PROCLAMATION No. 402/2004
COOPERATIVE SOCIETIES (AMENDMENT) PROCLAMATION
WHEREAS, it is necessary to amend cooperative societies proclamation No. 147/1998;
NOW, THEREFORE, in accordance with Article 55 (1) of the Constitution, of Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows:
1. Short Title
This Proclamation may be cited as “Cooperative Societies (Amendment) Proclamation No. 402/2004.”
Cooperative Societies Proclamation No. 147/1998 shall be amended as follows.
1. The following new Sub Articles (6), (7), (8) and (9) are added after Sub Articles 5 of Articles 9:
“6. Any cooperative society which has been legally registered pursuant to Sub Articles 3 of this Article shall engage in any business as of the date of registration without the necessity of securing additional trade license.
1. Where the appropriate authority ensures that requirements indicated under Sub Article 2(a)-(g) are met, it shall grant temporary certificate which may serve not more than a year and shall cause the rest requirements to be observed within a specified period of time.
2. Where any society is found operating out of the objectives for which it is established, it may be suspended by the appropriate authority from carrying out activities permitted by this law.
3. Where the general assembly of a society suspended pursuant to Sub Articles 8 of reverse the decision for suspension and where the appropriate authority found the request appropriate, it may reverse the decision for suspension. Where the appropriate authority did not reverse the suspension it shall give a written explanation to the General Assembly of appeal to the higher court which has jurisdiction on the decision made by the appropriate Authority.”
2. Articles 16(1)-(3) is hereby deleted and replaced by the following new
“Article 16: Payment of shares”
1. Any cooperative society shall, after securing the decision of the general assembly, sell shares that shall have equal number and parvalue with the view to enable the society to obtain capital necessary to start its function.
2. Any cooperative society shall collect, upon its formation from the members at least 1/5 of the amount of the share that the general assembly has decided to be sold. And it shall sell the rest of the shares within four years as of the time of its establishment.
3. Where the need for additional capital is arose, upon completion of the sell of shares in accordance with the decision of the general assembly, the general assembly may decide once again for the sell of additional shares in accordance with Sub article 1 of this Article.
4. The share that the society sells may be sold either in cash or in kind. Shares paid in kind shall be determined by the by-law of the society.
5. Any member may not hold more than 10% of shares out of those that the general assembly decide to be sold.
6. A society which faces shortage of capital may sell certain shares to a person who is not a member to the society shall be determined by the by-laws of the society.”
3. The following new Sub Article (3) (4) are added after Sub Articles (2) of Article 31.
“3. He Council of Ministers may make any society free from any court fees that is payable in connection with dispute entertained by courts.
4. Any right emanated from a contract concluded by the society involving its properties shall be barred by statue of limitation after 20 years.”
1. Articles 33(1) and (2) are deleted and replaced by the following new Article 33
“1. Any cooperative society shall deduct 30% of the net profit and allocate for the reserve fund. The amount allocated for the reserve fund shall not exceed 30% of the capital of the society and it shall be deposited in the saving account of the society.
2. The distribution of the remaining net profit shall be determined by the general assembly.
3. Any member who has received net profit as per Sub Article 2 this Article can buy an additional share.”
2. Sub 2 of Article 34 is deleted.
3. The following new Sub-Articles (3) and (4) are added after Sub Articles (2) of Article 40.
“3. Where the court decides for its dissolution
4. Where the auditing reveals that it is bankrupt and when the appropriate authority ensures that causes the dissolution and the general assembly decides.”
4. Article 40(3) shall become Article 40(5).
5. Article 46 is deleted and replaced by the following new Article.
“46. Settling disputes through conciliation
1. Disputes indicated under Article 49 may be settled through reconciliation of parties elected by disputants before they are submitted to arbitration.
2. Each party shall elect a reconciliation; the chairperson of the reconciliation shall be elected in accordance with the agreement of the two parties.
3. Where the two parties failed to reach agreement to elect the chairperson of the reconciliation, the chairperson shall be elected by the appropriate authority.”
6. Article 58 (2) is deleted and replaced by the following new Article 58 (2).
“(2) Agricultural cooperative societies, which were established pursuant to Proclamation No. 85/1995 and which are still operating shall be registered one again in accordance with this Proclamation.”
7. The following new Articles added as Article 59
“59. Obligation to cooperate
Any Concerned organ shall have the obligation to cooperate on matters provided in this Proclamation.”
8. Article 59 shall become Article 60
9. “61 Effective Date
This Proclamation shall come into force on the 11th day of May, 2004.
Done at Addis Ababa, this 6th day of May, 2004
PRESIDENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA