereof, from the society:
Cap. 379.
Provided that such rules and obligations shall be directly
related, necessary and proportionate to the formation and proper
functioning of the society and that the compatibility of such rules
and obligations with the provisions of the Competition Act shall, in
every event, be assessed together with and within the context of the
economic conditions prevailing in the relevant market in particular
the market power of the society concerned.
(2) The statute, or contract, as the case may be, may also
provide for reasonable and proportionate penalties or other
consequences to be incurred by a member of a society who acts in
violation of the provision referred to in subarticle (1).
Disciplinary 
penalties.
41. The statute of a society may provide for the imposition of
pecuniary penalties on its members for any infringement of the
rules   thereof, but no such pecuniary penalty shall be imposed upon
any member until written notice of the intention to impose the same
and the reason therefor has been served on him and he has had an
opportunity of being heard or otherwise of showing cause why the
pecuniary penalty should not be imposed.
Privileges.
Cap. 16.
42. (1) Without prejudice to any other law to the contrary,
where a society has supplied to any member any material,
equipment, funds or services directly related to the activities
carried out by the society, the society shall have a special privilege
over such material, equipment, funds or goods produced therewith
or therefrom or by virtue of such funds or services; such privilege
shall rank concurrently with the privilege mentioned in article 2009
of the Civil Code:
Provided that nothing herein contained shall affect the
rights of any  bona fide  purchaser or transferee.
Cap. 16.
(2) A society shall have a special privilege upon the share or
other interest in the capital and on the deposits of a member or past
member or deceased member and upon any dividend, patronage
refund, or other sum payable to a member or past member or to the
estate of a deceased member in respect of any debt due to the
society from such member or past member or estate, and may set
off any such debt against any sum credited or payable to a member
or past member or estate of a deceased member as aforesaid. Such
privilege shall rank concurrently with the privilege mentioned in
article 2009( a )   of the Civil Code.
Transfer of shares.
or other interest of the deceased member to the person entitled to
such share or interest according to law   or pay to such person a sum
representing the nominal value of such member’s share or interest
as ascertained in accordance with the society’s statute:
18 g CAP. 442. CO-OPERATIVE SOCIETIES
Provided that where the heir of a deceased member, or in
the event of more than one heir, then one of such heirs as may be
appointed by them, is eligible for membership of the society, then
such heir shall have the right to request and obtain membership in
the society and shall be registered accordingly in his own name.
Copies of entries in 
book.
44. (1) A copy of any entry in a book of a society regularly
kept in the course of business, shall, if duly certified as provided in
subarticle (2), be  prima facie  evidence in any legal proceedings,
civil or criminal, of the existence of such entry and of the matters,
transactions and accounts therein recorded in every case where, and
to the same extent as, the original entry itself is admissible.
(2) The copy of an entry in the book of a society shall be
certified by a declaration in writing at the foot of such copy stating
that it is a true copy of such entry and that the book containing the
entry is still in the custody of the society; such declaration shall be
dated and signed by the President   and the secretary of the society.
(3) No officer of any society shall, in any legal proceedings to
which the society or the liquidator of the society is not a party, be
compelled to produce any of the society’s books, the contents of
which can be proved in accordance with subarticle (1) or to appear
as witness to prove any matters, transactions or accounts therein
recorded, unless the court for special reasons so directs.
Financial 
statements.
45. (1) The financial statements of every society shall be
audited at least once in every year by an auditor or auditors
appointed at each general meeting at which audited financial
statements are presented. Such auditors shall hold office from the
conclusion of that general meeting until the next general meeting at
which audited financial statements are presented. The audit fee
shall be approved at the general meeting.
Cap. 281.
(2) For the purposes of this Act, an auditor means a person
who is an individual who holds a warrant to act as auditor issued
under the Accountancy Profession Act, or is a partnership of
auditors duly registered under the said Act.
(3) Every society shall appoint, and cause to have at all times
appointed, a person qualified and authorised as aforesaid to be the
auditor of the society. The first auditor of a society may be
appointed by the committee of management of the society at the
first opportunity and definitely before the first general meeting of
the society at which annual accounts are presented, and the auditor
so appointed shall hold office until the conclusion of that meeting.
(4) The committee of management shall, at any time before the
general meeting of a society at which the annual accounts are
presented, fill a casual vacancy in the office of auditor:
Provided that the society in general meeting may fill such a
casual vacancy itself.
(5) If no auditors are appointed or re-appointed by the
committee of management or by the general meeting of a society as
required by the foregoing provisions of this article, then the Board
may, on an application made by any member of the society, appoint
an auditor to fill the vacancy.
CO-OPERATIVE SOCIETIES g CAP. 442.  19
Disqualification.
or from holding the office of auditor of a society if, in the case of
an individual, he has at any time during the previous three years
been -
( a ) an officer, member or employee of the society; or
( b ) a member, employer or employee of an officer of the
society; or
( c ) a member or employee of an employee of the society;
or
( d ) related by consanguinity or affinity in the direct line,
or, up to the third degree, in the collateral line, to any
officer of the society.
Powers of auditors.
( a ) have a right of access at all times to the society’s
accounting records, accounts and vouchers;
( b ) require from the society’s officers such information
and explanations as they think necessary for the
performance of their duties as auditors;
( c ) receive all notes of, and other communications relating
to, any general meeting which a member of the society
is entitled to receive;
( d ) attend any general meeting of the society; and
( e ) be heard at any general meeting which they attend on
any part of the business of the meeting which concerns
them as auditors.
(2) An officer of a society who, knowingly or recklessly,
makes to the society’s auditors a statement, whether written or oral,
which conveys or purports to convey any information or
explanations which the auditors require, or are entitled to require,
as auditors of the society, which is misleading, false or deceptive in
a material particular, shall be guilty of an offence under this Act.
(3) A secondary or tertiary society, and the auditors of such a
society, and the auditors of any subsidiaries of any society, shall
give to the auditors of any of their member societies such
information and explanations as they may reasonably require for
the purpose of their duties as auditors of that society.
Submissions to the 
Board.
48. (1) A society shall, as soon as practicable but not later
than five months after the close of each financial year, submit to
the Board:
( a ) one certified true copy of the audited financial
statements of the society as laid down in Parts I to IV
of the Third Schedule, together with the audit report
for that period prepared in accordance with article 49;
( b ) one certified true copy of audited financial statements
for public inspection, as laid down in Part V of the
Third Schedule, together with the audit report for that
period prepared in accordance with article 49 and
stating whether in the auditor’s opinion the society is
20 g CAP. 442. CO-OPERATIVE SOCIETIES
entitled to prepare an abridged set of audited financial
statements, for public inspection.
(2) A society may elect not to submit to the Board an abridged
set of audited financial statements together with the audit report
mentioned in subarticle (1)( b ), in which case the Board shall make
the society’s audited financial statements, together with the audit
report, referred to in subarticle (1)( a ), available for public
inspection.
(3) The Board may, if the auditor of the society is not of the
opinion that the society is entitled to prepare an abridged set of
audited financial statements, make available for public inspection
the society’s audited financial statements mentioned in subarticle
(1)( a ).
(4) The audit reports mentioned in subarticle (1)( a ) and ( b )
shall be signed by the auditors.
(5) The society shall keep proper accounts and records of its
transactions and affairs and shall do all things necessary to ensure
that all payments out of its moneys are correctly made and properly
authorised and that adequate control is maintained over the assets
of, or in the custody of, the society and over the expenditure
incurred by the society. Such accounts shall, subject to the
provisions of this Act, conform to International Accounting
Standards .
(6)  The society shall, as soon as practicable but not later than
three   months after the close of each financial year, prepare and
submit the financial statements in respect of that year to the auditor
who shall audit and report on them. Such an audit shall, subject to
the provisions of this Act, conform to the International Standards
on Auditing.
(7) References in this article to signature by the auditor shall
refer to the signature of an individual partner or partners signing on
behalf of the partnership and authorised to sign on its behalf, in
those cases where the office of auditor is held by a partnership.
Audit report. 49. (1) The auditor of a society shall audit the accounts and
other relevant records of the society and shall forthwith inform the
Board and the society or any of its officers, of any material
irregularity disclosed in the course of his audit. The financial
statements prepared by the society after the close of the financial
year shall be audited and reported on by the auditor.
(2) A society’s auditor shall present a report on all financial
statements of the society to the society’s members. Copies of the
financial statements and of the auditor’s report thereon are to be
laid before the society in general meeting, but shall be available for
inspection by the members at the society’s premises as from five
working days from the date announced for the holding of the
meeting.
(3) The auditor’s report shall be drawn up in accordance with
International Standards on Auditing and shall state whether, in the
auditor’s opinion, the financial statements have been properly
prepared in accordance with this Act, and in particular whether a
CO-OPERATIVE SOCIETIES g CAP. 442.  21
true and fair view is given -
( a ) of the state of affairs of the society as at the end of the
accounting period; and
( b ) of the income and expenditure of the society for the
accounting period.
(4) A society’s auditor shall, in preparing his report, carry out
such investigations as will enable him to form an opinion as to
whether -
( a ) proper accounting records have been kept by the
society;
( b ) proper returns adequate for the audit have been
received from branches not visited by him;
( c ) the society’s accounts are in agreement with the
accounting records and returns; and
( d ) the society has functioned in accordance with its
statute and the provisions of this Act.
(5) If the auditor -
( a ) is of the opinion that any of the items mentioned in
subarticle (4) are not in conformity with the
requirements of this Act; or
( b ) is unable to obtain all the information and explanations
which, to the best of his knowledge and belief, are
necessary for the purpose of his audit,
he shall state that fact in his report.
(6) The auditor may at any other time report to the Board and
to the society upon any matters arising out of the performance of
the audit.
(7) The audit of the accounts of a society may, for
management purposes, include an examination of and a report on
overdue debts, if any, and an examination of and a report on the
valuation of the assets and liabilities of the society.
Remuneration of 
auditors.
50. (1) The remuneration of auditors shall be fixed by the
society in general meeting or in such manner as the society in
general meeting may provide. The remuneration of auditors
appointed by the committee of management or by the Board shall
be fixed by the committee of management or by the Board, as the
case may be.
(2) There shall be stated in the notes to the accounts the
amount of the remuneration paid to the society’s auditors,
including any other remuneration earned by the auditors in any
other capacity from the same society.
(3) For the purposes of this article, "remuneration" includes
sums paid in respect of expenses.
(4) The provisions of this article shall apply in relation to
benefits in kind and to payments in cash; and, in relation to any
such benefit, references to its amount are to be construed as
references to its estimated money value. The nature of any such
22 g CAP. 442. CO-OPERATIVE SOCIETIES
benefit shall also be disclosed.
(5) The Minister may by regulations provide for the manner in
which the amount of any remuneration received or receivable by a
society’s auditors or associates of such auditors shall be disclosed;
in particular, the regulations may prescribe the circumstances in
which a person or body shall, for the purposes of such regulations,
be considered as an associate of the auditors.
Regulations 
regarding auditors.
51. The Minister, acting on the advice of the Board, may make
regulations, not inconsistent with the provisions of this Act,
regulating -
( a ) the appointment, removal, qualification,
disqualification, remuneration and resignation of
auditors; 
( b ) the powers, functions and duties of auditors; 
( c ) the keeping of accounting records, and the form and
content of accounts; 
( d ) the auditor’s report and any other reporting duties; and 
( e ) any other matter as may be necessary or appropriate
for the better carrying out of the provisions of this Part
of the Act.
PART V
R I G H T S   A N D  D U T I E S   O F  M E M B E R S
Register of 
members.
52. (1) Any person who becomes a member of a society,
whether upon registration or at any later date, shall be deemed to
have agreed to comply with the rules of the said society, and to the
provisions of article 36. The names of members of the society shall
be entered in the register of members. 
(2) New members shall be admitted by the committee of
management on an application made for that purpose:
Provided that if a person’s application is refused by the
committee, such person may appeal to the general meeting of
members and in any such case he may be admitted as a member by
a resolution passed by not less than two-thirds of the members
present and voting at such a meeting.
Qualification for 
membership.
53. (1) A person shall qualify for membership in a primary
society if he is an individual who -
( a ) has attained the age of eighteen years and is of sound
mind; and
( b ) satisfies such other requirements with regard to
residence, employment, profession or other matter as
may be prescribed by the statute; and
( c ) is not an undischarged bankrupt.
(2) Where the statute of a society specifically so permits, a
commercial partnership may also qualify for membership of a
society:
Provided that -
CO-OPERATIVE SOCIETIES g CAP. 442.  23
( a ) the operations of the commercial partnership are
wholly or mainly similar or equivalent to the
operations of the society;
( b ) the commercial partnership shall be represented by a
duly authorised individual at the general meetings of
the society; and that such an individual shall be a
director, partner or the majority shareholder of the said
partnership;
( c ) a commercial partnership may not be a member of a
committee of management or of a supervisory board, if
any; and
( d ) the Board is informed immediately, by the society,
whenever a commercial partnership is accepted as a
member of that society.
(3) It shall not be lawful for a person to appear as a member of
a society as nominee or for the interest of any undisclosed person.
Any nominee agreement or similar agreement contrary to this
subarticle shall be null and void, and the person whose name
appears on the statute or in the Register of members shall, for all
purposes, be deemed to be the member.
(4) Any person who at any time does not have the
qualifications for membership as provided in this article shall be
struck off the register of members by the committee of management
and shall thereupon cease to be a member of the society.
Exercise of 
membership rights.
54. No member of a society shall exercise any of the rights of a
member unless he has made such payment to the society in respect
of membership, or has acquired such shares or other interest in the
society, as may be prescribed under this Act or by the statute   of the
society.
Conflict of interest.
any other primary society having the same or similar objects or
activities.
(2) The statute of a society may contain rules prohibiting or
restricting its members from carrying out activities in competition
with those carried out by the society.
Votes.
each member of a primary society shall only have one vote in the
affairs of the society, including at general meetings, irrespective of
the number of shares he holds, and the right to vote shall be
exercised in person and not by proxy. Notwithstanding anything
contained in any statute, the granting of a proxy shall be in written
form, and a proxy may not represent more than two members at a
meeting, including the member exercising the proxy.
(2) In a secondary society or tertiary society, each society
which is a member shall have as many votes as may be provided by
the statute of the secondary society or tertiary society, and may,
subject to such a statute, appoint any number of delegates, not
exceeding the number of such votes, to exercise its right to vote.
Share capital.
statute of a society, no member shall hold more than forty per cent
24 g CAP. 442. CO-OPERATIVE SOCIETIES
of the share capital of any society:
Provided that in the case of secondary or tertiary societies,
a member which is itself a co-operative society may hold more than
forty per cent of such share capital.
Transfer of shares 
or other interest.
58. (1) No member of a society shall transfer any share held
by him or his interest in the capital of the society or any part
thereof unless -
( a ) he has held such share or other interest for not less
than one year; and
( b ) the transfer is in favour of the society, a member of the
society or a person whose application for membership
has been accepted by the committee of management of
the society.
(2) No transfer of a share or other interest shall be valid and
effective unless and until such transfer and the name of the
transferee has been approved and registered by the committee of
management.
Limited liability. 59. (1) The liability of a member, present or past, of a society,
shall be limited to the amount, if any, unpaid of the shares held by
him.
(2) The liability of a past member for the debts of a society in
terms of subarticle (1) shall be limited to those which existed on the
date on which he ceased to be a member and shall cease on the
expiration of two years commencing on that date.
(3) The liability of the estate of a deceased member shall be
limited to the debts of the society, as they existed on the date of the
death of the member and shall cease on the expiration of two years
commencing on that date. 
Withdrawal. 60. (1) A member may withdraw from a society subject to
such conditions, and by giving to the society such notice, as may be
prescribed by the statute.
(2) The amount that should be paid to the withdrawing member
for the redemption of his share or interest shall be the nominal
amount thereof.
(3) The statute of a society may stipulate the manner in which
such payment is to be effected.
Expulsion. 61. A member who contravenes any of the provisions of this
Act or of any regulations made thereunder or of any provision of
the statute of the society, and any member who acts in any way
detrimental to the interests of the society, may be expelled from the
society:
Provided that the statute of a society may provide for a
different procedure for the expulsion of members, as long as such
procedure provides for the giving to the person charged reasonable
notice of the charge and an opportunity to make representations and
to present evidence against the charge.
CO-OPERATIVE SOCIETIES g CAP. 442.  25
PART VI
O P E R A T I O N   A N D  M A N A G E M E N T   O F  S O C I E T I E S
General meetings.
general meeting of its members.
(2) Subject to article 56 and to the provisions of this Act, every
member shall have the right to attend and vote at all general
meetings of the society, in person or by proxy.
Legal and judicial 
representation.
63. The legal and judicial representation of a society shall be
clearly specified in its statute; a society which does not clearly
specify, in its statute, its legal and judicial representation shall not
be registered.
First general 
meeting.
64. (1) Every society shall, within six months from its date of
registration, hold a first general meeting of its members.
(2) The business of the first meeting shall include the election
of the officers who are to serve until the first annual general
meeting.
Annual general 
meeting.
65. (1) Every society shall provide in its statute for an annual
general meeting to be convened by the committee of management
and to be held as soon as practicable, but not later than six months,
after the end of each financial year, and may also provide for other
general meetings.
(2) Notice of every general meeting shall be given in writing
to each member or delegate entitled to attend the meeting. Such
notice shall be given at least fifteen clear days prior to the date of
the meeting: 
Provided that in cases of urgency a general meeting, other
than an annual general meeting or a general meeting having on the
agenda an amendment of the statute, may be called by a notice of
not less than three working days.
(3) Every notice of a general meeting shall state the matters for
discussion and the resolutions to be proposed, and no other subject
shall be discussed without the consent of the majority of the
members present and voting at such general meeting.
(4) The accidental omission to give notice of a meeting to, or
the non-receipt of notice of a meeting by, any person entitled to
receive notice, shall not invalidate the proceedings at that meeting.
Functions of the 
annual general 
meeting.
66.   The functions of the annual general meeting of a society
shall be -
( a ) to consider and confirm, with such amendments as it
may deem fit, the minutes of the previous annual
general meeting and of any other intervening general
meeting not previously approved at another general
meeting;
( b ) to consider the auditor’s report, the reports of the
committee of management   and the supervisory board,
if any,   and any report made by the Board;
( c ) to consider and approve the financial statements;
( d ) subject to the provisions of this Act and the statute, to
26 g CAP. 442. CO-OPERATIVE SOCIETIES
consider and determine the manner in which any
available net surplus shall be distributed or invested;
( e ) to consider and adopt any amendments to the statute;
( f ) to propose and approve any honoraria, allowances,
audit fees and/or other remuneration as defined in
article 77;
( g ) to elect members of the committee of management and
of the supervisory board, if any;
( h ) to appoint the auditors of the society;
( i ) to decide appeals of persons whose application for
membership has been rejected by the committee of
management;
( j ) to consider and determine the maximum amount the
society may borrow;
( k ) to hear and decide upon any complaints brought by
members aggrieved by a decision of the committee of
management, provided that notice of the intention to
bring such complaints before the meeting has been
given to the secretary or manager at least two days
prior to the meeting; 
( l )  if so requested by him, to hear any auditor who has
been removed by the society;
( m ) to transact any other general business of the society of
which due notice has been given to members. 
Extraordinary 
meeting.
67.   (1) An extraordinary meeting of a society may be
convened at any time by the committee of management of the
society.
(2) An extraordinary general meeting of a society shall be
convened by the committee of management -
( a ) on receipt of a request for such a meeting signed by at
least one-fourth or fifteen of the members or delegates
of the society, whichever is the less, stating the objects
of the meeting;
( b ) on receipt of a request from the supervisory board, or
the Board, stating the objects of the meeting.
(3) If the committee of management fails to convene an
extraordinary general meeting in accordance with subarticle (2)
within one month of receiving the request for the meeting, the
supervisory board, or the Board, as the case may be, making the
request shall have power to convene the meeting themselves by
notice to all members of the society stating the object of the
meeting and the fact that the committee of management has failed
to convene the meeting.
Quorum.  68. (1) No business shall be transacted at any general meeting
unless a quorum of members or delegates is present. The quorum
necessary for the transaction of business shall be fifteen or one-
fourth of all members or delegates qualified to vote, whichever is
the less.
CO-OPERATIVE SOCIETIES g CAP. 442.  27
(2) If within thirty minutes after the time fixed for a general
meeting the members or delegates present are not sufficient to form
a quorum, such meeting shall be considered as dissolved if it is
convened on the request of members or of delegates; in all other
cases it shall stand adjourned to the same day in the next week at
the same time and place and a notice to this effect shall be sent by
post, to the registered addresses of the members and of whoever is
entitled to attend, by the secretary within forty-eight hours of the
adjournment; and if at the adjourned meeting a quorum is not
present within thirty minutes from the time fixed for the meeting
the members or delegates present shall form a quorum:
Provided that a general meeting with such reduced quorum
shall not have the power to amend the statute.
Voting.
statute, any question referred to the members or delegates present
at a general meeting shall be decided by a majority of votes.
(2) At any general meeting a resolution put to vote shall be
decided by a show of hands unless voting by call of names or by
ballot is demanded by at least two members, where the number of
members present is less than twenty, or by at least five of the
members present in any other case:
Provided that for the election of officers the voting shall in
all cases be carried out by ballot.
(3) In the case of an equality of votes the motion shall be
rejected. The chairman shall have no casting vote.
Minutes.
minute book and shall include:
( a ) the names   of members or delegates present at the
meeting and the name of the chairman who presided;
( b ) the time the meeting commenced and ended;
( c ) all resolutions and decisions taken at the meeting.
(2) The minutes of each general meeting shall be read at the
next following general meeting, and when signed by the chairman
of that meeting and the secretary, whether following confirmation
or amendments, they shall be evidence of anything contained
therein. 
Committee of 
management.
71. (1) Every society shall have a committee of management
consisting of not less than three and not more than nine committee
members as may be provided by its statute.
(2) Members of the committee of management shall be elected,
suspended or removed only by a majority of members or delegates
present and voting at a general meeting of the society.
(3) All the members of a committee of management shall be
individual persons and shall serve on the committee of management
on their own responsibility and not as nominees or representatives
of any other person.
Eligibility for 
membership.
72. An individual shall be eligible for membership of the
committee of management of a society or to remain a member of
28 g CAP. 442. CO-OPERATIVE SOCIETIES
such a committee if he -
( a ) is a member of the society;
( b ) is an individual appointed in writing by a commercial
partnership which is a member of the society;
( c ) does not engage in an activity which gives rise to a
conflict of interest;
( d ) does not take part, on a permanent or occasional basis,
in any activity which is directly or indirectly in
competition with that of the society;
( e ) is not an undischarged bankrupt:
( f ) has not   been convicted of any crime punishable by
more than one year’s imprisonment;
( g ) does not have any outstanding debt owing to the
society at the end of the society's financial year other
than in respect of a loan made under the relevant rules
of the society statute;
( h ) in the case of a primary society, he is not already a
member of a committee of management of another
primary society having the same or similar objects or
activities;
( i ) he does not receive any remuneration, salary or other
payments, except as provided for in article 77:
Provided that, with respect to paragraph ( c ), the general
meeting of the society may decide that a person shall be so eligible
notwithstanding that he engages in any such activity.
Term of office. 73. (1) All the members of the committee of management of a
society shall serve until the next annual general meeting of the
society:
Provided that the statute of a society may provide that in
the annual general meetings that may be held following the first
annual general meeting, one-third of the members for the time
being, or if their number is not three or a multiple of three, then the
number nearest one-third shall retire from office and such members
shall be those who have been longest in office since their last
election:
Provided further that in case of persons who became
members on the same day, those to retire in accordance with the
preceding proviso, shall, unless they otherwise agree among
themselves, be determined by lot.
(2) A retiring member shall be eligible for re-election.
(3) If, during the term of office of a committee of
management, a vacancy occurs in the committee, the committee
may, and if the number of members falls below three shall, co-opt a
member of the society to serve on the committee of management
until the next general meeting of the society:
Provided that, where the statute so provides, and where
applicable, the first person to be considered for such co-option
shall be the person who had obtained the highest number of votes
CO-OPERATIVE SOCIETIES g CAP. 442.  29
amongst the non-elected candidates, followed by the person with
the second highest number of votes, and so on in descending order.
Functions of the 
committee of 
management.
74. (1) Saving those powers reserved to the general meeting
of members, and subject to the provisions of this Act, the
committee of management shall be vested with the conduct and
management of the affairs and business of the society and, subject
to any restrictions contained in the statute or in any resolution
taken at a general meeting of members, the committee of
management may exercise all the powers required to ensure the full
and proper administration and management of the affairs, business
and property of the society, including the putting into practice of
proper and prudent accounting policies.
(2) Without prejudice to the generality of subarticle (1), the
functions of the committee of management shall include the
following:
( a ) to consider, in terms of the provisions of article 52,
applications for membership of the society;
( b ) to call for and examine reports from persons employed
by the society with the object of disclosing the true
position of the society, its operations and financial
condition;
( c ) to open and operate banking accounts;
( d ) to appoint sub-committees;
( e ) to keep members informed of the progress of the
society, to encourage interest and a sense of ownership
on the part of the members and to carry out
educational and advisory work among the members
with respect to co-operative principles and the objects
of the society;
( f ) to prepare and present to the annual general meeting of
the society proposals for the distribution of any net
surplus accrued during the preceding financial year in
accordance with this Act and the statute of the society;
( g ) to present reports to the annual general meeting on the
work of the committee of management during the
preceding financial period   and containing such
recommendations as they deem necessary to maintain
or improve the services provided by the society to its
members;
( h ) to take immediate action to correct mistakes, errors or
malpractices, if any, which may be disclosed in the
reports of the supervisory board, the Board and, or, the
auditor.
