OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA 10 Year No. 47 ADDIS ABABA - 284 June 2004 CONTENTS Council of Ministers Regulation No. 106/2004 Coucils of Ministers Regulation No. 106/2004 to Provide for the implementation of Cooperative Societies Proclamation No.147 / 1998 . ... Page 2641 COUNCIL OF MINISTERS REGULATION No. 106/2004 COUNCIL OF MINISTERS REGULATION TO PROVIDE FOR THE IMPLEMENTATION OF COOPERATIVE SOCIETIES PROCLAMATION ፩፻፵፯ / ፲፱፻፵፩ ኣንቀጽ ፵፬ እና የኢትዮጵያ ፌዴራላዊ ዲሞክራ | This Regulation is issued by the council of Ministers pursuant to article 5 of the definition of powers and Duties of the Executive organs of the Federal Democratic Republic of Ethiopia Proclamation NO.4 / 1995 and article 59 of Cooperative Societies Proclamation No.147 / 1998 . SECTION ONE General 1. Short Title This Regulation may be cited as “ Coucils of Ministers Regulation No. 106/2004 to Provide for the implemen tation of Cooperative Societies Proclamation No.147 / In this Regulation , unless the context requires otherwise . 1 / “ Proclamation ” cooperative societies Proclamation No. 147/1998 . 2 / “ Regular meeting ” means a general assembly convened pursuant to sub article 1 of article 22 of proclamation No 147/1998 3 / “ Cooperative society ” Means an entity that has got a definition referred to ( indicated ) under article 2 ( 2 ) of the proclamation . means Unit Price The African Law Archive -- No. 47 , 28 June , 2004– Page 2642 4 / “ Appropriate Authority ” means Cooperatives Com mission established pursuant to article 2 ( 1 ) of proclamation 274/2002 and includes cooperative promotion Bureaus and offices established in cach region . 5 / “ Union ” means a union composed of more than one primary cooperative socieities that have similar 6 / " Federaton " means a group consists of unions and cooperative socieities with similar objectives 7 / “ League ” means cooperative society league of Ethiopia established by cooperative societies at the national level . SECTION TWO Establishment of Cooperative Societies Establishment of Primary Cooperative Societies 1 / Primary cooperative society shall be established by voluntary individuals who live or work in the same area or engaged in the same profession . Number of members establishing the society shall not be less than ten . The appropriate authotiry shall , taking into account the economic efficiency , determine the least number of establishing members through directives issued by itself . 2 / The operational area of primary cooperative society established pursuant to article 1 of this article may be confined to one region or cover more than one regions . 31 Different kinds of primary cooperative societies may be established in the operational area indicated in sub article 2 this article . Establishment of a union 1 / Subject to the provision of this Regulation and that of other relevant laws on coperative society , primary cooperative societies having similar objective may establish a union . 27 Subject to the Provision of this Regulation and that of other laws an individual who carries out similar activities to that of a union and who is willing to observe the principles of the society may become a member of the union . 5. Establishment of Cooperative Federation 1 / Subject to the provison of this Regulaton and that of other relevant laws , unions having similar objectives at Federal level may establish a Federation . 2 ) Subject to the provision of this Regulation and that of other relevant law , cooperative societies and an individual that carries out similar activities with that of the Federation may become a member of the Federation . 6. Establishment of Cooperative League 1 ) Subject to the provision of this Regulation and that of other relevant laws , primary cooperative societies , unions , and federations may establish a league that represents all cooperative societies in Ethiopia . The African Law Archive No. 47 28 June , 2004Page 2643 2 ) The number of the league establsihed pursuant to sub article 1 of this article may not exceed one . 7. Operational Area 1 ) The operational area of a union or a Federation Established pursuant to Article 4 or 5 of this regulation shall be determined by the by - laws of the union or the Federation . 2 ) The league shall have an operational area through out the territory of Ethiopia . SECTION THREE Types and Functions of Cooperative Societies A cooperative society may engage in production or service rendering activities or in both production and service rendering activities . 9. Cooperative Society Engaged in Production Activities Cooperative Societies Engaged in Production Activities shall be one which takes part in production process or which converts raw materials or semi - finished products to finishedd products . 