Section 55
Capital gains
of Co-Operative Societies Act 1993
A co-operative society shall credit to its Capital Reserve
Account all capital gains arising from—
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(a)
the sale of land or building, or both, as fixed assets; and
(b)
the revaluation of land or building, or both, as fixed assets, with the approval of the Commission.
(2)
The capital gains referred to in paragraph (1)(a) may be utilized by the co-operative society for all or any of the following purposes:
(a)
the issue of bonus shares;
(b)
the writing off of accumulated losses;
(c)
the writing off of capital losses; and
(d)
the creation of a Bonus Share Redemption Fund.
(3)
No co-operative society shall utilize the capital gains referred to in subsection (1) for the purpose of issuing bonus shares unless and until all its accumulated and current losses, if any, have been completely written off.
(4)
The capital gains referred to in paragraph (1)(b) may be utilized by the co-operative society for the issue to its members of bonus shares which shall not be withdrawn except, with the approval of the Board, be transferred to another member of that co-operative society or, in the case of a member who dies after the issue of the bonus shares, be paid out of the Bonus Share Redemption Fund of that co-operative society.
(5)
The bonus shares redeemed by a co-operative society may be reissued as bonus shares to its members in accordance with the provisions of its by-laws.
(6)
A register of bonus shares shall be maintained by the co-operative society.
(7)
This section shall not apply to a co-operative society that is required by the provisions of any other written law governing its operations to deal with its capital gains in the manner provided in such law.
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