(3) A full and correct record shall be kept of the proceedings
of the committee of management. Such records shall be available
for inspection by the supervisory board of the society, if any, by the
Board and by the auditor. 
(4) The committee of management may appoint, on such terms
and conditions as it thinks fit, a manager to administer and manage
30 g CAP. 442. CO-OPERATIVE SOCIETIES
the affairs of the society and may employ such other persons as the
committee considers necessary to assist the manager in the
discharge of his duties.
(5) The committee of management may at any time suspend an
officer for any good and sufficient cause arising out of the
performance of his duties. Any such suspension shall be
communicated to the Board, together with the reasons for the
suspension.
(6) In the event of the suspension of an officer, the committee
may appoint a substitute to hold office during the period of such
suspension. The committee shall communicate the name of the
substitute to the Board.
Meetings of the 
committee.
75. (1) The committee shall meet as often as the business of
the society may require and in any case not less frequently than
once in every month. 
(2) The quorum for a meeting of the committee of management
shall be a simple majority of its members.
(3) Decisions shall be taken by a simple majority of votes of
members present and the President shall have no casting vote.
(4) Minutes of committee meetings shall be recorded by the
secretary in the minute book and shall include -
( a ) the number and names of those present;
( b ) the name of the chairman of the meeting;
( c ) a brief record of the business done and the decisions
taken and a statement with respect to each decision
whether it has been taken unanimously or by a
majority.
(5) Any member of the committee of management who,
without valid reason, fails to attend three consecutive meetings of
the committee of management shall be deemed to have vacated his
office which shall thereupon be filled as provided by article 73(3). 
Conduct of affairs. 76. (1) In the conduct of the affairs of a society, the members
of the committee of management shall exercise the prudence and
diligence of ordinary persons of business and shall be jointly and
severally liable for any losses sustained through failure on their
part to exercise such prudence and diligence or through any act
which is contrary to the provisions of this Act or of any regulations
made thereunder, or to the statute of the society or to any direction
of any general meeting.
(2) Where the committee of management has employed a
manager to administer and manage the affairs of the society, such
appointment shall not absolve the committee from its responsibility
for the proper direction of the affairs of the society.
Remuneration. 77. (1) Allowances and honoraria payable to members of the
committee of management or to the members of the supervisory
board, if any, shall be those authorised by the statute or by the
general meeting of the society. 
(2) No member of a committee of management shall receive a
CO-OPERATIVE SOCIETIES g CAP. 442.  31
wage or a salary, except in such societies where the members of the
society are also the employees.
Composition of 
society.
78. (1) Every society shall have a President and a Vice-
President, elected by the committee of management from among its
members.
(2) The committee of management shall also elect a secretary
and a treasurer from among its members:
Provided that where a committee of management appoints
a person as a full-time manager, any of the duties of the secretary
or of the treasurer may be delegated to such manager, subject to the
general supervision of the committee of management.
(3) The offices of secretary and of treasurer may be held by the
same person.
President.
at all meetings of the committee of management. In the absence of
the President his functions shall be carried out by the Vice-
President, and in the absence of both the President and the Vice-
President at any meeting, by any other person elected by a majority
of those present at that meeting.
(2) The President shall be responsible for the smooth and
orderly running of all general meetings and all meetings of the
committee of management, and shall have the rights conferred upon
him by the statute.
Duties of the 
secretary.
80. The duties of the secretary shall include:
( a ) the duty to maintain all the society’s records, papers
and registers correctly and up-to-date;
( b )  the duty to keep an inventory of the property
belonging to the society;
( c ) the duty to handle all correspondence on behalf of the
committee of management;
( d ) the duty to convene   and attend general meetings and
meetings of the committee of management and to
record the proceedings of such meetings in the minute
book; and
( e ) the duty to manage the day-to-day running of the
society’s activities, and perform such other duties
entrusted to him by the committee.
Duties of the 
treasurer.
81. The duties of the treasurer shall include:
( a ) to take charge of all financial transactions of the
society, including all moneys received, and to make
disbursements in accordance with the directions of the
committee of management;
( b ) to give or cause to be given all the receipts, vouchers
and documents required by the statute or called for by
the committee of management;
( c ) to keep a proper record of the society’s accounts; and
( d ) to assist the auditors of the society.
32 g CAP. 442. CO-OPERATIVE SOCIETIES
Duties of the 
manager.
82. The manager shall have such duties as may be specified in
the statute of the society or in the letter of his appointment. He
shall conduct his duties under the general supervision and policy
directions of the committee of management. Such duties may
include:
( a ) to manage the business and property of the society;
( b ) to attend the meetings of the society and of the
committee of management as may be requested by the
committee from time to time;
( c ) to carry out all reasonable and legitimate instructions
of the committee of management.
Supervisory board. 83. (1) Every society shall, if required by its statute, or if
requested by at least a simple majority of members present and
voting at a general meeting convened in terms of the provisions of
this Act, have a supervisory board consisting of not less than three
and not more than five members or otherwise as may be prescribed
by its statute. The members of the supervisory board shall be
elected at the annual general meeting after the election of the
members of the committee of management.
(2) No member of the committee of management may be a
member of the supervisory board.
(3) The duration of the office of members of the supervisory
board of a society shall be regulated by the statute of the society or
by the general meeting, as the case may be. In the absence of any
such provision, the term of the supervisory board shall expire at the
next annual general meeting.
(4) The members of the supervisory board may include
individuals who are not members of the society, and shall
preferably be chosen from persons having knowledge of
accounting, auditing and financial procedures.
Procedure. 84. (1) The supervisory board shall regulate its own
procedure. 
(2) The quorum of a meeting of the supervisory board shall be
half the number of its members.
(3) Decisions shall be taken by a simple majority of votes of
members present at the meeting. The chairman shall have no
casting vote.
Responsibility. 85. (1) The supervisory board shall be responsible to the
general meeting of the society for assisting the committee of
management in the effective and efficient running of the society,
and to ensure that the management thereof is conducted in
accordance with the provisions of this Act as well as in accordance
with the statute of the society and with the decisions and
resolutions adopted at general meetings or the committee of
management or committee meetings. Its functions shall include:
( a ) to present to the annual general meeting a specific
report on the management and financial position of the
society only in such cases in which the committee of
management has failed to act in accordance with the
CO-OPERATIVE SOCIETIES g CAP. 442.  33
requirements of the statute or with the
recommendations of the same supervisory board; 
( b ) to summon extraordinary general meetings of the
society in accordance with article 67; and
( c ) bring forthwith to the attention of the committee of
management any matters concerning the affairs of the
society which may require the same committee of
management to take action.
(2) The supervisory board may at any time require the
committee of management to summon an extraordinary general
meeting whenever it considers that the members should be
informed immediately of the position of the society and shall also
have the power to summon an extraordinary general meeting
themselves if the committee fails to do so within one month from
receiving the request.
Convening of 
meetings.
86. Notwithstanding anything contained in this Act, the statute
of a society may make provision for the holding of general
meetings, and of meetings of the committee of management and of
the supervisory board, if any, through suitable electronic means,
including internet, telephone or video conferencing, provided that
adequate measures are put in place to safeguard the right of each
and every member to participate, to vote, and to ensure the
adequate recording of the proceedings. In such an event, the
provisions of this Part shall be construed and applied accordingly.
PART VII
P R O P E R T Y   A N D  F U N D S   O F  S O C I E T I E S
Capital of a 
society.
87. (1) The capital of a society may be raised, subject to the
provisions of this Act, in any one or more of the following
manners:
( a ) admission fees; 
( b ) subscription and payment of shares;
( c ) savings deposits made by its members;
( d ) deposits or loans from non-members;
( e ) surplus carried to reserve funds.
(2) The following rules shall have effect with respect to the
manner of raising capital specified in subarticle (1):
( a ) no admission fee shall be refundable except in respect
of an application for membership that has been
rejected;
( b ) no share may be redeemed except in accordance with
the statute of the society and no rule in the statute
allowing such redemption shall have effect unless such
rule also specifies the minimum number of shares a
member shall hold while he is a member;
( c ) savings deposits may be either obligatory and regular
or voluntary. Regular and obligatory deposit shall be
made in accordance with the statute of the society and
34 g CAP. 442. CO-OPERATIVE SOCIETIES
may not be withdrawn except for purposes and in
accordance with conditions specified in the statute, or
on termination of membership; such deposits may
serve to secure loans taken by or guarantees given by a
member. Voluntary deposits may be withdrawn,
subject to any conditions or restrictions specified in
the statute;
( d ) deposits or loans from non-members shall be subject to
the provisions of this Act and of the statute   of the
society;
( e ) a reserve fund shall be kept and used in accordance
with the provisions of this Act and of the statute of the
society.
(3) A society may not issue bonds or debentures without the
authority of the Board and shall, in any such issue, comply with any
conditions prescribed by the Board.
Deposits and loans. 88. (1) A society may receive deposits and loans from
members and from persons who are not members only if so
authorised by its statute and only to such extent and under such
conditions as may be determined or prescribed by its statute or
under the following provisions of this article.
(2) A society which under its statute has power to borrow
money shall determine from time to time, at a general meeting, the
maximum liability which it may, within the limits prescribed by its
statute, incur in respect of loans or deposits from members and
non-members including bank overdrafts. 
Investments or 
deposits of funds.
89.   A society may invest or deposit its funds -
( a ) in accordance with the provisions of its statute; or
( b ) in any other manner not inconsistent with its statute, as
the committee of management may consider
appropriate, subject to any general or specific
directions, if any, as may be determined by the general
meeting.
Reserve fund. 90. (1) Every society shall maintain a reserve fund, and such
fund shall be used exclusively to cover losses incurred by the
society.
(2) The reserve fund shall be kept in the form of liquid assets. 
(3) Every society shall transfer into the reserve fund at least
twenty per cent of its surplus at the end of each accounting period:
Provided that the requirement of this subarticle shall not
apply at the end of any accounting period in which the reserve fund
is equal to the total of the paid-up share capital and of twenty per
cent of the borrowed capital of the society as shown in the audited
and approved balance sheet of the preceding financial period.
Central Co-
operative Fund.
91. (1) There shall be a Central Co-operative Fund,
hereinafter referred to as ''the Fund'', which shall be administered in
such manner as the Minister may prescribe by regulations made
under this Act. 
CO-OPERATIVE SOCIETIES g CAP. 442.  35
(2) The Fund shall be used in furtherance of co-operative
education, training, research, and for the general development of
the co-operative movement in Malta ,  and for such other purposes as
may be stipulated in regulations made under this article.
(3) Every society shall contribute five per cent of the surplus
resulting from its activities, operations, investments and any other
sources at the end of each accounting period to the Fund.
(4) Regulations made under this article may establish the
highest amount that a society may be obliged to contribute in any
financial year to the Fund.
(5) The Fund shall have a distinct legal personality and,
subject to the provisions of this Act, shall be capable of entering
into contracts, of suing and being sued, and doing all such things
and entering into all such transactions as are incidental or
conducive for the fulfilment of its objectives.
(6) The Fund shall be responsible for collecting, recovering
and instituting proceedings for the payment of sums due to it, in
terms of the provisions of this Act.
(7) The Board shall, on receipt of the audited accounts of a
society, furnish to the Fund such information as will enable the
Fund to determine the contribution of the said society towards the
said Fund.
Division of surplus 
funds.
92. (1) The net surplus of a society at the end of each
accounting period after transfers have been made to the reserve
fund and to the Fund in accordance with articles 90 and 91 may be
divided among the members by way of dividend or in any manner
authorised by this Act or by the statute of the society, and may also
be allocated to any other funds of the society to such extent and
under such conditions as may be prescribed under this Act or by the
statute of the society.
(2) ( a ) The statute of a society may establish the maximum
rate that the society may pay to its members by way of
dividend. 
( b ) Where a maximum rate is not specified in the statute of
a society, the maximum rate shall be that specified,
from time to time, by regulations made by the
Minister, in consultation with the Board.
(3) Subject to any provisions contained in the statute of a
society, or to general or specific directions determined by a general
meeting, a society may apply an amount of its net surplus for any
charitable, educational or other public purpose.
Patronage refund.
its net surplus by way of patronage refund.
(2) Patronage refund means the distribution of all or any part
of the net surplus of a society, paid among its members in
proportion to the volume of business or other transactions done by
them with the society.
Bonus certificates 
and shares.
94. (1) A society may distribute any part of its net surplus
among its members in the form of bonus certificates or bonus
36 g CAP. 442. CO-OPERATIVE SOCIETIES
shares. 