10. Cooperative Societies engaged in service rendering activities A cooperative society engaged in service rendering shall deliver various services to members or cause them to obtain the same . 11. Cooperatives Societies Engaged in Production and Service rendering activities A cooperative society engaged production and service rendering shall carry out both activities indicated under article 9 and 10 of this regulation . 12. Types of Cooperative Societies 1 / Cooperative Societies of different type may be organized in any economic or social sector of the country . 2 ) Cooperative societies differ from others based on their unique nature such as their working place , establishment , function and legal personality they 3 ) The unique nature of cooperative societies shall be determined by a directive issued by the appropriate Authority . SECTION FOUR Registration of Cooperative societies 13. Registration . 1 ) The Federal Cooperative commission shall register the league and the federations as well as unions at the national level . 2 ) Any society established pursuant to this regulation shall have legal personality as of the date of its registration . The African Law Archive 17. Particulars of by - laws of a Cooperative society Subject to the provision of article 11 of the Proclamation , any by - law of a cooperative society shall contain the following particulars : ( a ) Objecties , values and principles of cooperative societies ; ( b ) Administrative structure of the society ; ( c ) Budget year of the soeiety : ( d ) Manner of keeping the fund of the socieity and ways of its utilization ; ( e ) Procedures on loans ; ( f ) procedure to be applied in the instance of with drawal , dismissal or death of members ; ( g ) Rules of procedures for the meeting of the society and notifications to be given to members ; ( h ) Procedures for the appointment or employment of managers and other officers of the society , their powers and duties and term of office ; ( i ) Administration of employee of the society ; ( i ) Matters requiring special or quorum resolutions ( decision ) ; ( k ) Procedure to be applied in cases where the by - law of the society is amended or in cases where the society is dissolved , divided or amalgamated with other societies ; ( 1 ) Other appropriate particulars ; 15. Share certificate of members of a cooperative society 1 ) Any member shall be granted certificate for the amount of full shares he has paid for . 2 ) The share certificate shall be printed in confidence ( secretly ) and shall contain the following particulars : ( a ) Name , address and emblem of the society ; ( b ) Date of registration and registration number of the society ; ( c ) Identification number of share certificate ; ( d ) par value of each share ; ( e ) _Name and identification number of the mem ( f ) The amount of shares he has paid for ( bought ) and the price of the share he has bought ; ( g ) Signature of a person entrusted with a power of leading the society ; ( h ) Seal of the society ; ( i ) Date , month and year of issuance of certificate ; 3 ) The share of the society may not be transferred from one member to the other or from a member to a third party . 16. Dismissal of members 1 ) A member who failed to meet his obligation shall be dismissed from the society . The member shall be deemed not to meet his obligation where he : ( a ) has failed to pay fully for the shares within a period specified , ( b ) has failed to meet his oblitation emanated from the occupational sector granted by the society for more than two times ; ( c ) has not participated for a year in any transaccion or services rendered by the society ; * The African Law Archive 28 June , 2004Page 2645 ( d ) Has not participated in two consecutive regular meetings of the society without sufficient reason . 2 ) Any member who has committed a fault shall be dismissed from membership . The member shall be deemed to have committed a fault where he has ; ( a ) Committed a fault which is contrary to the objective of the society ; ( b ) Deliberately caused harm or caused to be harmed the properties of the society ( c ) Misappropriate the properties of the society that he has received for various reason ; ( d ) Deliberately misappropriate the fund of the society or facilitate conditions for the same action to be committed ; ( e ) Bribed somebody or been bribed by somebody in the name of the society ; ( f ) Sold or caused to be sold under price or bought or caused to be bought over price the properties of the society with view to derive unlawful advantage ; ( g ) Reduced the amount or the quality of productor service that the society supplies . 