DEFINITIONS OF A COOPERATIVE SOCIETY

According to International Labour Organization (ILO)

A Cooperative society is an association of persons, usually of limited means, who voluntarily, democratically come together to achieve a common economic and social objectives of its members by making an equitable contribution to the risk and benefits undertaking.

According to International Cooperative Alliance (ICA)

A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

POINTS TO UNDERSTAND FROM THE DEFINITIONS

i. Autonomous Association 

ii. Voluntary Association

iii. Democratic Control

iv. Equitable Contributions

v. Meeting individual’s economic, social and cultural needs.

VALUES OF COOPERATIVE

i. Self-help

ii. Self-responsibility • iii. Democracy

iv. Equality

v. Equity and solidarity.

THE 3 TIERS OF COOPERATIVE SOCIETIES

i. Primary Society: This refers to a unit cooperative society at the grass root level. This society could either be a community based or an industrial based cooperative society.

ii. Secondary Society: This is the combination of different primary societies to form a Cooperative Union. A secondary cooperative is formed by at least 5 primary cooperative societies.

iii. Apex Society: This refers to cooperative at the tertiary level for which Lagos State Cooperative Federation stands for. It is the combination of all the cooperative unions in the state.

COOPERATIVE PRINCIPLES

i. Voluntary and Open Membership 

ii. Democratic Member Control

iii. Member Economic Participation

iv. Autonomy and Independence

v. Education, Training and Information 

vi. Cooperation Among Cooperatives

vii. Concern for Community for Sustainable Growth and Development.

TYPES OF COOPERATIVE SOCIETY

I Cooperative Thrift and Credit Society (CTCS).

This society under Cooperative Bye-Law is only allowed to collect savings and to issue loan to members as at when due.

ii. Cooperative Multipurpose Society (CMS).

This society is engaged in more activities than collection of savings and issue loan. It can venture into businesses, buy and sell goods or properties to members or the general public.

iii. Cooperative Agricultural Multipurpose Society (CAMS)

Cooperative societies tax implecations

Cooperative societies profits are exempted from companies income tax in section 23 of Companies Income Tax and Section 20(2) of Nigeria Cooperative Societies Act. All instrument executed by cooperative societies in respect of any transaction is also exempted from stamp duties in section 20(1) of the Act.

Our own type is community based cooperative and this should be depicted in the write up

NOTE: Our own type is community based cooperative

COOPERATIVE BYE-LAW

This can be referred to as the policy established to guide the activities of a cooperative society. It is expected of every cooperative society to have a bye-law which is binding on the society.

SOCIETY’S NAME

The captioning of the society’s name should include the following: • i. The name of the cooperative society.

ii. The name of the geographical area should be included in a closed bracket in the society’s name.

iii. The society’s name must indicate either the society is a Cooperative Thrift & Credit Society (CTCS) or Cooperative Multipurpose Society (CMS).

iv. The name of the cooperative society must end with the word “Limited”. This implies that the cooperative society can be sued and can sue.

MEMBERSHIP

 i. According to the Lagos State Cooperative Law, the minimum number required for the registration of a cooperative society is 20members.

ii. Anyone who is interested in joining the society must write an application to that effect.

iii. ENTRANCE FEE: Every member of a cooperative society is expected to pay a unified amount of money as an entrance fee. This is statutory and the amount must be based on the agreement of the general meeting. The fee is non-refundable and it is an income to the society.

iv. NOMINEE FORM: It is expected of individual member of a cooperative society to fill a nominee form. The form allows an individual member to give the society the name and a brief information about the person that he/she would like to receive on his/her behalf, his/her due benefits in the society in case of death, insanity or other unforeseen contingency.

V. MONTHLY SAVINGS: Every member of a cooperative society must be an economic member of the society through a monthly financial commitment. Each member is liable to make a monthly saving with the society as convenient for him/her.

vi. SHARE CAPITAL: It is very important that every member of a cooperative society pays a share capital most especially members of cooperative multipurpose societies. This stands as members’ ordinary shares in the society’s investment(s).

vii. COOPERATIVE SOCIETY MEETING: Cooperative societies hold a number of meetings and every member is expected to attend meetings regularly. These are:

a. Ordinary General meeting.

b. Special General Meeting.

c. Annual General Meeting.

Minimum of 20 members, 

They will pay minimum of #2,000 as entrance fee, 

They will choose date for meeting, whether every week, forthnight or monthly, 

Those that people initiated the society will become the executive, 

members will be contributing ordinary savings as members capacity, 

shares capital base on total amount agreed by society, 

development levy either#100 or #200 per meeting for the running expenses of society, 

QUORUM

This means that the presence of at least one third of the members of a cooperative society shall form a quorum at meetings

 ELECTION OF OFFICERS

The officers of a cooperative society must be elected officers. The election must be conducted at any of the above stated meetings as the need arises. The election is conducted on the ground of the cooperative principle of Democratic Members Control “One man one vote”.

The cooperative officers are:

i. President

ii. Vice President

iii. General Secretary

iv. Financial Secretary

v. Treasurer

The society can decide to have more elected officers but the decision has to be based on the agreement of the general meeting and must reflect in the society’s bye-law. Furthermore, the number of executives has to be an odd number.

Note: The President, General Secretary and one other member of the management which is usually the Treasurer are the trustees of a Cooperative Society and they stand to be the signatories to the society’s bank account.

TENURE OF OFFICE

The tenure of any cooperative officer in a Cooperative Thrift and Credit Society shall be one (1) year. Any elected officer can be re-elected to serve for a second term. No officer shall serve more than two (2) consecutive tenures. Under a Cooperative Multipurpose Society, one tenure shall be for a period of 2 years.

 LOAN FORM: Loan applicants are expected to obtain a loan form at a cost which serves as an income to the society. Loan applicant fills the loan form stating the amount and purpose of the loan. The President or the credit committee minutes on the form stating if the applicant is qualified for the loan or not.

LOAN ACCESSIBILITY: The bye-law states that a member of a cooperative society can only access times two (x2) of his/her total savings. This goes along with 2 standing guarantors who must be members of the cooperative society.

LOAN INTEREST RATE: The cooperative bye-law states that the interest rate on loan should be between 5% – 15%. The decision on the specific interest rate that the cooperative should charge on loan shall be taken by the general meeting. This model is recommended for new cooperative societies.

Requirements for registration:

1. Application for registration with a proposed date for inauguration or Obtain registration form from the Area office.

2. Cooperative Society’s Bye-Law.

3. The cooperative books. (Register, Minutes book, Financial books etc).

4. Registration Fee.