(2) A bonus certificate shall entitle the holder to claim
payment of the sum for which the certificate is issued out of the
society’s funds on a date specified in the certificate, being a date
not earlier than five years from the day when the bonus certificate
was issued. No interest or dividend shall be paid on such
certificates.
(3) A bonus share may not be withdrawn or transferred before
the expiration of ten years from the date of its issue unless the
holder of the bonus share has ceased to be a member, in which case
the sum claimed by a former member may be claimed by the same
person, or his heirs, up to twelve months after the date when the
person had ceased to be a member.
PART VIII
A M A L G A M A T I O N   O F  S O C I E T I E S
Amalgamation. 95. (1) Subject to the provisions of this Act, any two or more
societies may by instrument in writing amalgamate into a single
society if each of such societies has so resolved, by a three-fourths
majority of the members present and voting, at an extraordinary
general meeting held for the purpose and for which a notice in
writing, containing the resolution and giving the date and place of
the meeting, has been given at least fifteen days before the meeting
is held.
(2) The new society formed as aforesaid may apply for
registration under article 26 and may be registered under article 29.
(3) The instrument of amalgamation shall have no effect until
and unless the new society is so registered.
Amalgamation by 
merger.
96. (1) Subject to the provisions of this Act, any two or more
societies may, by instrument in writing, amalgamate by merger in
such a manner that one or more societies are acquired by another
society, referred to as the acquiring society, if each of such
societies has so resolved, by a three-fourths majority, or by a higher
majority as may be stipulated in the statute, of the members present
and voting, at an extraordinary general meeting held for the
purpose and for which a notice in writing, containing the resolution
and giving the date and place of the meeting, has been given at least
fifteen days before the meeting is held.
(2) The society or societies which are acquired by the
acquiring society as provided for in subarticle (1) shall be dissolved
and struck off the register without winding up.
New societies. 97. (1) An acquiring society referred to in article 96, or a new
society set up in terms of article 95, shall succeed to all the assets,
rights, liabilities or obligations of the society or societies ceasing to
exist by virtue of the act of amalgamation, without the requirement
for any formalities, and the said succession shall thereupon be
effective even as regards third parties.
CO-OPERATIVE SOCIETIES g CAP. 442.  37
Cap. 364.
Cap. 123.
(2) The succession to all assets, rights, liabilities or
obligations of the society or societies ceasing to exist by the
acquiring or by the new society, as the case may be, shall not give
rise to any liability for the payment of any duty or tax under the
Duty on Documents and Transfers Act or the Income Tax Act.
Assets and 
liabilities.
98. (1) Subject to the provisions of this Act, a society which is
so authorized by a resolution passed as provided in article 95(1),
may, by instrument in writing, transfer to another society
authorised to accept the transfer by a resolution similarly passed,
all its assets and liabilities without exception.
(2) The instrument effecting such transfer shall be registered
with the Board, and shall not have effect until it is so registered.
Amalgamation of 
societies and 
transfer of assets 
and liabilities.
99. (1) The amalgamation of societies in terms of articles 95
and 96, and the transfer of the assets and liabilities of a society to
another society in terms of article 98 shall not be effected and the
relative instrument shall not be signed before the expiration of a
period of three months, or such shorter period as the Board may, in
exceptional circumstances, allow, from the publication in the
Gazette of a notice by the Board, containing the general particulars
of the intended amalgamation or transfer.
(2) During the period referred to in subarticle (1), any creditor
of the societies involved may in writing to the society object to the
proposed amalgamation or transfer, and the amalgamation or
transfer shall not take place unless the society in question satisfies
the Board that the proposed amalgamation or transfer shall not
adversely affect the legitimate interests of the said creditor and that
sufficient guarantees would remain for the settlement of his
legitimate claims.
(3) Any member of an amalgamating society or of a transferor
society may, notwithstanding any rule to the contrary, by notice in
writing given to the society of which he is a member, not later than
two months from the date of the relevant resolution passed by that
society, declare his intention not to become a member of the new
society ,  or of the acquiring society, or of the transferee society, as
the case may be; and upon giving such notice he shall cease to be a
member and shall be entitled to receive the nominal value of his
shares.
(4) Where a transfer of the assets and liabilities of a society to
another society has been effected as provided in article 98, the
transferee society shall succeed to all such rights, assets, liabilities
and obligations as may be stipulated in the transfer agreement, duly
registered with the Board as provided in article 98(2), and all
deeds, contracts, instruments and other documents shall have effect
and be construed accordingly.
PART IX
D I S S O L U T I O N   A N D  L I Q U I D A T I O N   O F  S O C I E T I E S
Dissolution order.
is of the opinion that such society ought to be dissolved, it may
issue a dissolution order, dissolving the society. In taking its
decision, the Board shall consider the interests of the members,
38 g CAP. 442. CO-OPERATIVE SOCIETIES
creditors and employees of the said society.
(2) The Board shall, on receipt of a resolution passed by a
three-fourths majority, or such other higher majority as may be
stipulated in the statute, of the members of a society present and
voting at an extraordinary general meeting convened for the
purpose of dissolving the said society, issue a dissolution order:
Provided that where the statute of a society requires that a
resolution for the dissolution of a society be confirmed at a second
and subsequent general meeting, the Board shall only issue such
order if the resolution is so confirmed.
(3) The Board may, on its own motion, make a dissolution
order in respect of a society which has become insolvent, or has not
commenced operations or has ceased to operate or the membership
of which is reduced to less than the minimum membership required
by article 22.
(4) When making a dissolution order under subarticle (1), (2)
or (3), the Board shall appoint a liquidator for the purposes of
winding up the affairs of the society.
(5) The liquidator shall be appointed from amongst persons
who have, for at least five consecutive years, held a warrant to
practise as a Certified Public Accountant (CPA) or as a Certified
Public Accountant and Auditor (CPAA), not being a person who
has served as an officer, accountant or auditor of the society, at any
time during the five years prior to the date of the dissolution order.
(6) A person shall be disqualified from appointment as
liquidator in the same cases,  mutatis mutandis , in which under
article 46 he would be disqualified to be appointed as auditor.
(7) Upon the appointment of a liquidator by the Board, all
powers and functions of the committee of management, and of the
supervisory board, if any, shall cease.
(8) When a society has been dissolved, it shall, from the date
of dissolution, cease to carry on its business except in so far as may
be required for the beneficial winding up thereof.
(9) The costs of the liquidation, including the remuneration of
the liquidator, shall be payable out of the assets of the society in
priority to all other claims.
(10) As soon as a liquidation is started, the Board shall
determine whether the assets of the society in liquidation are
sufficient to cover all the costs of the liquidation, including the
remuneration of the liquidator. If the assets of the society are not
sufficient for the above purposes, these costs, and these costs only,
shall be payable by the members of the committee of management
or by all the members of the society, as the Board may determine in
each particular case. 
(11) The Board shall, as soon as possible, cause a notice to be
published in the Gazette, giving the general particulars of any
dissolution order issued by it under this article. 
Power of 
liquidator.
101. (1) Subject to the provisions of any order made by the
Board under article 102, a liquidator appointed by the Board shall
CO-OPERATIVE SOCIETIES g CAP. 442.  39
have the power to -
( a ) take immediate possession of all assets belonging to
the society and of all books, records and other
documents pertaining to the business thereof;
( b ) carry on the business of the society in as far as may be
necessary for winding up its affairs beneficially,
provided that he shall not for this purpose be entitled
to issue any loan;
( c ) fix by notice published in one or more local
newspapers the day before which creditors must
present their claims in order that they may be admitted
to any distribution;
( d ) refer any dispute to arbitration and institute and defend
suits and other legal proceedings on behalf of the
society;
( e ) take such decisions as may be necessary in regard to
the collection and realisation of assets in the course of
winding up the society;
( f ) investigate all claims against the society and, subject
to the provisions of this Act, decide questions of
admissibility of claims and of priority between
claimants;
( g ) pay claims against the society, including interest
payable up to the date of the dissolution   order,
according to their respective priorities, if any, in full
or to such extent as the assets of such society permit;
( h ) with the approval of the Board, enter into any
compromise with regard to any claim by or against the
society;
( i ) call such meetings of members as may be necessary
for the proper conduct of the liquidation, giving not
less than fifteen clear days’ notice of every such
meeting;
( j ) subject to any rule limiting the liability of members
and subject to the provisions of article 59, decide on
the contributions to be made to its assets by members,
past members or by the estates of deceased members
of the society;
( k ) submit a scheme of distribution to the Board for its
approval, and arrange for the distribution of the assets
of the society in a convenient manner; and
( l ) report to the Board any suspected irregularities which
occurred either before or after the dissolution order,
and which come to his notice during the course of the
dissolution.
(2) Any person aggrieved by any order of the liquidator made
under the provisions of subarticle (1)( f ), ( j ) or ( l ) may appeal in
writing to the Board within thirty days from the date of such order.
(3) A liquidator shall deposit the funds and other assets of a
40 g CAP. 442. CO-OPERATIVE SOCIETIES
dissolved society which are collected by him or which come into
his possession as liquidator in such manner and in such place as
may from time to time be determined by the Board.
(4) A liquidator shall, every year, submit to the Board a report
stating the progress made in winding up the affairs of the society,
as well as the audited financial statements of the society for that
year and shall, on completion of the liquidation proceedings,
submit a final report which includes an audited scheme of
distribution and hand over to the Board all books, registers and
accounts of the society in his possession. 
Powers of Board 
over liquidator.
102. (1) A liquidator shall exercise his powers subject to the
supervision of the Board. 
(2) Without prejudice to the generality of the provisions of
subarticle (1), the Board may -
( a ) remove a liquidator from office and appoint a new one;
( b ) by order in writing, limit the powers of a liquidator, as
it may deem appropriate;
( c ) determine the remuneration of the liquidator.
Order by 
liquidator.
103. An order made by a liquidator in terms of article 101(1)
and (2) and ratified in writing by the Board shall be enforceable by
the Civil Court or by the Court of Magistrates (Malta) or the Court
of Magistrates (Gozo), in its superior jurisdiction as if it were a
judgement of that Court, and the provisions of article 19(3) shall,
mutatis mutandis , apply.
Winding up of 
society.
104.   Upon the winding up of a society, the assets, including the
reserve fund, shall be applied first to the costs of liquidation, then
to the discharge of the liabilities of the society, then to the payment
of the share capital or subscription capital, and thereafter, if the
statute   of the society permits, to the payment of a dividend or
patronage refund at a rate not exceeding that specified in
regulations made under this Act or in the statute   of the society for
any period during which no dividend or patronage refund was in
fact paid.
Cancellation of 
registration.
105. (1) When the affairs of a society have been wound up, the
Board shall make an order cancelling the registration of such
society and the society shall be struck off the register. A notice of
such an order shall be published in the Gazette. 
(2) The claim of any creditor of the society which remained
unsatisfied under the approved scheme of distribution shall be
barred by prescription on the expiration of two years from the date
of a cancellation order of the society.
(3) Any moneys remaining after the application of the funds to
the purpose specified in article 104 and any sums unclaimed during
the period mentioned in subarticle (2), shall not be divided among
the members, except in the case of the liquidation of a secondary
society, but shall be deposited into the Co-operative Societies
Liquidation Account kept by the Board.
(4) Any sum deposited into the Co-operative Societies
Liquidation Account shall, after a period of five years, be
CO-OPERATIVE SOCIETIES g CAP. 442.  41
transferred to the Fund. 
PART X
C O N S T I T U T I O N , F U N C T I O N S   A N D  D U T I E S   O F   T H E  A P E X  
O R G A N I S A T I O N
Apex organisation.
satisfies the Board that it complies with the following
requirements:
( a ) that it has a membership of at least an absolute
majority of all primary co-operative societies enjoying
full registration in terms of article 29;
( b ) that its statute states that the principal object of the
association is to facilitate the operations of all
primary, secondary and tertiary co-operative societies
in Malta;
( c ) that its statute states that the object of the association
is to provide, organise and supervise effective
centralized services for co-operative societies and for
co-operative education and training, and such other
services as may be necessary or expedient for its
members;
( d ) that its statute makes provision for the association to
be managed by persons freely elected by the members
of the association in an election which is held at least
once every calendar year;
( e ) that the association does not have the making of profit
as one of its objects; 
( f ) that the association is independent of any other
association, or grouping whose principal object is not
the promotion and development of co-operative
societies; and
( g ) that the association may accept as its members any
society, whether primary, secondary or tertiary.
Recognition of 
Apex organisation.
107. (1) An association wishing to be recognised and
registered as an Apex organisation shall submit to the Board:
( a ) an application on the appropriate form issued under
the authority of the Board;
( b ) an updated copy of its statute, duly certified by the
persons elected in terms of article 106( d );
( c ) a list of the officers of the association;
( d ) a list of the co-operative societies which have joined
as members of the association; and
( e ) its official address.