17. Charges Any cooperative society shall pay charges indicated in the schedule attached thereto to government upon receiving a share certificate or its substitute . 18. Grant of substitute certificate 1 ) A cooperate society that has lost its certificate may apply to appropriate authority for the grant of substitute certificate ; 2 ) The appropriate authority shall grant the substitute certificate within 10 days as of the submission of the request . 3 / The appropriate authority shall issue directives on the manner of granting substituted certificate ; 19. Conditions for the Prohibition of Registration Any cooperative society shall not get registered and be granted certificate where : 1 ) It has got similar name and emblem with the society that has already registered ; 2 ) It lacks its own project proposal ; 3 ) It doesn't observe registration requirements specified in this regulaton and the proclamation ; 4 ) Its objective is found contrary to this regulation , the proclamation and directive issued by the appropriate authority . SECTION FIVE Meetings of a Cooperative society 20. Regular Meeting of the general Assambly 1 ) Any cooperative society shall convene its regular general assembly at least once in a year . 2 ) There shall be a quorum where more than half members of the general assembly are present . The African Law Archive 3. Where there is no quorum of the general assembly called , the second general assembly shall be called within 15 days as of the date of the first general assembly . Where there is no quorum for general assembly called for the second time , the meeting shall be convenced by members present . 4. The decision passed by the general assembly , which is convenced in a situation where there is no quorum as is indicated in sub article 3 of this article , shall be deemed to have been made in the presence of all members . 1. Where there is no quorum in an emergency meeting called as per article 22 of the proclamation , the managment committees shall call the second emer gency meeting within 15 days as of the date of the first meeting . Where there is no quorum in emer gency meeting called for the second time , the appropriate authority may call another meeting . 2. There shall be quorum where two third of members of the general assembly are present . 22. Call for the meeting The managment committee shall make a call , as per the provisions of the proclamation to all members 15 days before the emergency meeting is convened through a News Paper having nation wide circulation or using any means found convenient . 23. Voting Procedure of a Cooperative society 1 ) Unless and otherwise provided in the by - law of the society , decision of regular or emergency meeting shall be passed by a majority vote . 2 ) In cases of a tie , the chairperson of the general assembly , shall have a casting vote . SECTION SIX Assets and funds of the Cooperative society 24. Allocation of Net profit 1. 30 % of the net profit of the society shall be deducted and allocated for the reserve fund . The amount allocated for the reserve shall be deposited only " ntil it shall not exeed 30 % of the capital of the society . 2. The amount of fund deducted from the net profit and allocated for the reserve shall be deposited in a saving account opened in the name of the society . The utilization / aplication of this fund shall be determined by directive issued by appropriate authority . 25. Indivisibility of Assets of the society Where the asset of the society is : ( a ) Registered as a reserve fund account . ( b ) Obtained through donation or inheritance it shall remain indivisible and common asset of the society . The assets of a dissolved cooperative society left after the creditors are paid as is indicated under Article 44 sub article 4 of the proclamation shall be distributed to a member who is active at the time when dissolution pronounced , to a member who is dismissed for the reason other than committing a fault , and to a substitute of a deceased member . Manner of distribution of the asset shall be determined by a directive issued by the ap propriate authority . The African Law Archive 28 June , 2004Page 2647 27. Repealed laws Regulations or a directives inconsistent with this regulation shall be inapplicable . 28. Power to issue a Directive The appropriate authority shall issue a directive neces sary for the implementation of this regulation . 29. Effective Date This regulation shall come in to force on the date of its Done at Addis Ababa , this 28th day of June 2004 PRIME MINISTER OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA The Federal Democratic Republic of Ethiopia Cooperative Commission Schedule of fees for certificate service DESCRIPTION FEE / BIRR REMARK NEW REGISTRATION SUBSTITUTION TEMPORARY CERTIFICATE The African Law Archive