OH 45 Learning Objectives 3.Analysing the Rules Pertaining to a Co-operative by: Comprehending the legal nature of a Co- operative Interpreting the formation, Membership and capital of a Co-operative Interpreting the advantages and disadvantages of a Co-operative Examining accounting and taxation requirements of a Co-operative Examining the limitations of the Co-operatives Act and the Banking requirements of a Co- operative

OH 46 Criteria 3.Analyse the Rules Pertaining to a Co-operative Define a Co-operative Describe a Co-operative as a legal entity Describe the winding-up of a Co-operative Describe the formation of a Co-operative Differentiate between the Membership of the three types of Co-operatives Describe the liability of the Members of a Co- operative List the advantages of a Co-operative

OH 47 Criteria (Continued) 3.Analyse the Rules Pertaining to a Co-operative List the records and registers to be kept and maintained by a Co-operative Describe the taxation of a Co-operative Describe the liability of the Members of a Co- operative Describe the limitations of the Co-operatives Act with regard to: Section 49 Section 52 Section 53 Judge the contractual capacity of a Co-operative

OH 48 Definition of a Co-operative The word “Co-operative” is derived from the word “co- operate” A Co-operative can be defined as: “An organisation ‘sui generis’ (of its own kind) acting for the benefit of its Shareholders and producing Members”

OH 49 Types of Co-operatives The Act provides for the formation and incorporation of three types of Co-operatives, namely: 1.Agricultural Co-operatives 2.Special Farmers’ Co-operatives 3.Trading Co-operatives An Agricultural and Farmers’ Co-operatives may be formed for the purposes specified in the Act A Trading Co-operative may be formed to carry out any object in terms of the Act

OH 50 Registration of a Co-operative A Co-operative is registered with the Directorate of Co- operatives Once the name and particulars have been entered in the Register of Co-operatives, the entity becomes a juristic person and can commence its activities The application for the registration of the statute and the incorporation must be made to the Registrar in writing

OH 51 Statute of a Co-operative This controlling document must contain the following information: 1.The full name of the Co-operative 2.The type and form of the Co-operative 3.The main and other objectives of the Co-operative 4.The Directors of the Co-operative 5.The powers, including details of qualified or excluded powers of the Co-operative 6.Place where the Co-operative will conduct main business and where the Co-operative will establish a Branch or Depot 7.Indicate period for which the Co-operative is to be formed, if it is to be formed for a limited period

OH 52 Accounting records The accounting records to be kept include the following: 1. Records showing the assets and liabilities of the Co- operative 2. A register of fixed assets, including cost prices and depreciation 3. Records containing daily entries in sufficient detail of all cash received and paid out 4. Where the business of the Co-operative involves dealings in goods, records of all goods sold and purchased 5. Records showing the percentage business turnover in respect of transactions concluded with non- Members 6. Records of annual stocktaking