(2) The Board shall, at its earliest opportunity, examine and
verify whether the association satisfies the requirements laid down
in article 106. Where these requirements are satisfied, the Board
shall register the association as the registered Apex organisation,
and shall issue a certificate confirming the registration of the said
42 g CAP. 442. CO-OPERATIVE SOCIETIES
association and the date of registration.
(3) Where the Board determines that an association does not
satisfy the requirements for registration as an Apex organisation, it
shall within fourteen days of its decision give notice thereof in
writing to the association, stating the grounds for such a decision.
(4) A certificate issued by the Board to the effect that a
particular association is a registered Apex organisation shall be
valid and conclusive evidence of the fact that the association is so
recognised and registered for all intents and purposes of law.
(5) No fees shall be charged for the registration, by the Board,
of an association as an Apex organisation.
P A R T  XI
M I S C E L L A N E O U S
Power to make 
regulations.
108. (1) The Minister may make regulations for the purpose of
carrying out and giving effect to any of the provisions of this Act.
(2) Without prejudice to the generality of the power conferred
by subarticle (1), the regulations may -
( a ) make provision for the administration of the Central
Co-operative Fund and of the Co-operative Societies
Liquidation Fund;
( b ) prescribe the maximum rate of dividend on share
capital which may be paid by societies, unless
specified in the society’s statute;
( c ) prescribe in which form and under what conditions the
Government may recognise and support co-operative
schemes in the public sector;
( d ) prescribe fees to be levied with respect to any matter
required or allowed under this Act;
( e ) prescribe the circumstances under which a society may
be required to prepare consolidated accounts and the
format and other requirements to be adopted for this
purpose;
( f ) prescribe for the conduct of winding-up proceedings
under Part IX of this Act; and
( g ) prescribe or otherwise provide for any matter which is
to be or may be prescribed or provided for by
regulations under this Act.
(3) The Minister shall also have power, by regulations made
under this article, to amend or substitute the Schedules to this Act.
(4) The Minister may, acting in concurrence with the Minister
responsible for commercial partnerships, make regulations
establishing the procedures and other requirements whereby:
( a ) a commercial partnership may be converted into a
society;
( b ) a society may be converted into a commercial
partnership.
CO-OPERATIVE SOCIETIES g CAP. 442.  43
Cap. 386.
(5) The regulations referred to in subarticle (4) may make
provision for the consequences of such a conversion, and may
provide for the application of any provision of Part VIII of this Act,
or of Part VII of the Companies Act, subject to such modifications,
amendments or qualifications as may be laid down in the
regulations.
Disputes.
election of its officers or the conduct of its general meetings, or the
management or business of the society, arises -
( a ) among members, past members and persons claiming
through members, past members and deceased
members; or
( b ) between a member, past member or deceased member,
and the society, its committee of management, its
supervisory board, or any officer of the society; or
( c ) between the society or its committee of management
or its supervisory board and any officer of the society;
or
( d ) between a society and any other society; or
( e ) on the basis of a claim by a society for any debt or any
other dues from a member, a past member or the heirs
of a deceased member, whether such debt or other dues
are admitted or not; or
( f ) any dispute arising out of the interpretation of the
statute of a society, or of any rule thereof,
then such dispute may, and if provided in the statute of a society
or if agreed to by the parties involved in the dispute shall, be
submitted to arbitration by an arbitrator appointed by the Chairman
of the Malta Arbitration Centre:
Provided that the provisions of this article shall not apply
to a dispute between a society and its employees in matters
concerning the contracts of service of such employees.
Offences.
( a ) a society or an officer or member thereof wilfully
neglects or refuses to do any act or furnish any
information required for the purposes of this Act by
the Board or by any person duly authorised in that
behalf by the Board; or
( b ) a society or an officer or member thereof wilfully
makes a false return or furnishes false information; or
( c ) any person wilfully or without reasonable excuse
disobeys any summons, requisition or lawful written
order issued under the provisions of this Act, or does
not furnish any information lawfully required from
him by a person authorised to do so under the
provisions of this Act; or
( d ) any person acts or purports to act as a member of a
committee of management or supervisory board when
not entitled to do so; or
44 g CAP. 442. CO-OPERATIVE SOCIETIES
( e ) a society or an officer or member thereof, wilfully
performs any act which requires the consent or
approval of the Board without first having obtained
such consent or approval; or
( f ) a society or an officer or member thereof wilfully
omits to do or to cause to be done an act or thing which
is required by or under this Act to be done or to be
caused to be done; or
( g ) a society or an officer or member thereof wilfully does
or causes to be done any act or thing prohibited by or
under this Act.
(2) Every society, officer or member of a society or other
person found guilty of an offence under this article shall, on
conviction, be liable to a fine ( multa ) not exceeding two thousand
liri and, in the case of a continuing offence, to a further fine  (multa)
not exceeding twenty liri for each day during which the offence
continues.
Saving. 111. Any registration, authorization, approval, appointment,
order, regulations or other action whatsoever made or issued by
virtue of the Co-operative Societies Act (Cap. 278, repealed by this
Act) shall continue in force as if made under this Act.
CO-OPERATIVE SOCIETIES g CAP. 442.  45
FIRST   SCHEDULE 
Article 26(1) 
Application for Registration of a Co-operative Society
1. We, the undersigned
.............................................................................................
................................................................................................................................ .........
................................................................................................................................ .........
(insert name, age, address and occupation of at least five   persons, or of at least two
persons duly authorised in this behalf of each society (if the application is made by
societies) who desire to form a co-operative society under the Co-operative Societies
Act, and hereby apply for registration).
2. The name of the proposed society shall be
.......................................................................... insert name proposed).
3. The registered office of the proposed society shall be at .....................………
(insert proposed address) and its postal address shall be ..................................................
................................................................................................................................ .........
4. Enclosed is a signed copy of the proposed statute, specifying the objects of the
society and a copy of the viability statement (if already requested by the Board), and a
copy of the feasibility study (prepared and signed by) ……..............................………...
5. The proposed statute was approved on .…......................… 20 ……….. 
6. The persons undersigned are now willing to become members and have made
the payments necessary for admission to membership as provided in the enclosed
statute.
7. Enclosed is also the additional information which may assist the Board in
considering this application.
8. We, the undersigned, are the founding members or the representatives thereof
and have consented to manage the affairs of the proposed society and otherwise
perform the functions of such committee in accordance with the Co-operative Societies
Act, until our successors are elected at the first general meeting held after registration
of the society.
…………………………… ……………………………
Provisional President  Provisional Secretary
................................................................................................................................ ..
................................................................................................................................ .........
46 g CAP. 442. CO-OPERATIVE SOCIETIES
Founding Members 
Additional information about proposed society
1.  Location of proposed society
Give location and approximate site of area in which the proposed society will provide
services to members (if other societies are to be members, give their names and
location) ......................................................................……………….....................……
................................................................................................................................ ..
2. Kind of co-operative society required
Describe briefly the main purpose for which the society is to be organised
................................................................................................................................ .........
................................................................................................................................ .........
3. Reasons
Give detailed reasons for forming the society
................................................................................................................................ ..
................................................................................................................................ ..
4. Source of membership support
Briefly describe the main occupation or employment, or residential area, or other bond
of association or occupation of the people expected to become members
................................................................................................................................ ..
................................................................................................................................ .........
5 . Attitude towards community projects
Do the people referred to in item 4 work together in voluntary projects to benefit the
community or area in which they live, or the occupational, employment or other group
to which they belong'
6. Expected membership
( a ) Number of persons ready to join now.
( b ) Estimated number of persons expected to join within the first year of
operation
................................................................................................................................ .........
...... ......................................................................................................................... .........
7. Management
If the society is registered, will the services of a competent manager (or secretary or
CO-OPERATIVE SOCIETIES g CAP. 442.  47
treasurer) be available' ......................................................…….……………………….
( a ) Name ...................................................…………………...……………..
( b ) Experience and training ..........................................…………...………..
( c ) Will he be able to keep or supervise the keeping of accurate books or
records'
............................................................................................................................. 
.............................................................................................................................
8. Financial participation by members
( a ) Will members provide share capital or other funds to start the society
and continue to give it financial support after operations commence'
.............................................................................................................................
( b ) Value of each share .................... Liri. Total expected to be paid on
shares and/or subscriptions when operations commence .....................
Liri.
( c ) Total paid-up membership fees expected when operations
commence…...… Liri.
Total entrance fees to be paid when operations commence ......………
Liri.
( d ) From what source of income will members provide the capital required'
(e.g. salaries, wages, business, etc.) …..............................………………………
9.  Educational meetings
Have educational meetings been held to discuss the proposed society, its operations and
its benefits to members if they support it'
.............................................................................................................................
( a ) If so, how many' .......................……………...........…………………
( b ) Average number of attendance .......………..............………………..
( c ) Speakers……………………………………………………………….. 
10.   Discussion on Statute
Have study and discussion groups been organised to involve and inform people who
wish to become members' ....………………………………………………….. 
Has a model statute been discussed' If so, when, how, by whom and
with whose assistance' ..…………………......….........……………….
11.   Office space 
If office space, a building or equipment is required for the purposes of the society, how
will this be obtained and financed ' 
48 g CAP. 442. CO-OPERATIVE SOCIETIES
................................................................................................................................ ..
................................................................................................................................ .........
12. Planning and Technical Advice
Has advice been obtained on whether planning of the proposed society seems adequate
and whether it has reasonable prospects of success if the members give it their support'
................................................................................................…………………………..
If so, give the source of such advice ………………………...............………………
................................................................................................................................ ..
................................................................................................................................ .........
13.   Consultation with an officer of the Board
Has an officer of the Board been consulted on the need for the proposed society and
necessary preparations for organisation'
(give details) ................................................................................................................. ...
................................................................................................................................ ..
................................................................................................................................ ..
Dated at…………………… the.......................... day of ……..……. 20   ...
Names and signatures of original prospective members: 
…………………………………………………..
…………………………………………………..
…………………………………………………..
SECOND SCHEDULE
Article 34(2)
The following is a non-exhaustive list of matters required to be included in the statute
of a Co-operative Society:
1. The name of the society.
2. The place and postal address of its registered office.
3. The objects of the society.
4. The geographical area of operation of the society.
5. The purposes to which the society’s fund may be applied.
6. The value of each share, if the society is formed with share capital, or the
minimum amount of monthly subscriptions.
CO-OPERATIVE SOCIETIES g CAP. 442.  49
7. The qualifications for membership, the terms of admission of members, the
entrance or affiliation fees, if any, payable, and the mode of admission.
8. The manner of raising share capital, if any, and other funds and the terms of
withdrawal or transfer of shares and, or, subscription capital.
9. The rights and obligations of members and the extent of the liability of members
for debts of the society.
10. The conditions in which a member may withdraw from membership, including
the procedure whereby the nominal value of the shares held by a withdrawing member
shall be redeemed.
11. The mode of summoning and conducting meetings, and the rights of voting.
12. The powers and duties of general meetings, committee of management, officers,
and supervisory board (where applicable).
13. The mode of election, appointment, suspension and removal of the committee of
management, the supervisory board (where applicable), and officers of the society.
14. The legal and judicial representation of the society, including the authorisation
of an officer or officers to sign documents and otherwise act on behalf of the society.
15. The method of constituting, operating and allocating the reserve fund and the
amount or method of fixing the amount to be contributed thereto.
16. The disposal of the annual net surplus.
17. The  honoraria  or allowances, if any, to be paid to officers of the society.
18. Restrictions of transactions with persons other than members, if any.
19. In the case of a society the objects of which include the creation of funds to be
lent to the members, additional rules in its statute with respect of the following matters: 
( a ) the conditions on which loans may be made to members, including -
(i) the maximum rate of interest;
(ii) the maximum period allowed for the repayment of a loan;
(iii) the extension of the term and renewal of a loan;
(iv) the purposes for which a loan may be granted; and
(v) the security required for repayment.
( b ) the consequences of default in payment of any sum due on account of
shares, subscriptions, deposits or loans and the consequence of failure
to use a loan for the purpose for which it was granted;
( c )  the occupation or residence of persons who may become members; and
( d ) the conditions on which loans and deposits may be received from
members and non-members and the extent to which the society may
borrow from members and non-members.
20. In the case of a secondary society or tertiary society or the Apex organisation,
50 g CAP. 442. CO-OPERATIVE SOCIETIES
the method of representation of members at general meetings, the removal of delegates
and the manner of voting of delegates.
21. If deemed appropriate, rules distinguishing between active members and non-
active members in relation to the qualification for membership of the society and any
other matters related thereto.
22. Rules in respect of any other matter incidental to the management of the
society’s business.
23. If deemed appropriate, rules with respect to the referral of disputes to the
Arbitration Centre.
24. The maximum rate that the society may pay to its members by way of dividend.
25. If deemed appropriate, the provision of proxy rights.
26. If deemed appropriate, the provision of holding general meetings through
suitable electronic or other means.
