OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA 10th Year No. 43 ADDIS ABABA - 11th May , 2004 CONTENTS Proclamation No. 402/2004 Cooperative Societies ( Amendment ) Proclamation .. Page 2629 PROCLAMATION NO . 402 / 2004 . COPPERATIVE SOCIETIES ( AMENDMENT ) PROCLAMATION WHEREAS , necessary amend cooperative societies proclamation No. 147/1998 ; NOW , THEREFORE , in accordance with Democratic Republic of Ethiopia , it is hereby proclaimed as follows : 1. Short Title Proclamation cited “ Cooperative Societies ( Amendment ) Proclamation No. 402/2004 . ” 2. Amendments 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 : Unit Price The African Law Archive “ 6. Any cooperative society which has been legally registered pursuant to Sub Articles 3 of this Article shall engage in of the date of registration without the necessity of securing additional trade license . any business 7. Where the appropriate authority ensures that requirements indicated under 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 . ” 8. Where any society is found operating out of the objectives for which established , it may be suspended by the appropriate authority from carrying out activities permitted by this law . Where the general assembly of a society suspended pursuant to Sub Articles 8 of this Article submits request to 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 the society . The General Assembly may 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 . The African Law Archive 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 . 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 . A society which faces shortage of capital may sell certain shares to a person who is not a member of the society without contradicting the principle of the society . Particulars as regards to manner of sale of shares to a person who is not member to the society shall be determined by the by - laws of the society . ” 3. The following new Sub Articles ( 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 . Any right emanated from a contract concluded by the society involving its properties shall be barred by statute of limitation after 20 years . The African Law Archive i Law Sa Ave.core 4. Articles 33 ( 1 ) and ( 2 ) are deleted and replaced by the following new Article 33 “ 1 ) any cooperative society shall deduct 30 % the net profit and allocate for the reserve fund . The amount allocated for the reserve fund shall nor 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 . ” 5. Sub 2 of Article 34 is deleted . 6. 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 . Where the auditing reveals that it is bankrupt and when the appropriate authority ensures that causes the dissolution and the general assembly decides . ” Article 40 ( 3 ) shall become Article 40 ( 5 ) . Article 46 is deleted and replaced by the following new Article . “ 46. Settling disputes through concil iation 1 / Disputes indicated under Article 49 may be settled through reconciliation of parties elected by disputants before they are submitted to arbitration . The African Law Archive party shall elect reconciliation ; the chairperson of the reconciliation shall be elected in accordance with the agreement of the two parties . Where the two parties failed to reach agreement to elect the chairperson of the reconcili- ation , the chairperson shall be elected by the appropriate authority . ” 9. Articles 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 once again in accordance with this Proclamation . ” 10. The following new Articles added as Articles 59 “ 59. Obligation to cooperate Any concerned organ shall have the obligation to cooperate on matters provided in this Proclamation . ” 11. Article 59 shall become Article 60 12. “ 61 Effective Date The Proclamation shall come into force on 11 date of May , 2004. ” Done at Addis Ababa , 11 " day of May , 2004 . PRESIDENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA The African Law Archive