Cooperative laws are important when buying land or owning a house or even venturing into business. Lack of knowledge of these laws can give room to fraud and mismanagement of the funds or property.
It is important to have an effective cooperative law and the members usually elect among themselves their management committee through democratic process.
The elected management committee is expected to provide the necessary leadership role for a cooperative society.
Some of the regulations that guide the operations of cooperative societies and protect you from unnecessary losses on your investments as stated by The Lagos State Cooperative Law which is the regulatory body for cooperative societies in Lagos State include:
Regulation 9 which deals with functions of the Annual General Meeting and makes it compulsory for all registered cooperative societies to hold this meeting once a year.
It must however be noted that no valid AGM can be held without an Annual Statement of Accounts duly approved by the Director of Cooperative Services.
Regulation 10 makes it obligatory for an officer of a society to seek re-election every year. An officer of a society shall not be appointed to his office for an indefinite period or for a period exceeding one year. A retiring officer shall, unless the byelaws otherwise provide, be eligible for re-election
Regulation 15 and 16 specify the duties of the Management Committee of a cooperative society which includes: strict adherence to the law and regulations made under the cooperative law, proper conducting of the business of the society, ability to maintain true and accurate accounts, aptitude to keep up-to-date record of the assets and liabilities of the society as well as a correct register of all members, presentation of the profit and loss account and balance sheet at the annual general meeting, providing assistance during the inspection of books by the person authorized to see them and also to take adequate security from members as well.
However, in a credit society, the committee must ensure that loans are utilized for approved purpose.
Regulations 17 and 18 make it compulsory for registered societies to keep such accounts and books as may be required or prescribed by the Director of cooperatives.
These accounts include: an account showing the income and expenditure for the year, profit and loss and balance sheet. The accounts must be made up to December 31st of every year and is submitted to the director of cooperatives
Another regulation put in place is the one that protects the Rights of members as provided in Section 37 (1) which states that each member of a registered society shall have one vote only in the affairs of the society. However, in the event that votes given for and against any proposal are equal in number, the President shall have a casting vote.
Section 37 (5) states that a registered society which is a member of any other registered society may appoint as proxy, for the purpose of voting in the affairs of such other registered society, any on.