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In forceUpdated to 1 Apr 2015Read it in Bahasa Malaysia
Contents

Part VI · Property and Funds of Co-Operative Societies

57. Distribution of audited net profits

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(1)

Every co-operative society shall—

(a)

maintain a Statutory Reserve Fund; and

(b)

before declaring any dividend from its audited net profits of each year, after due provision is made for taxation, transfer to its Statutory Reserve Fund out of the audited net profits of each year—

(i)

a sum equal to not less than twenty-five per centum of the audited net profits of that year, so long as the amount of the Statutory Reserve Fund is less than fifty per centum of its shares and subscription; or

(ii)

a sum equal to not less than fifteen per centum of the audited net profits of that year, so long as the amount of the Statutory Reserve Fund is fifty per centum but less than one hundred per centum of its shares and subscription.

(1A)

Notwithstanding subsection (1), the Commission may from time to time specify a different portion of the audited net profits of each year, being either lesser or greater than the portions specified in subsection (1), to be transferred to the Statutory Reserve Fund of a co-operative society for the purpose of ensuring that the amount of the

Statutory Reserve Fund of such co-operative society is sufficient for the purpose of its business and adequate in relation to its liabilities.

50 Laws of Malaysia ACT 502

(1B)

Notwithstanding subsection (1), the Statutory Reserve Fund may be applied—

(a)

subject to regulations or by-laws, for the payment of shares or subscription withdrawn by members of co-operative society; or

(b)

with the approval of the Commission and subject to such terms and conditions as the Commission may impose, in issuing bonus shares to members of a the co-operative society.

(1C)

Nothing in this section shall authorize a co-operative society to pay dividends out of the Statutory Reserve Fund.

(1D)

The Statutory Reserve Fund shall be indivisible and no member shall be entitled to claim a specific share of it.

(1E)

The Statutory Reserve Fund shall be maintained in a separate account and shall be invested in the Co-operative Deposit Account as referred to in the Malaysia Co-operative Societies Commission Act 2007.

(2)

Subject to subsection (7), every co-operative society shall, out of its audited net profits for each financial year, before declaring any dividend pay such sum as may be determined by the Commission to—

(a)

the Co-operative Education Trust Fund; and

(b)

the Co-operative Development Trust Fund for any secondary or tertiary co-operative society which the

Minister has declared to be a body representing the co-operative movement at the national and international level, established under the regulations for the furtherance of co-operative principles.

(3)

No secondary or tertiary co-operative society shall be declared under paragraph (2)(b) to be a body representing the co-operative movement at national and international level unless-Co-operative Societies 51

(a)

the objects of such co-operative society include the promotion of cooperative principles and the facilitation of the operations of co-operative societies; and

(b)

the by-laws of such co-operative society provide for—

(i)

the affiliation of all co-operative societies without any restrictions or the payment of any fee except entrance fees; and

(ii)

the appointment to its Board, by the Minister, of at least one representative from his ministry and of one representative from the Ministry of Finance.

(4)

There may be deducted from the sum mentioned in subsection

(1)

any sum paid pursuant to subsection (2).

(5)

Subject to subsection (7), a co-operative society may, after the payments specified in subsections (1) and (2), utilize the audited net profits for each financial year for all or any of the following purposes:

(a)

the payment of rebate on patronage;

(b)

the payment of dividend, on the shares and subscriptions of members of the co-operative society as may be specified by directives or guidelines:

Provided that, payment of dividend from any source other than the audited net profit for that financial year shall not be made except with the prior written approval of the

Commission which shall not in any case exceed such maximum rate as may be specified in the directives or guidelines;

(c)

the payment of honoraria to members of the Board of the co-operative society, which shall not in any case exceed such sum as may be recommended by the annual general meeting and approved by the Commission; or

52 Laws of Malaysia ACT 502

(d)

the payment for the welfare of its members and the community.

(6)

No rebate on patronage, dividend on shares and subscriptions shall be payable to members of a co-operative society and no honoraria shall be payable to members of the Board of a co-operative society except out of the audited net profits of that co-operative society.

(7)

No co-operative society shall utilize its net profits for any purpose under subsection (2) or (5) unless and until all its accumulated losses, if any, have been completely written off.

(8)

Notwithstanding subsection (7), a co-operative society whose accumulated losses have not been completely written off may, with the approval of the Commission, utilize its audited net profits for the payment of dividends which shall not in any case exceed five per centum of the shares or subscriptions, or both, of members.

Report

Part VII

Accounts and Audit

Read on from Part VII

Part VIII

Inspection, Inquiry, Dissolution and Disputes

Read on from Part VIII

Part IX

Miscellaneous

Read on from Part IX

Part X

Repeal, Saving and Transitional

Read on from Part X

Schedules