27. The maximum amount that a society may borrow, including bank overdrafts.
28. A procedure for the expulsion of members.
29. If deemed appropriate, the provision for including the possibility of having
commercial partnerships as members.
30. The manner for convening the annual general meeting.
31. The number of members composing the committee of management.
32. Restrictions on members in relation to membership in other societies having the
same or similar objects or in relation to activities carried out in competition with those
of the society.
33. Rules on the transmission of shares  causa mortis .
34. Rules concerning the majority of votes required for amendments to the statute,
conversions, amalgamations or dissolution of the society.
35. Rules on the receipt, expenditure and investment of monies and the acquisition
and disposal of assets by the society.
36. If deemed appropriate, the provision for requiring a second general meeting to
confirm a resolution for the dissolution of the society.
37. If deemed appropriate, the provision for the distribution of any part of the net
surplus of a society among its members in the form of bonus certificates or bonus
shares.
CO-OPERATIVE SOCIETIES g CAP. 442.  51
THIRD SCHEDULE
FORM AND CONTENT OF INDIVIDUAL ACCOUNTS
PART I - GENERAL RULES AND FORMATS
General rules
1. (1) Subject to the following provisions of this Schedule -
( a ) every balance sheet of a society shall show the items listed in the
balance sheet format set out immediately following paragraph 13 of this
Schedule: and
( b ) every income and expenditure account of a society shall show the items
listed in the income and expenditure account format set out immediately
following the balance sheet format,
in either case in the order and under the headings and subheadings given in the format
adopted. For this purpose the words in brackets against the headings, the subheadings
and the items are explanatory and do not have to be reproduced in the individual
accounts.
(2) Sub-paragraph (1) is not to be read as requiring any item, or the heading or
subheading for any item, to be distinguished by any letter or number assigned thereto
in the format adopted.
2. (1) Where, in accordance with paragraph 1, a society’s balance sheet or
income and expenditure account for any accounting period has been prepared by
reference to one of the formats set out herein, the committee of management of the
society shall adopt the same format in preparing the financial statements for
subsequent accounting periods of the society unless, in their opinion, there are
special reasons for a change.
(2) Particulars of any change in the format adopted in preparing a society’s
balance sheet or income and expenditure account in accordance with paragraph 1
shall be disclosed, and the reasons for the change shall be explained, in the notes to
the accounts drawn up when the new format is first adopted.
3. (1) Any item required in accordance with paragraph 1 to be shown in a
society’s balance sheet or income and expenditure account may be shown in greater
detail than required by the format adopted.
(2) A society’s balance sheet or income and expenditure account may include an
item representing or covering the amount of any asset or liability, income or
expenditure not otherwise covered by any of the items listed in the format adopted,
but the following shall not be treated as assets in a society’s balance sheet -
( a )   expenses of and commission on any issue of shares; and
( b ) costs of research.
Any additional items as aforesaid shall be included under either an existing
heading or subheading or under a new heading or subheading as appropriate.
(3) The layout, nomenclature and terminology of items in the balance sheet and
income and expenditure account that are preceded by Arabic numerals shall be
52 g CAP. 442. CO-OPERATIVE SOCIETIES
adapted where the special nature of an undertaking so requires.
(4) Items to which Arabic numbers are assigned in any of the formats set out
herein may be combined in a society's individual accounts for any accounting period
if either -
( a ) their individual amounts are not material to assessing the state of affairs
or surplus or loss of the society for that accounting period; or
( b ) the combination facilitates that assessment,
but where the provisions of sub-paragraph  ( b )  apply, the individual amounts of any
items so combined shall be disclosed in the notes to the accounts.
(5) Save where there is a corresponding item for the preceding accounting
period, a balance sheet or income and expenditure account item for which there is no
amount shall not be shown. In such case, the heading or subheading in respect of that
item shall also not be shown if that item is the only one under such heading of
subheading.
4. (1) In respect of every item shown in a society’s balance sheet or income
and expenditure account or in the notes to the accounts, there shall also be shown the
corresponding amount for the accounting period immediately preceding that to
which the individual accounts relate.
(2) Where that corresponding amount is not comparable with the amount to be
shown for the item in question in respect of the accounting period to which the
individual accounts relate, the former amount shall be adjusted and particulars of the
adjustment and the reasons for it shall be disclosed in the notes to the accounts. Such
adjustments shall be made in accordance with generally accepted accounting
principles and practice.
5. Save as otherwise provided in this Schedule, or as may be permitted by
generally accepted accounting principles and practice, any set-off between asset and
liability items, or between income and expenditure items, shall be prohibited.
6. (1) In determining whether particular assets are to be shown as fixed assets
or current assets reference shall be made to the purpose for which they are intended.
(2) Fixed assets shall comprise those assets which are intended to be held on a
continuing basis in connection with the undertaking’s activities.
(3) Where an asset or liability relates to more than one layout item, its
relationship to the other item or items shall be disclosed either under the item where
it appears or in the notes to the accounts, if such disclosure is essential to the
comprehension of the individual accounts.
(4) Shares in secondary and tertiary undertakings may be shown only under the
items prescribed for that purpose.
7. (1) "Provisions for liabilities or charges" are intended to cover losses or
debts the nature of which is clearly defined and which at the date of the balance
sheet are either likely to be incurred, or certain to be incurred but uncertain as to
amount or as to the date on which they will arise.
(2) "Provisions for liabilities or charges" may not be used to adjust the values of
assets.
8. (1) "Secondary and tertiary societies" shall have the meaning assigned to it
CO-OPERATIVE SOCIETIES g CAP. 442.  53
by the Act.
(2) "Turnover" shall comprise the amounts derived from the sale of products
and the provision of services falling within the society’s ordinary activities, after
deduction of sales rebates and taxes directly linked to the turnover.
9. (1) Income and charges that arise otherwise than in the course of the
society’s ordinary activities shall be shown under "Extraordinary Income" and
"Extraordinary Charges".
(2) Unless the income and charges referred to in sub-paragraph (1) hereof are
immaterial for the assessment of the results, explanations of their amount and nature
shall be given in the notes to the accounts. The same shall apply to income and
charges relating to another accounting period.
10. (1) Every income and expenditure account of a society shall show the
amount of the society’s surplus or loss on ordinary activities before taxation.
(2) Taxes on the surplus or loss on ordinary activities and taxes on the
extraordinary surplus or loss may be shown in total as one item in the income and
expenditure account before "Other Taxes not shown under the above items". In such
a case "Surplus or Loss on Ordinary Activities after Taxation" shall be omitted from
the income and expenditure account layouts prescribed in this Schedule.
(3) Where this derogation is applied there shall be disclosed in the notes to the
accounts the extent to which the taxes on the surplus or loss affect the surplus or loss
on ordinary activities and the extraordinary surplus or loss.
11. Every surplus and loss account of a society shall show separately as
additional items:
( a ) any amount set aside or proposed to be set aside to, or withdrawn or
proposed to be withdrawn from, reserves; and
( b ) the aggregate amounts of -
(i) any dividends paid; and
(ii) any dividends proposed.
12. (1) The provisions of this Schedule shall be interpreted by reference to the
application of generally accepted accounting principles and practice to give a true
and fair view within the meaning of this Act.
(2) Amounts which in the particular context of any provision of this Schedule
are not material may be disregarded for the purposes of that provision.
Required formats for accounts
13. References in this Schedule to the items listed in any of the formats set out
below are to those items read together with any of the notes in the formats which
apply to any of those items, and the requirement imposed by paragraph 1 to show the
items listed in any such format in the order adopted in the format is subject to any
provision in those notes for alternative positions for any particular items.
BALANCE SHEET FORMAT
A. Called Up issued share capital not paid (may be shown in either of the two
positions herein)
B.  Formation Expenses (may be shown as the first item under "Intangible Assets")
54 g CAP. 442. CO-OPERATIVE SOCIETIES
C. Fixed Assets
I. Intangible Assets
1. Development costs
2. Concessions, patents, licences, trade marks and similar rights and assets
(if these were acquired for valuable consideration and are not to be
shown under goodwill or these were created by the society itself)
3.  Goodwill (only to the extent that this was acquired for valuable
consideration)
4. Payments on account
II. Tangible Assets
1. Land and buildings (including all rights on immovables)
2. Plant and machinery
3. Other fixtures, fittings, tools and equipment
4. Payments on account and tangible assets in the course of construction
III. Financial Assets
1.  Loans to members
2.  Shares in secondary societies
3. Loans to secondary societies
4.  Shares in tertiary societies
5.  Loans to tertiary societies
6.  Shares in subsidiary undertakings
7.  Loans to subsidiary undertakings
8.  Shares in associated undertakings
9.  Loans to associated undertakings
10.  Other investments other than loans
11.  Other loans
D.  Current Assets
I. Stocks
l.  Raw materials and consumables
2.  Work in progress
3.  Finished goods and goods for resale
4.  Payments on account
II. Debtors (The amount falling due after more than one year shall be shown
separately for each item included under debtors)
l.  Trade debtors
2.  Amounts owed by members
CO-OPERATIVE SOCIETIES g CAP. 442.  55
3. Amounts owed by secondary societies
4. Amounts owed by tertiary societies
5. Amounts owed by subsidiary undertakings
6.  Amounts owed by associated undertakings
7.  Other debtors
8. Called up issued share capital not paid (may be shown in either of the
two positions herein)
9. Prepayments and accrued income (may be shown in either of the two
positions herein)
III. Investments
1.  Shares in secondary societies
2.  Shares in tertiary societies
3.  Shares in subsidiary undertakings
4. Shares in associated undertakings
5. Other investments
IV. Cash at Bank and in Hand
E. Prepayments and Accrued Income (may be shown in either of the two positions
herein)
F. Creditors: Amounts falling due within One Year
1. Bank loans and overdrafts
2. Payments received on account (payments received on account of orders
shall be shown here in so far as they are not shown as deductions from
stocks)
3. Trade creditors
4. Bills of exchange payable
5. Amounts owed to members
6. Amounts owed to secondary societies
7. Amounts owed to tertiary societies
8. Amounts owed to subsidiary undertakings
9. Amounts owed to associated undertakings
10. Amounts owed to the Central Co-operative Fund
11. Other creditors including taxation and social security (the amounts for
creditors in respect of taxation and social security shall be shown
separately from the amount for other creditors)
12. Accruals and deferred income
G. Net Current Assets/Liabilities (in determining the amount to be shown for this
item any amounts shown under "prepayments and accrued income" shall be taken into
account wherever shown)
H. Total Assets less Current Liabilities
56 g CAP. 442. CO-OPERATIVE SOCIETIES
I. Creditors: Amounts falling due after more than one year
1. Bank loans and overdrafts
2. Payments received on account (payments received on account of orders
shall be shown here in so far as they are not shown as deductions from
stocks)
3. Trade creditors
4. Bills of exchange payable
5. Amounts owed to members
6. Amounts owed to secondary societies
7. Amounts owed to tertiary societies
8. Amounts owed to subsidiary undertakings
9. Amounts owed to associated undertakings
10. Other creditors including taxation and social security (the amounts for
creditors in respect of taxation and social security shall be shown
separately from the amount for other creditors)
11. Accruals and deferred income
J. Provisions for Liabilities and Charges
1. Pensions and similar obligations
2. Taxation, including deferred taxation
3. Other provisions
K. Capital and Reserves
I. Called Up Issued Share Capital (in addition, the amount of the issued share
capital and the amount of the called up issued share capital which has been paid up
shall be shown separately in the notes to the accounts)
II. Reserve Fund
III.  Share Premium Account 
IV. Revaluation Reserve 
V. Other Reserves
1. Capital redemption reserve
2. Reserves provided for by the statute
3. Other reserves
VI. Accumulated Surplus and Deficit Account
INCOME AND EXPENDITURE ACCOUNT FORMAT
1.  Turnover
2. Cost of sales (after taking into account any necessary provisions for
CO-OPERATIVE SOCIETIES g CAP. 442.  57
depreciation or diminution in the value of assets)
3. Gross surplus or loss
4. Distribution costs (after taking into account any necessary provisions for
depreciation or diminution in the value of assets)
5. Administrative expenses (after taking into account any necessary provisions for
depreciation or diminution in the value of assets)
6. Other operating income
7. Income from shares in secondary societies
8. Income from shares in tertiary societies
9. Income from shares in subsidiary undertakings
10. Income from shares in associated undertakings
11. Income from other financial fixed assets (income, including interest, derived
from members, secondary and/or tertiary and/or subsidiary and/or associated
undertakings shall be shown separately from income derived from other sources)
12. Other interest receivable and similar income (interest and similar income
derived from members, secondary and/or tertiary and/or subsidiary and/or associated
undertakings shall be shown separately from that derived from other sources)
13. Amounts written off in respect of financial fixed assets and investments held as
current assets
14. Interest payable and similar charges (the amount payable to members,
secondary and/or tertiary and/or subsidiary and/or associated undertakings shall be
shown separately)
15. Tax on surplus or loss on ordinary activities
16. Surplus or loss on ordinary activities after taxation
17. Extraordinary income
18. Extraordinary charges
19. Extraordinary surplus or loss
20. Tax on extraordinary surplus or loss
21. Other taxes not shown under the above items
22. Surplus or loss
23. Contribution to the Central Co-operative Fund
58 g CAP. 442. CO-OPERATIVE SOCIETIES
24. Provision to the Reserve Fund
25. Net surplus or loss
26. Provision to any reserve fund provided by statute
27. Provision for any purpose allowed by the Act or provided by statute
28. Dividend
29. Patronage refund
30.  Bonus certificate or bonus share issue
31. Income and expenditure account balance for the accounting period
PART II - ACCOUNTING PRINCIPLES AND RULES
Accounting principles
14. Items shown in the individual accounts shall be valued in accordance with
the following general principles -
( a ) the society must be presumed to be carrying on its business as a going
concern;
( b ) the methods of valuation must be applied consistently from one
accounting period to another;
( c ) valuation must be made on a prudent basis, and in particular:
(i) only surplus realised at the balance sheet date may be included in
the income and expenditure account,
(ii) account shall be taken of all foreseeable liabilities and potential
losses arising in the course of the accounting period concerned or
of a previous one, even if such liabilities or losses become
apparent only between the date of the balance sheet and the date
on which it is drawn up,
(iii) account must be taken of all depreciation whether the result of the
accounting period is a loss or a surplus;
( d ) account must be taken of income and charges relating to the accounting
period, irrespective of the date of receipt or payment of such income or
charges;
( e )  the components of asset and liability items must be valued separately;
( f ) the opening balance sheet for each accounting period must correspond
to the closing balance sheet for the preceding accounting period.
