Co-operatives Act, 2005 (Act No. 14 of 2005)

Chapter 1 : Definitions, Purpose and Application of Act

1. Definitions and interpretation

Purchase

(1)	In this Act, unless the context indicates otherwise—

"Advisory Council"

means the Co-operatives Advisory Council established by section 85 of this Act;

[Definition substituted by section 1(a) of Notice No. 558, GG 36729, dated 5 August 2013]

"Agency"

means the Co-operatives Development Agency established by section 91A;

[Definition inserted by section 1(b) of Notice No. 558, GG 36729, dated 5 August 2013]

"agricultural co-operatives"

means a co-operative that produces, processes or markets agricultural products and supplies agricultural inputs and services to its members;

"annual report"

means a document prepared by the Board containing financial statements, a social report and the management decision report;

[Definition inserted by section 1(d) of Notice No. 558, GG 36729, dated 5 August 2013]

"associate member"

means the person contemplated in section 14A;

[Definition inserted by section 1(d) of Notice No. 558, GG 36729, dated 5 August 2013]

"audit"

means the examination of, in accordance with prescribed and applicable auditing standards—

(a)	financial statements or financial and other information prepared in accordance with suitable criteria;

(b)	social reports; and

(c)	management decision reports,

with the objective of expressing an opinion as to their fairness and compliance with identified criteria, including the reporting framework as published by the Minister in the Gazette in terms of section 47(4) and any applicable statutory requirements;

[Definition inserted by section 1(d) of Notice No. 558, GG 36729, dated 5 August 2013]

"audited report"

means a report by an auditor examining and evaluating the financial statements, social report and management decision report;

[Definition inserted by section 1(c) of Notice No. 558, GG 36729, dated 5 August 2013]

"Auditing Profession Act"

means the Auditing Profession Act, 2005 (Act No. 26 of 2005);

[Definition inserted by section 1(d) of Notice No. 558, GG 36729, dated 5 August 2013]

"auditor"

means a registered auditor as contemplated in the Auditing Profession Act;

[Definition inserted by section 1(e) of Notice No. 558, GG 36729, dated 5 August 2013]

"Board"

means the Board of directors set out in section 32;

[Definition inserted by section 1(f) of Notice No. 558, GG 36729, dated 5 August 2013]

"Commission"

means the Co-operative Conflict Resolution Commission contemplated in section 91V;

[Definition inserted by section 1(f) of Notice No. 558, GG 36729, dated 5 August 2013]

"community development"

means a set of values and practices which aim to combat poverty, assist the historically disadvantaged and unite communities, by developing individual and collective skills, knowledge and experience and thus empower communities to undertake initiatives to combat social, economic, political or environmental challenges;

[Definition inserted by section 1(f) of Notice No. 558, GG 36729, dated 5 August 2013]

"Companies Act"

means the Companies Act, 2008;

[Definition inserted by section 224(2) (item 1(a) of Schedule 3(B)) of the Companies Act, 2008 (Act No. 71 of 2008), Notice No. 421, GG 32121, dated 9 April 2009]

"constitution"

means a governance document adopted by all members or prospective members of a co-operative, which sets out the objectives, policies and management of that particular co-operative;

[Definition inserted by section 1(h) of Notice No. 558, GG 36729, dated 5 August 2013]

"consumer co-operative"

means a co-operative that procures and distributes goods or commodities to its members and non-members and provides services to its members;

"co-operative"

means an autonomous association of persons united voluntarily to meet their common economic, social or cultural needs and aspirations through a jointly owned and democratically controlled enterprise organised and operated on co-operative principles;

[Definition substituted by section 1(i) of Notice No. 558, GG 36729, dated 5 August 2013]

"co-operative burial society"

means a co-operative that provides funeral benefits, including funeral insurance and other services to its members and their dependants;

"co-operative principles"

means—

(a)

Voluntary and Open Membership requiring co-operatives to be voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without discrimination on the basis of race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language or birth;

(b)	Democratic Member Control requiring co-operatives to be democratic organisations controlled by their members through—

(i)	members actively participating in setting their policies and making decisions by majority vote;

(ii)	men and women serving as elected representatives and being accountable to the members;

(iii)

equal voting rights in Category A and B primary cooperatives (one member, one vote); and

(iv)	a democratic organisation for voting in Category C primary, secondary and tertiary co-operatives and the national apex co-operative;

(c)	Member Economic Participation requiring members to contribute equally in amounts proportionate to their membership shares and democratically control the capital of their co-operative usually by—

(i)	retaining part of the capital as common property of the co-operative;

(ii)	giving members limited compensation, if any, on capital subscribed as a condition of membership;

(iii)

allocating surpluses to the reserves required in terms of section 46 and any additional reserves required by the co-operative’s constitution or considered necessary or desirable by the members;

(iv)	benefiting members in proportion to their transactions with the co-operative; and

(v)	supporting other activities approved by the members;

(d)

Autonomy and Independence requiring co-operatives to be autonomous, self-help organisations controlled by their members and if co-operatives enter into agreements with other organisations, including governments, or raise capital from external sources, they should do so on terms that ensure democratic control by their members and maintain their co-operative autonomy;

(e)

Education, Training and Information requiring co-operatives to provide appropriate education and practical training for their members, elected representatives and employees so that they can contribute effectively to the development of their co-operatives and are able to inform the general public, particularly young people and opinion leaders, about the nature and benefits of co-operation;

(f)	Co-operation among Co-operatives requiring co-operatives to serve their members as effectively as possible and strengthen the co-operative movement by working together through local, national, regional and international structures where possible; and

(g)	Concern for Community requiring co-operatives to work for the sustainable development of their communities through policies approved by their members;

[Definition substituted by section 1(j) of Notice No. 558, GG 36729, dated 5 August 2013]

"Department"

means the Department of Trade and Industry;

"deputy registrar"

[Definition deleted by section 224(2) (item 1(b) of Schedule 3(B)) of the Companies Act, 2008 (Act No. 71 of 2008), Notice No. 421, GG 32121, dated 9 April 2009]

"Director-General"

[Definition deleted by section 224(2) (item 1(b) of Schedule 3(B)) of the Companies Act, 2008 (Act No. 71 of 2008), Notice No. 421, GG 32121, dated 9 April 2009]

"financial co-operative"

means a co-operative whose main objective is to provide financial services to its members;

[Definition substituted by section 1(k) of Notice No. 558, GG 36729, dated 5 August 2013]

"financial statements"

means statements drafted by the Board for a particular financial period and includes—

(a)	a statement of financial position (balance sheet);

(b)	an income statement;

(c)	a statement of changes in membership shares;

(d)	a statement of cash flows; and

(e)	notes, comprising a summary of accounting policies and other explanatory notes;

[Definition inserted by section 1(l) of Notice No. 558, GG 36729, dated 5 August 2013]

"general meeting"

means a meeting of the members of a co-operative, and includes, as the context indicates, an annual general meeting, a special general meeting or a regional general meeting;

"housing co-operative"

means a co-operative which provides housing to its members;

[Definition substituted by section 1(m) of Notice No. 558, GG 36729, dated 5 August 2013]

"independent review"

means an assessment by an independent reviewer of the financial statements and the social and management decision reports so as to determine, through performing a preliminary inquiry using analytical procedures and evaluating the sufficiency and appropriateness of evidence obtained, whether there is reason to believe the financial statements, social reports and management decision reports are not prepared in all material respects in accordance with the applicable reporting framework;