Historical cost accounting rules
15. (1) Formation expenses shown as assets in the balance sheet shall be
written off within a maximum period of five years.
(2) The amounts entered under "Formation Expenses" shall be explained in the
notes to the accounts.
16. (1) In the case of any fixed asset which has a limited useful economic life,
CO-OPERATIVE SOCIETIES g CAP. 442.  59
the amount of -
( a ) its purchase price or production cost; or
( b ) where it is estimated that any such asset will have a residual value at the
end of the period of its useful economic life, its purchase price or
production cost less that estimated residual value,
shall be reduced by provisions for depreciation calculated to write off that amount
systematically over the period of the asset’s useful economic life. Such provisions shall
be charged in the income and expenditure account.
(2) The purchase price of an asset shall be determined by adding to the actual
price paid any expenses incidental to its acquisition.
(3) The production cost of an asset shall be determined by adding to the
purchase price of the raw materials and consumables used the amount of the costs
incurred by the society which are directly attributable to the production of that asset.
(4) In addition to the costs specified in sub-paragraph (3) of this paragraph there
may be included in the production cost of an asset -
( a ) a reasonable proportion of the costs incurred by the society which are
only indirectly attributable to the production of that asset, but only to
the extent that they relate to the period of production; and
( b ) interest on capital borrowed to finance the production of that asset, to
the extent that it relates to the period of production. The inclusion of
such interest and the amount thereof shall be disclosed in the notes to
the accounts.
(5) Fixed asset investments shall be accounted for in accordance with the
following rules:
( a ) such investments shall be included in the society’s individual accounts
by using the cost method;
( b ) the cost method referred to in sub-paragraph ( a ) is a method of
accounting whereby the investment is recorded at cost. The income and
expenditure account reflects income from the investment only to the
extent that distributions are received or are receivable by the investor
from accumulated net surplus of the investment arising subsequent to
the date of acquisition;
17. (1) Where a financial fixed asset has diminished in value, provision for
diminution in value may be made in respect of it and the amount to be included in
respect of it may be reduced accordingly. Any such provisions shall be charged in
the profit and loss account and if not shown separately in the profit and loss account,
shall be disclosed (either separately or in aggregate) in the notes to the accounts.
(2) Provision for diminution in value shall be made in respect of any fixed asset
which has diminished in value if the reduction in its value is expected to be
permanent (whether its economic life is limited or not), and the amount to be
included in respect of it shall be reduced accordingly. Any such provision shall be
charged in the income and expenditure account and, if not shown separately in the
income and expenditure account, shall be disclosed (either separately or in
aggregate) in the notes to the accounts.
(3) Where the reasons for which any provision was made in accordance with
sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be
60 g CAP. 442. CO-OPERATIVE SOCIETIES
written back to the extent that it is no longer necessary. Any amounts written back in
accordance with this sub-paragraph which are not shown separately in the income
and expenditure account shall be disclosed (either separately or in aggregate) in the
notes to the accounts.
18. (1) Notwithstanding that an item in respect of "development costs" is
included under "fixed assets" in the balance sheet formats contained in this
Schedule, an amount may only be included in a society’s balance sheet in respect of
development costs in special circumstances.
(2) If any amount is included in the society’s balance sheet in respect of
development costs the following information shall be given in the notes to the
accounts:
( a ) the period over which the amount of those costs originally capitalised is
being or is to be written off; and
( b ) the reasons for capitalising the development costs in question.
19. (1) Where goodwill is treated as an asset the following provisions of this
paragraph shall apply.
(2) Subject to sub-paragraphs (3) and (4), the amount of the consideration for
any goodwill acquired by a society shall be reduced by provisions for amortisation
calculated to write off that amount systematically over a period chosen by the
committee of management of the society.
(3) The period chosen shall not exceed the useful economic life of the goodwill
in question.
(4) In any case where any goodwill acquired by a society is shown or included
as an asset in the society’s balance sheet the period chosen for writing off the
consideration for that goodwill and the reasons for choosing that period shall be
disclosed in the notes to the accounts.
20. (1) Subject to the following paragraph, assets which fall to be included -
( a ) amongst the fixed assets of a society under the item "tangible assets"; or
( b ) amongst the current assets of a society under the item "raw materials
and consumables",
may be included at a fixed quantity and value.
(2) Sub-paragraph (1) applies to assets of a kind which are constantly being
replaced, where -
( a ) their overall value is not material to assessing the society’s state of
affairs; and
( b ) their quantity, value and composition are not subject to material
variation.
21. (1) Subject to sub-paragraphs (2) and (3), the amount to be included in
respect of any current asset shall, insofar as it is applicable, be its purchase price or
production cost.
(2) If the net realisable value of any current asset is lower than its purchase
price or production cost, the amount to be included in respect of that asset shall be
the net realisable value.
CO-OPERATIVE SOCIETIES g CAP. 442.  61
(3) Where the reasons for which any provision for diminution in value made in
accordance with sub-paragraph (2) have ceased to apply to any extent, that provision
shall be written back to the extent that it is no longer necessary.
22. The method of determination of purchase price and the method of
determination of production cost given in paragraph 16 of this Schedule shall apply
for the purposes of paragraph 21 of this Schedule. Furthermore, distribution costs
may not be included in production costs.
23. (1) Subject to the qualification mentioned in sub-paragraph (3), the
purchase price or production cost of -
( a ) any assets which fall to be included under any item shown in a society’s
balance sheet under the subheading "stocks"; and
( b ) any assets which are fungible assets (including investments),
shall be determined by the application of one of the methods mentioned in sub-
paragraph (2) in relation to any such assets of the same class.
(2) The methods referred to in sub-paragraph (1) are -
( a ) the method known as "first in, first out" (FIFO);
( b ) the weighted average price method; and
( c ) any other method similar to any of the methods mentioned above.
(3) The method actually chosen for the purposes of this paragraph shall be the
one which appears to the committee of management to be appropriate in the
circumstances of the society.
(4) Where in the case of any society -
( a ) the purchase price or production cost of assets falling to be included
under any item shown in the society’s balance sheet has been
determined by the application of any method permitted by this
paragraph; and
( b ) the amount shown in respect of that item differs materially from the
relevant alternative amount given in sub-paragraph (5),
the amount of that difference shall be disclosed in the notes to the accounts.
(5) Subject to sub-paragraph (6), for the purposes of sub-paragraph (4)( b ), the
relevant alternative amount, in relation to any item shown in a society’s balance
sheet, is the amount which would have been shown in respect of that item if assets of
any class included under that item at an amount determined by any method permitted
by this paragraph had instead been included at their replacement cost as at the
balance sheet date.
(6) The relevant alternative amount may be determined by reference to the most
recent actual purchase price or production cost before the balance sheet date of
assets of any class included under the item in question instead of by reference to
their replacement cost as at that date, but only if the former appears to the committee
of management of the society to constitute the more appropriate standard of
comparison in the case of assets of that class.
(7) For the purpose of this paragraph, assets of any description shall be regarded
as fungible if assets of that description are substantially indistinguishable one from
another.
62 g CAP. 442. CO-OPERATIVE SOCIETIES
24. (1) Where the amount repayable on any debt owed by a society is greater
than the value of the consideration received in the transaction giving rise to the debt,
the amount of the difference may be treated as an asset.
(2) Where any amount as referred to in sub-paragraph (1) is treated as an asset -
( a ) it shall be written off by reasonable amounts each year;
( b ) it shall be completely written off before repayment of the debt; and
( c ) if the current amount is not shown as a separate item in the society’s
balance sheet it shall be disclosed in the notes to the accounts.
25. (1) Provisions for liabilities and charges may not exceed in amount the
sums which are reasonably necessary.
(2) Particulars shall be given of each provision included in the item "other
provisions" in the society’s balance sheet in any case where the amount of that
provision is material.
Alternative accounting rules
26. (1) Subject to paragraphs 28, 29 and 30 of this Schedule, the amounts to be
included in respect of assets of any description mentioned in paragraph 27 of this
Schedule shall be determined on any basis mentioned in that paragraph.
(2) References in paragraphs 27 to 30 of this Schedule to "the depreciation
rules" are to the rules embodied in paragraphs 16, 17, 18, 20, 21 and 24 of this
Schedule.
27. (1) Tangible fixed assets may be included at a market value determined as
at the date of their last valuation.
(2) Investments of any description falling to be included under either of the
balance sheet formats contained in Part I of this Schedule may be included either -
( a ) at a market value determined as at the date of their last valuation; or
( b ) at a value determined on any basis which appears to the committee of
management to be appropriate in the circumstances of the society,
but in the latter case particulars of the method of valuation, etc., adopted and of the
reasons for adopting it shall be disclosed in the notes to the accounts.
(3) Notwithstanding any other provision of this Schedule, investments in which
investment companies have invested their funds shall be valued on the basis of their
market value determined as at the balance sheet date.
28. (1) Where the value of any asset of a society is determined on the basis
mentioned in paragraph 27 of this Schedule that value shall be the starting point for
determining the amount to be included in respect of that asset in the society’s
individual accounts, instead of its purchase price or production cost or any value
previously so determined for that asset; and the depreciation rules shall apply
accordingly in relation to any such asset with the substitution for any reference to its
purchase price or production cost by a reference to the value most recently
determined for that asset on any basis mentioned in paragraph 27 of this Schedule.
(2) The amount of any provision for depreciation required in the case of any
fixed asset as it applies by virtue of sub-paragraph (1) is referred to in sub-paragraph
(3) as the adjusted amount, and the amount of any provision which would be
CO-OPERATIVE SOCIETIES g CAP. 442.  63
required in respect of that asset according to the historical cost accounting rules is
referred to as the historical cost amount.
(3) Where sub-paragraph (1) applies in the case of any fixed asset, the amount
of any provision for depreciation in respect of that asset -
( a ) included in any item shown in the income and expenditure account in
respect of amounts written off against the assets of the description in
question; or 
( b ) taken into account in stating any item so shown which is required by the
explanatory notes in the income and expenditure account format
contained in Part I of this Schedule to be stated after taking into account
any necessary provisions for depreciation or diminution in the value of
assets included under it,
may be the historical cost amount instead of the adjusted amount, provided that the
amount of any difference between the two is accounted for in the income and
expenditure account and disclosed separately therein or in the notes to the accounts.
29. (1) This paragraph applies where the amounts to be included in respect of
assets covered by any items shown in a society’s individual accounts have been
determined on any basis mentioned in paragraph 27 of this Schedule.
(2) The items affected and the basis of a valuation adopted in determining the
amounts of the assets in question in the case of each of such items shall be disclosed
in the notes to the accounts.
(3) In the case of each balance sheet item which is affected -
( a ) the comparable amounts determined according to the historical cost
accounting rules; or
( b ) the differences between those amounts and the corresponding amounts
actually shown in the balance sheet in respect of that item,
shall be shown separately in the balance sheet or in the notes to the accounts.
(4) In sub-paragraph (3), references in relation to any item to the comparable
amounts determined as mentioned thereto are references to -
( a ) the aggregate amount which would be required to be shown in respect of
that item if the amounts to be included in respect of all the assets
covered by that item were determined according to the historical cost
accounting rules; and
( b ) the aggregate amount of the cumulative provisions for depreciation or
diminution in value which would be permitted or required in
determining those amounts according to those rules.
30. (1) With respect to any determination of the value of an asset of a society
on any basis mentioned in paragraph 27 of this Schedule the amount of any surplus
or loss arising from that determination shall be credited or, as the case may be,
debited to a separate reserve to be called "the revaluation reserve", after allowing,
where appropriate, for any provisions for depreciation or diminution in value made
otherwise than by reference to the value so determined and for any adjustments of
any such provisions made in the light of that determination.
(2) The amount of the revaluation reserve shall be shown in the society’s
balance sheet under a separate subheading in the position given for the item
64 g CAP. 442. CO-OPERATIVE SOCIETIES
"revaluation reserve" in Format 1 or 2 of the balance sheet formats contained in this
Schedule, but need not be shown under that name.
(3) The revaluation reserve shall be reduced to the extent that the amounts
standing to the credit of the reserve are in the opinion of the committee of
management of the society no longer necessary for the purpose of the accounting
policies adopted by the society; but an amount may only be transferred from that
reserve to the income and expenditure account if -
( a ) the amount in question was previously charged to that account; or
( b ) it represents realised surplus.
(4) Any amounts transferred from the revaluation reserve to the income and
expenditure account in accordance with the provisions of sub-paragraph (3) shall be
shown separately in the income and expenditure account.
(5) Notwithstanding the provisions of sub-paragraph (3) the balance standing to
the credit of the revaluation reserve may be capitalised in whole or in part at any
time.
(6) The treatment for taxation purpose of amounts credited or debited to the
revaluation reserve shall be disclosed in the notes to the accounts.
PART III - THE NOTES TO THE ACCOUNTS
31. Any information required in the case of any society by the provisions of this
paragraph shall, if not given in the balance sheet or the income and expenditure
account, be given by way of the notes to the accounts. The information in respect of
the following matters shall be provided as a minimum -
( a ) The valuation methods applied to the various items in the individual
accounts, and the methods employed in calculating the provisions for
depreciation and diminution in value. For items included in the
individual accounts which are or were originally expressed in foreign
currency, the bases of translation used to express them in local currency
shall be disclosed.
( b ) The number and the nominal value of the shares subscribed during the
accounting period within the limits of the authorised capital.
( c ) The name, registered office and the type of each of the societies and/or
partnerships, of which the society is a member, with unlimited liability;
provided that this information may be omitted if it is not material.
( d ) Information in respect of each item which is or would but for paragraph
3(4)( b ) of this Schedule be shown under the general item "fixed assets"
in the society’s balance sheet, relating to -
(i) the amount of the purchase price or production cost, leaving out
therefrom the depreciation or diminution in value in respect of
that item, as at the date of the beginning of the accounting period
and as at the balance sheet date respectively;
(ii) the effect on any amount shown in the balance sheet in respect of
that item of -
- any revision of the amount in respect of any assets
included under that item made during that period,
-  acquisitions during that period of any assets,
-  disposals during that period of any assets, and
CO-OPERATIVE SOCIETIES g CAP. 442.  65
-  any transfers of assets of the society to and from that item
during that period.
( e ) In respect of each item within indent ( d ) of this paragraph -
(i) the cumulative amount of provisions for depreciation or
diminution in the value of assets included under that item as at
each date mentioned in indent ( d )(i) of this paragraph;
(ii) the amount of any such provisions made in respect of the
accounting period;
(iii) the amount of any adjustments made in respect of any such
provisions during the period in consequence of the disposal of any
assets; and
(iv) the amount of any other adjustments made in respect of any such
provisions during the period.
( f ) The information required to be disclosed by virtue of indents ( d ) and ( e )
of this paragraph shall also be provided in the case of "Formation
Expenses" where this item is shown separately from "Fixed Assets" in
the balance sheet.
( g ) Amounts owed by the society and becoming due and payable after more
than five years as well as the society’s entire debts covered by valuable
security furnished by the society with an indication of the nature and
form of the security. This information shall be disclosed separately for
each creditor’s item, as provided for in the formats described in Part I of
this Schedule.
( h ) The total amount of any financial commitments that are not included in
the balance sheet, in so far as this information is of assistance in
assessing the financial position. Any commitments concerning pensions
and group undertakings shall be disclosed separately.
( i ) The turnover within the meaning of paragraph 8 of this Schedule,
broken down by categories of activity and into geographical market in
so far as, taking account of the manner in which the sale of products and
the provision of services falling within the society’s ordinary activities
are organised, these categories and markets differ substantially from
one another.
( j ) The average number of persons employed during the accounting period,
broken down by categories and, if they are not disclosed separately in
the income and expenditure account, the staff costs relating to the
accounting period broken down as otherwise required by Formats 2 and
4 of the income and expenditure account.
( k ) The difference between the tax charged for the accounting period and
for earlier accounting periods and the amount of tax payable in respect
of those periods, provided that this difference is material for purposes of
future taxation. This amount may also be disclosed in the balance sheet
as a cumulative amount under a separate item with an appropriate
heading.
( l ) (i) The aggregate amount of the emoluments granted in respect of the
accounting period to the members of the committee of management of a
society for their services as members of the committee of management
of that society or for their services as members of the committee of
management of any of its secondary, tertiary, subsidiary, or associated
undertakings, while acting as directors/members of the committee of
66 g CAP. 442. CO-OPERATIVE SOCIETIES
management of that undertaking; and
(ii) The aggregate amount of any other emoluments granted in respect
of the accounting period to the members of the committee of
management of a society for their services in connection with the
management of the affairs of the society or any of its secondary,
tertiary, subsidiary, or associated undertakings, while acting as
directors/members of the committee of management of that undertaking;
and shown separately from the aggregate amount of emoluments
referred to in item (i) above; and
(iii) The fact that the society has, during the accounting period,
purchased or maintained a provision for any of its officers and, or, the
auditor of such society, exempting them or indemnifying them, or any
of them, as the case may be, against any liability which, by virtue of any
law, would in the absence of such provision have been attached to them,
as the case may be, in respect of any negligence, default or breach of
duty, and the aggregate amount of premiums paid in respect thereof.
In this indent, emoluments shall include the remuneration for the
services of the members of the committee of management referred to
herein and all fees, percentages, gifts, compensation for loss of office
and other similar payments; as well as any commitments arising or
entered into in respect of retirement pensions, superannuation
allowances, gratuities or other similar commitments in favour of former
members of the committee of management of the society referred to
herein.
The commitments arising or entered into in respect of retirement
pensions, superannuation allowances, gratuities or other similar
commitments in favour of former members of the committee of
management of the society shall be shown separately from the other
emoluments.
( m ) The amount of advances and credits granted to members of the
committee of management of a society with indications of the interest
rates, main conditions and any amounts repaid; as well as commitments
entered into on their behalf by way of guarantees of any kind. The said
commitments shall be shown separately.
( n ) The name and registered office of the undertaking which draws up the
consolidated accounts of the largest body of undertakings of which the
society forms part as a subsidiary undertaking.
( o ) The name and the registered office of the undertaking which draws up
the consolidated accounts of the smallest body of undertakings of which
the society forms part as a subsidiary undertaking; and
( p ) Where the parent companies referred to in indents ( q ) and ( r ) of this
paragraph are not registered in Malta, the place where copies of the
consolidated accounts referred to in these indents may be obtained,
provided that they are available to the public.
32. (1) If at the end of its accounting period, the society has one or more
secondary, tertiary, subsidiary, or associated undertakings or participating interests
in other undertakings, the following information shall, where applicable, be given
with respect to each such undertaking -
( a ) the kind, name and registered or principal office of each undertaking;
CO-OPERATIVE SOCIETIES g CAP. 442.  67
( b ) in relation to the shares of each class of each undertaking held by the
society, the identity of each class and the proportion of the nominal
value of the issued shares of that class represented by the shares held as
at the end of the undertaking’s relevant accounting period; and
( c ) the aggregate amount of the capital and reserves of each undertaking as
at the end of its relevant accounting period, and its surplus or loss for
that period.
(2) For the purposes of sub-paragraph (1), the relevant accounting period is-
( a ) if the accounting period of the undertaking ends with that of the society
giving the information in its notes to the accounts, that accounting
period; and
( b ) if not, the undertaking’s accounting period ending last before the end of
the accounting period of the society giving that information.
(3) The provisions of sub-paragraph (1) are subject to the exceptions and other
provisions contained in paragraphs 33 and 34 of this Schedule.
33. (1) Information otherwise required by paragraph 32(1) of this Schedule
need not be given if it is not material.
(2) References in this paragraph and in paragraph 32 of this Schedule to shares
of undertakings shall include references to beneficial interests in undertakings where
the capital of such undertakings is not divided into shares.
34. (1) The information referred to in indent ( l ) of paragraph 31 and in
paragraphs 32 and 33 of this Schedule may be omitted when it appears to the
committee of management that their nature is such that they would be seriously
prejudicial to any of the undertakings affected by these provisions and the Board
agrees that the information need not be disclosed.
(2) Where any information is omitted from the notes to the accounts by virtue of
the provisions of sub-paragraph (1), that fact shall be disclosed in the notes to the
accounts.
35. (1) Particulars shall be given in the notes to the accounts of any charge on
the assets of the society to secure the liabilities of any other person including, where
practicable, the amount secured.
(2) The following information shall be given with respect to any other
contingent liability not provided for other than where the possibility of a loss is
judged by the committee of management of the society to be remote -
( a ) the amount or estimated amount of that liability;
( b ) its legal nature; and
( c ) whether any valuable security has been provided by the society in
connection with that liability and, if so, what valuable security has been
so provided.
(3) There shall be stated, where practicable -
( a ) the aggregate amount or estimated amount of contracts for capital
expenditure, so far as not provided for; and
( b ) the aggregate amount or estimated amount of capital expenditure
authorised by the committee of management which has not been
contracted for.
68 g CAP. 442. CO-OPERATIVE SOCIETIES
(4) Commitments within any of the preceding sub-paragraphs of this paragraph
undertaken on behalf of or for the benefit of a group undertaking shall be stated
separately from the other commitments within that sub-paragraph.
36. (1) Where any amount is transferred -
( a ) to or from any reserves; or
( b ) to any provision for liabilities or charges; or
( c ) from any provision for liabilities and charges otherwise than for the
purpose for which the provision was established,
and the reserves or provisions are shown as separate items in the society’s balance sheet
or in the notes to the accounts, the information mentioned in sub-paragraph (2) shall be
given in respect of the aggregate of reserves or provisions included in the same item.
(2) That information to which reference is made in sub-paragraph (1) is -
( a ) the amount of the reserves or provisions as at the date of the beginning
of the accounting period and as at the balance sheet date respectively;
( b ) any amounts transferred to or from the reserves or provisions during
that period; and
( c ) the source and application respectively of any amounts so transferred.
PART IV - TRANSITIONAL ARRANGEMENT
37. (1) If, when individual accounts are drawn up in accordance with the
provisions of this Schedule for the first time, the purchase price or production cost of
a fixed asset cannot be determined without undue expense or delay, the net book
amount at the beginning of the accounting period may be treated as the purchase
price or production cost.
(2) Any application of the provisions of sub-paragraph (1) shall be disclosed in
the notes to the accounts.
PART V - ABRIDGED FINANCIAL STATEMENTS - RULES AND FORMAT
Societies which, on their balance sheet date, do not exceed the limits of two of
the three following criteria:
- balance sheet total: one million, one hundred thousand Maltese liri;
- turnover: two million, two hundred thousand Maltese liri;
- average number of employees during the accounting period: fifty;
shall in this Act be designated as small societies and may, for the purposes of this Act,
draw up an abridged set of audited financial statements as specified in paragraphs (2)
and (3) of this Part for public inspection.
(2) For the purposes of this Part, the word "abridged" -
( a ) when used therein in relation to a balance sheet, shall mean an
abbreviated version of the balance sheet, showing only those items to
which a letter or Roman number is assigned in the balance sheet format
shown under Part I of this Schedule, immediately following paragraph
13, under the heading "Balance Sheet Format"; but such version shall,
CO-OPERATIVE SOCIETIES g CAP. 442.  69
in all other respects, correspond to the full balance sheet;
( b ) when used therein in relation to an income and expenditure account,
shall mean the full income and expenditure account with the exception
that items 1, 2, 3 and 6 in the income and expenditure format shown
under Part I of this Schedule, immediately following paragraph 13,
under the heading "Income and Expenditure Format", can be combined
as one item under the heading "gross surplus or loss".
(3) Societies referred to in paragraph (1) of this Part may draw up abridged
notes to the accounts, omitting the disclosures prescribed by indents ( g ) to ( l ) of
paragraph 31 of Part III of this Schedule. The notes to the accounts shall however
disclose the information specified in indent ( g ) of the said paragraph 31 in total for
all the items concerned.
